next gen platforms: mirage or paradise?

greg ballardpresident & ceo

source: comScore m:metrics, january 2009

downloaded mobile game by platform: audience three-month average ending nov. ‘07 vs. nov. ‘08

u.s. mobile phone users (000s)

nov. ‘07 nov. ‘08 y-o-y growth

smartphones

non-smartphones

total

734

6,486

7,220

2,869

5,593

8,463

291%

-14%

17%

smartphones drive mobile games adoption

emerging battlefield of mobile content

oem’s carriers

digital media companies

Top US Games Publishers

Carrier Business(April 2009, Nielsen Mobile)

EA, 27.3%

Gameloft, 12.9%

Glu, 12.9%

Namco, 7.0%

Hands-On, 5.4%

Sony, 3.8%

Capcom, 3.2%

Digital Chocolate,

2.7%

Other, 24.8%

5glu mobile - company confidential

5

App Store Market Share – Q209

Quality Has Been Tied to Quantity

0500100015002000250030003500400045005000

MobilePhones

1,500

100 200

1,092 *

30,000

Source: WGR’S Wireless Content Tracking Service

What We Learned

• To succeed, the mobile platform requires:

1. Quality2. Merchandising3. Sales data4. Predictable business environment5. Breakthrough titles

Page 8

current challenges to next gen platforms

apple and others addressed key issues of carrier business; now have newer issues to resolve.

onslaught of titles may overwhelm consumer choice and provide a bad experience

• more is not always better• larger publishers need to make money to justify further

investment• advanced quality (big file size, graphic rich games) may ebb

pricing pressures keep prices lower than required to make money

• average price of 99 cents for top 10 title too low• top games algorithm only encourages lower prices

hardware/app store providers need to focus on publisher’s ecosystem