This week RealNetworks Inc., maker of streaming video and audio software, acquired Helsinki-based Mr. Goodliving, a maker of mobile phone games like "Trivial Pursuit" and "MetalSmash Pinball," for $15 million, joining the teeming wireless gaming market.
The deal is coming at an apt time because industry revenue, according to Now Playing Magazine, is expected to total $1.5 billion by 2008. Total mobile gaming revenues today are a fraction of that -- in the tens of millions of dollars.
"Gaming is hot now," said Doug Brisotti, president and publisher of Computer Games Magazine and Now Playing Magazine, based in Fort Lauderdale, Fla. "You can't pick up a game that hasn't been a movie or a TV show or another entertainment property. It makes sense to make gaming portable -- communications are portable now. Why not gaming?"
What will keep the industry growing is for mobile phone game developers and distributors to come up with innovative new games.
"We need the right titles," said Jason Ford, general manager of games and entertainment at Sprint PCS, based in Overland Park, Kan. "Having the right games and the right distribution are two entirely different matters."
Acquisitions like this week's RealNetworks purchase of Mr. Goodliving show new distributors crave mobile phone content from independent producers.
Not all distributors, however, want to buy the game technology developers outright and prefer the Hollywood model, where they will work with an agent to vet the best prospects before putting money into them to make them bankable stars.
Sprint works with a "wireless development agency" that screens prospective game titles before they are submitted for internal review at the mobile phone carrier, Ford said. "They act as an agency. They work with us to create an extension of our team so that they can act as a filter for us to have companies go through them, and they can pull the games out and present them to us. They're like a talent agent -- but the majority of the revenue goes back to the developer.
"This is a good thing for us. They are not a forward facing name -- so the publishing brand of the game is Sprint," Ford added.
A firm that provides that kind of intermediary service for mobile phone operators -- T-Mobile, Verizon, Sprint and Orange in the U.K. -- is Handango, located in the Dallas area.
The 6-year-old company provides a platform for wireless carriers to create their own online stores.
"We work with each of the operators in slightly different ways," said Clint Patterson, vice president of marketing of Handango. "We consolidate and aggregate content and have a distribution platform that operators can use. There are going to be a lot of players who can make money in the value chain for mobile games -- people who provision the brands and the mobile operators."
Developers are using new, cutting-edge software, like Visual Communicator 2 from Serious Magic Inc. of Folsom, Calif., to incorporate realistic images into video and other multi-media projects. That makes games more realistic -- which players love.
One thing that is attractive about the business to firms entering the fray is that consumers can be charged for the games on their monthly wireless bills. No extra effort is needed to buy the games -- they don't have to go to the store. They can just download them over the wireless network and begin to play.
"The transactional element is a key," Brisotti said. "People are more likely to buy the games if they don't have to take out the credit card and go through that process."
The business of mobile phone gaming emerged from the success of ring tones, a way to customize a telephone by adding software code that plays wolf whistles or the first few bars of "Rock Lobster." Other elements that started to sell consumers on the idea of playing games on their phone or Personal Digital Assistant included "text messaging, news and information services based on many of the most well-known entertainment and sports brands," said Jeff Nuzzi, director of global marketing for THQ Wireless, a developer of branded content for mobile carriers.
Venture capitalists suspect there is an opportunity in this field, too, and are eyeing mobile gaming in much the same way they were excited about e-commerce in the late 1990s.
"Mobile gaming is an area of high interest this year," said a spokesman for BA Venture Partners, an arm of Bank of America, based in San Francisco.
The reason the money men are interested is simple -- it's not just teenagers who play video games on mobile phones.
"Middle-aged moms are playing cell phone games," BA spokesman said, "providing a new audience and potential consumer segment heretofore not known for their interest in this type of entertainment."
Gene J. Koprowski is a 2005 Winner of a Lilly Endowment Award for his columns for United Press International. He covers telecommunications for UPI Science News. Contact, firstname.lastname@example.org.