By: Jesse Cryderman

From pinball machines and Super Mario Bros. Nintendo cartridges to PC role-playing games and now wildly popular tablet and smartphone franchises, gaming has come a long way. The digital revolution took it from the physical plane of arcades and living rooms to the virtual plane, and today the mobile revolution is transforming it once again. While Gen Xers still bond over shared memories of “fixing” malfunctioning console cartridges by blowing on their metal contacts, today’s gamers get their content beamed from the cloud, wherever they may be and whenever they desire.

Video games, like flesh-and-blood sports, have become a popular pastime. You could even say gaming is a lifestyle, a way in which many people define themselves. It also happens to be big business: gaming is arguably the largest entertainment industry in the world today, and mobile gaming and MMOs (massively multiplayer online games) are its fastest-growing segments.

Mobile devices are now powerful enough to enable users to play games that were once only available on consoles or PCs, including the early-‘80s hit Pac-Man. Gaming is suddenly mainstream, not just something boy-nerds do in their parents’ basement. Today everyone plays mobile games — all ages, sexes, races, and nationalities — and social gaming, as evidenced by titles like FarmVille, which has waned in popularity since its introduction on Facebook four years ago but nevertheless still draws a crowd, is a real phenomenon. 

There are many opportunities for communications service providers (CSPs) to get in the game, so to speak, and leverage unique assets such as location, profile, presence, device, and billing relationship to become the trusted provider and manager of the next-gen mobile gaming experience. CSPs can also create premium services like guaranteed quality of service (QoS), which third parties can’t, and monetize it by offering it to developers through application programming interfaces (APIs). In an era of commoditization and declining traditional revenues, mobile gaming is a service ecosystem that CSPs simply can’t afford to lose.

Sizing up the game

To avoid running past these opportunities like Sonic the Hedgehog in superspeed mode, consider the following data points:

• The mobile gaming market is currently valued at upwards of $10 billion and is projected to reach $15 billion by 2015. By comparison, last year the US movie industry earned $10.71 billion in ticket sales.
• The majority of investment activity in the gaming sector is directed at mobile games, including funding from mobile service providers like Deutsche Telekom, which invested €2 million in startup developer Flaregames last year.
• Games represent the largest market for paid mobile content, and mobile games make up the leading download category in the top three app stores.
• Tablets are killing consoles. According to the latest research report from NPD Group, the market has shifted in favor of tablets, as game revenue has moved from console (Microsoft’s Xbox, Sony’s PlayStation, Nintendo’s Wii) to mobile. In fact, tablet users spend 67 percent of their time on the devices playing games.
• Today more people play games on smartphones than on dedicated handheld systems such as the Nintendo DS Lite.
• Consumers are increasingly spending real money to purchase virtual commodities in mobile games like FarmVille.
• The intersection of identity, presence, social, location, and gaming is creating new opportunities.
• Major content developers like Electronic Arts are partnering with service providers and adjusting their business strategies to embrace mobile.

So, how do CSPs fit into this picture?