Part of Nokia's Financial Results for 2004 included numbers on the sale of the N-Gage and N-Gage QD - 1.3 million units to the end of Dec 2004. Given Nokia launched the device in October 2003, that works out to an average of around 92,000 units a month. Nokia have been reluctant to give out any more figures on intermediate sales, so it's hard to place an exact number per month, or if the QD really did shake up the market, but let's have a look and compare those numbers.

October 2003 to September 2004 saw 11,450,000 Symbian OS units sold [1], and the N-Gage makes up 1,104,000 of these [2] around 92,000 units a month. Consider the Symbian OS sales are over 6 companies and 29 different phone models [1], that means the N-Gage is responsible for close to 10% of the Symbian OS market.

This shouldn't be at all surprising. Firstly, it's a Series 60 device, which means it has huge compatibility with the majority of Symbian OS devices. And if you look at the price point of the N-Gage and N-Gage QD (around $200 [4]), it's between a third and a half of other Series 60 devices. Okay there's no camera, but it has more memory, better battery life, a clearer screen, a direction pad that works and a slew of extra games that really make it worthwhile.

Forget all the hype about the PSP and the DS selling 60,000 units a week. Yes they're big numbers, but the biggest isn't always the best - and these are numbers directly after the much hyped launch. Nokia were never looking to win a battle purely in terms of volumes measured against new handhelds, they were looking to understand the gaming market, gain respect, and have a nice little ecosystem.

Now here's some very speculative numbers. The build cost of the N-Gage QD is (conservativly) around $40-$50. Let's say $50 to be fair. The offline price for the unit is around $200 [4]. Adding in markups for wholesalers and retail chain, and it'd be fair to say Nokia are making around $50 per unit, so gross profit per month on unit sales is around $4,500,000.

Okay, let's throw in the other variable, and that's MMC Development Costs, which run to between $100,000 and $500,000 per game [3]. All About N-Gage has 50 MMC Games in the database, so if we assume the average Development cost is $400,000 a title, that means the MMC games have cost $20,000,000 in total, or an average of $1,400,000 a month over the retail life span of the N-Gage.

We've not counted a lot of other ancillary things (such as advertising, distribution, staffing costs, or even the revenue from selling the MMC games) but a gross profit of over $3,000,000 a month isn't to be sneezed at.

The one problem in all of this is the perception of the press. Nokia aren't playing the game (one reason some of the numbers up there are educated supposition) and everyone is going to label them a Quixotic failure just because they want to beat up Nokia over something - and it's so easy to do when Sony and Nintendo post headline sales numbers in six or seven figures. But so what if Nokia are making a profit, and are one of the few companies to be able to take a decent fight to Nintendo? Let's just kick them because they're doing something different.

The N-Gage may have performed below Nokia's expectations. But given the numbers here, I'd say it's proving to be one of the most popular Smartphones out there. It's also a source of continuing revenue for Nokia - and if they can capitalise on that over the the next year, look at some different distriibution models for the game titles, and continue to win supporters, then the N-gage is going to be just as strong next year. Nokia promised three festive seasons to the N-Gage to prove itself. With two down and one to go, I'm quietly confident that Nokia are pleased with the results...

References...

[1] Symbian Q3 2004 results
http://www.symbian.com/press-office/2004/pr041111.html

[2] N-Gage Sales Oct 2003 to Dec 2004, Nokia's 2004 Financial Report
http://press.nokia.com/PR/200501/977727_5.html

[3] Ilkka Raiskinen on gamesindustry Biz
http://www.gamesindustry.biz/content_page.php?section_name=new&aid=1784

[4] T-Mobile Bundle at EB Games. With Slight subsidy, but we'll ignore that. If we didn't, the numbers would look even better.
http://www.ebgames.com/ebx/product/245094.asp