Shades of 1999, all over again?

As Moco goes on to say:

Keep in mind, most of these are me-too companies, with some hit titles and no guarantees of future hits. Also, mobile operators still have a huge share of the power in determining the fate of these companies. That is why the companies think they need scale...if we're big, the telcos won't push us around, the thinking goes. Plus we need an assembly line of hits in the rather fickle mobile gaming market, goes another line of thinking. That's the same kool-aid VCs are drinking from as well.

I'd also add that many of these investments still haven't figured out the basics of designing games for a mobile, as opposed to PC environment.

But why is it that otherwise rational VC's display this tendency to play "follow my leader"? It's actually very simple - it's a natural human behaviour which can best be described as "fear of loosing out".

What happens is that one VC decides to take a punt on an investment, for good, logical reasons, or plain stupid ones - it doesn't really matter. And then other VC's hear about it and assume that the original one MUST know what they're doing. So they MUST follow suit or loose out.

Actually, they have little choice here. If they fail to invest, they have to explain why they lost out on fabulous returns if everything works out. And if the returns don't materialize, they can say that they had the same poor luck as everyone else.

This kind of scenario isn't actually unusual in a wider business context - it's not just restricted to the poor old VC's. An example is the ludicrous price operators paid for 3G licenses in the UK.

Again, in fairness, this was a "no win" situation. Even if the management knew in their hearts and brains that they were overpaying, if they hadn't got a license, they'd have been crucified in the City. And the management wouldn't have been able to hang on to their jobs to say "I told you so".

There's scant satisfaction in being right if the price is your career.

So is the latest rash of investments in mobile gaming justified? Well, mobile gaming is certainly going to be officially humongously huge. But, in my view, very few of the game developers demonstrate an understanding of the mobile platform and how people play games on them.

PC gaming is about immersive playing - totally commanding a player's concentration for significant slugs of time. Mobile gaming is about killing time in between other things. It's a totally different concept. The phrase I've used in the past is that PC gaming is Turkey and all the trimmings, while mobile gaming is like sushi.

I see very little evidence in the market of this basic understanding and until it becomes prevalent, mobile gaming is going to consistently fall short of its potential.