Thursday, January 12, 2006

Mobile Gaming: Too many 'wrong numbers'


It's being touted as the Next Big Thing. But how big depends on which numbers you believe. And there are a LOT of different figures floating around right now.

Yesterday ET
declared: "Paid download figures for mobile games are around 600,000 a month but it could be anything between 50-60% more".

Huh? Why can't ET arrive at a fixed figure for number of paid downloads after speaking to all mobile operators? I can understand operators overstating downloads - why would they understate them by 50% ??

Incidentally, on 22 Nov 2005, Hindu Businessline reported 450,000 downloads a month. "And it is growing by 30-40 per cent". Annually, or monthly? Must be the latter if it's 600,000 less than 45 days later - which is impressive.

Perspective, please
Hutch says that it has had a 50 fold rise on downloads (from 2200 per month in Feb 2005 to 120,000 per month currently). But while growth is heady the numbers are chickenfeed compared to ringtone downloads - 300,000 a DAY.

That's about 9 million downloads a month.

Of course the average ringtone costs Rs 10-15 while the average game costs Rs 50. Still 80% of Value Added Services revenue come from ringtone and caller tunes as of now; games accounts for 2-8%.

In light of that statistic this statement by Business Standard does not make sense: "Within a year, the market (for mobile games in India) has expanded from a mere Rs 25 crore to at least Rs 80 crore in 2005".

3rd standard mathematics problem: The ringtone market in 2005 was estimated at Rs 150 crores (a figure that appears correct given the no of downloads X Rs 10-15 per download formula).

8% of Rs 150 crores? Closer to 12 crores than 80 crores!

CIOL on the other hand estimates (correctly, I think) that the market size of wireless/mobile games in India was US $3 million (Rs 13.5 crores) in 2004. They explain how the figure was arrived at:

It is estimated that, on average, there are 200,000 downloads of games via GPRS network of the cellular mobile players - Orange, Airtel, Idea, and BPL. The market size estimation assumes an average charge of Rs 50 per download.

Elementary, my dear Watson. Maybe all journalists should be put through a compulsory course in addition and multiplication!

And oh, somewhere in the equation lie another 15 million free game downloads in the CDMA space.

More maths lessons
Sorry for throwing all these figures at you - honestly I am the last person to show off when it comes to mathematics (my worst subject at school). But bear with me, there is a point in all this somewhere.

Currently India has approximately 76 million mobile-phone subscribers .

The question is - how many have GPRS/ java/ colour screen handsets? Pyramid Research, an Economist Group company estimates that "almost a third of Indian mobile users are restricted from gaming due to a lack of sophisticated handset availability".

The Pyramid survey shows that around 32% of cellphone users in India play games on their mobiles - double the UK figure. Obviously these are pre-loaded games like Snake, given that we don't see corresponding figures of downloads.

Again I fail to understand how this FE journalist concluded that "Indian mobile gaming market constitutes 5% of the world share".In 2004 the mobile gaming market in China ALONE topped $98 million.

Arun Gupta, COO Mauj Telecom says, "With the introduction of faster networks and colour java handsets becoming more affordable, the Indian mobile gaming market is expected to grow tenfold in five years."

Fair enough - sounds entirely plausible. But according to a research by In-Stat/MDR , the Indian mobile gaming market is projected to grow to $336 million by 2009.

From $3 million in 2004 to $ 336 million is um... just not going to happen. The analysts are in the business of making dizzying projections - the figures get printed - everyone feels good.

It's like the astrologer who makes yearly predictions. No one checks back on the 99 things he predicted which did NOT come true (I distinctly remember one gent who predicted on Jan 1 2005 that Salman and Aishwarya would get back together..)

Magar agar ek bhi prediction sahi nikli - ya 50% bhi sahi nikli - both astrologer and analyst ki lottery lag gayi!

Who's playing
Back to the gaming conundrum. You and me know ringtones are huge - everyone has them. But games? Ask 10 people around you and it's unlikely that any has downloaded a mobile game.

Survey after survey by JAM magazine confirms that the 15-22 year old India metro-based youth is not an avid mobile gamer - at least not of the download variety.

Why? For one, they aren't impressed with the quality of games on offer. Most Indian developers are churning out a large quantity of games but there's no one game that's proved addictive enough to spread by word-of-mouth and become a must-have.

Secondly, Rs 50 (going upto Rs 150) is not a sum you want to throw away on a dud game download. Earlier operators did allow you to download a trial version of a game for Rs 20 but that seems to have been scrapped.

So neither do we have a killer app in mobile gaming, nor a price so low that the average Anand doesn't think twice before making an impulse download.

Games at throwaway prices (I'm thinking Rs 10) could expand downloads significantly. Mobile operators know better than anyone else that once they've hooked you, they've cooked you. That, and they would need to identify a few 'killer games' which junta would want to own.

The combination of affordability + desirability is crucial.

The Action shifts
The interesting thing is, currently B and C towns are driving a large portion of the growth in value-added services for the mobile industry. Techtree reports:

In such towns, mobile entertainment cost is almost considered as mainstream entertainment, because of the lack of an alternative."

Which is why Mauj has just launched mobile games in Hindi and 7 regional languages including Marathi, Gujarati, Bengali, Tamil, Malayalam, Telugu and Urdu. The move is targeted at regional audiences, as only 3 to 5 percent of the populace is familiar with English.

The 3 games developed by Mauj - "Mastibhari Udaan," "Saahas Ka Yudh," and "Jaanbaaz".

This is also why Bollywood based games are finding favour with developers. According to Mid-day: On average, a movie sells 7,000 to 10,000 copies with more popular movies like Hum Aapke Hain Kaun even going up to 25,000 downloads. The Sholay game, which kicked off the Bollywood-mobile gaming frenzy has over 50,000 downloads so far.

Again, you and me would probably not download these games - but their appeal to the large mass of users is high. So they do make good business sense.

Among the SEC A and B metro crowd Nokia's Ngage was high on the most-wanted list last year. But now, the lack of camera and FM have reduced its appeal.

Bottomline: Mobile gaming will grow in popularity - since the base is small to begin with the growth will appear spectacular. But better - and more affordable - games are the need of the hour.

And honest statistics derived from common sense calculations need to be used by the breathless reporters helping to hype up the phenomenon. Wrong numbers are inevitable in telecom. They should not be, in journalism!

Although, as I type those words, I worry... Kya mere saare calculations correct hain?

pic: www.techtree.com

18 comments:

  1. Interesting read. It's certainly very irresponsible to create a hype based on false calculations and misrepresented figures.

    ReplyDelete
  2. It is always the same. Analyst after analyst, journalist after journalist predicts numbers based on frivolous analysis and then the hype dies down.

    Remember the figures that late Mr. Dewang Mehta used to throw at Indians. He & his association never used to climb below a figure of a few hundred billion dollars of e-commerce happening by the year 2005. Ofcourse reality (though quite good) is much more moderate. The same happened to the outsourcing markets - people lined to provide medical transcription services & later realised the hyped up figures. It is only now - that the market seems to be maturing. The same seems to be happening to education market. My next take would be figures that would be thrown about bio technology as business.

    I remember an Indore Management Convention where former CEO of HLL - Mr, Dutta suggested that figures predicted about e-commerce cannot be met for the simple reason that both computer & internet reach in India is limited. So while there is enormous potential the road to greener pastures is a long & grueling one. Same is true of most industries.

    Great piece Rashmi.

    ReplyDelete
  3. A day will come when Indian subscribers will say 'Quit playing GAMES with my mobile'! :)
    Nice read. Very well researched.

    Ashish
    http://kreativekommons.blogspot.com/

    ReplyDelete
  4. Good read, and very timely one too, as currently (12th and 13th Jan), NASSCOM is hosting the biggest gaming and animation event in India.
    Offlate, I have stopped believing in numbers thrown by analysts. But looking it from other side, it does help to probe further into the predictions, but with one's own assumptions and analysis.
    Its same with analysts all over the world, some others in the list being nanotechnology, fuelcells, MEMS, product outsourcing etc.
    But they do the good job of spreading the optimism, albeit ending too optimist most of the times, but if reports are not so promising then who'll read and discuss (or flaunt) them at the so called power-meetings.

    ReplyDelete
  5. Hi Rashmi,
    yes another well researched article!
    yes, the analysts operate in a very hypothetical domain and the very fact that these newspapers publish these figures (ET tops the list with so many such hypothetical figures) shows how much interest they have in the credibility of the figures. May be, they do this to prop up the sentiments of the general public or to increase their revenue, but it is the reader who is left confused at last!
    Another example, ET said Jet might buy Air Sahara for close to 3000 crores while CNN-IBN said Jet might acquire for around $ 560m. But, alas, the news is yet to be verified. In the race for being the first, they hush up numbers and print it. Such number tinkering activities will definitely increase in the upcoming days!

    ReplyDelete
  6. Rashmi, I hope YOU don't make the same mistake that the others are making:

    "Which is why Mauj has just launched mobile games in Hindi and 7 regional languages including Marathi, Gujarati, Bengali, Tamil, Malayalam, Telugu and Urdu. The move is targeted at regional audiences, as only 3 to 5 percent of the populace is familiar with English." (emphasis mine)

    This puts all other languages, other than Hindi at a sub-par level and we know this is not true. I hope you will take note of what I said in the right spirit :-).

    ReplyDelete
  7. Well Rashmi I have been reading ur blogs from quite often .... But I am surprised to see u often criticising....Yaar ek aajibo garib pesimist attitude dikhayi deta hain.....
    Yaar kuch karo....

    ReplyDelete
  8. Hey,
    TOI, Bangalore flicked the idea off your blog. :-)
    I'd read what you'd posted a few days back, thought whether I should put in my two cents worth about mobile gaming, decided not to, and went home. Within a couple of days, what do I see? TOI, Bangalore edition has a similar article.. :-)

    ReplyDelete
  9. You're forgetting the piracy element in your equations. All you need to download these games for free is google and a little knowledge. Amongst all my friends who are into computer games, none of them has, to my knowledge, ever bought a mobile game. As for me, all my games are donated by the, um, file fairy. I put a blank CD under my pillow.

    ReplyDelete
  10. Blogged this here with my comments.

    ReplyDelete
  11. Don't know how jad and jar files landed on your phone. Ideally, when you click on the link of sent to you, game should INSTALL on your handset.

    ---
    Ashish Patil
    http://aadipa.com

    ReplyDelete
  12. I recently visited www.hovr.com, and i was surprised to see that they are offering all the highly rated mobile games absolutely free. And that's not all they have free mobile games for virtually all the brands of mobile games. You need to first register and choose your mobile phone and then you can download cell phone games via SMS, WAP or you can download them on to your pc.

    ReplyDelete
  13. This comment has been removed by the author.

    ReplyDelete
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