In-fusio's wrong business model and mobile games value

"Rumour has it that three years ago mobile games publisher In-Fusio was valued at 300 million euros by an unnamed and ultimately unsuccessful suitor. And as recently as 2004 the company raised $27 million. This week it was sold to fellow French publisher Zenops for 3 million euros (according to the industry grapevine). Some investors were no doubt reaching for their beta blockers. But whatever the reasons for its decline, In-Fusio should be remembered for its genuinely pioneering work.In 1998 the company created a cut-down proprietary version of Java called ExEn, which it embedded into handsets. In so doing In-Fusio launched downloadable and connected games before anyone else in the West.This headstart enabled it to raise millions of dollars and purchase companies such as Thumbworks, Cybiko and Mobile Scope. Ultimately, however, In-Fusio's decision to stick with its proprietary path led to its eventual sale. But does the the In-Fusio deal tell us anything about the current state of mobile games generally? Certainly, opinion among developers, publishers and operators is as changeable as the British weather.The analysts, at least, are feeling bullish. Having initialised its coverage of Glu earlier this month, Goldman Sachs forecast that global mobile games revenue will grow from $2.1 billion in 2006 to $8.4 billion in 2010 (equivalent to a 41 per cent CAGR).Nearly all the mobile games luminaries we polled agreed with Goldman Sachs' upward trend (naturally) but indicated the CAGR was a little aggressive - 15-20 per cent being a more realistic expectation.A more tangible indicator came from Orange UK this week. Its first Media Usage Index revealed that Orange World users downloaded an average of 250,000 mobile games a month in the first quarter of 2007 (700,000 for the whole period).This compared to a combined 250,000 ringtones, full-track music downloads and music video downloads per month and 65,000 wallpapers.We could definitely be onto something with this mobile games lark." Mobile Entertainment May 2007