Wireless Games The Next Internet Goldmine

Whether or not wireless games will be the killer application of tomorrow, as Datamonitor puts it, it will be the next Internet goldmine for entrepreneurs.

Results from other research companies seem to corroborate the theory.

Frost & Sullivan has stated that the global mobile game industry, which generated US$436.4 million in revenues last year, will balloon to US$9.34 billion by 2008. Ovum has mentioned that the global mobile game industry will be worth US$4.4 billion by 2006.

Although more modest, In-Stat/MDR has also said that revenues generated from the wireless gaming industry will be in the billions, reaching US$2.8 billion by 2006.

Where Is The Goldmine?

As Allen H. Kupetz, director of sales & international business development of MeshNetworks Inc. (US), sees it, Asia is going to be a much bigger market for wireless games than Europe or the US. He estimates that by 2004, Asia could well contribute 50 percent to MeshNetworks’ worldwide revenues.

Datamonitor has estimated that by 2005, about 200 million people in the US and Europe will be playing mobile games. Asia will surpass that. Kupetz explains that not only Asia has two-thirds of the world’s population. But the continent has already surpassed the West in mobile Internet usage.

According to Pyramid Research, Japan alone has almost 50 million mobile Internet subscribers. To put it in a better perspective, in Kupetz’s article “4G Wireless in Korea”, he mentioned that Tokyo-based high-tech consultancy Eurotechnology said that Japan has 81 percent of the world’s mobile Internet customers.

The same article stated that South Korea, home to the first commercial CDMA network, has 18.5 million wireless Internet users at the end of March 2001.

While Japan and Korea are early adopters of wireless Internet usage, others in Asia will not be too far behind.

Pyramid Research has predicted that by 2002, there will be 410 million mobile phone subscribers in Asia. China currently has about 170 million mobile phone subscribers. By 2007, it will have more than 500 million mobile subscribers and they will be using the devices not just for voice but data as well.

In Singapore, one in three Singaporeans owns a mobile phone. Datamonitor has predicted that revenues from games played on mobile phones, PDAs and other wireless devices in Singapore, the smallest market in Asia in terms of population size, will surpass the US$100 million mark by 2006 from US$3 million in 2001.

Analysts may say that mobile phones are not ideal for games because of the limited screen size and graphics. But Asian gamers will beg to differ.

Generally, Asians, especially those in their teens and twenties, spend a lot of their time on their mobile phone sending and receiving data rather than making and receiving voice calls.

Kupetz says: “Instead of just standing in a subway car in Tokyo for instance, the commuter would rather be playing games on their mobile phones, or listen to music, etc.”

Challenges in Asia
Despite the opportunities, Asia is a highly fragmented. Each country has its own culture, language and regulations.

Kupetz draws an example: “In Japan, only low-power devices in the 2.4 GHz band are allowed. This arbitrary rule increases the cost to deploy networks. The increase in costs are then passed to the consumers and this limits the growth of the wireless gaming business.”

Disparity in disposable income between countries can also pose as a barrier.

“While someone in Japan might be willing and able to pay US$150/month for voice, video and data services, this would be beyond the average Filipinos’ means,” says Kupetz.

To overcome these challenges, Kupetz suggests partnering with strong, local companies that know their internal markets and share the vision of making broadband wireless affordable to everyone.

3G Vs 4G
While gamers are eagerly anticipating the arrival of 3G in Asia as telcos are in the throes of putting everything in place and calculating how to recoup their billion-dollar investments, 4G is not far away.

However, a standard definition of 4G has yet to be established. Some believe that it would encompass speeds of up to 20-40 Megabits per second (Mbps). But others have been reluctant to commit to that.

“No one is getting 20-40 Mbps at home or at work so why would one expect that from a mobile system, which is always handicapped vis-a-vis a fixed network. 4G, to me, means “towerless wireless,” which comes from an ad hoc peer-to-peer architecture. The goal of 4G is to replicate the fixed Internet experience with the mobile Internet experience and it should be a cheaper and better alternative to 3G,” says Kupetz.

According to Kupetz, it would cost a company up to 90 percent less to deploy a 4G network, one example being MeshNetworks’ Mesh-enabled architecture (MEA), as opposed to a 3G network. And MEA will provide speed to the user at up to 6 Mbps.

As Japan is by far the most advanced market in terms of technology adoption and the biggest market for wireless gaming in Asia, where it has more than two million people playing games on their mobile phones, it will be among the first in Asia to implement MeshNetworks’ MEA suite of products.

Korea and Singapore will likely be implementing the MeshLAN before MEA, a wireless network based on 802.11b standards. All these installations will likely take place over the next six months.

You can catch Kupetz at the 802.11 Planet Conference, held at the Pan Pacific Singapore on October 3, 2002, where he will be presenting ‘A Nightclub in Your Pocket: The Future of Mobile Gaming and Entertainment’.

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