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Mobile games industry eyes social networking, Nokia

By Tarmo Virki Tue Mar 4, 8:27 AM ET

HELSINKI (Reuters) - A boom in social networking and a new delivery platform from Nokia offer mobile video game publishers a boost after a slowdown in 2007. ADVERTISEMENT

The mobile gaming market suffered an unexpected slump last year, with many game developers and analysts pointing to telecom operators' lack of interest in investing in marketing games.

Now they are looking at booming takeup of new social networking sites, aiming to market the games on those sites themselves.

Digital Chocolate, one of the few global game publishers, has put its hit game Tower Bloxx on several networking and gaming sites on the Internet. The game was installed more than 400,000 times in just four months on Facebook.

"The takeup has been better than any of our expectations," said Ilkka Paananen, head of game development at Digital Chocolate. "This year we will support all our key products with similar kind of marketing."

Media research firm M:Metrics said the number of people who bought mobile games in the United States and Europe last year was almost unchanged from a year ago, with pre-loaded games growing in popularity.

"The mobile games segment has been stuck in a rut for a long time now, with less than 5 percent of subscribers actually buying and playing games," said Informa analyst Daniel Winterbottom.

"Operators have spent very little on the marketing and promotion of new game titles," Winterbottom said, adding that around 90 percent of mobile game purchases have been through operator portals.

Informa expects revenues from mobile games to grow 23 percent this year to $4 billion, helped by Nokia's N-Gage gaming service which is set to reach market in coming weeks.

N-Gage service will be downloaded on Nokia's multimedia phones, with access to trial versions of many games.

All major cellphone game publishers -- including Electronic Arts Inc, Gameloft and Glu Mobile -- have signed up for the Nokia platform.

One of the key challenges of mobile game publishers is the vast number of cellphone models -- the world's five largest cellphone makers alone bring to market several hundred new models each year.

Making different versions of games for a wide-array of phones, which all have different software, can make up to half of game publishers costs.

Nokia's N-Gage will allow developers to offer a single version of a game to more than 10 million phones.

The number is set to multiply in the second quarter, and also licensees of Nokia's S60 software platform, Samsung Electronics and LG Electronics, could use it in the future.

(Editing by David Cowell)