Apple’s devices taking a big bite out of handheld video game market (with Google’s help)

Nov 15, 2011
Games

It’s kind of hard to gauge the influence that mobile devices have on other markets. For example, Apple believes that the iPad is having a pretty serious effect on the PC market (as well as some effect on Mac computer sales), diverting customers away from traditional computers and toward its tablet. But it’s hard to […]

It’s kind of hard to gauge the influence that mobile devices have on other markets. For example, Apple believes that the iPad is having a pretty serious effect on the PC market (as well as some effect on Mac computer sales), diverting customers away from traditional computers and toward its tablet.

But it’s hard to determine if that’s really the case because it’s impossible to poll every iPad buyer to ask if they would have otherwise bought a PC. Likewise, it has been suspected that mobile devices such as the iPhone and iPad (as well as other smartphones and tablets running on Google’s Android operating system) have been gobbling up video game sales that would otherwise go to the likes of industry giants Nintendo and Sony. But it has been difficult  to confirm that suspicion up to now.

New data from Flurry Analytics, however, seems to suggest that yes, mobile gaming is robbing more traditional handheld video game leaders of their sales, according to a story from Pocket Gamer. Flurry specifically targets the fact that Nintendo’s handheld numbers have been falling pretty fast during the sat two years. Nintendo has traditionally pretty much dominated handheld gaming, or at least been an enormous presence on that landscape.

As Flurry notes, software revenue for the Japanese game maker’s Nintendo DS handheld has plummeted pretty steadily, dropping from accounting for 70 percent of handheld gaming market revenue in 2009 to 57 percent in 2010 and 36 percent in 2011. Meanwhile, revenue generated by software on Apple’s iOS mobile operating system and Google’s Android operating system has steadily increased, going from accounting for 19 percent of revenue in 2009 to 34 percent in 2010 and to 58 percent in 2011. Sony’s chunk of revenue dropped as well, but less sharply – software for its PSP line accounted for 11 percent of handheld revenue in 2009, 9 percent in 2010 and 6 percent in 2011. Total revenue for the handheld gaming software market clocks in at $3.3 billion.

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Here’s a quote from Pocket Gamer’s story:

“Combined, iOS and Android game revenue delivered $500 million, $800 million and $1.9 billion over 2009, 2010 and 2011, respectively,” states Flurry’s Peter Farago.

“And just as smartphone game revenue has climbed aggressively, Nintendo DS and Sony PSP revenue has dropped precipitously.

“Over the last three years, Nintendo and Sony posted a combined $2.2 billion, $1.6 billion and $1.4 billion for 2009, 2010 and 2011, respectively.”

Now, while iOS and Android gaming sales are climbing like crazy, the popularity of smartphones is likely not the only culprit for these numbers. For one, Nintendo just released a new handheld gaming device, the Nintendo 3DS, which is struggling to take off in the market, perhaps because of its lack of big-time Nintendo-produced games to capture the imaginations of players.

Sony, too, may be the architect of its own drop in sales, having announced a new handheld device last year that will be released in the coming months called the Sony Vita. That device actually encompasses a lot of recognizable smartphone technologies, such as touchscreen controls and an internal accelerometer. It’ll also be competitively priced (around $249) and already has a slate of big game franchises that will be available at launch.

So to say that the iPhone (and Android) are the death of handheld gaming might be a little premature – it’s not a level playing field at the moment. How the numbers adjust in 2012 will be telling, because we may very well see what many video game industry insiders maintain: that the iPhone gaming market and the handheld gaming market actually aren’t really one in the same. While smartphone gaming is tapping into a huge portion of the total market, it’s likely that it’s also expanding it quite a bit, while handheld gaming continues to appeal to a more “hardcore” crowd.

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Phil Hornshaw

Phil Hornshaw is a freelance writer, editor and author living in Los Angeles, dividing his time between playing video games, playing video games on his cell phone, and writing about playing video games. He’s also the co-author of So You Created a Wormhole: The Time Traveler’s Guide to Time Travel, which attempts to mix time travel pop culture with some semblance of science, as well as tips on the appropriate means of riding dinosaurs. Check out his profile.

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