Will mobile TV kill the mobile games industry?

Last week’s mobile media (subscription only) made interesting reading. What really caught my eye was the reported slowdown of growth in the South Korean mobile games market – traditionally a poster child for the whole industry, due to its innovation and high revenues. As with Japan and console gaming, Korea is seen in the mobile world to be the market that acts as a global trendsetter.

The article suggests that the Korean market may even have shrunk by up to 40% over the past year – a huge decline in a country that has a special affinity for gaming. So why the change?

According major publishers Com2Us and Gamevil, it’s just a blip caused by me-too content and not enough marketing being done.

In my experience, when companies start blaming their marketing output it means there are much more serious problems at heart. The right marketing can make or break a single product, but a whole industry? After all, without core demand for a product or service there is no audience to market to. So if the market for mobile games is shrinking – even temporarily – it means that consumers are spending their time and money doing something else. And for something else, read watching mobile TV.

According to The Korea Times, mobile TV viewers subscribing to free content had topped 1 million within seven months of launch. And data released at last week’s Broadcast Asia show in Singapore had mobile TV capable handsets selling at more than 10,000 units a day. To put it another way, more Korean consumers are signing up to mobile TV faster than UK consumers are signing up to 3G.

Like it or not, mobile TV is looking more and more like the killer 3G app that people believed gaming was going to become. By its very nature, TV requires focus and dedication from the consumer – it’s a solitary experience on a mass scale. Console and PC gaming is facing the same challenges from digital TV, and has turned to online and community-based gaming to offer something different. Many people in the mobile games industry (most notably Trip Hawkins and Digital Chocolate) want to follow the same path. So it’s not rocket science to see that the time for watching mobile TV is being created at the expense of other forms of entertainment, especially gaming.

This all means that Korean publishers face the challenge of retaining consumer interest that’s being diverted by this new, sexier mobile technology. Innovation is one approach – Com2Us have recently launched a MMORPG for mobile that can support 1,000 simultaneous players, and is based on a monthly subscription. Other publishers have made use of the high performance 3D handsets which are common in Korea to deliver very high-end, premium games. But I really wonder whether these kinds of hardcore gaming experience can really compete with mobile TV in the eyes of consumers.

It may be that in Korea we are seeing the mobile games industry reaching its limit. Handset manufacturers, operators and content companies all see mobile TV as the new golden goose. I was struck by something that mobile consultant Jan Michael Hess said on his blog:

“When I was in Seoul in October 2005 with our Mobile Executive Tour we actually met an early adopter that had already bought his second TV phone and was an active participant in one of the DMB online user communities.  

It turns out that this guy likes mobile TV pretty much and actually spends less money for mobile music or games nowadays.”

To write this kind of experience off as the actions of an individual or not being representative of most people misses the point. Three years ago exactly the same things were said about mobile gaming by commentators who couldn’t see a use for a mobile phone beyond voice and texts. If the Korean mobile games market really is the weather vane for the rest of the industry, then some interesting times lie ahead.