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EA
Mobile Senior VP (and former Jamdat CEO) Mitch Lasky kicked off his
keynote at the GDC Mobile segment of Game Developers Conference 2006
with an extended spiel about his history with Jamdat Mobile, the
changing fabric of the industry, and what he sees as the biggest
obstacles (and avenues) to future growth and maturation.
According
to Lasky, one of the biggest forces for change has been his own
company, Jamdat -- and in its current form, as the mobile division of
Electronic Arts, Lasky sees it as perhaps the most important force for
future change.
Lasky
explained how Jamdat went, as he put it, from a value of zero to
$684,000,000 in six years. When they began, they were a team of six
people; previous to the EA merger two months back, Jamdat was already
the biggest mobile publisher. To contrast, the amount EA paid for
Jamdat is five times greater than Maxis fetched, making it the biggest
EA transaction to date. "One day you're the giant killer," Lasky
quipped; "the next day, you get to be the giant."
What Makes Jamdat Special
Of
course with this kind of growth, it is only natural for other
developers to go public in search of similar success. Lasky suggested
the search was ultimately futile, as at the time Jamdat went public it
was "fundamentally different": not only did they have six years of
experience as an industry leader; they also had nine consecutive
quarters of GAAP profitability. Beyond that, Jamdat was the first
pre-play IPO on NASDAQ.
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EA Mobile Senior VP Mitch Lasky
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Beyond
that, in picking up Jamdat, EA also acquired Jamdat's distribution
network and -- most significantly, to Lasky's mind -- seventeen more
years of Tetris. At some point before the EA deal, Jamdat
surveyed various people for their favorite games ever; the chart they
came up with was divided into roughly similar wedges for Scrabble, Doom, Tetris, Poker, Super Mario Bros., Pac-Man,
and "other". The first four categories together added up to about
two-thirds of the chart -- and those represent what Jamdat had to offer
to EA. The deal was about more than Jamdat's existing properties,
however; now, with the increased overhead, "we are doubling our
already-aggressive R&D spending."
So,
as Lasky would have it, Jamdat simply offered more for the money than
any other mobile publisher could hope to. Why, though, did Jamdat sell
itself to EA? Because, as Lasky explained, it was necessary for the
industry. A company with the kind of combined distribution that Jamdat
and EA could provide was the solution needed to "take this business to
the next level" -- and previous to the merger, none existed.
Lasky
compared the situation (favorably) to the old Hollywood studio system,
where one monolithic entity was responsible for everything: content
creation, publishing, distribution, and marketing. To his mind, for
mobile games to grow they need a powerhouse of that kind to force its
way into the future and dictate the laws of the land.
Now
that EA Mobile has been forged, and has approximately two billion
dollars of free cash to work with, Lasky sees little room for
medium-sized mobile publishers. "It may be too late for mid-sized
publishers who don't own hits." Other publishers who are just starting
out are almost sure to fail, as before now it was already hard enough
to compete against Jamdat. Now the market is more competitive, more
complicated, and much more expensive.
Lasky
does offer some words of encouragement to small developers, however,
citing them as the creative force needed to keep the industry healthy.
"Small developers with innovative, original products are going to be
increasingly valuable. If I were an investor", Lasky beamed, "this is
what I'd be excited about -- the ability to innovate."
Torching the Carriers
Tailing
up his spiel, Lasky gave out a list of the enemies that we all must
rise up against for the mobile game market to grow. What these
basically boil down to are the carriers: "Carriers will not grow their
games business by squeezing publishers", Lasky said. "We're not the
ringtone business – we actually make stuff." Lasky cites a "lack of
competitive messages on the carrier level" for the stagnation of
content delivery.
According
to Jamdat studies, users cite both buying songs from iTunes and
recording a movie off cable as far less of a headache than downloading
a game – and yet those same users cite downloading a ringtone as far
less irritating than either of those tasks. Lasky attributes these
annoyances to the lack of innovation in the distribution channel at the
same rate that mobile content has evolved.
Another
big problem, to Lasky's mind, is that there are just too many games out
there – and too many of them are "bad". Apparently, the ideal number of
games to make available for download ranges around 150-200; the
explanation he provides for this is that about 150 games account for
97% of all download revenue, and that the top 200 games on any carrier
account for 93% of that carrier's revenue from game downloads. By the
logic he proposed, any more games than that on a given carrier (and all
of the three biggest carriers – Verizon, Cingular, and Sprint – have at
least 150 more) will mean wasted time and effort. As he put it, people
still have to do QA on those games.
"Too
much choice," Lasky explained, "is bad." He proposed that the more
games were made available, the less money a carrier will actually make,
just from the clutter it all creates. He proposed that if the mobile
industry continues without some kind of filtering process so only the
cream of the crop will be made available, there is the danger of an
"Atari 2600 episode", where users will turn away in droves.
Reach Out and Touch Someone
The
final problem Lasky illustrated was an almost complete lack of
connected games – which seems odd, considering that connectivity should
be one of the primary draws to developing a mobile game. Lasky cited an
online mobile game that Jamdat developed three years ago that he
described as still "state of the art" – a situation that he finds kind
of pathetic.
So
it is that inertia is the true enemy of progress. Likewise, Lasky
insisted, through heavier regulation comes competition, which is the
only way that mobile games will have a future.
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