Post with 3 notes
Just yesterday I read how Glu plans to boost its global gaming network with the launch of gPartners. And today we have an annoucement from EA that they’re expanding their partners program to Chillingo and Playfish (acquistions in 2010 and 2009, respectively). And at the Game Developer’s Conference this week you had Nintendo President Satoru Iwata share his thoughts on the gaming industry’s problems - he criticized the huge development process for many console games, which has resulted in the loss of the finer details in game creation.
So, you’ve got everyone from OpenFeint, Adknowledge, TinyCo, Scoreloop and more developing alternative revenue streams, partnering with the likes of Microsoft, and raising significant rounds of investment from heavy players like Horowitz. Does this signal that as this market matures, established players cannot grow fast enough organically, so they’re looking to partners to help boost growth and innovation?
Possibly. But this may also have to do with many companies’ larger ambitions to create and establish their own independent (revenue) ecosystems to offset or perhaps even compete directly with Apple, Google 1, and Facebook. Skeptical?
You have reason to be skeptical to be sure. I have no idea how this will play out.
What I can say about established publishers - newspapers, TV, Film, console games, software developers - is that the digital distribution space has rattled traditional ARPU business models and companies have yet to figure out how they’re gonig to replace those traditional and lucrative revenue streams with ones that bring in pennies by comparison.
Companies from Apple to Amazon to Netflix have significant credit card registration bases from which to tap recurring revenue streams - the kind of golden goose that is the real money behind TV/Cable/Studio networks. So, when you consider how the market may move from mass fragmentation toward consolidation through the establishment of aggregated developer networks that could evolve into closed or at least “controlled” ecosystems by a fewer number of players, all these “partner” systems start to make sense - dollars and sense that is.