05 December 2008

Electronic Arts and Gameloft
Say Mobile Gaming Market Doing Well

Leading mobile games publishers Electronic Arts (EA) and Gameloft have said that the mobile gaming industry will ride-out the current economic downturn that has led to a decline in handset sales, reports Reuters.

Their comments came in response to an earlier announcement this week by rival mobile gaming company, Glu Mobile, which said it is to cut jobs and operating expenses across its global organisation.

"Concerning the iPhone, mobiles etc, we are not worried, it's all going well," a Gameloft spokeswoman told Reuters when asked about fourth-quarter demand.

Meanwhile, Barry Cottle, head of EA's mobile business, noted that "mobile games are actually thriving right now" due to the increasing adoption of smartphones, which have offset the overall fall in handset sales. The emergence of new high-end handsets, and new platforms such as Apple's iPhone, Google's Android and Nokia's N-Gage are seen as a huge opportunity for the mobile gaming industry.

Glu Mobile had earlier said it would reduce operating expenses by approximately US$13 million, or 19 percent, from its second-quarter 2008 levels and is aiming for total non-GAAP operating expenses in 2009 of around US$57 million.

"These decisions are difficult but necessary given the increasing economic headwinds facing our industry and the softening in consumer spending," said CEO Greg Ballard, who has also agreed to a 25 percent cut in his own salary.

He noted, however, that Glu would continue to invest in key growth opportunities, especially those concerning high-end handsets and new platforms such as Nokia's N-Gage, Google's Android and Apple's iPhone to boost the market next year as they make it easier for consumers to find and buy games. Glu Mobile said in its statement it would continue its efforts to develop games for the three platforms despite cost cuts elsewhere.

Nokia launched its N-Gage platform earlier this year, but it is only now starting to gain traction as the company has started to ship new smartphone models with a pre-installed gaming service. "We like N-Gage. We're bullish on it," Cottle said. "As it gets incorporated the addressable market continues to grow." "We really believe the N-Gage experience is the right one -- we are going to see mass market adoption," he said.

EA said it has built several games for Google's Android, but so far sells them through third parties. "As soon as they have a billing system in place we'll launch even more games," Cottle said.