The iPhone effect: fear and trembling in the mobile games industry.

(From Guardian Unlimited)

Last week, I attended the Mobile Games Forum , an annual conference where developers, publishers and network operators get together to discuss the latest industry developments -- which this year meant iPhone, iPhone and, oh yes, iPhone. Apple's hugely successful entry into the market (there are now around 20,000 applications on App Store, almost 2,000 of which are games) has sent out palpable shockwaves. Everyone's feeling unsettled.

And here's why.

Until Apple entered the scene, the mobile games market was dominated by the network operators, because a huge majority of mobile titles are sold through network portals like Vodafone Live or O2 Games Arcade -- relatively few are sold 'direct to consumer', either through aggregation sites or a publisher's own online service. The network operators not only take 50% of the revenue from every game download, they also effectively control which games their customers get to see and play -- only a small number of titles are 'featured' on the front pages of the portals, and these spaces are often paid for by publishers. The rest of the games are usually hidden away in difficult-to-navigate menu sections.

This has typically meant that original games have …