German game developer HandyGames will offer 28 titles as free downloads. Instead of charging for the games through a carrier's portal or an off-deck publisher, HandyGames generate revenue from in-game advertising using technology from Greystripe.
In addition to the obvious benefits--users love free stuff--this approach also eliminates the threat of software piracy and much of the overhead from billing and accounting.
Ad-supported gaming still has some obstacles, however. Price may be a driving factor in mobile content adoption, but it is hardly the only one. I-Play has just released the an international survey of mobile users that show 30 percent of respondents are unsure if their phones are capable of playing games and that 17.5 percent have not downloaded a mobile game because they don't know how. And, at least in the U.S., it's still pretty tough to hit it big without carrier support--and I don't expect many carriers would be willing to take a risk on this business model.
Regardless, expect to hear a lot more about "advergaming" in the future. Advergaming pioneer Massive, recently acquired by Microsoft, is already putting together Web-based casual games for clients, and it's only a matter of time before they make the jump to mobile. The entire mobile ad industry is also waiting for Google--the undisputed king of Web ads--to step into the mobile ring. It's widely assumed that Google is preparing a mobile advertising network ("AdSense for Mobile") with the potential to make it much easier for smaller developers to create free, ad-supported content.
I'm going to be following advergaming pretty closely; I like trends that have the potential to redefine the power structure in an industry. Now, if we can just get the record labels to see that ringtones promote album sales and convince them they should be paying us to download them... - Eli