March 7, 2006

Consumption of mobile games has stagnated as carriers have steadily increased prices during the last six months, according to figures from M:Metrics.

The research firm said the number of subscribers who downloaded at least one mobile game a month has consistently fluttered between 5 million and 6 million, and has actually decreased since last September.

Meanwhile, game prices have climbed every month, averaging $5.77 per download in January.

Subscription prices have climbed as well, reaching an average monthly price of $2.90.

And carriers are expanding already cumbersome content decks, increasing their gaming offerings by nearly 20 percent since September. The average number of titles on carrier decks has climbed to 355, M:Metrics reported, up from 296 last fall.

“As all carriers more aggressively promote subscription-based models, they are also testing price inelasticity by gradually inching up average pricing,” said Seamus McAteer, senior analyst at M:Metrics.

“To grow the market, carriers must work in tandem with publishers to provide real value for a more expensive subscription, rather than treating it as just another pricing tactic.”

Many believe a lack of quality games continues to shackle the industry. But operators—which have often placed more importance on branded titles than quality game play—are reconsidering their priorities.

Carriers are deploying and monitoring forums such as Sprint’s Game Lobby, where members can review and comment on mobile games, and are considering ratings from gamer-focused sites like Gamespot and ign.com.

“I don’t think carriers thought (quality) was that relevant before, but the growth has slowed,” said Trip Hawkins, founder of Digital Chocolate Inc., a California-based publisher of casual and community-based games.

“I think we’re just at that turning point now” where quality is becoming the top priority for operators.

Source: RCR