1. iGillottResearch Wireless Gaming – The Mobile Arcade Iain Gillott Charul Vyas

2. iGillottResearch www.igillottresearch.com What it is A service in which an end-user connects with a wide area wireless network - such as cellular, PCS or 3G - in order to play interactive, server-based or downloadable gaming applications May include those that communicate with a server though a WAP or other mobile Internet gateway or through messaging gateways such as those of SMS and MMS platforms Gaming applications refer to those that involve skill and/or luck-based competition with either other players or a server- based host Competitiveness can depend on the players skills related to strategy, reflexes, logic, timing, memory and knowledge

3. iGillottResearch www.igillottresearch.com What is isn’t Not included Mobile entertainment applications such as horoscopes and fortunes, ring tones, character downloads, sports news, jokes and other music and video multi-media Mobile gambling Embedded games such as snake

4. iGillottResearch www.igillottresearch.com Who Games? Very Few Right Now Wireless Users Wireless Data Users Messaging Users Wireless Internet Users Entertainment Users Game Players Server-Based Games Online Games Messaging Games Downloadable Off-line Games Hybrid Games Messaging and Internet Users

5. iGillottResearch www.igillottresearch.com Who Games? 145 million Americans, or approximately 60% of the U.S. population, regularly plays video games on their computer or video game console Average age of game player is 28 years old 42% of game players are women Vast majority of people who play do so with friends and family Almost 60% of frequent game players play with friends, 33% play with siblings, and about 1/4 play with their spouse and/or parents U.S. computer and video game software sales grew 8% in 2001 to $6.35 billion

6. iGillottResearch www.igillottresearch.com Why gaming? Offers sticky application for carriers End users see it as a value add This may help reduce churn if games offered are seen as a differentiator

7. iGillottResearch www.igillottresearch.com Who Uses W. Gaming? Case example - gaming company Digital Bridges reported over 10 million WAP user sessions in the past 18 months Company says mobile phone gamers have used WAP games - both in color and black & white - for approx. 71.4 million minutes in this period, which add up to 136 years of accumulated game play Says it has seen a steady uptake in WAP game played over the past two years First half 2002 = close to 4 million games played

8. iGillottResearch www.igillottresearch.com Aggregate and distribute gaming content to carriers. Often include content such horoscopes, ring tones, character images. Application Developers and Communities License Holders and Brands Enabling Middleware Platforms Extensions Wireless Carriers / Network Access Providers Portals and Distribution Channels Household names among professional athletes, pop music stars, movie titles and video game titles from non-mobile platforms that are licensed to mobile gaming publishers. Commerce Enabling Platforms Device Enabling Platforms Include micro browsers, media players, and other middleware, also consist of platforms such as Palm, Pocket PC, JAVA, BREW and other abstraction layer systems. Write the code for graphics, scores, interactivity in the mobile environment. Manage licensing and development of mobile applications, review and qualify applications in order to ensure that they are ready to present to carrier customers, find and select distribution channels. Billing, payment, mediation, clearing and settlement functions that enable carriers to measure, bill, collect and distribute revenues specific to the provisioning of mobile gaming content. Provide access to wireless networks that enable players to interact with other players and servers in order to download or play server based games. Enjoy the most control over the value-chain due to their control over the relationship with the end-user. Includes plastic handsets, as well as device-based solutions such as Texas Instrument’s OMAP, Nokia’s series 60 and other device-centric platforms. Publishers Value Chain Description

9. iGillottResearch www.igillottresearch.com Gaming Types Entertainment Users - wireless data users subs or pay-per-use in order to access and transmit various entertainment content - games, ring-tones, music, video, cartoon characters, horoscopes, fortunes and sports news Game Players - subset of entertainment user market. Users play strategy, combat, sports, trivia, classic and casino style games. Excluding actual betting and embedded games such as Nokia’s Snake Downloadable Off-line Games - through the use of abstraction-layer and virtual machine platforms such as J2ME and BREW, users can download over the air and play off-line are emerging as meaningful applications Server-Based Games - utilize on-going connection with a server throughout duration of the game. The following two basic categories of server-based games are emerging: Messaging Games - player maintains connectivity with a messaging server through an SMS, EMS, or MMS gateway On-Line Games - player maintains connectivity with wireless Internet service through a WAP or other Internet service gateway Hybrid Games - downloadable, server- based and even embedded gaming components will interoperate within a single game creating the hybrid game genre. Example: In-Fusio’s Football Fans - players download additional teams to play and register score by sending an SMS

10. iGillottResearch www.igillottresearch.com Billing Types Various types of billing needed for various types of games: Minute based Event based Content based Bit rate based Subscription based Prepaid Hybrid

11. iGillottResearch www.igillottresearch.com The Bad Devices too small Too little processing power Too little memory Awkward interfaces 2G networks and devices to slow Old 2G billing systems can’t always bill for different kinds of games Poor marketing of gaming by most operators

12. iGillottResearch www.igillottresearch.com The Good Gaming has a loyal following New billing platforms allow for flexibility Devices usually with the person at most times Early pioneers of video games are getting into wireless gaming i.e.:Scott Orr, early developer for Atari and Commadore, now making wireless games

13. iGillottResearch www.igillottresearch.com The Good Location-based gaming a possibility as networks begin to support E911 Major media, sports and entertainment brands looking at wireless gaming New development platforms + new games + new devices + new network = more appealing gaming experience

14. iGillottResearch www.igillottresearch.com U.S. Forecast of Gaming Users 2001 – 2006 (000s) Number of users very low right now - 1.26M in 2001 But users expected to be 15M by end of forecast period - CAGR of more than 90% Total gamers will only be about 6.5% of the total wireless user base, and only 20% of the actually W.I. user base by 2006

15. iGillottResearch www.igillottresearch.com U.S. Gaming ARPU Forecast 2001 - 2006 Number of session to grow from 20 per month to 27.5 Revenue per user per session to increase from $.08 to $.11 Average gaming user will generate $3.00 in ARPU per month by 2006

16. iGillottResearch www.igillottresearch.com Things to remember Gaming is just getting started All pieces are starting to come together Consumers are price sensitive Education of the market is needed Gaming can build loyalty - if distinct

17. iGillottResearch Questions? Iain Gillott 512-263-5682 iain@igillottresearch.com Charul Vyas512-282-0161 charulv@igillottresearch.com