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To be continued: The Evolution of Video Gaming Distribution
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While most non-gaming companies would struggle in the gaming industry, an exception to this is Apple, which has managed to deliver millions of games downloads through its App Store. However, this strategy is successful for them only because it involves mobile gaming exclusively, is extremely simple and user friendly and Apple avoids having to source its own content through soliciting games from the developer community. Although Apple was successful with this strategy, that does not mean that carriers can follow up with the same method. Providers have to worry about compatibility with many devices and therefore will have a hard time building up a developer community willing to make games for them even if they start an application storefront. Furthermore, it will be difficult for carriers to make the process of acquiring and playing games as easy as it is on the iPhone due to these compatibility issues. For these reasons, carriers should refrain from directly aggregating gaming content either through a portal or through some kind of application storefront. 

One thing that carriers could provide through some kind of portal is non-gaming content, especially if the console players do not offer certain types of content in some countries. For example, Deutsche Telekom’s Videoload platform allows DT’s subscribers to access video-on-demand services. Since Xbox Live does not offer Netflix outside the United States, that would be a good opportunity for carriers like DT to offer their own VOD services through that console. This strategy can be especially effective in developing countries where services such as Hulu and Netflix are not available. Carriers in these countries can start their own VOD or music streaming service and then tie them in with consoles. In this way, console makers get the benefit of the knowledge of local media markets that the local carrier has and the carriers benefit from increased sales channels.

Another unattractive strategy for carriers is to position themselves as content hosting partners. Although some telecom providers may have the equipment and ability to fulfill such a role, it would not be attractive for them to do so since content hosting is already such a crowded market, with many competitors driving down profit margins. Additionally, Microsoft, Nintendo and Sony already have content hosting solutions in place that they likely are not willing to replace unless there is a significant cost advantage in doing so. Additionally, carriers should avoid trying to provide billing or other backend support systems for digital distribution platforms. This is also because the major console makers and digital distributors already have their own billing solutions that customers are already familiar with. Subsequently, the console makers and other game distributors already have a relationship with the customers that telecom providers do not and therefore do not need a third party to bill customers for downloads. An exception would be for mobile gamers where wireless providers already engage in billing support since they are also often the distributors of the games themselves. In this case, the existing relationship with the customer enables carriers to integrate billing of game downloads.

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