the handheld days may be numbered

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Page 1: The handheld days may be numbered

The Handheld Days May Be Numbered

Gameboy came out back in the day.  That pea soup colored screen, playing Tetris, not being allowed to take it to school…  Ah, the good ‘ol days.  Times have clearly changed.  After attending E3 this year, I was able to see all of the up and coming hardware/software from all the big dawgs.  It’s exciting, but doesn’t really paint an accurate picture of what’s really happening in the world of mobile gaming.  Nintendo released a 3D handheld earlier this year only to slash prices after not-so-good sales and Sony has yet to release the PS Vita (due out early next year); the Vita is hotly anticipated since the PSP has never truly gained a strong market presence with the PSP.  Over the past 3 years, however, the reality is that the trend has been favoring iOS and Android gaming.

It seems that folks are using their smartphones more and more for gaming, as opposed to purchasing a separate form-factor for their gaming use.  In a recent Flurry blog post, Peter Fargo writes, “Recently, no industry has been more impacted by digital distribution than video games.  Leading the disruption are iOS and Android devices, whose free and inexpensive games, distributed across a massive installed base of powerful and networked tablet and mobile phone form factors, have already disrupted billions of dollars of game revenue.”

The Flurry article is interesting because it totals all of the smartphone gaming and compares it to Sony and Nintendo, and the results are rather alarming.  Fargo goes on to write, “The most striking trend is that iOS and Android games have tripled their market share from roughly 20% in 2009 to nearly 60% in just two years.  Simultaneously, Nintendo, the once dominant player, has been crushed down to owning about one-third of market in 2011, from having controlled more than two-thirds in 2009.  Combined, iOS and Android game revenue delivered $500 million, $800 million and $1.9 billion over 2009, 2010 and 2011, respectively.”  See the full chart here.

As smartphones become more all-in-one, consumers are relying on them more and more.  That explains why ad revenue is up on mobile devices, and continuing to climb.  Think about it…  I’ve left my camera at home before a party or an outing with friends, and didn’t break a sweat because I had my cell phone.  The cell phone actually proved more convenient, because I could simply take a photo and upload it to Facebook, etc. and go right back to the action.  Smartphones essentially killed the PDA business, and now with mobile gaming, it seems to be trending the

Page 2: The handheld days may be numbered

same way.  Matt Matthews over at Gamasutra has a solid article that outlines how retail sales for video games are kinda flat.  That’s an alarming statistic because as the “app market” continues to grow, consumers are becoming less and less likely to purchase additional hardware when they have a smartphone that serves a similar purpose.

There’s always going to be some people who don’t want to play games on a phone.  Yes, folks like me, are now considered the “hardcore”.  And even deeper look reveals it could be the type of games available. You can’t play Call of Duty on a mobile phone with the same experience as on a console or even a handheld.  However, addicting games, like Paper Toss, Blackjack, and Angry Birds are dominating the play space these days.  The games are free, $0.99, or dirt cheap by comparison and offer hours of fun just as well.  Plus, they come with ads of their own, thus creating gold mines for developers and ad providers.

We’ll see how it shakes out this holiday season, when Nintendo goes H.A.M. and pulls out Mario for the Nintendo 3DS.  Early next year, Sony drops the PS Vita, and it looks amazing.  Hopefully, mobile gaming for the big boys isn’t ready to call it a day.  But maybe it’s just the push needed to get these fellas into an app driven, wi-fi connected, mobile gaming arena.  I’m pulling for ya Mario.

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