Nokia N-Gages With Mobile Games

Nokia Corp. (NYSE: NOK) today launched the revamped version of its N-Gage games service for its N-series devices, which is a critical element in the handset-maker's services strategy. (See Nokia Intros N-Gage Service.)

The new games service will be part of Nokia's Ovi branded suite of Internet services that comes with some of its high-end mobile devices. So far, Telefónica SA (NYSE: TEF), Telecom Italia Mobile SpA (Milan: TIM), and Vodafone Group plc (NYSE: VOD) have partnered with Nokia to collaborate on offering Ovi services. (See Nokia Stakes Claim on Services, Telefónica Hugs Ovi, Vodafone Opens the Ovi, and Nokia, TIM Do the Net.)

While the N-Gage service is mainly intended to help Nokia sell more phones and gain new services revenue, mobile operators stand to benefit from Nokia's technology and content development.

With N-Gage, Nokia has improved the performance of its mobile games, improved the retail buying experience, and added a "connectivity element" to mobile gaming, according to Paul Goode, senior analyst at M:Metrics Inc. He adds that N-Gage was "phenomenally fast to download," when he took the service for a test spin.

The connectivity element that Goode refers to is a social networking feature called the N-Gage Arena, where users can play multiplayer games, post comments on message boards, and talk to each other via live chat. Multiplayer mobile games can generate a lot of data traffic for mobile operators.

"Operators are trying to find various kinds of content to enhance or sustain ARPU," says Windsor Holden, principal analyst at Juniper Research Ltd. "If they don't get it from rich media content such as games, they’ll be in trouble."

Juniper estimates that revenues from mobile games will be nearly $10 billion by 2009 with 460 million mobile users downloading games onto their devices by 2009.

Holden says that a key benefit Nokia can bring to mobile gaming is better marketing of the services compared to mobile operators' attempts at offering these services.

"There's an opportunity to engage in more direct marketing... This is one of the things Nokia will be driving as it moves from a handset to a rich media provider," says Holden. "Nokia will drive the marketing of different kinds of content, which mobile operators haven't done very successfully."

Nokia's new N-Gage service is compatible with the N81, N81 8 GByte, N82, N95, and N95 8 GByte. According to M:Metrics, that means Nokia's addressable market in Europe is the current 2.7 million installed base of these devices.

The games are expected to cost between €6 ($9) and €10 ($16) and can be downloaded over-the-air direct to the device, via WiFi or cellular network, or from a PC to be sideloaded onto a device. Users can then pay for the game by credit card or by adding the charge on to their mobile phone bill.

The first N-Gage games available include FIFA 08 by EA Mobile, Brain Challenge by Gameloft , and World Series of Poker Pro Challenge by Glu Mobile .

— Michelle Donegan, European Editor, Unstrung

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