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Smartphones take 58 per cent of portable gaming revenue

Thu 10 Nov 2011 10:10am GMT / 5:10am EST / 2:10am PST
Hardware

New US study suggests Sony PSP only accounts for 6 per cent ahead of Vita release

Apple

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A new study that shows thanks to the rise of the smartphone, Apple and Android now has the largest share of the portable gaming market, ahead of traditional devices like the Nintendo DS and Sony PSP.

In statistics provided by analytics firm Flurry, iOS and Android had a 58 per cent share of the revenue from US portable game software. The Nintendo DS had only 36 per cent, with Sony's PSP trailing at just 6 per cent.

In 2009 mobile games took just 19 per cent of the market, rising to 34 per cent in 2010, while Nintendo has seen the opposite, falling from a dominant 70 per cent in 2009.

The study calculated the changing revenue totals for the portable gaming market at $2.7 billion for 2009, $2.5 billion in 2010 and $3.3 billion in 2011. Those numbers, combined with cheap and easy access to games through App Stores, and the rise of free-to-play revenues, appear to make for a profitable combination.

Flurry also points out the there are around 250 million iOS devices and 190 million Android devices currently in circulation.

What the study doesn't make clear is whether or not the figures take into account the recent 3DS release, nor does it acknowledge the relative age of the Sony PSP, which is soon to be replaced by the PlayStation Vita, a factor that could stop consumers investing in software for a machine they're planning to replace.

The figures were compiled by Flurry from NPD reports, public data and information from mobile devices. Figures for November and December 2011 were estimated, based previous performance ratios.

21 Comments

Daniel Hughes
Studying PhD Literary Modernism

410 455 1.1
"nor does it acknowledge the relative age of the Sony PSP, which is soon to be replaced by the PlayStation Vita, a factor that could stop consumers investing in software for a machine they're planning to replace."

Neither does this acknowledge the age of the DS, or the fact it's already being replaced by the 3DS... :-p Though as you say, the study doesn't state whether or not 3DS figures are included at all. Given the pie is increasing in size, I doubt Nintendo will mind a smaller percentage share, so long as that share doesn't become too small.

Posted:2 years ago

#1

Patrick Frost
QA Project Monitor

383 175 0.5
Nor does it take into account that Nintendo's business model that makes profit from the hardware.

Posted:2 years ago

#2

Tom Keresztes
Programmer

632 223 0.4
Given that portables seem to be responsible for 40% of the income and less than a quarter of the installed base...

Posted:2 years ago

#3

Bruce Everiss
Marketing Consultant

1,716 598 0.3
Worldwide 500,000 new Android devices connect every day and that number is going up rapidly.
Most of our target demographics now carry a smartphone everywhere with them.
iOS has around half a million apps.
So why bother with carrying a dedicated gaming device? The concept is ridiculous.

Posted:2 years ago

#4

Greg Wilcox
Creator, Destroy All Fanboys!

1,993 902 0.5
Because, Bruce, between those GAMERS who want to play titles not available on smartphones and those who don't care about being a "target demographic" (we're actual people who want to have more choice in what we play and what we play on), the concept isn't "ridiculous" at all.

For me (and many others), an "all in one" device that shares my life and data with people I don't care to share it with, interrupts my gaming with messages, ads and other stuff I play games to ESCAPE from and in general, costs more to use than a dedicated handheld (I don't need a data plan or have a credit card billed endlessly for my PSP, DS, NGP ot other portables) is more a digital nuisance than anything.

Just a thought.

Posted:2 years ago

#5

Reza Ghavami
Marketing Analyst

17 1 0.1
I would have to concur with you Greg. Last year I bought the iPod touch 4, out of curiosity about how much the App Store was booming as a games market. I actually thought it could be a viable replacement for my traditional handheld game system. One year later, I have to conclude that while there are some amazing titles available for a platform like iOS, in general they come nowhere near the level of depth offered by dedicated gaming devices, even something as antique as a Game Boy Advance. The lack of buttons on a smartphone is a massive concern too.

Posted:2 years ago

#6
There's no fighting the ticker on this one, the handheld gaming market now belongs to Smartphones and Tablets.

Posted:2 years ago

#7

Jim Webb
Executive Editor/Community Director

2,210 2,051 0.9
Chris, I have to agree with Greg and Reza. The smartphone market belongs to the smartphones. the handheld market still belongs to the handhelds.

By that I mean the markets aren't fully inclusive. You have two great examples above showing exactly why only so much of the market will go towards the phones. More so than that, it's not that the smartphones have eaten away 58% of the portable market but the market has grown to encompass more than dedicated portable devices.

If you are a small developer, smartphones are a fantastic market to tap into. If you have a larger budget or want to develop deeper games, look to dedicated devices. But if you're expecting the market to move solely to smartphones, don't bank on it. It's not worth risking your capital on a bubble being hyper inflated.

Posted:2 years ago

#8
I have to agree with Bruce. While it may be true (and obvious) that a handheld gaming device produces a better user gaming experience, the reality is that the consumer isn't going to shell out for both. I empathize with the devs out there whose paycheck comes from hand held games but ask yourself the simple gut check question "someone walks into BestBuy with $500 to spend on a fancy new device - is the lineup longer infront of the tablets or the handhelds"

Posted:2 years ago

#9

Matthew Aileru
Studying Computer Science & Games Technology

4 0 0.0
Have to agree with Greg and Jimmy. I think what you meant to say Chris is that the casual handheld gaming market belongs to the smartphones and tablets. There will always be a huge market for the hardcore gamers in the handheld arena (although whether it will be huge enough for Nintendo and Sony remains to be seen, hopefully with the right focus...).

Posted:2 years ago

#10
In the handheld space Sony might make it, I think Nintendo is done for. Growth or not, I just don`t think the numbers are there to retain consumer spending on these devices like they used to. I think we can all agree at the very least its going to remain tough for these guys against Android and iOS, especially now as we are seeing the next gen of quadcore devices with waayy better graphics.

Posted:2 years ago

#11
If I was regularly travelling a lot daily, I would definitely be carrying my 3DS, and using it for gaming ahead of my Samsung Galaxy. I have been following most of the games on the device, and I still haven't found anything I would consider a "real" game, nor anything I want to play for any reason other than to kill a few minutes.

I don't want to poo-poo this report off the bat, but without seeing how the figures are calculated its impossible to know how right they are.

We know how many software units Sony & Nintendo shipped, and this amounts to "billions" of dollars every qrt, every territory. Given the figures from Apple about how much they have paid out to developers from the AppStore (several billion, over 4-5 years), and given that Android does a similar (if not less business) - I can't see how they are comparable.

If the report is including revenue from "freemium" sources and advertising, then maybe - how they would calculate any of this is beyond me though. Its also not entirely fair, as it spills over into the browser/web/PC market.

Posted:2 years ago

#12

Robert Schoeppe
Sr. Manager - Business Development - Games

1 0 0.0
what are the thoughts on Sony Ericsson's Xperia PLAY being a cross over device that services both the portable gaming need and smartphone need?

Posted:2 years ago

#13
Devices like the Xperia are the way of the future. There is no doubt in my mind that a device that can offer a top shelf game experience and also let people Facebook, Tweet, email and run their calendar is a much better consumer purchase.

Posted:2 years ago

#14

Greg Wilcox
Creator, Destroy All Fanboys!

1,993 902 0.5
Robert, if I could get my grubby review-crazy paws on a review unit and some games, I'd let you know. I'm intrigued by the device, but more as a games machine first and foremost. I like the PS Certified thing Sony has going on, but again, I'd use it less as a phone and more for handheld play.

Posted:2 years ago

#15

Greg Wilcox
Creator, Destroy All Fanboys!

1,993 902 0.5
Oh Chris...

If you talk to GAMERS and not use metrics and stats to define us all as "consumers", you'll see that a LOT of us progress hatin' losers have both handhelds AND smartphones (In my case, something like a dozen or so handhelds).

I actually do own a phone and while not too smart (it's n N-Gage QD. Hey, it works when I need to make a call!), it happens to play a couple of games I can't get anywhere else (Rifts, Pathway to Glory, Elder Scrolls: Shadowkey and a few others). Some of use make our purchases not on features we know we'll never use or keeping up with the Jobses, but on what's available to keep us busy at home and when on the road.

I also break the mold by playing the majority of my games at home. That said, if I do travel a long distance, I really don't mind carrying (*gasp!*) more than one device on me (*shocking!*). I always get amused by this being overused as a "valid" argument against portable game platforms versus smartphones. Finally, just because something is popular, doesn't mean it's really the "best" thing for all. That said, I'm VERY impressed with how Apple has managed to market their iOS line as the best thing since sliced bread, warts and all AND get people to dump a non-obsolete product a year or so after buying into what was supposed to be the best thing since.. well, you know...

Meh, I'm just immune to marketing, like to change my own batteries and hate a device suggesting to me what I might like when that's what I have a brain of my own for...

Posted:2 years ago

#16

Jim Webb
Executive Editor/Community Director

2,210 2,051 0.9
Content...are we forgetting content here? With $500 to spend, I'm not just looking at features, I'm looking at content. Can I get my Mario, Zelda, in depth RPG's, IP this, IP that, etc...on a smartphone? No. So long as content remains relevant (and may we all hope that is the case), dedicated devices will have their place in the market.

Who wants to carry 2 devices? I don't mind it. 1 devices handles calls, contacts, online and music while the other device handles game content I can't get on the phone with controls the phone can't compete against.

You can make the phone have all the pretty pretty graphics you want, if the content isn't there, if the IP's aren't there, if the complexity isn't there....I'm looking elsewhere for my gaming needs. And I'm not alone.

Posted:2 years ago

#17

John Bye
Senior Game Designer

477 434 0.9
Daniel - "Given the pie is increasing in size, I doubt Nintendo will mind a smaller percentage share"

If I'm reading the story correctly, Nintendo's slice of the pie has halved, while the pie has only got about 20% bigger, so overall they have almost 40% less pie than they had two years ago.

If things keep going this way, sooner or later it's not going to be economical to develop games for dedicated handheld platforms. Which is sad, because there are major issues with smartphones at the moment which are preventing them from replacing dedicated handhelds entirely -

1) The vast majority of smartphones don't have dedicated game controls (or even physical buttons in most cases), and touch screens and tilt detection just aren't adequate for all genres of game.

2) Battery life on smartphones is poor at best. If you spend long playing games, with the screen on and the processor running full pelt, it's going to die pretty quickly. If my PSP runs flat while I'm on the move, I can't play games anymore. If my Android runs flat while I'm on the move, I can't contact friends and loved ones, check my e-mail, find out where I am, check train times etc etc etc. Until smartphones stop futilely chasing ever faster processor speeds and deliver a phone that can last a day of heavy usage without recharging, this severely limits how much time I'm willing to spend out of the house playing games on it.

3) There aren't many really high quality smartphone games available that are good for more than a few minutes messing around at a time yet. If I want to spend half an hour on the train to work playing a "real" game like Zelda, Advance Wars, Valkyria Chronicles, Patapon or something, I mostly have to do that on a dedicated handheld gaming system.

4) Finding good smartphone games can be a real chore. The vast majority of apps I download are pretty poor and get deleted within a few minutes. It's all very well having 100,000 apps on your store, but if 99% of them are rubbish you're just making it hard to find anything worth playing.

Posted:2 years ago

#18

Peter Paninar
Artist

34 3 0.1
There are great, deep games on ios, on the same or very close level as psp exclusives.. Nonody says that u have to bother with 99% of the social crap or angry birds clones thats available. Just play that 1% of excepional ones :) I certainly have no problem to locate the ones that will last for 20-40 hours or more... And for the 1/4 of the price or less... And no need to carry any "extra hw" all Available on my phone whenever i get some spare time to play. The problem with psp was i never had it with me when i got some spare time to waste.

And as more and more developers/publishers getting the hint that there is huge space (and potential customer base) for aaa-like games even on the phones or tablets.. I can see the dedicated hanheld devices share will continue to shrink to the point that it will be more interesting to develop for phones as the potential for sales will be a lot higher than do a exclusive for vita or 3ds and try fo sell it for 30 (there isnt many IPs that im willing to pay this price point for a handheld game)

Posted:2 years ago

#19

Greg Wilcox
Creator, Destroy All Fanboys!

1,993 902 0.5
+1 Daniel. I never even got to battery life, as it's such a HUGE issue that it automatically makes device gaming a pain in the ass for me. I have an iPod Touch with a game on it I got to write a guide for, but I never used it after that after finding the battery life was awful. Play a game far less time than on the DS, but I have to charge the battery up after about 4 hours? Yikes.

My other point is about profit and a new paradigm. What's the return for a dev and publisher on a .99 game? Or even a 5-10 dollar game? I'd like to see an experiment that tries for a higher-priced, better quality core game experience (or even a collection of games at a fair price on reusable media) that was directly sold to users not at retail, but through a game's own website shop. If you're going to kill retail off at some point, at least create some damn jobs to supplant the ones that get lost.

Digital delivery, while lovely and efficient is also becoming a pretty good job killer in some areas. Sure, people make games and tackle stuff like customer support and patches such, but we're also seeing this super convenience end up tossing too many book, record and video store employees to the curb. Not to mention others in that supply chain who aren't normally counted. I think it's time for a "new" way to get games to the masses that takes some old elements and reworks them while keeping the speed most crave.

I say get some company to do digital for the "gotta have it FAST" crowd AND retail releases for those who don't care (and don't mind paying more for a packaged product). Hire people to staff a mail order department, offer up the ability to trade in used product in resalable condition for credit toward the purchase of new games, resell the used stock at a lower price point. All this with smaller form recycled packaging and a flat shipping rate (or even free shipping for larger orders) would be an interesting experiment that could get people employed and even help others learn a few new skills. It may sound kooky to a lot of you, but hell, you can't keep minimizing the amount of people who actually work in this industry and not see that it's a BAD thing in the long run.

Yeah, games may be cheap and easy to get, but when you end up with people who won't even be able to afford to pay the fees on their data plans which means they won;t be able to buy those cheap games), well, it's pretty much all over no matter how good they've gotten.

Also, Peter - you're mostly right, but that 99% is the problem. Until you have enough quality control so that there are less awful games and more, 1% isn't enough to make these platforms a good deal for those of us who prefer diversity (and less crap) in our gaming libraries.

Finally, I like ACTUAL tactile controls on my gaming platform. Blocking the game screen with my big fingers is something I just can't get to liking, no matter how good the device game. I really like the Vita because it gives you the option to use either the sticks or touch pads. That, and the screen is a nice size and wonderful to look at.

Posted:2 years ago

#20

Curt Sampson
Sofware Developer

564 278 0.5
Chris Boothroyd writes, the reality is that the consumer isn't going to shell out for both.

Right. That's changed from, "the reality is that the consumer isn't going to shell out for either." The vast majority of consumers have never bought portable gaming platforms.

Growth or not, I just don`t think the numbers are there to retain consumer spending on these devices like they used to.

You're incorrect about that. The portable gaming market in 2005, a pre-smartphone year of very large growth, was about $1.4 billion ([link url=http://money.cnn.]http://money.cnn.[/link] com/2006/01/13/technology/personaltech/gamesales/). The handheld consoles' 42% share of this year's $3. 3 billion is $1.38 billion. So it doesn't seem as if the software market for them is changing much. It's just as viable today as it was six years ago, regardless of the size of any other market.

As for the Xperia PLAY, it's not the way of the future in its current form, at least for gamers already invested in the Sony platform. Not being able to play my PSP games I can kind of understand, but not being able to play my PSOne games or Minis? Heck, I own about four times as many downloaded PSOne games as are even available for the Xperia play, and none of them will ever be playable on the platform anyway (unless I repurchase them).

To make my gaming more portable, I ended up keeping my old featurephone (about half the size of a smartphone) and just buying a PSP Go. I can (with a bit of cramming) keep both in the pockets of my jeans.

Posted:2 years ago

#21

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