So what is keeping this from happening? Hubris for one. Every Value Added Services executive in the industry thinks they know best. And they will keep thinking this as ARPU declines quarter over quarter while the sub-category of smartphones and data ready phones actually posts better year on year sales numbers then the rest of the cell phone market. Do I have the perfect answer? No. But would I localize industry best practices on value added services and give it a shot. Absolutely. Unfortunately a portal based and game download approach is the most you will find. “Come to us” the SP’s seem to be saying. While they should be figuring out ways to go to the customer virally.

Cost is an issue. Not the cost of the network which would be a deal breaker if you tried this as a model for PC gamers to log onto your server farm. The SP’s have the network. But the cost to the end user. Data is getting cheaper but is still not cheap enough. Someone addicted will spend five hundred to a thousand hours online a year on the mobile web. A typical user maybe a hundred to a hundred fifty hours. Someone needs to figure out a way to bring the cost down. Either by providing it nearly at cost and using an advertising model to supplement income or by using a casual gaming model in which you log in a few times a day for five to fifteen minutes and do what you gotta do. Casual gaming giants like Zynga and Playfish use this approach successfully in franchises like Farmville, Mafia wars etc. Mobile gaming will not bring someone on for hours at a time. It’s just not hardwired that way from an experience perspective. And won’t be till everyone has an Apple internet tablet. My opinion has always been that you need at least ten inches of screen to spend a lot of time plugged in. What can work is level based play. You download a level and when you finish it you must login to download the next level free. Or you can only defeat the boss monster while logged in.

Do not worry about the graphics. Ask any gamer and they will tell you they will take game play over looks any day. Game play needs to have a social element that keeps players hooked. Either by using player created content or by creating a competitive ladder. Location based gaming is definitely something that plays to the SP networks’ strength.

Here is what I recommend:

1. Create a startup for this gaming initiative within a service provider whose head is at most two levels below the CEO. This is important as this will need to cut across billing, Values Added Services, Strategy, Finance and IT. And these are silos which require on boarding. Not getting this collaboration is often the reason why Managed Services fail but that’s a story for another day.

2. Use an alliance model to bring the right partner or franchisee on board. Make sure they will allow you to localize content or do not bother with them. Have you heard of gbanga? I thought not. Lots of options out there. Half of them probably in Korea that leads mobile and broadband innovation in entertainment.

3. Make it simple. Game play, logging in should be simple and quick. If you need someone to register you have lost them.

4. Be bold. Do not be afraid to look at the massive potential of this market and the talent available. License the Exit Games platform and use local gaming development and talent to create something yourself if needed. I know five people who can do this in a room.

A road as virgin is bound to be riddled with adversity. But a fight for survival demands that Service Provider’s wake up and be bold. The cycle that follows telecom de-regulation is fairly predictable. New players emerge with a go-to market based around coverage. Once teledensity plateaus a bloody price war emerges. Value Added Services are deemed a savior and almost inevitably fail to deliver on the massive expectation placed upon them. Providers get acquired or go bankrupt. There are two or three left standing who try to rebuild in a market they themselves have spoiled on price and margins. My fear is that the networks will look at 3G as the ARPU savior while the answer is reinventing 2.5G.

Buck the trend. Go gaming.

- Habib “Noori Nath” Khan

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But it is not going to happen when men are making the games for women. The empathy, the secret sauce of greatness…. It just won’t happen. And this is now a pressing concern. Women gamers are coming out in greater numbers then ever before as the casual game market led by the iPhone and facebook applications explodes. Yet more women are not making the games that women want to play. This is not a normal evolution of things in my opinion. All hardcore gamers end up becoming loosely affiliated or actively governed by a sort of tribal community mechanism either via gaming forums dynamics or the institution that is a gamers guild. These are male dominated entities and act as a deterrent to the recruitment of women. Initiatives like Women In Games International http://www.womeningamesinternational.org/ and G.I.R.L Gamers In Real Life that seek to place women in game development positions are welcome initiatives but without the ability to scale to critical mass.

What is needed is for the Video Gaming industry and groups that formally represent it to embrace this as a key initiative and enforce it via collaboration of relevant academic institutes so that the percentage of women making games increases dramatically. Gaming studios can chip in by making sure female characters in games are not overly curvaceous scantily clad women who talk with bedroom eyes and husky voices. Making them believable and full of character will get women wanting to play them. In the long term studios need to make sure that the narrative that unfolds in a game - whether it be an RTS, FPS or and RPG - makes an emotional connection with female who may want to play a game. I have always thought of the best video games as movies in which we ourselves star. The games industry could take some lessons from Hollywood in creating empathy with a female audience.

At stake are hundreds of millions of dollars in potential revenue that are already being leaked to the emerging causal games juggernaut. This is not an academic argument. - Habib “Noori Nath” Khan

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1. Could you tell us a bit about 5th Cell Media and how it all started? 5TH Cell Media is an independent game developer. We started out in mobile games and have since moved on to developing on the Nintendo DS. The company was founded in 2003 in a modernised variation on the “garage” startup cliche. I was studying an MBA at the time, and was playing the beta of Shadowbane (Asia) in my spare time. As I already had one successful business under my belt, I found the MBA easy going so had plenty of time spare to put into playing and testing Shadowbane. I gained quite a profile in the game’s community, and the publisher noticed me too as I submitted roughly 25% of all bugs in the Asia-Pacific beta, which was more than the next 3 or 4 most prolific testers combined.I had an interest in getting into the gaming industry, so I put my resume in with the publisher. Really I didn’t expect anything to come of it since they were based in Hong Kong and I was in Australia and had no intention of relocating. As a successful entrepreneur and manager, its not like I was going to take an entry level QA job either. But thanks to the community manager at the publisher having gotten to know me and my skill set, when he moved on from there he approached me about partnering up with himself and some of his past associates to form 5TH Cell. My QA and commercial skills perfectly filled a hole in the management team he had been working on putting together.

The business operated virtually, with the management team spread around the globe - engaging contractors who were equally dispersed. It was more than 6 months after formation before I met my business partners face to face for the first time. With some blood, sweat and tears and a tiny trickle of capital we eventually managed to professionalise our operations and over time bring together most of the management team and operations to one office location. To this day however I still operate from Australia and we still engage some international contractors - even though the bulk of the management team and operations are now located in Seattle USA.

2. Could you tell us a bit about your DS title and its reception at E3? Where did you get the inspiration for such an amazing concept? Drawn to Life received less coverage than we would have liked at E3. The feedback its been getting generally has been positive, interestingly several reviewers have commented that they didn’t think we took the user created content angle far enough - which is amusing to us given how far ahead of anything else on the DS it is in this regard.

3. Could you tell us a bit about the mobile gaming market and your work in that area? Our experience in the market was not great. Our core competence as a company is making great original games, and we found this to be a complete mis-match with the way mobile games are marketed and distributed. Principally, brand names and IP are massive draw cards for people buying off a deck where the name of the game is the only information they have. And for low value purchases, people typically aren’t interested in doing research to ensure they are getting best possible value.

4. Pakistan will have over 50 million cell phone users soon. Do you think such subscribers in emerging markets with low Average Revenue Per User can be turned into a valid profit center by Service Providers using games? What role can companies like 5thcell Media play? I don’t see any reason why service providers cannot capitalise on this opportunity. As far as I can see there is no role for a company like 5TH Cell Media however. If the situation in the fully developed world is anything to go by, mobile games become licensed commodities and not outlets for creative operations - other than as a potential proving ground to build credibility and experience for an indepentent developer. We found that we made just as much money in developing markets as we did in established western markets with the games we did put to market. Low ARPU is nothing to lose sleep over when the volume of users is large enough. But in terms of game production, the key with mobile games lies in efficiency for porting operations and related logistics rather than creative flare. As a creative company we found this a drag.

5. How are development cycles different for handhelds and mobile phones? They are less different than you would think in terms of duration. While mobile is a 3 month theoretical development time, in practice with QA and porting and language certification it can end up taking the better part of a year from the first line of code until deployment. On DS the raw development time is much longer than 3 months (anywhere from 6 to 12), but because there is no porting, and certification processes are more mature and streamlined (you are working with an experienced publisher and a single vendor) all the incidental stuff is much faster. You can go from first line of code to deployment in just over a year, maybe under for a simple game that doesn’t do anything ground breaking or new. Obviously DS dev teams are larger also, but if you include the resources required to port for mobile - the teams aren’t that different in scale at the end of the day either.

6. Any chance to branch out to the nex gen consoles? Yes. We are interested in and exploring opportunities on next gen. Wii is the most compelling to us as we’re more interested in gameplay and fun factor than flash and sparkle. It is also more accessible in terms of budget. The fact that it is proving to be so massively successful as a platform in the market is icing on the cake.

7. Why on earth would you want to do this line of work? What keeps you going? I like games and I’m a perfectionist. The nature of my role allows me to work almost as a recluse (which I prefer), work in a field which I enjoy, and apply my skills to it. Like any job the work can be draining and frustrating, but the general backdrop of gaming provides more opportunities for enjoyment along the way I believe. 8. Did E3 really suck this year? Didn’t go, haven’t been for several years in fact. Not really convenient for me to get to the other side of the planet with a young family. This year we didn’t send anyone else either as we were all crunching like crazy to our final deadlines on Drawn to Life, so don’t really know much about how the new E3 went.

Habib “Noori Nath” Khan

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