Wireless gaming market leader Sorrent produces Shark Hunt. © 2002-2004 Sorrent Inc. All rights reserved.

Doug Lowenstein of the Entertainment Software Associates sees U.S. telecommunications companies using wireless gaming as a selling tool.

The prospect of wireless gaming — making interactive games available for play over cell phones or similar devices — is exciting to phone companies, handset makers, game developers, publishers, effects animators and content providers. All are looking for opportunities for incremental revenues. The question is whether wireless gaming will take off with consumers and when, and whether all the stakeholders will be able to make a profit from wireless gaming.

More than 450 million mobile phones are sold every year worldwide, and most cell phone users upgrade to a new device every two years or so to take advantage of greater processing power, better screens, improved battery life, and new functions.

Research firm Strategy Analytics values the global wireless gaming market at $1.34 billion (in service and transport charges). Asia accounts for 78% of the total, followed by Western Europe with 15% and North America with 5%. The North American market is expected to grow 84% over the next five years, however, generating $1.33 billion in 2008, versus $63.1 million in 2003.

Last year, 6% of the 1.3 billion wireless phone subscribers worldwide played games on their handsets, according to researcher A.T. Kearney, double the number that did so in 2002. South Korea and Japan are the two leading markets for mobile gaming, with 15% of cell phone subscribers in Korea and 35% in Japan playing games on their phones.

Why the U.S. is Lagging
The U.S. market’s small share of the global wireless gaming business is due to a number of factors. U.S. wireless networks have not been as sophisticated as those in Asia and Europe, although the mobile network has improved over the last two to three years and is currently nearly on a par with Europe. Cellular penetration in the key target group for wireless gaming (16- to 24-year-olds) is lower than in Asia and Europe, and handsets are also more advanced, especially in Asia, where cell phones are starting to have sophisticated 3D displays. Asian wireless publishers are offering 3D games, and some Java and BREW-based titles include networked components as bandwidth increases.