Apple iPhone Ignites Mobile Marketing with Music, Gaming and Virtual World Apps

"It's still early" is a frequent refrain when discussing the maturity of all things technology, but in the case of the mobile platform -- July 11 -- the release of the iPhone 2.0/3G, can truly be said to be the Big Bang. As Netscape founder Marc Andreessen (now head of Ning) told Newsweek back in June, "The iPhone... is the first real, fully formed computer that you can put in your hand. It has all the requirements it needs to be a viable platform." Blogger Mark Sigal of The Network Garden was even more smitten: "[It's] is a game changer on par with the advent of the PC."

But first, the financial incentives: Apart from having an installed based of 6M users, the iPhone has the backing of venture firm Kleiner, Perkins, Caufield & Byers, whose $100M iFund has encouraged more than 200,000 developers to download applications of Apple's software developer kit (SDK). Looming closely is Google, which launched its Open Handset Alliance with thirty-four members -- a Who's Who in carriers and handset manufacturers, with the visible absence of Apple. While there have been delays bumping the release of Android, its open source platform, to Q4, it, too, has a slush fund to incent developers - not as flush - but it's distributing its $10M largess among 50 teams of developers.

Patrick Nagle, chairman, global marketing strategies for Kameleon Technologies, has been pioneering the mobile marketplace since way before the Big Bang. "[I]t's going to be big, especially with kids. They will drive the market," he says. "The applications thing is the key now. As it seems all carriers are opening their platforms, apps will be big business for developers, especially developers who build in location-based features into their apps." While Chris Sherman, Executive Director of Virtual Worlds Management, shares Nagle's overall tenor, he is concerned about interface issues (lack of buttons) on the iPhone, while noting that "certainly people can design using the keypad overlay or the accelerometer, but users need to get used to using these interfaces." That said, he observes that "mirror world type games, as well as some great augmented reality applications for the enterprise, should do well with the iPhone's large screen and GPS capabilities. Also, those companies targeting the Nintendo DS (and the handhelds before it) will take a hard look at the iPhone." He's also assured that "you'll see a lot more companies try to monetize via advertising." But what excites him the most? "Low cost implementations that push the bounds of creativity. You will see new styles of gameplay. Just as the Wii and Wiimote brought new styles of gameplay and Guitar Hero brought forth new markets and new users, iPhone has the ability to do the same." Chadrick Baker of Metaversatility, which brands itself as a virtual world development company, is cautious. "We are probably looking at least another three to five years before a strong working client is on a mobile phone. First iteration? Most likely a reduced Second Life client, or something already focused towards being specifically on a phone. I happen to know Samsung is working on an SL client for their phone." [Comverse created a Second Life proxy for the iPhone back in February.] While Baker agrees with Sherman that brands will flock to mobile, he has a special pleading for sensitivity: "I hope it's done with class and doesn't take the in-your-face intrusive Facebook and MySpace route, and learns from previous MMOG's like World of Warcraft and Second Life and lets the experience speak for itself." As for why advertising has been a mixed bag in virtual worlds, Baker is unambiguous in his criticism: "Companies looking to advertise in virtual spaces have often hired content development companies to advertise for them, such as Millions of Us. The problem with this is, as far as advertising agencies go, they are hacks. Their campaigns fail, they draw little to no traffic, and they consistently sell their clients to spend more. The campaigns aren't interesting and quickly become desert wastelands of advertising that the users aren't using. If advertising were done properly, agencies would hire game studios that have Virtual Worlds experience, like Metaversatility, or Semo, or Rivers Run Red." Michael Wilson, CEO of There.com, offers lessons from what has worked: "I think that all of our partners are interested in mobile because of its persuasiveness," he says, "but want to do the right thing there. In the virtual world space, we've seen a few companies be successful, such as Coca-Cola, Cosmo Girl, and Scion -- by thinking carefully about the space, and pacing their investments and expectations, and been very pleased, and many others, who have not done that, have been disappointed. The same applies to the mobile space: If you try and rush out an offering on our still-to-mature wireless network, and it doesn't work well, you'll be disappointed. If you look carefully at what the customer wants and what the products and networks are capable of, today, and act accordingly, you will probably be more successful. Paramountis already successful in the space of delivering short bits of content (movie clips) tailored for Facebook and virtual worlds, this is an ideal form factor for a true 3G network."

Surprisingly, there are a handful of first drafts out there. Earlier this year Habbo Hotelran a beta with the Nokia Symbian reaching out to 100,000 participants. Peak Virtual Entertainment (PKVE) has The Legacy of Holy Castle in open beta, a browser-based MMO strategy game for both PC and smartphones, including the iPhone. Like many developers PKVE is taking a more casual approach to what was once a space for exclusively hardcore gamers, while still offering persistent worlds (a game that can be resumed at any time, from any platform). Parallel Kingdom is a medieval role-playing game specifically designed for cell phones running on the iPhone (it will be available for Android as well). It overlays the virtual world on top of the real world using the GPS inside your phone, boasting that it's the first Mobile Multiplayer Trans-Reality Game, or, MMTRG. Vollee, which focuses on 3G gaming for mobile, debuted its version of Second Life for mobile at the end of June. Currently, it supports over twenty five handsets from manufacturers including Sony Ericsson, Nokia, and Samsung, and has confirmed that it's working on an application for the iPhone. Not that everything is roses. Apple's inability to package Flash in this iteration of the iPhone remains problematic. The Adobe software is used in many browser-based worlds. That said, developers are leveraging the iPhone's capabilities in both its touchscreen and motion-sensitivity (again, think Wii).

Mobile's early obstacles to market adoption -- lack of speed and computing power, exorbitant pricing -- now tamed, have become its assets. Marry the immersive aspect of virtual worlds with the "anytime anywhere" possibility of mobile - and you have a marketers wet dream. It's win-win: Virtual worlds can extend their reach and accessibility beyond the PC, while content-hungry mobile taps into a store of Must-See MMO's. Until an "iPhone killer" comes along (don't hold your breath/you never know) Apple will be carrying the banner, supporting the scaffolding of an emerging mobile platform. It's not "too early" to show leadership -- as either a content developer or a brand -- it's just the right time.

Note: Wagner James Au, author of the very fine The Making of Second Life: Notes From The New World, will facilitate the panel, Mobile Virtual Worlds: Leaving the Personal Computer Behind, at the Virtual Worlds Expo in L.A. on September 3rd.

Comment from Metaversatility: Mr. Baker was not authorized to speak on behalf of Metaversatility and his comments above are not reflective of the culture of Metaversatility. This is not how we do business.

As the CEO of a virtual worlds development company I have always respected the exemplary work of Millions of Us and they are indeed leading the field in many ways. Their market-leading work with Google Lively and Sony Home are quality examples of the direction of virtual worlds. It is our opinion at Metaversatility that MoU's fine work strengthens the industry.