Armin Fischer, Joerg Borowski, Michael Fritsch

Today’s Telco operators have acknowledged the convergence of information technologies, media content and communication networks and have evolved into multi-faceted players that enrich and bundle voice and data connectivity offerings with multi-media content and Internet services. Competing for the consumer’s attention, some players aim to bond with customers by satisfying their entertainment and information needs through a coherent service platform, prominent examples being Apple’s iTunes or the recently launched PlayNow Arena platform by Sony Ericsson. While many operators aiming to become fully fledged content service providers have copied this strategy and are now offering music and video content as part of their entertainment content strategy, there is still room for improvement in the field of gaming services.

When Fusajiro Yamauchi started the Nintendo Playing Card Company in 1889, little did he know how his company would transform to meet the changing playing habits of future generations. Nintendo’s strategy decisions of the last years hold valuable lessons for Telco operators in search of attractive additions to their content portfolio.

Gaming is still the stepchild in operators’ content platforms   

Just a few years ago video games were essentially associated with male youths shooting their way through virtual fantasy worlds. With the launch of the Nintendo Wii and DS gaming systems in 2004 Nintendo made the point that video games present an appealing past time for virtually all age groups and both genders alike. Sales figures have proven the validity of Nintendo’s course which is easily exemplified by a comparison of Sony’s vs. Nintendo’s top selling games for their portable consoles: While the Sony Playstation Portable version of much acclaimed Grand Theft Auto 4, a violent high speed shooter and racing game with high end, almost photo-realistic graphics, sold an impressive 5,4 million copies, Nintendo easily dwarfs this figure with its home-made bestseller “Nintendogs”. Nintendogs is a game about grooming and feeding puppies - it sold 18.7m copies.[1]  

When assessing the relevance of gaming for their portfolio of broadband content services, Telcos should consider the following results of a recent US market survey[2]:   

1. US computer and video game software sales grew 6 % in 2007 to USD 9.5 billion – more than tripling industry software sales since 1996.
2. Sixty-five percent of American households play computer or video games.
3. The average game player is 35 years old and has been playing games for 13 years.
4. The average age of the most frequent games purchaser is 40 years old.
5. Forty percent of all games players are women.
6. In 2008, 26% of Americans over the age of 50 played video game, an increase from 9 % in 1999.

Operators should realize that ignoring the gaming market increasingly means ignoring principal ICT needs of core Telco segments. The good news is that a noticeable convergence of the gaming and Telco markets creates ever more opportunities for Telcos to get involved.   
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