2005 Outlook: Consumer Tech I Trip Hawkins –

Trip Hawkins honed his gaming skills on Monopoly and Stratego as a kid growing up near San Diego. Today, few are as intimately familiar with gaming as the 51-year-old. Hawkins, while at Harvard University in the early 1970s, created a football simulation game called AccuStat just as computers and video games were beginning to take off. After graduation, he was one of the first to join the startup Apple Computer, where he helped develop the Mac. Later, he founded Electronic Arts, which has become the world’s largest video game company. Now, Hawkins is focused on the mobile phone. Last year, he founded Digital Chocolate, a San Mateo, Calif.-based maker of games and entertainment for wireless devices. It has raised more than $21 million from Kleiner Perkins Caufield & Byers, Sequoia Capital and Sutter Hill Ventures. Hawkins, the startup’s CEO, says that mobile phones are “turning into the largest computer platform in the history of mankind.”

Q Will the mobile phone become the dominant platform for games this year?

A No, if you’re a hardcore gamer, you’ll stay home and play John Madden Football on your PlayStation. Mobile phones have limited screens and limited input capabilities for that.

So why are we seeing an explosion of consumer devices and mobile phones?

A It’s not about video gaming; it’s about social gaming. Whether it’s a feature phone or some other mobile device, the mobile platform is a network platform. It’s about connecting with other people and creating a sense of community, whether you’re playing games, sending text messages, taking photos or listening to music. That’s what’s causing so much interest. These consumer devices are creating multiple social connections.

Well, VCs showed interest in 2004. Will the investment activity continue in ’05?

On the consumer content side, companies like Digital Chocolate, Sorrent or Jamdat (which launched an IPO in 2004) will see VC activity. But I suspect there will be some consolidation in the consumer market this year and not everyone will make money. Some companies won’t have the right approach and could fall flat on their face.

What will be the innovation that we should watch for this year?

It has to do with Moore’s Law (computing power will rise exponentially with each new development). It was a no-brainer for phone carriers to switch cell phone technology from an analog device to a digital. And now that the mobile device is a computer, it will give rise to many new applications. The devices will move from one sophisticated level to the next. More consumers will be using a phone to do more than make calls. That’s what you should watch for.

It seems like most of the consumer companies are fighting over the same piece of meat – providing entertainment for mobile devices. Is that a big enough market to carve out a niche?

True, this is a dog-eat-dog world. That doesn’t bother me. I’m just trying to invent something new. And as more and more users move from a voice phone to feature phone with a camera or to a smart phone or device, such as a BlackBerry, the number of users will grow and the markets will grow.