Fear and Loathing in the Mobile Entertainment Industry

The economy may be mired in an existential crisis, but there's one place where the money is flowing: into those fun apps on your phone. As I discovered at a "casual mobile entertainment sector" conference last month, Portland isn’t the only place where the dream of the 90s lives on.

At Casual Connect, held in San Francisco from July 30-Aug 1st, the schwag flowed, the middlemen were out in force, the reptiles of New Vegas mapped the pathways from our touch screens to our dopamine receptors and the fair children of Silicon Hollywood brought the games of their youth to the platforms of tomorrow.

Casual mobility gaming is the child of traditional gaming and the web. So what can we expect from the bubble this time? Here’s what I learned from some of the players at Casual Connect:

The Undiscoverable Country

“Discoverability," or the ease with which an application obtains new customers, is the word mobility people shout when they sit bolt upright screaming and drenched in sweat after waking up from a nightmare (you know, the way you do.)

The mobility gaming market is like American Graffiti without Wolfman Jack: the kids are cruising in their cars, everyone is chatting up a storm and the radio is playing all the hits...all at once. No one can hear a thing over the din. In Apple and Google’s app stores, everyone is vying to be in the top 10. Anything below top 50 might as well ship exclusively on the Enigma for all the customers it’s likely to see.

In the brick and mortar days, games had to compete for shelf space in boutiques and big box stores. Game marketing was not for the squeamish or the broke. Online app stores have eliminated the distribution bottleneck, but they have also turned the world into a global garage, with would-be Jobs and Wozniaks strewn from here to Timbuktu and back. Or, if you’re reading this in or near Timbuktu, then from here to Portland and back.

In one sense, this is leading to an embarrassment of riches. I haven’t seen so many unique and innovative titles in one place since the Clinton administration. But in a market where every app faces not hundreds, not thousands, but hundreds of thousands of competitors, unique and innovative don’t necessarily mean much.

Many of the content providers I spoke to are counting on traditional old media and web-style advertising to bring them close enough to the surface for in-game advertising to finish the job, but there were more than a couple of aggregators and publishers offering opportunities to improve visibility beyond what most small studios can do for themselves.

“Right now, the app stores are like Wal*Mart,” said Anders Evju, director of corporate marketing PlayPhone. “You log in and there are thousands of titles vying for your attention.” PlayPhone hopes to make app shopping more of a boutique experience, where customers can quickly and easily find the apps most likely to appeal to them.

Other aggregators, like Tapjoy, facilitate connections between developers and advertisers. “Free-to-play games are currently seeing between 1% and 3% user monetization," said Brian Sapp, Tapjoy's head of Developer Partnerships. "We help increase that percentage by rewarding players with in-game currency for engaging with our ads. It’s a bargain for our advertisers because they don’t pay anything until a user actually interacts with their ad by watching a video or answering a quiz. The developers see a portion of that revenue, the users unlock more of the game and the advertisers are only paying for ads that are actually seen.”

If PlayPhone and Tapjoy are taking a scalpel to the discoverability problem, Animoca is taking a shotgun...a shotgun full of scalpels. Originally founded as an email provider in 1998, Animoca is a publisher and not an aggregator, but they have a wide catalog and an aggressive strategy of acquiring licensed properties and titles to publish. “The key to our longevity has definitely been diversification,” said Henry Oh, Director of Strategic Initiatives. “You never know how things are going to succeed. One of our top products has been Pretty Pet Salon, which we naturally thought of as a girl’s game, but we found that a lot of boys were playing it as well. So we adapted it with a more boy-focused brand called My Car Salon.”

Midcore Rising

For many gamers like me, the mobility platforms are a lonely and desperate tundra of the cute and cuddly. While no one expects Skyrim or Call of Duty on the iPhone, the market for challenging and engaging games that can be played at a casual pace (5-10 minutes at a time) feels woefully underserved.

Enter the midcore, games which provide reasonable depth of challenge while still being easy and fun to get into. Midcore games seek to capture the huge excluded middle of the audience who have outgrown Farmville, but don’t necessarily want to commit to the bureaucratic depth of something like Eve Online.

For some, the midcore is about providing easy to get into updates of retro gaming experiences. There were a good many space trading games, traditional RPGs, dungeon crawlers and point-and-click adventures on the floor. “We got into game development in 2008,” said Braden Moulten, president and COO of 5th Planet Games. “We were literally founded as a World of Warcraft guild and when Facebook gaming started up, we wanted to make games that we liked to play for that platform , traditional hardcore fantasy and science fiction.”

In addition to the retro genres, however, many midcore games seem to also call back to another feature of gaming from the 80s and 90s: micro-transactions. If you want to keep playing, you're going to need a shitload of quarters.

The monetization model most content providers are going with is “free to play.” With the barriers to discoverability so high, charging customers up front for an app just isn’t a viable option for many studios. And so most apps are free to play and then offer the player the opportunity to purchase more of the game (in the form of in-game currency or level unlocks) once they're hooked. While this model harkens back to the fine tradition of free game demos, it also presents the danger of turning players off.

“We don’t like ‘pay to win’ as a model,” said John Kopp, PR director of GameInsight, whose new title, Starborn Wanderers, is an old school space trading/combat adventure reminiscent of Star Control and Spaceward Ho! “We do monetize by selling upgrades and unlocks in the game, and so we have no in-game advertising, which is nice. But we made sure that players can still have a completely satisfying experience of the game for free.”

Another popular path to the midcore is user created content. Grand Cru, who cut their teeth on Habbo Hotel more than a decade ago, presented Supernauts, a world-building game inspired by Minecraft. “We definitely see a place for collaborative creativity in the midcore," said co-founder Markus Pasula. "Some of our beta testers are power users who make incredible worlds while others are tourists who just like to explore.”

Narr8 is an app that delivers animated graphic novels and interactive text, as well as plain old traditional text and all the multi-media in between, to the tablet. “We do all of our content development in-house,” said Sr. PR Manager Alexis Valerio. “We’re not looking for freelance solicitations or publishing deals. But we have released our Storymaker content creator so our readers can develop and contribute their own titles that we publish in our user-created content section. We expect high quality user created content to drive more people to our app.”

Winter is Coming

Hundreds of companies and billions of dollars holding conferences in facilities barely large enough to host a prom can only mean one thing: it’s party time in Bubble City. At events like Casual Connect, the mobility market seems like ten thousand dipping sauces in search of a McNugget.

While it is certain that a die off and buy up is coming, and the big players like AT&T, Google, Apple and Verizon will soon be taking a stronger hand in defining the landscape, each vying to be the next Microsoft or Sony (not so much Nintendo), I will say this for these kids today: at least no one was talking about making a billion dollars delivering ice cream to stoners at three o’clock in the morning. The worst sin anyone I spoke to could be accused of is delusions of viability, but since it’s unlikely that this industry will even be recognizable in ten years, ultimately there is no long game to play.

As of right now, there is no imaginary secondary market for anyone’s product, no pie in the sky promises of instant wealth and no sock puppet mascots. And those are all good things.