Revenue From Smartphone Gaming Surpasses Handhelds

Nov 10, 2011 by  

Smartphone gaming surpasses handhelds

Perhaps Angry Birds isn’t such a fad after all.

In a report released by mobile analytics firm Flurry, iOS and Android had only 19% of the U.S. portable game market in 2009, compared to 11% for Sony’s PSP and 70% for the Nintendo DS. However, in 2011, iOS and Android now have a combined 58% of the market, compared to 36% for the DS and 6% for the PSP.

That is nothing short of a remarkable turnaround, and a sign of the change in how consumers demand their media. Apple was really the first to pioneer the market for smartphone gaming with the launch of its App Store in 2008, with Google following closely behind with their own Android Market. Now there are hundreds of thousands of titles available on both stores, allowing users to download games over-the-air with a simple tap on the screen. No need to wait in line at the store, no need to wait for the delivery truck to arrive at your doorstep.

The bigger picture here is the world of apps for these devices, where Nintendo and Sony have fallen flat on their collective faces. Both corporations still prefer consumer packaged means of product delivery, a delivery method that customers are beginning to turn their noses up against.

Handheld vs Smartphone gaming

Apple’s iPad and the Android tablets are cornering the market on high-end portable gaming, while Apple’s iPhone triples its graphics performance every year. Android and iOS command about $1.9 billion in revenues in 2011, much of that revenue coming through the free-to-play business model, where users can play games for free and pay real money for virtual goods.

Comparatively, Nintendo, who earned $1.2 billion, is expected to announce its first fiscal year loss next March. Flurry wondered if the end is in sight for handhelds.

“The days of paying $25 or more for a cartridge at a retail store may soon end.”

What does this mean for the 3DS and the upcoming Vita? Are they doomed to fail unless Nintendo and Sony modify their software delivery model?

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Follow me on Twitter @mattrowland1

Source: Flurry (via Shack News)

6 Comments

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  1. Wow this sucks, now handheld gaming is going to get less attention. I plan on buying the PSVita but now I’m worried they won’t cater to it as much as they should.

    Gaming platforms and the games with it are an investment. Don’t want to make a bad one.

  2. However, with recent games like Epoch and Aquaria the duture of the iPad and tablets is bright. Why even get a Vita or a 3DS if you already have a pad with its gorgeous widescreen display”

  3. To be honest I really thought the 3DS would be a success, I thought glassless-3D would be huge. But it isn’t. It looks like smartphones are grabbing all (or a sizeable portion) of casual handheld gamers. But dedicated game handheld consoles won’t die; it’ll become a smaller market; as long as Mario, Link etc aren’t on iPhones… It might be too late for Sony and Nintendo to start making phone/gaming devices (although maybe not for Sony Ericsson) but maybe it just won’t be financially viable come the next generation of handheld consoles.

    Is it just a matter of time before IOS/Android users visit Hyrule?

    • Jay, I personally think it is a ways off before something that size comes to mobile devices, but then again, you could have a stripped down mobile version of some Zelda game as well, something quirky and addictive. Anything is possible. :)

      -Matt

      • Maybe in 5 years iPhones would be as powerful as a DS; who knows; i think the price point for games is killing the 3DS; I’ve seen some 3DS games for €40, which is a few euros off a fully-fledged console title; which is completely unacceptable. Hopefully this mobile-casual gaming market will force Nintendo and Sony’s hand to slash prices for their games. Considering they take half the time & manpower to make, if even!!

        How powerful are iPhones? Like could they run GBA games (if they had an emulator)?

        • It can run Unreal Engine 3 which is far more powerful than even the 3DS sadly ): and the reason why the games for 3DS are almost console price is because of the updated size of the game cart and how much more console like the games are getting

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