Palm's New Gaming Platform Won't Save Palm

jon rubinstein

As Palm continues to try and ape Apple’s iPhone success, it’s pushing into mobile gaming, which has been a huge hit for Apple.

This is not a stupid move on Palm’s part — at this point, anything is worth a shot. But mobile gaming alone is not going to save Palm.

Today, the company announced that it has released a public beta version of a new tool, the Palm WebOS Plug-In Development Kit. This is designed in large part to help game companies move their games from platforms like the iPhone over to Palm WebOS, without having to recreate them from scratch.

A few big gaming companies have experimented with the product so far, including Gameloft, Electronic Arts, and Glu Mobile.

While it’s not surprising that these big gaming companies — whose expectations for the iPhone have been far surpassed — are experimenting with Palm’s platform, it seems unlikely that they’ll continue to pour resources into WebOS unless Palm starts selling significantly more phones. Today, even if gameplay on Palm gadgets is as good as it is on Apple devices, game publishers probably won’t make enough sales to make the investment worthwhile.

Why not? Three big reasons:

  • Palm simply doesn’t have enough users to generate enough game sales to offer a big return on investment, at least in comparison to the huge user base on the iPhone platform. Even if Palm decides to subsidise the companies’ ports over to WebOS, the resulting sales probably won’t be worth the investment. We would be surprised if game companies produced every game for WebOS that they are producing for iPhone. So Palm remains a lesser platform.
  • Palm does not have the equivalent of an iPod touch — an inexpensive, unsubsidized, wi-fi-only device. The iPod touch is HUGE with gaming, and many gaming companies report to us that over half its user base is on iPod touches. Palm just doesn’t have anything here.
  • While Palm is making it easy to move parts of game code to WebOS from iPhone, it is not yet providing key parts of game commerce, which makes money for developers. For example, Palm does not offer an in-app purchasing service for virtual goods. Several game makers are shifting their revenue focus toward in-app purchasing, and so far, Palm has nothing to offer them. (Some companies have built their own in-app purchasing systems, but this is not nearly as seamless or consistent as Apple’s system, and requires additional development.) This could eventually be fixed with a software update. But then it’ll be a question of whether Palm can deliver as seamless a solution as Apple, and whether it’ll be worth it for developers to fit a game into two different in-game commerce and virtual goods fulfillment systems.

To be sure, this is a chicken-and-egg-type problem. More games could potentially attract a few more users to the platform, which could create more game purchases down the road, someday, maybe generating enough revenue for game companies to justify their investment in WebOS.

And if anything, it provides more visual candy for Palm and its carrier partners to advertise on TV, the way Apple has used iPod touch gaming ads to sell iPods.

But at this point, Palm is so far behind Apple, and even Google Android, that a handful of games won’t make a difference.

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