Funk Buddy
02-04-2005, 02:20 PM
Read this today and found it kind of interesting. Please for give the layout as I typed it in from the article since I don't have a scanner at work. Also, any typos should be ignored since I did this at work and had to dodge the boss while doing so. :D
Sprint plays to win as wireless revenue hunt enters next level
Next time you gasp at dropping $9 to see a flick, think about this: In 2003, videogame products outsold movie tickets.
Or play around with this: One expert predicts that more people will have color wireless phones than have TV sets world-wide in the very near future.
The final level: Two billion people walking around with video game machines in their pockets.
A few clicks buys a game – and transforms all the fun into an investor’s dream.
In a wireless industry nearing saturation and hunting for new revenue streams, video games are supplying more than fantasy. Boston-based Strategy Analytics Inc. projects a $6.5 billion market globally by 2008 for games on wireless phones. Others think that’s envisioning a Game Boy when the market can be a Playstation 2.
“People want to be entertained,” said Jason Ford, the Sprint Corp. executive who runs its video game division. “They want competition. They want to be numb to things”. Ford, 33, runs Sprint’s games division with Kris Davis, 28. Both grew up playing video game and still do. They’ve watched the industry evolve into the behemoth it is today.
“What the game industry has become is a dominating entertainment force,” said Chris Melissinos, chief gaming officer at Sun Microsystems Inc., which built the programming platform for games on Sprint phones.
Ford has another term: “It’s the anti-productivity tool.” Market research failed to spot this phenomenon early on, he said. Surveys suggested that more people were interested in downloading spreadsheets than Tetris. But when Sprint made games available, they were downloaded faster than a hyper-fast hedgehog. This turned gaming a huge growth engine at Sprint and Ford into a kingmaker. Sprint’s user base is equal to about 13 percent of U.S. wireless customers. People who want to download a game have to do it from their phone in a virtual store run by their carrier, which takes a cut much like a retailer.
What Barnes & Noble is to books, Sprint, Verizon Wireless and Cingular Wireless might be to these games.
Sprint keeps the amount of money that games generate close to the vest, the way a gamer might guard his or her strategy for beating “The Legend of Zelda.” The number probably reaches the tens of millions of dollars. In May, Sprint said it had sold 3.5 million games in the first four months of 2004 – a pace to end the year with 10.5 million downloads. Games cost $2 to $6 apiece to acquire, and many carry monthly fees. “You do the math,” Davis said.
And that’s the tip of the iceberg, said Trip Hawkins, the mercurial founder of Electronic Arts Inc., a $3 billion game-maker whose “John Madden Football” series is the best-selling video game ever. Hawkins does his own math: He said 2 billion color-screen phones will be in people’s pockets worldwide five years from now – that’s more than the number of TV sets. He also said games and other downloadable entertainment may be worth $50 a month to the end-user by then. “That’s $1.2 trillion a year,” he said. “If games represent a percentage of that, it’s huge. Big names are buying that brand of Kool-Aid. Kleiner Perkins Caulfied & Byers and Sequoia Capital – the same tandem that financed Google Inc.’s beginnings – have pumped $21 million into Digital Chocolate, Hawkin’s mobile games and entertainment startup in Silicon Valley.
The hype has Ford fending off eager game developers. In one instance, a Pizza Hut employee pitched a wireless game called “Babe Brawl.” He also has had a game developer shove a phone in his face – at a urinal. “I had run through a lot of scenarios in my head, and I hadn’t run through that scenario,” Ford said.
All of this hoopla is far removed from the industry’s Pong-like beginnings. Mobile gaming’s Atari days began in 1999 when Sprint released its Wireless Web service, which allowed mobile phone users to check stock quotes and sports scores. Around the same time, Sprint’s Bill Blessing, senior vice president of corporate strategy, got the idea to form an incubator in Santa Monica, Calif. He gave $15 million in company money to a lieutenant, Tom Ellsworth, to go invest in startups that might build something useful for Sprint phones. Ellsworth spotted on immediately: Jamdat Mobile Inc., formed by a handful of former executives at Activision Inc., a gaming company. Jamdat built the first game for Wireless Web, a text-based joust called “Gladiator.” “Super Mario Brothers” it was not. Ford said he remembers sending Jamdat $37 checks. That proved short-lived. By the end of 2000, 2 million people had downloaded the game, racking up tens of millions of minutes for Sprint to bill. “Gladiator’s was like a bomb going off,” said Ellsworth, now a top executive at Los Angeles-based Jamdat.
That didn’t get Sprint to the magic castle immediately. Ford recalls a meeting around 2000 with top Electronics Arts officials (Hawkins had left by then), who dismissed wireless gaming as “a really cool art project.” “We’d throw out some numbers, and they’d go, ‘Well, I can make that much money in one day selling Madden Football.’” Ford said.
It’s a new game today: Electronic Arts announced in October that it will aggressively develop wireless games.
It’s proof that the industry, not just its customer base, is growing up.
By Charlie Anderson (staff writer)
Printed in The Business Journal February 4-10, 2005
Sprint plays to win as wireless revenue hunt enters next level
Next time you gasp at dropping $9 to see a flick, think about this: In 2003, videogame products outsold movie tickets.
Or play around with this: One expert predicts that more people will have color wireless phones than have TV sets world-wide in the very near future.
The final level: Two billion people walking around with video game machines in their pockets.
A few clicks buys a game – and transforms all the fun into an investor’s dream.
In a wireless industry nearing saturation and hunting for new revenue streams, video games are supplying more than fantasy. Boston-based Strategy Analytics Inc. projects a $6.5 billion market globally by 2008 for games on wireless phones. Others think that’s envisioning a Game Boy when the market can be a Playstation 2.
“People want to be entertained,” said Jason Ford, the Sprint Corp. executive who runs its video game division. “They want competition. They want to be numb to things”. Ford, 33, runs Sprint’s games division with Kris Davis, 28. Both grew up playing video game and still do. They’ve watched the industry evolve into the behemoth it is today.
“What the game industry has become is a dominating entertainment force,” said Chris Melissinos, chief gaming officer at Sun Microsystems Inc., which built the programming platform for games on Sprint phones.
Ford has another term: “It’s the anti-productivity tool.” Market research failed to spot this phenomenon early on, he said. Surveys suggested that more people were interested in downloading spreadsheets than Tetris. But when Sprint made games available, they were downloaded faster than a hyper-fast hedgehog. This turned gaming a huge growth engine at Sprint and Ford into a kingmaker. Sprint’s user base is equal to about 13 percent of U.S. wireless customers. People who want to download a game have to do it from their phone in a virtual store run by their carrier, which takes a cut much like a retailer.
What Barnes & Noble is to books, Sprint, Verizon Wireless and Cingular Wireless might be to these games.
Sprint keeps the amount of money that games generate close to the vest, the way a gamer might guard his or her strategy for beating “The Legend of Zelda.” The number probably reaches the tens of millions of dollars. In May, Sprint said it had sold 3.5 million games in the first four months of 2004 – a pace to end the year with 10.5 million downloads. Games cost $2 to $6 apiece to acquire, and many carry monthly fees. “You do the math,” Davis said.
And that’s the tip of the iceberg, said Trip Hawkins, the mercurial founder of Electronic Arts Inc., a $3 billion game-maker whose “John Madden Football” series is the best-selling video game ever. Hawkins does his own math: He said 2 billion color-screen phones will be in people’s pockets worldwide five years from now – that’s more than the number of TV sets. He also said games and other downloadable entertainment may be worth $50 a month to the end-user by then. “That’s $1.2 trillion a year,” he said. “If games represent a percentage of that, it’s huge. Big names are buying that brand of Kool-Aid. Kleiner Perkins Caulfied & Byers and Sequoia Capital – the same tandem that financed Google Inc.’s beginnings – have pumped $21 million into Digital Chocolate, Hawkin’s mobile games and entertainment startup in Silicon Valley.
The hype has Ford fending off eager game developers. In one instance, a Pizza Hut employee pitched a wireless game called “Babe Brawl.” He also has had a game developer shove a phone in his face – at a urinal. “I had run through a lot of scenarios in my head, and I hadn’t run through that scenario,” Ford said.
All of this hoopla is far removed from the industry’s Pong-like beginnings. Mobile gaming’s Atari days began in 1999 when Sprint released its Wireless Web service, which allowed mobile phone users to check stock quotes and sports scores. Around the same time, Sprint’s Bill Blessing, senior vice president of corporate strategy, got the idea to form an incubator in Santa Monica, Calif. He gave $15 million in company money to a lieutenant, Tom Ellsworth, to go invest in startups that might build something useful for Sprint phones. Ellsworth spotted on immediately: Jamdat Mobile Inc., formed by a handful of former executives at Activision Inc., a gaming company. Jamdat built the first game for Wireless Web, a text-based joust called “Gladiator.” “Super Mario Brothers” it was not. Ford said he remembers sending Jamdat $37 checks. That proved short-lived. By the end of 2000, 2 million people had downloaded the game, racking up tens of millions of minutes for Sprint to bill. “Gladiator’s was like a bomb going off,” said Ellsworth, now a top executive at Los Angeles-based Jamdat.
That didn’t get Sprint to the magic castle immediately. Ford recalls a meeting around 2000 with top Electronics Arts officials (Hawkins had left by then), who dismissed wireless gaming as “a really cool art project.” “We’d throw out some numbers, and they’d go, ‘Well, I can make that much money in one day selling Madden Football.’” Ford said.
It’s a new game today: Electronic Arts announced in October that it will aggressively develop wireless games.
It’s proof that the industry, not just its customer base, is growing up.
By Charlie Anderson (staff writer)
Printed in The Business Journal February 4-10, 2005