With the CTIA Wireless conference revving up today in Orlando, Fla., expect at least one announcement that should further enliven the popular Blackberry platform. Gameloft, a top developer of mobile phone games, is launching new titles for Research In Motion's (NASDAQ:RIMM) widely adopted device. Don't get too excited, though; Gameloft may face a limited business opportunity here.
Mobile gaming is an unquestionably hot market. A Juniper Research report predicts that the category will skyrocket from $3.1 billion in 2006 to $10.5 billion in 2009. A big chunk of that will likely go to carriers like Verizon (NYSE:VZ), Sprint Nextel (NYSE:S), AT&T's (NYSE:T) Cingular, and Vodafone (NYSE:VOD).
So why shouldn't RIM, with 8 million subscribers, get a piece of that action? Gameloft charges $6 to $8 per downloaded game, and RIM would mostly reap profits by splitting that revenue.
But unlike mobile phones, BlackBerries are still predominantly a business tool, and it's common for corporate information technology (IT) departments to tightly regulate the software loaded on them. IT administrators would likely frown upon any game-playing on company time.
Games have a much better chance on RIM's consumerish BlackBerry Pearl. On the company's fiscal Q3 2007 earnings conference call, former CEO Jim Balsillie called the Pearl the "most successful BlackBerry launch" in RIM's history.
Yet RIM's consumer footprint is still in the early stages, and it's likely that most mobile gaming will take place on cell phones or the upcoming Apple (NASDAQ:AAPL) iPhone. I also suspect that BlackBerry users already engage in lots of time-wasting activities as is, creating little motivation in corporate America to add Gameloft's offerings to that equation.
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Fool contributor Tom Taulli, author of The Complete M&A Handbook, does not own shares mentioned in this article. He is currently ranked 1,590 out of 24,619 in CAPS.
