N-Gage owners buy more games over the air than regular phone users. See, the N-Gage is making a killing in one if the marketing sectors it was targetted at. David Thomson digs a little bit deeper...

Russell Beattie, in a post primarily about the Nokia 7610, points to a Nokia document where we learn:
[quote]
...the N-Gage may be a failure from a sales point of view, [but] the people who did buy an N-Gage have a massive ARPU. Very interesting - it shows that Nokia isn’t going to give up on the category. There’s an N-Gage 2 in the works already and Nokia realizes that even though the gaming market is a hard nut to crack, if they can find the sweet spot, the carriers are going to love them for it. In the presentaiton Nokia says, for example, that on average about 2-5% of consumers buy Java games, but 50% of N-Gage users buy them. Wow. If you’re a carrier, those are the sorts of numbers that make you re-think.
[/quote]

These ARPU figures are no great surprise to me, and it is basically what I as alluding to in this post about device divergence. It stands to reason that specialised devices such as N-Gage will have a lot more success with the types of activities they are designed for. The N-Gage is a phone that is great at playing games, so it’s no great shock to learn that the people who own an N-Gage buy and play games on it.

Anyone who’s listened to me talk about the N-Gage will know I’m no great fan of the device because of the strategy Nokia have taken. I said above that the N-Gage is a phone which is great at playing games. However, that does not make it a games console. Someone at Nokia obviously had delusions of grandeur when they started planning N-Gage, and figured they’d pitch it as a games console, thus setting themselves up for the massive amounts of criticism which has come their way since then.

Nokia have previously introduced new categories very carefully: the first music-oriented phone was very much a niche product, which paved the way for all the other music phones we’ve seen since then; and the first time I heard Nokia talking about N-Gage (prior to public announcement), they alluded to this fact and hinted that they would follow that approach again in future. As we know, N-Gage didn’t follow that approach, and has been slammed for it. If we imagine for a moment that Nokia had indeed followed the niche product path, then the sales figures aren’t anything like as bad; in fact, I’d declare N-Gage a success on that basis.

The problem comes with the other element of the strategy: pushing MMC based native games for the device. Big mistake. If they had instead concentrated their energies on having a kick-ass

MIDP 2.0 plus all relevant JSRs implementation, then people would still have been able to make great looking, Bluetooth enabled games. Nokia, however, decided to "persuade" game publishers to bring their games to N-Gage. I’m not going to go into much detail, but basically, these games are not a reason to own an N-Gage, and they have cost Nokia the chance to claim that their games business unit is breaking even in 2004.
And of course, the marketing sucked and indeed, was recently banned in the UK (I would have thought for the fact that it sucked, but apparently some of it was vaguely rude).

So, Nokia, listen up - here’s a brief to-do list for N-Gage 2 (in the order I write them down):

Don’t call it N-Gage 2 - I don’t think there’s too much brand equity to lose, and having device sequel makes me think of it in the same as a film sequel: the same thing all over again, only a bit shinier;

Focus on the MIDP environment - that’s what is making money for the carriers and the game developers;
If you really want to be a game publisher, spin off a company, and hire some people who know about games;

Fix all the stuff people already told you was broken.

Historically, Nokia has excelled at producing platforms, and letting other people get on with the business of using those market dominating platforms to make new businesses. On N-Gage, it completely dropped the ball and got carried away in its own hype. Nokia is smart, though, so I’ve no doubt that their next games phone will be a whole lot better.

David Thomson