Games offer highest consumer stickiness for carriers

Although a recent study from KPMG reveals that consumers worldwide are likely to break out of their multimedia bundles and switch to another provider for most services if the price is right, games appear to be the one product category where consumers show loyalty in spite of price. "When asked how their usage of a particular site or application would change if the cost of that service were to rise - or if there were a cost imposed on a service that had been free- respondents voted with their feet, and in nearly every category they indicated that they would switch," reads Consumers and Convergence II: The Search for Value, Choice and Convenience in the Digital Age. Games, however, were exempt from this rationale. And not only did games score highest among survey respondents asked the impact of price on usage of online services, no other service approached games' level of stickiness with consumers. A full 41% of respondents to the KPMG survey said their usage level of a game would remain the same in the face of a price increase. The next-closest service was instant messaging, about which only 16% of respondents said their usage level would remain the same. And taking into account the 15% of respondents who said they would continue using games only less often, we can see that less than half of gamers will switch because of price. The next-closet service when examining those who wouldn't switch due to price was multimedia entertainment, where only 34% of respondents indicated they would continue using their current service to some extent if it became more expensive. The report reveals a tough landscape for the majority of developers and providers: "This means that all players in the Internet ecosystem must adjust their business models, and in short order, because while consumers need Internet access, they know that Internet-based service delivery is an indelible fact of life. They also know that ultimately they - both individually and as members of a larger community - are in charge of defining that relationship rather than the content providers and service carriers." Of course, as games seem to be the one service immune to that conclusion, developers find themselves in a position of strength as they can help carriers retain customers and even increasingly monetize their services to some extent. And while consumers are less willing to pay for games over a mobile phone than on the Internet, games still prove more attractive at a price than all other mobile services. Only 5% of respondents to the survey said they were willing to pay wholeheartedly to access games over their mobile phone, but an additional 21% said they would pay a limited amount to access games from their mobile phone. Additionally, 20% of respondents said they did not mind receiving advertisements on their cell phone to access games free of cost, which means 46% of consumers are open to incurring some fee in exchange for receiving games on their mobile handset, giving game developers even more to smile about.

Games offer highest consumer stickiness for carriers

Broadcast | October 30, 2007

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