What Platforms Should I Build For?

FYI – Re-posting this since my server had crashed and this was between a backup.
At a recent dinner with a number of friends from the mobile gaming industry, I validated that iPhone was the #1 platform in terms of revenue but what’s interesting is what the rest of the platform stack looks like in the US – in order of revenue rank:

1. iPhone
2. Blackberry
4. J2ME
5. Android

One of the game publishers said iPhone was doing 7X Blackberry which was their #2. Note, in the BB App World, apps are often listed upwards of $20. Also interesting to see Android at the bottom of the list but I fully expect that to climb especially as more Android based devices are launched later this year assuming we don’t have massive app store fragmentation on the platform. That being said, I also hear Android has the highest return rate, near 75% for some developers given how seamless the process is to return an application (clicking a button rather than having to make a phone call).

BREW is still a big money-maker and several X more than J2ME even though it’s basically a Verizon-only proposition – this story hasn’t changed from 01. The contrarian move would be to double-down on BREW given that so many developers are focused on the high-end. Also interesting is that S60 and Windows Mobile are not on the map but again, I fully expect that to change once the Ovi store is in full-force and the Windows Marketplace is up and running.

To Operator or to Not to Operator

At CTIA last week, I helped lead a session on “Making Money” at WIP JAM run by my friend, the mobile machine, Caroline Lewko. Anyways, a couple interesting notes came out of our discussion that I want to share – the question is whether I partner with an operator to distribute my application?

  Direct to Consumer Partner with Operator
Volume 100s of K Millions
Money Not guaranteed Guaranteed but painful rev-share
Time ~3 Months 6 to 18 months

This simple table actually represents quite a bit of learnings. The most controversial row is volume – app stores have definitely made it a lot easier to achieve millions of installs but most developers still get stuck in the 100s of K of installs.

Most interesting is with revenue, many of my friends at many of the large mobile game publishers are struggling with the iPhone and other “democratized” app stores. The problem is, with carriers, they have guaranteed revenue since they have guaranteed placement – with the app store, there is no guarantee, they could spend 3 months of dev time, money on licenses and not achieve an ROI. This high-risk distribution avenue doesn’t immediately suit well for the traditional “tight margin” mobile game publishers.

And as you would expect, working with operators takes a lot longer (and a lot more money) than most people imagine. Most of this is because of the painful requirement of having to port to all their phones – I fully expect this to change since there has been increased focus on the high-end.

One final note, sort of the VC pain, how many mobile companies do you know that make millions a year that do not require operator partnerships (very few) – that’s why I’m an industry fan of the lifestyle business.