By Diarmuid Mitchell BBC News

Many mobile games are licensed from films and television shows

The former head of Sony Europe Chris Deering has described mobile gaming as the "big kahuna", with 1 billion mobile phones worldwide poised to take up games.

Revenue from mobile games is predicted to grow by more than $5bn (�2.5bn) to about $7bn (�3.5bn) in the next five years, according to a report by Informa Telecoms and Media.

But such predictions have failed to materialise before.

According to earlier predictions by some media analysts, the sector should already be worth around $18bn (�9bn).

While many believe mobile gaming is on the brink of exploding into the mainstream, the industry faces unique challenges in fulfilling its potential.

'Managing chaos'

Robert Tercek, keynote speaker on mobile games at last week's Games Developer Conference (GDC) in San Francisco, said mobile content publishing was "an exercise in managing chaos".

Expect to see tremendous innovation in the use of the camera to control the game Thor Gunnarsson Ideaworks3d

Consoles usually have a lifetime of five to six years, giving games publishers a period of stability in which to develop titles and franchises.

But business models and technologies in mobile phones are constantly evolving, which means mobile developers face additional pressures in producing games for an ever-changing market.

The chaotic nature of mobile gaming extends to the process of buying and downloading a specific game to a particular model of phone.

Thousands of games are available for mobile phones but universal compatibility does not exist - some games may not work on many handsets, limiting choice for gamers.

Fragmentation

This issue of game and handset compatibility has been a key problem for developers.

Games need to be developed to run on hundreds of different handsets supported by a number of platforms ranging from Java (J2ME) to Windows Mobile, Brew and Symbian S60.

This fragmentation of technologies creates difficulties for developers in deploying, or porting, their games to many different handsets.

3D accelerated graphics phones support more advanced games

Thor Gunnarsson, vice-president of mobile developer Ideaworks 3D, said the industry has traditionally taken a "brute-force approach" to this problem.

Work is outsourced to porting teams in Eastern Europe and India who adapt a master version of the game for different handsets.

This method is inefficient and unprofitable, and is set to disappear as new mobile game development software incorporates features both for game creation and deployment to different handsets, said Mr Gunnarsson.

'Hard-casual or casual-core?'

Much has been made of the supposed division of the mobile game market between casual and hardcore gamers.

The mobile games industry is responding to this perceived split in gaming tastes by producing hybrid games that combine the visual and interactive nature of high-end 3D games with simplified control and game mechanisms.

In producing Final Fantasy VII for mobiles, Ideaworks3D's design brief required the graphical richness and performance of the PlayStation 2 (PS2) game, coupled with new game controls to allow single-handed play.

"This kind of hybrid game is the way forward - extreme cases of very hardcore games or very casual games tend not be where the bulk of the market is," said Mr Gunnarsson.

"It's in the middle ground where a lot of the true innovation is. Probably we need a new way to describe it, maybe hard-casual or casual-core."

Future trends

But mobile gaming is still waiting for the "killer application", that single game that redefines what a mobile game is.

MILESTONES IN MOBILE GAMES 1997: First mobile game, Snake embedded in Nokia 6110 1999: Japanese carrier NTT DoCoMo offers downloadable games for flat subscription fee 2002: Pay-per-download games become widely available in Europe and US 2003: Bejewelled, first real-time head-to-head multiplayer game launches in US 2005: Fantastic Four, first synchronized global release of mobile game and film 2006: More than 17m people download games in US 2007: Game downloads to be available at some UK cashpoints

Making use of mobile phone connectivity for multiplayer gaming is a current trend we can expect to see develop in the future, according to Chris White, European head of studio at Glu Mobile.

"There are plenty of connected games out there," said Mr White.

"In Project Gotham Racing Mobile players can upload ghost-races to our online server and then race against friends," he added.

"In the future we'll see connected mobile communities developing in much the same way as on console, but with the added integration of the phone's camera and microphone/audio capabilities."

Making use of mobile phones' audio and camera capabilities is widely seen within the industry as the next step forward, says Thor Gunnarsson of Ideaworks3D.

"Expect to see tremendous innovation in the use of the camera to control the game or to use the camera to enhance the game in the same way the Eye Toy did for PS2," he says.

Some developers are seeking to move mobile gaming forward by creating cross-platform mobile games which link mobile and online versions of the same game.

"I think this interoperability will come shortly," said Glu Mobile's Chris White.

Realtime multiplayer games allow players to go head-to-head

"It would not be an identical game on mobile, but you'd be able to perform a subtask which would directly affect your experience in the console version."

This kind of cross-platform gaming is something Korean mobile massively multi-player online (MMO) game developers Gamevil is working towards.

Its mobile MMO game Path of a Warrior already supports some continuity between the online and mobile, allowing players to store and trade items online for use in the mobile game.

The sequel to Path of a Warrior, currently in development, is widely expected to build on this parallel gaming between platforms.

Counting the cost

Future mobile gaming could involve hours of immersive gameplay within mobile MMOs and realtime multiplayer games with gamers chatting while they play.

But these advancements will come at a price.

For mobile gaming to reach its predicted levels of profitability, operators need a solid revenue stream, and developers need to recover development costs.

The most likely business model is the subscription method dominant in Japan, the world's most advanced market for mobile gaming.

Mobile gamers there usually pay a monthly charge to subscribe to large compelling games or to game providers who offer bundles of smaller games.

Whatever the method of payment, the mobile game industry will need to engage with the broader mobile ownership worldwide to make its predicted billions.