Mobile game publishers predict tablet “bloodbath,” rising development budgets

By Scott Reyburn Comment

The best and brightest of mobile game publishers gathered at Tapjoy’s San Francisco office earlier this month to discuss the state of the industry in an event titled “Publishing 2.0.” Representatives from GREE, 6waves, Kongregate and DDM weighed in on the rapidly evolving landscape and where we can expect to see publishers pushing their money in the coming months.

Tapjoy’s panel was moderated by its director of publishing Rob Carroll. The four panelists were GREE senior vice president marketing and developer relations Eros Resmini, 6waves senior vice president publishing Jim Ying, Kongregate CEO Jim Greer, and DDM founder Jeff Hilbert. Note that 6waves recently cut staff, a move which will eventually eliminate Ying’s position.

Below are some of the meatier points made during the panel:

Game budgets getting bigger — While games like Infinity Blade most certainly weren’t made on a shoestring budget, the average mobile game developer usually has smaller team sizes and a lower cost of development relative to console game developers. The panelists agreed that mobile game publishers won’t fund games on concept alone, even if the scope of the mobile game calls for a AAA console game’s multimillion dollar budget. And even if a publisher agrees to fund a game, said the panelists, the publisher may not invest as much money in a developer’s title until it proves itself. For example, Resmini says when developers hit particular core metrics, it signals to him that GREE is willing to invest additional money in a game.

Funding milestones vs. metrics – Traditional games publishing relies on a system of milestones where developers have to hit certain deadlines to reassure publishers that their money is being spent properly on a product that will make it to launch. When asked if this structure would work for mobile game publishing, the panelists seemed divided on whether it made sense to use milestones — or even to let the developer know they had to hit any kind of targets at all. Resmini, for example, said the relationship should be structured around incentivizing key metrics such as monetization and engagement. The better a developer does in those metrics, the more marketing money it unlocks with the publisher. “The metrics will tell you when the game is ready,” says Resmini. “It’s not going to based on some arbitrary date that someone comes up with.” Hilbert, meanwhile, said he didn’t see how a publisher could fund a developer without a milestone schedule because it’s easy for the publisher to lose perspective on which developer’s game is launching at what time.

Upcoming tablet bloodbath — The panelists all see tablets as the next major focus of mobile publishing. Hilbert went so far as to call it a “bloodbath.” Resmini added that there’s a rapid movement toward higher quality, high-production value content in mobile. “If it proves out that those higher-production, AAA style content are successful on mobile, then we’re all going to have to rethink these models that we’re talking about even today,” he said. Hilbert also said he’d received requests for proposals from publishers for tablet games with a $2.5 million budget (see previous bullet point on budgets).

You can watch the Tapjoy panel in its entirety here. You can also join Inside Network in New York City on Dec. 3 for our Inside Social Apps conference where we’ll dive deep into many of the key points raised by mobile publishers. Find out more about ISA New York here.