Daniel Eran Dilger in San Francisco
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iPhone gaming takes the stage at iGames Summit 2009 #igsummit09

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Prince McLean, AppleInsider

Small and large game developers are meeting with venture capitalists and technology companies to talk about the future of gaming on the iPhone platform at the 2009 iGames Summit being held here in San Francisco at the UCSF Mission Bay complex.

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The conference kicked off with a panel discussion named “Lessons Learned: Why iPhone Games Work,” with Neil Young of ngmoco, Andrew Lacy of Tapulous, Steve Demeter of Demiforce LLC (the developer of Trism featured in the iPhone 3.0 presentation held by Apple two days ago), and Keith Lee of Booyah. The panel was moderated by Ken Gullicksen of Morgenthaler Ventures, a venture capital firm.

Gullicksen first asked what kinds of games are working on the iPhone, if it can be a replacement for the Nintendo DS, and what kinds of games resonate with a significant volume of users.

Young answered that the iPhone’s design leans toward short gaming sessions that can be interrupted by phone calls, pointing out average play session time for Maze Finger is eight minutes. However, the play time for ngmoco’s new rolando is 22.6 minutes, demonstrating that longer and more engaging games are becoming feasible and more popular too.

Gullicksen then asked about how games will be monetized. Lacy answered that “Apple has done a phenomenal job” of creating a successful mobile platform in short length of time, but added that things are still developing and that Apple’s iPhone 3.0 announcements show that the company is focused on the long term future of the platform.

Lee brought up using free apps to bring attention to paid version, adding that there is a “huge fall off in conversion” from free apps to the paid version of apps. Lacy added that offering free apps does help to dramatically add to the developer’s user base, something that would be much harder to accomplish with only paid titles.

Asked about Apple’s iTunes market place for mobile apps, Young replied that the “App Store is awesome,” adding that “it’s like having WalMart and Best Buy in your pocket” and that it will continue to develop over time.

Getting titles to stand out from the huge volume of apps available in the App Store will require attention to developing a user base, Young said, including attention to global language localization since around half of mobile apps’ sales often come from buyers outside the US. Being able to create relationships with customers will be an important way to market new games to an installed base.

Demeter made the point that one reason why gaming has taken off on the iPhone in ways that it hasn’t on the Nintendo DS and Sony PSP, particularly among small developers, relates to the fact that game development for the iPhone is fun, saying, “I think it’s because Apple has put the power in the people’s hands.”

Lacy noted that small, single developer operations are currently able to reach the same kind of traction and attention as larger firms with a hundred developers. “I think they are going to become more rare,” Lacy said, stressing the need for developers to professionalize.

Young mentioned “the birth of new development talent” as a factor that could help take iPhone development to a new level. “We really admire Nintendo,” he said, particularly because the company works to get so much out of its hardware. He pointed out the rich potential for more sophistication available to the iPhone, calling it “really really exciting.”

Asked about larger game companies that haven’t yet targeted the iPhone, Lacy explained, “It’s such a different device from everything out there.” Existing gaming companies are stuck in “the old way of thinking of things” and “coding for the lowest common denominator.” As they get more comfortable with the iPhone and its differences, there will be more attention from the large developers Lacy said.

Lee, speaking of Blizzard Interactive, talked about the choices involved in porting existing titles to the Phone, such as a tie-in to World of Warcraft, versus developing entirely new IP, saying “it’s all about supporting the biggest breadwinners.”

Gullicksen noted that Nintendo recently announced sales of 100 million units in four years for its Nintendo DS. Asked when the iPhone would hit 100 million, Young answered, “I don’t think the iPhone and iPod touch is slowing down. The iPhone has gone Wii.” Lee said he “wouldn’t be surprised if the iPhone hit 100 million by the end of next year.”

Speaking of the social and viral aspects of iPhone gaming, Lacy mentioned the question of “how strategically important its it to be on other platforms,” whether other phone platforms or social network sites such as Facebook. Developing for other platforms requires more resources and time, a difficulty for small developers.

Asked what roll big publishers can play in iPhone gaming, who bring marketing, polish, and QA, Young said the role of the publisher would be different but accomplish the same things to get developers’ titles in front of more customers. Young described his company, ngmoco, as a value added publisher, not just taking a cut to provide developers with a wider audience, but also contributing a gaming platform to handle shared features, expertise on the iPhone, and related support.

Asked by an audience member, “without being actively promoted by Apple, how successful do you think you’d have been?” Demeter said he thought Apple promotion in iTunes was critically important, and said if he used a publisher, he would use ngmoco, implying that Apple had reason to promote its titles because of its affiliation with the iFund.

Young and Lee, both connected to the iFund, countered that they do not think Apple has offers any favoritism to iFund supported companies, instead stressing that the App Store promotes good work and describing it a “level playing field.”

Asked about how Apple compared to Sony, Microsoft, and Nintendo in gaming, Young replied that he originally anticipated that Apple would act more like those companies, with “significant first party publishing,” long TRC approval times and limited slots for third party offerings. Instead, Young said Apple was focusing on its platform, saying he was “very thankful” of that, and that Apple’s ability to offer the “best development tools and environment” were related to the fact that Apple is promoting its platform as a way to support third party developers rather than as a way to push its own software and make money from software.

Console gaming platforms typically lose money on hardware while the game makers, including Sony, Microsoft, and Nintendo, earn much of their revenue by charging game developers significant fees to license their titles to run on their gaming platforms. Apple is going the opposite, making its money on hardware sales while aiming running the App Store at a break even to induce developer interest.

A mobile developer in the audience replied that having such a level playing field actually made it harder to stand out among all the titles available simply because there was no favoritism, describing the resulting marketplace as a “fantastic experience.”

6 comments

1 StrictNon-Conformist { 03.19.09 at 7:03 pm }

This does bring up an observation: in the early days/weeks/months of the iPhone AppStore, an app was likely to have a lot of downloads/purchases simply by being there first, the developer having a pulse and breathing, and the app not being a horrible crash fest. Now, with the 25K apps available, with the majority of them being games, it becomes much much harder to first get the attention of potential customers: not only does the title need to work and work well as dictated by the purpose, it needs to be a decent enough idea, or at least something that stands out from what’s already there for functionality/price, but it also needs a lot more marketing. Still, though, developers at least know where to tell people to go, as there’s the simplicity factor that there is only one place to go.

2 Cataclysm { 03.19.09 at 7:31 pm }

As a developer for an upcoming iphone game, there was much garbage shoveled at the conference. What I mean there are things said that aren’t even factually correct. I’m disapointed that you, Daniel, didn’t look for what the real information was. I suppose you only bother to fact check during a Microsoft conference.

[Wow, this is a bit over the top I think.]

First, look at this telling paragraph:
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Asked about how Apple compared to Sony, Microsoft, and Nintendo in gaming, Young replied that he originally anticipated that Apple would act more like those companies, with “significant first party publishing,” long TRC approval times and limited slots for third party offerings. Instead, Young said Apple was focusing on its platform, saying he was “very thankful” of that, and that Apple’s ability to offer the “best development tools and environment” were related to the fact that Apple is promoting its platform as a way to support third party developers rather than as a way to push its own software and make money from software.
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What a tool Young has become. The essence of a game console is that it is a dedicated game machine, meaning, the hardware is designed for software of the first party. This is very different than a computer whose design purpose is for other applications. In other words, the Wii is a dedicated game machine while the iMac isn’t. The iMac can play games, but the iMac was not designed around the purpose to play games. In the same way, the DS was designed to play games. The iPhone was not. To compare the iPhone to the DS is like comparing the PC to the Wii. Both can play games but only one is designed to be a dedicated game machine (with its hardware designed for that purpose).

Instead of revealing this standard of the game industry, Young becomes a tool by saying Apple is being ‘different’ and is looking out for third party companies by focusing on making a platform for the hardware. Well, by that definition, so is Compaq, Dell, and every other PC manufacturer. The point is that Apple is not a game company, the iPhone is not a dedicated game device. Instead of praising the iPhone as a handheld PC (which can play games), he is furthering misdirection by saying it is similiar to the dedicated game consoles (which it is not).

[I don't follow your logic at all. First party games are software developed by the console vendor. The majority of the desirable games for Nintendo Wii are made by Nintendo, most of the rest is 3rd party shovel-ware. Apple has a couple apps in the 25,000 iPhone library. Apple is running the iPhone platform like a PC maker, because that's what Apple is. It's also borrowing the secured licensing model of the video game industry to keep mobile apps from doing things that would be bad. But unlike game platforms, Apple is intending to make its money from hardware, and it subsequently only charges a 30% cut, compared to the majority cut Microsoft takes for Xbox games. What's your point? I certainly don't see that you have one. ]

Here is a second quote:

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Console gaming platforms typically lose money on hardware while the game makers, including Sony, Microsoft, and Nintendo, earn much of their revenue by charging game developers significant fees to license their titles to run on their gaming platforms. Apple is going the opposite, making its money on hardware sales while aiming running the App Store at a break even to induce developer interest.
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This isn’t true in the slightest. Only one game console had the strategy to sell hardware at a loss to make up with software which is Sony, and they are currently abandoning that strategy. Microsoft doesn’t count because they lose money no matter what they do. Nintendo, as well as Sega, Atari, and other past console companies, have sold their hardware at a profit. The standard for the game industry is to sell hardware and software for a profit. There is no razor blades model for the game consoles.

[Wait, you're saying that Microsoft and Sony don't count, but console makers from the 80s and 90s do? Nintendo has always been the exception to the rule. Games are a viewed as a software business, not a place to make money on hardware, which is why so many console platforms failed, including 3DO and Dreamcast and Bandai's Pippin. It's hard to make cutting edge game hardware that can be sold cheaply. The iPhone can because its subsidized. The iPod touch works because the iPod brand is sticky. How many open source game consoles have failed? 100% of them. ]

The reason for the higher license fees is because these console companies are creating markets with their console. For example, Nintendo created the Wii market. But Daniel thinks all they did was make a ‘platform’ which isn’t true. Xbox Live and WiiWare are ‘platforms’ but they are not markets unto themselves.

[um, what?]

In other words, when someone buys a Wii or DS, they are buying it to play a game. When someone buys a PC or an iPhone, they MIGHT be buying it to buy a game, but mostly it is for non-game purposes. Even though there are far more PCs than game consoles, there is a bigger gaming market on dedicated game machines than on PCs. Ditto the same for handheld PCs versus handheld game consoles.

How about a third quote?

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A mobile developer in the audience replied that having such a level playing field actually made it harder to stand out among all the titles available simply because there was no favoritism, describing the resulting marketplace as a “fantastic experience.”
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Nevermind the fact that this developer likely is invested in the iphone and will carry the water no matter what, that quote applies to any PC and even flash gaming. Whopee. Anyone who believes this is ‘new’ is just a fool.

And what ‘favoritism’ is there in the dedicated game console market? None really. Games there live and die based on the market like any other. Where is all this BS coming from?

[the idea of favoritism was contrasted with what Apple could be doing with its iTunes clout, not what other platform vendors are doing. Whoosh.]

Another quote:

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Lee, speaking of Blizzard Interactive, talked about the choices involved in porting existing titles to the Phone, such as a tie-in to World of Warcraft, versus developing entirely new IP, saying “it’s all about supporting the biggest breadwinners.”
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And what software would Blizzard port over? Starcraft and Warcraft won’t work due to the lack of buttons and limited screen real-estate. Ditto for Diablo. I’m convinced Young is just talking out of his @ss. Blizzard makes a game like every four years, why on earth would they put something on a cell-phone?

[The idea is that Blizzard could produce mobile games relate to the Warcraft franchise or develop entirely new games. Nobody is asking for a WOW client. Whoosh. And why: money. ]

One more quote:

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Gullicksen noted that Nintendo recently announced sales of 100 million units in four years for its Nintendo DS. Asked when the iPhone would hit 100 million, Young answered, “I don’t think the iPhone and iPod touch is slowing down. The iPhone has gone Wii.” Lee said he “wouldn’t be surprised if the iPhone hit 100 million by the end of next year.”
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This obviously wasn’t a conference but just a marketing event. The iPhone was around 13 million sold since the latter 2008. The DS sales are still ahead of the iPhone at a similar point of time. More importantly, each of those DS sales was a gamer. Not everyone buying an iPhone is buying it for games. In fact, most of them likely are not. To compare dedicated game console sales to a hardware that is not dedicated to games is like comparing apples to oranges, like comparing a PlayStation to a PC.

[The iPhone + iPod touch are a single platform. One has a phone and a camera. The DS and DS Lite aren't counted separately. Apple's mobile platform has sold 30 million units. That's nearly a third of the DS in a fraction of the time. The DS is due to get replaced, the iPhone platform will only expand. I think your take on the conference was overblown. It was a meeting of iPhone people, not a journalistic critique of the platform, but it also wasn't advertising anything. -Dan ]

Come on Daniel. Use your reporting skills and blast this garbage that was being shoveled at the event.

3 Cataclysm { 03.19.09 at 7:35 pm }

StrictNon-Conformist-

There is currently a ‘gold rush’ to make games for the iPhone because developers think they will sell tons. However, there is not much gold when everyone is fishing from the same stream. I expect the production quality of the iPhone games to skyrocket due to the competition which means they will become dominated by the larger game companies. This is what occured on the digital download services for the game consoles after they had a ‘gold rush’ of young developers thinking tons of money would come their way by putting a game up.

4 StrictNon-Conformist { 03.19.09 at 7:49 pm }

Cataclysm, I suspect you’re absolutely correct in your assessment: once a market has become so large that there’s a huge selection, those that can afford to lose the most or at least promote the most are the ones that will put in the effort to try to dominate the market, and likely will. The sad reality is that most of the games for the iPhone/iPod Touch platform are rather simple and limited, and that’s a big reason why they’re so inexpensive to buy: it’s obvious not much time/effort/resources were put into most, by the production quality and the depth/breadth of the games. Then again, I’m not sure what the sweet spot for depth/breadth of a mobile phone game is, in that I can’t see something like WoW exactly working out well, even if the platform were technically capable of doing it reasonably well: it’s a small mobile device form factor! To think it is a universally useful device in all cases is delusional at best, and bankruptcy in the making at worst, if you work on the all things to all people premise, just like thinking a PC makes a very good phone system, in that you are forced to sit down in front of it and be stuck right there, its lack of portability is the killer for truly widespread adoption: and no, due to human psychology and culture, I don’t expect constant use of videophone usage, regardless of technical feasibility for everyone to have one :)

5 cy_starkman { 03.19.09 at 7:50 pm }

To add to @StrictNon-Conformist

In the early days I just looked to see what was new, swiped down the list and if something seemed interesting I investigated further.

Now though, I mostly look to see what is most purchased (free or paid) and then I may have a quick look to see what is new release.

I look for, purchase and review almost exclusively through the iPhone Appstore and not iTunes. A behaviour that developed due to the app sync failure issues that existed on day 1. I observe that this changes my buying behaviour because I cannot use the iTunes browse mode.

I have also found that product mentions on the web are starting to attract my eye more and I will seek out the product. This happened with Rolando for example and most recently the Australian ABC app. Reading the reviews still plays an important part in my decision making process.

As a final observation. I have noticed my increasing acceptance to paying more for an app. (In Australian Appstore prices) In the early days I was willing to part with $1.19 or Free, with a very rare purchase slightly above that. Something at the $5.99 mark was off the radar. I have noticed that acceptance creep up, now I am less interested in Free, unless it is a compelling product (ABC app), $1.19 has become a “looks interesting buy it and see” and $5.99 is my new “high price”.

I keep wanting to make more use of AppSniper but I observe that the decision making process is not exactly impulsive but if I want it, then I am unlikely to track the app to save $1

6 Brau { 03.19.09 at 8:54 pm }

When I spoke to my friend’s kids this weekend I asked them what they thought of the iPhone as a game machine and their response was quick, “No buttons!!” I’ve been watching the 3.0 news and heard Apple is opening up the connector to interface with third party devices and I just have to wonder the obvious – will Apple allow a third party to make a clip-on device for an iPhone with buttons to transform it into a more traditional gaming platform? It seems to me, if this was possible, it could make a huge difference.

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