Forced to part bulk of their earnings with the service providers, mobile gaming companies are finding new ways to increase their share from the downloaded games.
Making games in local languages for smaller towns and rural areas where the margins are larger, selling the games themselves rather than allying with operators and outsourcing are some of the methods adopted.
Current revenue share models for mobile games vary from 50:50 to a 80:20 share in favour of telecom operators.
With average revenue per unit being very low in India because of predominance of basic voice services and texting, it is in the high-end products that telecom operators see a chance to increase their returns and gaming is one of the high value revenue streams. A mobile game in India can cost anywhere between Rs 15 to 50, premium games could cost more.
"With an increase in consumer demand for quality content and increasing license fees for big ticket titles, we would like operators to re-look at current revenue share agreements," says Suhail Baghdadi, marketing manager of Indiagames, a mobile content producer.
"B and C towns are found to drive a large portion of the growth. Mobile entertainment cost is almost considered as mainstream entertainment, because of the lack of an alternative," says Arun Gupta of Mauj Telecom.
As part of localisation of games Mauj and Paradox have launched mobile games in Hindi and various regional languages including Bengali, Tamil and Marathi.
Companies say that revenue sharing in local language games is more equitable.
According to an international survey organisation In-Stat/MDR mobile gaming market in India is expected to increase to $336 million in annual revenues by 2009 from its curret around $30 million.
Having SMS short-codes and sites where the games can be downloaded directly is another option that the gaming companies are exploring. Mauj was one of the first gaming content makers to go for its own code and other companies are also lining up.
But mobile operators are not sure if the mobile content producers are in a position to drive their own products. "We spend a lot on advertisements promoting our short codes and products, I don't think they can sustain this on a long-term basis," says a spokesperson of a major telecom player.
Of the value added services, the revenue share of mobile games is currently estimated at around six per cent and industry sources say that this could go up to nine percent in the next three years. Currently game downloads are at around six-and-half lakhs per month.
Outsourcing is also seen as a big revenue earner, and hence more and more Indian companies are tying up with foreign telecom carriers.
"We are creating and customising games for several international telecom carriers. We are even creating the games in various local languages for these companies," says Rajiv Hiranandani of Mobile2Win.
Most of the outsourcing is done to South East Asian countries like South Korea, Japan and Taiwan.
Adapting seems to be the mantra for gaming companies, and they are doing it with some alacrity to rake in the moolah.
Do you want to discuss stock tips? Do you know a hot one? Join the Stock Market Investments Discussion Group