Market Watch

Gameloft Sells 20m App Store Games



Number one European mobile games publisher Gameloft, in second place to EA Mobile globally, has sold more than 20m games on Apple's App Store for its iOS devices (iPhone, iPod Touch and iPad). The 20m paid downloads include 42 titles which have reached the top five grossing applications chart and 25 number one grossing titles.

Following the launch of Apple's App Store in mid-2008, Gameloft's annual revenues grew 11 per cent to €122m in 2009, up from €110.3m in 2008. Its impressive performance has continued throughout 2010; Q2 2010 revenue was up 15 per cent at €33.6m with App Store revenues up 113 per cent on Q2 2009.

Analysis
Gameloft was quick to see the gaming potential of Apple's App Store; it launched 21 iOS games in 2008 and 36 in 2009, more than any other major mobile games publisher. Its line-up includes a mix of its popular original intellectual property (IP) brands such as its Real Football series of titles and a successful range of games from licensed IP such as the Shrek movie franchise.

Despite the success of its App Store games, the lower margin network operator market is still Gameloft's primary revenue source. However, the economics are far less attractive. To maintain its position in that market Gameloft has agreed deals with operators in more than 100 countries. For its App Store games it only has to deal with Apple.

The rise of application stores and the complexity of the network operator market has allowed Gameloft to consolidate its position as smaller developers and publishers have shifted resources to application stores or abandoned the operator business altogether.

As with other major publishers, Gameloft has found it difficult to replicate its App Store success on Google's Android Market. The Android mobile operating system is growing in popularity but limitations on its application store stifle paid apps; paid content is only available in a handful of countries. Furthermore, the lack of operator billing coupled with the predominance of free content has led Gameloft to offer its Android games direct-to-consumers (D2C) from its own website.

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