Outsourcing Games Portals Good For Publishers: Player X

A couple of days ago we noted comments by mobile games publishers worried about the effects of carriers outsourcing the running of their games portals. Tony Pearce, CEO of Player X (which has signed a couple of these outsourcing deals), sent in a response defending the deals. “It depends on the carrier and publisher. Generally, Tier 1 publishers keep the same revenue share. Player X provides services to the carrier (e.g. portal management, QA) which then passes on this cost to the publisher. This is a one-off flat fee that does not eat into the publishers’ revenue share, and hence the developers’ share,” wrote Pearce. “With Tier 2 publishers, Player X receives a revenue share that is similar to what they would have paid to go through an aggregator. Such publishers get value by having a route to market which would have otherwise been blocked altogether. Yes, they make less than having a direct deal with a carrier but the cost involved in having a sales team in place would be more than the revenue share paid to us – therefore good value to them and to the developers they work with.” As such, Pearce claims that “by Player X working this way with carriers, publishers are making more money this way then when the carrier had control of the portal. This can only be good news for the developer”.

If the companies which take the job of running the portal add value it makes sense it would be good for the industry and therefore a good thing to do — but the carriers passing on the cost to publishers is a bit disingenuous. If the carriers are passing off the job of running the portal they should also pass off some of the revenue. These deals may improve the mobile games portal and therefore be better for the mobile games industry, and it would improve even more if developers had a bit of leeway to make better games and take more risks with new IP, and that requires a higher share of the final revenue…

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