There is one bright spot in the flailing video game industry, and Hollywood already has started taking notice.
Last year, while video game sales were down 11 per cent, US mobile game publishers took in about $US539 million in sales - up 9.3 per cent, according to research firm SNL Kagan.
Even more impressive, annual customer spending is likely in the $US1.3 billion to $US1.5 billion range, according to Kagan analyst John Fletcher. Game publishers typically get 30 per cent to 50 per cent of the dollars.
And the income is likely to continue to rise as publishers charge higher prices for more intricate games designed for the iPhone, Blackberry and Android crowd.
In fact, the typical iPhone user is about 70 per cent more likely to use it for gaming than other mobile phone users. "The iPhone has really changed the landscape," Fletcher told TheWrap.
Meanwhile, more than 30 movie-based mobile game titles have already been produced over the past three years. (See accompanying story, "8 Movie Games for Your Phone.")
Most recently, Disney released a mobile game for Alice in Wonderland, 10 days before the Tim Burton film's debut last weekend. Coming up on March 23 is How to Train Your Dragon, based on the DreamWorks Animation film that opens in theatres three days later. And in July, Universal's Steve Carell-starring "Despicable Me" will be accompanied by a mobile game.
At this point, studios are still trying to walk the fine line between pushing enough titles to help market their films - but not so many that such an investment is for either a paid application that draws little revenue or a free application that provides little marketing punch.
"The filmmakers want as much product around the film as possible," said Stephen Saiz, director, marketing for Disney Interactive Studios. "For us, it's always going to be about making sure we're not crowding the marketplace with titles."
Indeed, as of Tuesday, Fast & Furious was number 18 on iTunes' Top 100 paid apps, and three film games - Transformers, Alice and Fast & Furious: Test Drive - made the Top 100 free list.
A mobile version of James Cameron's Avatar was released December 14, four days before the record-setting film was released in cinemas - but its pricetag certainly has eaten into sales. At $US6.99 it's more expensive than all but five of the Top 100 selling paid apps.
But, Fletcher points out, "It's still in the early stages of the market."
Nowhere is the juxtaposition between the mobile and console market clearer than it is with Electronic Arts, whose mobile titles include Harry Potter and the Half-Blood Prince, GI Joe and Kung Fu Panda.
For the month of December, EA published seven of the top 11 games for the iPhone and created at least half of the top 10 titles on Verizon, AT&T, Sprint and T-Mobile, EA Chief Financial Officer Eric Brown said on a conference call with analysts last month.
As a result, EA'S mobile division, the largest U.S. mobile-game publisher with about 20 percent of the market, boosted sales for the quarter ended Dec. 31 by 14 percent from a year earlier. By comparison, the parent company's sales plunged 25 percent, leading EA Chief Executive Officer John Riccitiello to call 2009 "a frustrating and challenging experience for us" in terms of overall game sales.
Of course, the main reason mobile games remain just a fraction of the total games market is because so many titles are cheap – if not free.
While Disney's Alice cost $US5, there was a free "Lite" version. Fast and Furious was only 99 US cents, as was the recent GI Joe. The popular Top Gun game was $US1.99, and Harry Potter and the Half-Blood Prince was free.
Hence, at least for now, the studios still see games-for-phones as more of a marketing tool than revenue generator.
But that likely will change. It's estimated that 240 million North Americans will use smartphones in 2013 - up from about 60 million in 2008, according to a report last year by digital research firm Parks Associates.
Also likely to change: the quality of the studios' games.
"The studios got a bad rap a few years ago for putting out hacked-together games," said Kagan's John Fletcher. "Now they're more interested in the quality of the games going out."
All of which supports Disney's Saiz and his burgeoning division's efforts.
While most of those at the studio working hard on the movie version of Alice felt the mobile game based on the film was merely there to support the theatrical debut, for Saiz, it was the other way around. His goal was to ensure that the game stand on its own merit and not merely glide on the coattails of a box-office hit or flop.
"We approached this as a full premium title," Saiz told TheWrap.
"Working in mobile, you're not going have the biggest budgets in the world, so to draft on the marketing campaign off a film is helpful."
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