Revenue From Smartphone Gaming Surpasses Handhelds

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?


Follow me on Twitter @mattrowland1

Source: Flurry (via Shack News)

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