SOURCE: Telephia

March 05, 2007 08:00 ET

Mobile Game Revenue in the U.S. Hits $151 Million in Q4 2006 With Strong Year-Over-Year Growth, According to Telephia

Preloading Game Demos Is a Key Merchandizing Lever to Drive Purchases

SAN FRANCISCO, CA -- (MARKET WIRE) -- March 5, 2007 -- On-portal mobile game revenue jumped 61 percent year-over-year to $151 million in Q4 2006 (see Table 1). Nearly 17.4 million mobile consumers downloaded a mobile game last quarter, up 45 percent from a total of 12 million downloaders a year ago, according to Telephia, the world's largest provider of syndicated consumer research to the telecom and mobile media markets. On-portal mobile game revenues also account for 74 percent of total mobile game revenues, while off-portal downloads account for the remaining 26 percent. While revenue is growing, revenue growth is slowing consistent with a market that is maturing.

Table 1: On-Portal Mobile Game Revenue and Audience Size YOY Trending (U.S.)

Metric         Q4 2005  Q1 2006  Q2 2006  Q3 2006  Q4 2006  % Growth

Number of
 Downloaders   12.0M    12.8M    13.5M    15.7M    17.4M      45%
Total Quarterly
 Revenues       $94M    $134M    $141M    $140M    $151M      61%
Source: Telephia Mobile Game Report, Q4 2006

Mobile games have not been limited to the typical console game demographic of men 18-24 years old. The demographic is much broader, and includes women and all ages. Sixty-five percent of all games are purchased by women. Forty percent of all games are purchased by mobile consumers age 25-36.

"The mobile game industry has seen strong growth very quickly with titles that appeal to a broad demographic. However, the industry is faced with a new challenge in order to sustain its growth. Several new mobile content services such as mobile video and full-track music are also competing for the mobile consumer's attention and wallet," said Kanishka Agarwal, Vice President of Mobile Content, Telephia.

The mobile game market continues to be a highly competitive space, with nearly 90 publishers vying for a piece of the market. EA Mobile leads the on-portal game download market with nearly 28 percent of total revenue. Gameloft and Glu Mobile share the second tier with 11 percent each. Namco, I-play, Digital Chocolate, Hands-On Mobile, Superscape, Capcom and Oasys Mobile make up the next tier of players with revenue shares ranging from 2-6 percent.

Using Preloads as a Merchandizing Lever

As the mobile game market gets more crowded, publishers are keen on finding new solutions to get a leg up on their competition. Top placement on carrier download decks is a hard-fought battle among publishers and a lot of emphasis is focused on that strategy. But preloading a game onto devices is another critical merchandizing lever. As part of Telephia's new Mobile Game Merchandizing product, the company will be tracking preloaded game decks. Preliminary Telephia findings are consistent with industry consensus that Tetris by EA Mobile is the most preloaded title in the U.S.

"Preloaded game demos provide consumers with easy access and a quick sample of the game title, increasing the likelihood of them purchasing the game and ultimately driving revenues for the publishers. Publishers must focus effort on handset preload decks in addition to carrier download decks as a critical merchandizing tool," added Agarwal.

About Telephia

Telephia is the world's largest provider of syndicated consumer research to the telecom and mobile media markets. Telephia is your connection to the digital consumer. Since 1998, executives at service providers, device manufacturers, content providers, and retailers have relied on Telephia data to make confident competitive strategy, marketing and resource allocation decisions. Telephia uses its unique measurement tools and large-scale consumer panels to completely understand the digital consumer's behavior, attitudes and experience.

To learn how Telephia data can help you understand the digital consumer and track your competitive performance, please contact us at (415) 395-0500 or www.telephia.com.

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