Game Publishers Concerned About Outsourced Carrier Portals


Pocketgamer has checked up with some mobile game companies as to their vision for 2008, and aside from the happy predictions of growth there’s some trepidation over the trend of carriers outsourcing the running of their game portals. Vivendi (EPA: VIV) Games Mobile’s Paul Maglione said: “For Europe, it’s more of a mixed picture, with some carriers doing great and really growing the business by 20 percent, 30 percent and more last year, whereas others are losing focus and, worse, outsourcing the editorial function to outside suppliers, thus reducing revenue available to share with publishers.” Christopher Kassulke, of HandyGames, is also said: “Operators are outsourcing their games business to distributors or other third parties. The biggest problem will be that the revenue shares of mobile game publishers are going down (because of the outsourcing). The industry cannot work under such conditions. That’s why some of the publishers


D Kainer

JT's point regarding the carriers keeping too much is where the crux of the issue lies. When the carrier itself is taking the time and effort to manage their games deck and portal, then having them take 50% of the revenue is justifiable (though probably still excessive). However what we are seeing is that a carrier will outsource that role to a 3rd party yet still carve off 50% of the revenue. The end result is the the publishers DO get less revenue – 50% less. Even if the download numbers are increased by 20% or 30% through ultra clever management of the portal this still does not compensate for the halving of the revenue share.

The solution to this is obvious – any carrier outsourcing it's portal needs to reduce it's revenue share significantly. Afterall, it has purely become an ISP at that point.

JT Klepp

Seriously, these comments are somewhat naive. Saying that Publishers will get less revenue is in most cases flat out wrong. Having a professional company managing the business vs (very often) a twenty something games manager who's claim to fame is often that he/she spent a lot of time in front of console games is not necessarily bad. Furthermore, even though professional managers at carriers are often brilliant, more often the carrier's own technical infrastructure is so rigid they cannot manage the portal with the flexibility needed to increase sales, which service providers often have.

Publishers need to realize it is better to have a smaller slice of a much bigger pie, than a bigger slice of a smaller pie. Most publishers do though, but the point they are making – Carriers keep to much – is certainly valid. And this is only getting worse, as more carriers are expecting publishers and service providers to pitch in ad dollars – often without offering higher rev shares.

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