What Googorola Means To Games

The acquisition of Motorola Mobility this week by Google, for $12.5 billion dollars, caught most observers by surprise. The primary reason is, ostensibly, the treasure trove of patents that Motorola possesses. Google's Android has come under fire, or rather manufacturers of smartphones and tablets using Android have come under fire, for patent infringement; Apple is attempting to get some nice settlement from Samsung over patent infringement, and is working to get injunctions against their sales. Microsoft has also been getting some payments from manufacturers for infringing on their patents. This sort of patent fighting goes on all the time in the high-tech business, and the only way to get around it is to have a pile of patents of your own. That way you can cut deals for mutual use of patents, and everyone avoids lawsuits.

Google will now have an array of patents that rivals its opponents, and thus should be able to defend itself and its Android partners from legal attacks. Google has so far maintained that just because Motorola has something like a 30% market share for Android devices, other Android partners shouldn't be concerned. Google plans to be hands-off with Motorola, and not give them favored status with Android releases or other special treatment.

Google may believe that right now, but the advantages of producing both hardware and software will ultimately prove too seductive to resist. Apple seems to be doing pretty well with that combination, and the weaknesses of Android have been in the integration of hardware and software... which Google should be able to solve now. Also, Google only makes about $6 per Android phone from the ad sales, since they charge no licensing fees. Apple makes hundreds of dollars in profits from the phones they sell; don't you think Google will want to get some of that action?

What does all this mean for games? Probably not much right away. In the long term Google may use its Motorola set-top box position (Motorola is one of the leading makers of boxes for cable services) to leverage Google TV into more households, and thus provide a big opening for games in the Android Market. I expect improvements in the Android Market, but that probably would have been happening anyway.

It'll be interesting to see if Motorola phones start getting special Android features before other hardware makers, but I wouldn't expect anything like that right away. Will we see other hardware makers back away from Android? Perhaps if somehow Microsoft can make Windows Phone 7 more attractive... but with Nokia in hand, other makers may be reticent about putting more effort into WP7.

The Motorola-Google deal probably won't affect gamers much in the near term. By 2012, we should see if Google can work Google TV into the standard set-top box; if they can, the impact on gamers could be huge.

Chrome Web Store Now With In-App Purchases

Coming soon to a desktop near you?

More news out of Google's I/O conference... the Chrome web store  (now featuring Angry Birds, BTW) has implemented in-app purchasing. The Chrome store is now available worldwide, too. Interestingly, in-app purchases are only charged a 5% fee by Google. Google also notes that in-app purchasing can be added to your app with one line of code. Impressively simple.

I'm going to stand out of the way now of game developers rushing to take advantage of these terms... hey, if you've got something that works in a browser, why wouldn't you try putting it into the Chrome store?

Adding to the appeal, Google is announcing some new Chrome laptops from Samsung and Acer, along with an interesting sales pitch: No money down, just get your Chrome laptop for $28 a month (if you're a business) or $20 a month (if you're a student). And these laptops come with Wi-Fi, and there's a 3G option, too. Interesting... I'm not sure if people will want to live in their browser all the time, or if this hardware will take off. But it's another reason to consider a browser-based version of your game, certainly. Oh, and you get Netflix and Hulu, too.

One more interesting thing: Google showed a desktop Chrome box from Samsung, too, called the Chromebox. No details... but lots of speculation. Set-top box? Competition for Google TV? Or just a way to do a Mac Mini at half the price?

AppDroid Apocalypse, Nowish

The face of destruction.

With Google's I/O conference coming up next week, it's a good time to look at what's happening to Google TV and Apple TV. According to this report, Google TV 2.0 will be coming with support for other chips than Intel, Android 3.0, and a full Android Market unleashed. What's that all mean? A lower price tag, since ARM-based chips are much cheaper than Intel's, an easier interface, and better graphics.

Which all means that Google TV may have a chance... if Google has been smart enough to cut some deals allowing content from major broadcasters to be shown through Google TV, unlike the first version. Sorry, Google, but if people can't watch the TV they want to watch through Google TV, don't expect the unit to take off.

Meanwhile, all is quiet on the Apple front... too quiet. Rumors have been bubbling up about the massive data center Apple has constructed in North Carolina, which apparently will be used in some fashion for iTunes. But it's probably connected to Apple's recent purchase of iCloud, and the streaming music service, and the deals Apple's been cutting with major music labels. I suspect even more than that... other rumors have Apple eying Netflix's business.

It all makes sense to me. Apple could certainly turn Apple TV into another huge growth center if they can put the pieces all together. Imagine streaming video deals where you could use the Netflix model, which has proven so popular Netflix now has more subscribers than Comcast. If you focus on streaming content, which you can do if you have a massive data center, then you don't need large local storage... a few GB in an Apple TV unit would suffice, thus keeping the costs of the unit way down. Streaming video, streaming audio, purchases kept in the cloud instead of stored locally... Now you put an A5 chip in the Apple TV, and suddenly the graphics power is now better than a Wii, and closing in on Xbox 360.

Flip the switch and allow the full App Store to be there on Apple TV. Now you're seeing a $99 box that outdoes a Wii for gaming power, easy use of an iPhone or an iPad as a controller (easily outdoing the planned Wii 2 controller-with-a-screen we're hearing about), and thousands... no, hundreds of thousands of apps available. Most of them for free or a few dollars... tens of thousands of games, and thousands of other types of apps, and more created every day.

Yeah, this is all coming soon to your family room, once Apple gets all the pieces in place. The media deals are the hardest part. The data center is ready, the hardware is ready. The gaming industry? Not ready. Nintendo, Microsoft, Sony... this is the next enemy you have to fight. Apple has hurt your handheld business, Nintendo, now they are aiming right for your jugular in the family room. Sure, Nintendo has their new console planned... but it will be hundreds of dollars, not $99. And I see no sign that Nintendo is going to embrace the new app business model that has propelled the smartphone business to amazing growth in the last few years.

Just to make it all worse, Apple is on a one-year hardware cycle, where the hardware gets a significant power boost every year. Think the new Apple TV that will be coming, with an A5 chip, is too wimpy? Wait a year for a newer $99 box. Another year or two after that and it will be more powerful than Nintendo's new console.

I still think Nintendo, Microsoft and Sony have some amazing assets in this fight, and a chance to continue to hold significant market share in the future. But unless they start embracing the future sooner rather than later, they are going to see their market share diminish between the onslaught of Google and Apple. The handheld business is just about a lost cause now, though Sony seems to be fighting an intelligent rearguard action with the NGP. Next up is the console business... and I can see that being upended the same way the phone business was upended in a few short years, by Apple.

Developers, get ready to rumble...

Google's Subscription Plan Plus

Google's new plan... no frills on the logo, at least.

It didn't take long for Google to respond to Apple's new subscription plan; one day, in fact. Google announced their One Pass system yesterday, and it looks like a direct shot at Apple's plan. Apple's been gathering some criticism for their plan for several reasons: Publishers don't like having to give up 30% of their subscription revenue, and they want all the customer data (Apple allows the customer to decide whether or not to give that data to the publisher). Streaming music services are complaining about the 30% cut because they don't have that much margin to give up; effectively Apple's plan means they can't offer their services. (Gee, I wonder if Apple's rumored new streaming music subscription plan might have something to do with this?)

Google now steps in with a streamlined plan that offers a very light footprint, both technically and financially. Google promises that it's easy to implement and doesn't weigh down your web site or application, while the financial cut is rumored to be only 10% instead of 30%. Plus, with Google's One Pass you can offer all sorts of payment plans:

"Publishers have control over how users can pay to access content and set their own prices. They can sell subscriptions of any length with auto-renewal, day passes (or other durations), individual articles or multiple-issue packages. Google One Pass also enables metered models, where a publisher can provide some content or a certain number of visits for free, but can charge frequent visitors or those interested in premium content based on the business model that the publisher prefers. It also allows publishers to grant access to existing subscribers through a coupon-based system — so it is easy to give full online access to current customers. Publishers can give their customers codes verifying their subscription status, or can seamlessly offer content to existing subscribers via solutions enabled by Google One Pass."

So the battle is joined. Android tablets and phones will have a competing option to Apple's. Better still, Google's One Pass works on web sites as well, offering a comprehensive solution. It's not clear if this takes in micropayments as PayPal's plan does; Google intends it to be used for subscriptions, but it's flexible enough to handle other types of content. Read more about it here. 

7 Smartphone Gaming Predictions For 2011

Smartphones 2011... Produced by Photoshop.

The tech industry basically shuts down between December 25th and January 2, and so the usual spate of news becomes a trickle. What's a blogger to do except make predictions? That's how I intend to fill things out this week, with a series of prognostications for 2011. If nothing else, this will set me up for a retrospective one year hence where I can laugh at the foolishness of my younger self. Until then, here's my take on what's going to happen in the Mobile Gaming Market in 2011.

• Smartphone games continue double-digit growth. Not a hard prediction to make, but let's go a little further: Smartphone games will pass handheld games sales numbers. There was about $1.6 billion in US sales for mobile games in 2010, and about $2.1 billion for handheld console games in 2010; with the trend lines smartphones can pass them up, if the 3DS and the PSP2 don't spawn massive software sales (which I don't think will happen). The battle is over, and smartphones have won. Handhelds just haven't figured out they're dead yet.
• Smartphone games become a bigger market than PC games at retail. PC games were about $2.1 billion in US sales in 2010, and that was down about 19% from 2009. I expect space at retail for PC games will shrink, not expand, so smartphone games have a good shot at passing them up. Not only that, smartphones will become a bigger market than PCs this year, worldwide. We're looking at over 500 million smartphones sold in 2011, if predictions are correct. Now that's a market worth being part of.
• Verizon adds iPhone. The rumors have reached a fever pitch, but I really start to believe when I hear from suppliers. Apple is now looking at selling around 20 million iPhones or more in 1Q, which looks like a truly astounding number for the entire year. Throw in some iPod Touches to that mix and Apple will likely more than double its iDevice installed base in one year. Whoosh.
• A new iPhone model arrives. Have I heard rumors? Nope, just educated guessing. Apple has generally introduced a new model every year or so. Sure, they'd love to slow down and bank more profits, but the fevered pace of the smartphone business means if you're only running, someone is sprinting past you. I think Apple has to keep pushing new phone tech out there in order to keep sales up. Probably this year will see less technical innovation than the iPhone 4. I expect a faster processor, maybe more memory for the money, and reduce the price on the older technology. Oh, and a redesign to fix the antenna problem (though that seems to have been mostly forgotten). The new iPhone model probably won't arrive until summer, just in time to push the old model price down and boost sales going into the last part of the year.
• Android outstrips Apple in units sold; Apple continues to make more money for developers. This will happen despite Apple vastly increasing its sales due to the addition of Verizon (see above). There are just more and more Android phones out there, and the competition will continue. Another release or two on the operating system will help. And I sure hope Google gets around to making in-app purchasing work, because that will be the best thing they can do for developers. But there's more than that going on: New chipsets will make smartphones even more affordable, with retail prices under $100 without a carrier subsidy. That's for a smartphone looking a lot like a Droid, and you'll be able to find them by next summer for around $75.... without a carrier subsidy. Oh, yeah, there will be a lot of those sold... and the buyers will be looking for apps.
• Blackberry and Nokia will continue to lose smartphone market share, only faster this year. These poor companies will continue to flounder around, denying that there's a problem. Their new widgets will fix the problem... and then they come out and no one cares. The Blackberry Playbook? Will anyone even remember the name by next summer? Nokia will continue to try to get their online store moving, but will seem to forget that it won't matter unless they can sell a lot of hardware. Meanwhile developers will keep busy with their iOS and Android projects, and only if they have time on their hands worry about other markets. Which they won't.  Meanwhile, we see Windows Phone 7 and Palm making inroads in the market; they will likely eat up share from Nokia and Blackberry.
• Data plans get cheaper. Virgin's offering a $25/month plan off contract. T-mobile has $10 a month plan. AT&T has a $15 a month plan. As the networks get built out, and carriers compete, prices will continue to drop. Tablets will only accelerate this. Cheaper data plans will be good for apps, and good for developers.

2011 looks to be a huge year if you're an app developers. But the extreme growth will probably mean little attention being paid to details like helping developers market their apps. It will be even harder to find apps in 2011, not easier, and marketing will be even more important.

Tablet Wars 2011

It's gonna get ugly for the hardware manufacturers. It'll be a bonanza for software developers. The tablet boom is coming to 2011.

Some analysts are estimating up to 75 million tablets will be sold in 2011, and Apple may sell half of those. Let's look at each segment of the market.

Apple: Expect a new iPad 2 this year, probably announced by April. Rumors suggest a higher resolution screen, thinner and lighter, and including front and rear cameras. My guess is that Apple will reduce the price of current iPads to make room for this new model, and boost sales even further (while fighting against the massive competition heading their way). I still expect Apple to cut some kind of deal with textbook publishers; the market possibility is huge (student signs up for classes, downloads all textbooks into his iPad... goodbye heavy backpack!). The gaming possibilities will expand as AirPlay allows iPad games to be viewed on an Apple TV-connected TV screen... with iPhones as controllers... we're gonna see some amazing games, especially if the new iPads have even faster processing than the current ones.

Android: The number of Android tablets heading to market is huge; we'll see a slew of them at CES soon. The big deal, though, will be the release of a version of Android crafted with tablets in mind. Google hasn't made any official announcements on this point, but there's plenty of speculation. Some point to the Chrome OS as Google's  reason for holding off on Android for tablets, being afraid that Android make make Chrome OS dead on arrival. I think Google will ultimately go with whatever sells, and right now the demand all seems to be lining up for Android. In any case, Google has to sort out the situation before Android tablets really take off. Even so, there is a wave of Android tablets headed to market soon.

Microsoft: Don't count them out of the tablet race. CES will see the introduction of a new variant of Windows designed for ARM processors as Microsoft aims to grab a slice of this fast-growing market. Still, they've failed miserably in the past to make Windows-based tablets sell; adapting Windows toa finger-based interface has been awkward and slow at best. Can Microsoft reinvent itself sufficiently to succeed? Certainly they've managed to do so with Windows Phone 7, so maybe they can pull it off after all. I think they have a very tough race ahead of them, though.

HP: Here's the real dark horse, with their PalmOS slated to become the basis for a new line of tablets. Certainly HP has the size and manufacturing capability to handle this task; can they be innovative enough? No announcements so far, but the rumors are pointing to a product introduction or several in 2011.

Developers will have multiple targets for tablet products. Gaming will be a major part of all of these platforms, if not the biggest part. It's going to be a wild year.

Ad Solutions For Rest Of Us

If you're looking to promote a book or a game in an inexpensive way, you've probably looked at Google's Adwords program. This is how you buy a listing next to search results, and it's been the source of 95% of Google's revenues. Because it works for advertisers, and they get to control their spending very precisely and see just how much they are making from their advertising. (As opposed to magazine ads, where you generally have only a vague idea of how effective they are, if any idea at all.)

Now there's Facebook Ads, which (not surprisingly) are somewhat similar to Adwords. You get to control how much you spend, and you can pay for clicks or just for viewing. You can send people to your Facebook page or to your web site. With Facebook's enormous audience, this could be worth a lot of business. Especially if you've been building up your social marketing by working a Facebook page and Twitter.

There are some examples to look at on the Facebook Ads site, but here's an article (a hat tip to George MacDonald) that presents some case studies of Facebook Ads usage, showing the range of what's possible. Just as with Adwords, you're limited in the amount of space and words available, but not as limited (Facebook gives you 25 title characters and 135 body text characters).

The best part about both of these programs is that you are in total control of how much you spend, and you get all the information you need to analyze your spending. It should be pretty easy to look at how much you spend, and how much revenue you bring in, and then decide whether or not to expand your ad buy or to stop spending.

Yes, you'll need to work on how you can make these ads as effective as possible... the right wording is crucial. Also, where you bring the customers and how you close the sale is important. The cool thing is you can tweak these variables and see the results, good or bad, almost immediately. There's nothing like feedback to make corrections!

(If you're looking for advice on Google Adwords, there are roughly a bajillion guides to using them out there... at some point I'll post some of my favorites. But there's plenty of advice for those interested in getting the most out of this tool.)

I see these as one of the key marketing tools for the small business marketer -- the author trying to sell an e-book, the developer trying to sell an app, a designer trying to sell an RPG. Once you've got your web site and your products ready to sell, this is how you get that first wave of customers beyond your closest friends. Without spending a zillion dollars on marketing.

Android Sales Rising, Android App Revenue Lagging

Google's Android continues its growth, as Google announced as part of their 3rd quarter earnings roundup (which was terrific, of course). The Android Market is now over 100,000 apps (about 30,000 of them are games), and apparently activations continue at about 200,000 every day, which pencils out to around 6 million new units a month. Whoosh. Google's mobile search and services drags in about $1 billion a year for the company, which will no doubt continue to grow.

We'll see the introduction of Android 3.0 this year, and probably more new versions next year. I'd bet on a tablet version next year some time, too. Google plans to a launch a streaming music service with Android 3.0 this year, according to reports. That should give it a boost, though rumors say Apple will be doing something similar at some point (they did acquire a streaming music company earlier this year).

The Android operating system overtook iOS in the second quarter in terms of global market share, 17.2% to Apple's 14.2%. Of course, they were both beaten by Blackberry and Nokia took first place for smartphones. But that was before Apple's iPhone 4 hit, and that has been a smash hit that bids to rewrite those percentages for the next report.

With all this, are developers making a lot of money off of Android apps? Well... not so much. This New York Times article lays out some of the problems. Sales are anemic compared to iOS app sales, in part because it's a lot easier to buy an iOS app; one click in the iTunes store and you're done. Google doesn't want to use anything but Google Checkout, and so most people have to enter in a credit card number and it is no longer simple. Also, there's no in-app purchase mechanism (which has been a huge boon for iOS developers), though Google has said they plan to implement that at some point.  Finally, many Android developers just depend on ad revenue, figuring that Google tends to attract people who don't plan to pay for things (since Google offers so many free applications and services).

Another big issue is the fragmentation among Android devices. There's a huge variance in the hardware and in the versions of Android, so developers have to spend a lot more time, effort and money testing their app on different devices. Yes, you have to check out your app on an iPod Touch, various flavors of iPhone and iOS, and iPad, but that's still far less of an issue than all the different versions of Android and the hardware it runs on. It almost reminds you of the bad old days of trying to create games for phones, with hundreds of handsets to consider. (At least, you don't have to worry about the telco getting in the way, or any problem putting your app on sale.)

I think we'll see more Android apps, especially from iPhone app developers looking to extend their success. Porting an app is going to be easier than starting from scratch, and many of your marketing efforts will help sales on both platforms. But it's a different market, and it still lacks some of the refinements of the iOS market. Those little touches can make a big difference in sales, and therefore a big difference to developers (especially small ones).

Marketers need to understand the differences between the two markets, and study them, before launching marketing efforts. Or even before finalizing app design; your revenue plans may need to force differences in the design. I wish it was all simple, but of course it's not.

Facebook Rats You Out

Yeah, Facebook Places, I'm talking about you. Some people seem to think it's a great idea. Personally, I think it's ruined by Facebook's usual sleazy implementation. They automatically set everybody up to be telegraphing their location, and worse yet, if your friends tag you someplace, that location will get broadcast too even if you have opted out of Places for yourself. You have to visit two widely separated spots in their settings to put the kibosh on this.

Of course, I understand why Facebook did things this way: if they have zillions of people signed up it's an attractive audience for selling to advertisers and marketers. So Facebook signed everybody up without their consent, and made it difficult to figure out what you're signed up for and how to turn it off. You know, if Facebook had never done things this way before I might cut them some slack. But this is how they've done things time and again; they usually take the method that promises to bring in the most revenue at the expense of their customers.

No wonder Google is trying to go after Facebook. They sense a market opportunity here. I hope Google does something that takes better care of privacy by default.

Google Invests in ngmoco

In case you needed more evidence that Google is interested in games, there's the news that Google Ventures just invested some $3 million to $5 million in ngmoco, the mobile game startup that has to this point only done iPhone games. Hmm,could we be seeing some Android games from ngmoco soon?

It is a source of some wonderment to me that we don't see more iPhone games ported to Android. If you've got a reasonable success on one platform, it seems like a no-brainer to find a programmer and port that sucker on over. Though I understand that programmers for iPhone or Android are in demand these days, so maybe the issue is finding one. Still, the more your games sell, the more money you have to throw at the problem.

While ngmoco might lose some of its mojo with Apple (being featured at press conferences and the like), I'd think supporting Android would more than compensate for slightly reduced PR. Marketing to multiple platforms is more efficient, too.

I betcha Google is looking for more ways to boost gaming on Android... who's next?

Google Games?

Here's an interesting bit of news: According to TechCrunch, Google has invested $100 million into Zynga, with the intent of making it the cornerstone of their upcoming Google Games. Zynga has been racing along, with a rumored $350 million in revenue last year, half of which was operating profit (!). Now, you might ask why Google is getting into games? A number of reasons spring to mind. Social games, for one thing, are an amazingly fast-growing market segment with intense profitability. So are mobile games. And what company would Google be trying to outmaneuver in the social networking space? Facebook, of course, and they and Zynga aren't getting along all that well right now.

Add in the upcoming Google TV revolution that could steal serious market share from console games, and you can see the outlines of a strategy here. (Plus it helps block Apple's march to world domination along the same path.) Talk about your battle of the titans... this is going to be an interesting scrum, as heavyweights like EA join the fun with Facebook, Apple, and Google.

One winner I can predict for sure: Consumers are going to have more gaming choices, and probably at lower prices, than ever before. I think gaming is going to be an ever larger share of overall leisure time, taking a bite out of TV watching for one thing. We'll have to see how this strategy unfolds, and particularly how the various players intend to make money. Will social gaming continue to have legs? Sure looks like it at this point...