Is The Handheld Market In Trouble?

Michael Pachter has been at it again – this time voicing his concerns over the handheld market. He thinks that the PSP2 is going to be “dead on arrival”, following in the footsteps of the original PSP.  Now it would be easy to bung that quote in as the headline to grab some attention, but it’s what he says next that’s interesting:

“We’re approaching saturation in the handheld market.  We’re starting to see DS hardware sales crack, the iPod Touch is cutting into the handheld market. It looks to me like young kids are just as happy playing with the iPod Touch.

The 3DS will prolong the handheld market for manufacturers, but ultimately I think handhelds are in trouble. What’s the difference if you play Tetris on an iPod Touch or on a DS? Well, you pay a buck on the iPod Touch and you pay $20 on the DS.

After the 3DS has had its little rush I think the handhelds will continue to decline.”

I find myself (mostly) nodding in agreement with what he’s saying.  One of the first things that usually gets mentioned when a new PS mini is released is “that’s quite expensive, I can pick it up for 59p on the iPhone”, and it’s true.  A case in point would be Flight Control and Auditorium; both amazing games but both can be picked up for peanuts from the app store.


Has the Pach man actually got something right?

Source: MCV



  1. So.. he hasnt heard of the PSP phone then? Muppet. *returns to bed & pizza*

    • If the PSPhone has a similar pricing structure as the PS Store for minis etc it will still fall behind the Apple devices.

      • Exactly. Unless Sony are courting devs just now to launch with 59p apps, they can forget it.

      • It entirely depends whether the PS Store is an arm of Android or a completely seperate entity, whether they allow for automatic mapping of the D-pad and buttons to take over from touch-titles without requiring an update.

        I personally hate touch controls, with the exception of games that have been inherently created for touch control (Flight control, Angry Birds etc). I’ll much prefer playing the games with buttons and the extra room this gives Android devs to make quality games that don’t solely rely on touch.

        I’m really interested to see how Sony take the PSPhone, attempt to lock it out from open-source coding and inevitably fail, or embrace the open dev community and create something truly awesome.

      • but sony are always playing catch up *psn cough cough, with other companies. They have never been innovators they are the proverbial lemming that follows others off a cliff (which doesn’t happen it was disney pushing them). apple have a massive jump on them but the android marketplace is catching up, so long as sony dont get all shitty about what can be used on the system

  2. Spot on there, the price difference is the main reason why the iphone versions will outsell any handheld versions, provided the games are like for like. However, handhelds will still reign supreme with “real” games like MGS, Pokemon etc

    • spot on there ive never played on an iphone game for more than 10 mins max but ol prof layton i’ll play for hours( probally caus im shit though)

  3. Why is Patcher vocals so loud throughout the internet…?

    Does anyone care what he says, is he some sort of Gaming Industry Guru?

    Or is he an absolute [email protected]?

    Excuse me francais mon ami’s

    • He’s a bit of a tit from time-to-time and doesn’t word things as thoughtfully as he could do but he’s utterly spot on. The iPhone has a far larger share of the mobile gaming market than the PSP. When I read about this recently I sat there and thought “no… no way. Really?” then a bit of time to cogitate everything and it made perfect sense.

      My “buy-everything-possible” mate doesn’t take his PSP with him any more. He sits on the train with his iPhone and iPad, knowing he has plenty of gaming pleasure at his fingertips. However, the PSP Phone could really make inroads into the market if Sony are man enough to have sensibly priced titles that can at least get near the pricing structure of iTunes.

      It will take quite a force of nature to get me to shift away from my iPhone at present (I’m no Apple fanboy, I just think it’s a great device) but the PSP Phone already teases at the best of both worlds. The one thing that’s sorely lacking from the iPhone is real buttons (when it comes to gaming).

      • Is that even a problem any more?

      • Lack of buttons are a major issue (for me at least) is the game requires you to use a magical ‘analogue’ stick and press buttons as well. It just doesn’t work well.

      • The great touchscreen games have a UI that doesn’t force you to use a fake analogue stick, the devs have designed a way of playing that makes use of what is there, saying that, a hybrid device like the PS Phone could have the best of both worlds if Sony can replicate Apple’s low barrier to entry App Store, for this reason the PS Phone is infinitly more attractive than a PSP2 to me

      • It is, nofi, very much so (meant nicely). Just not for you (and obviously many, many other folk who can get on with a lack of buttons in certain genres). However, there is a very unhealthy portion of us that simply can’t get along with such virtual buttons and overlook games instantly because the control system isn’t to our liking.

        I’m not even trying to be awkward! :-) I just cannot get along with them. Not that I haven’t tried or won’t. I plain don’t like it.

        If the PSP Phone sorts this out, I’ll be very interested to see how it performs.

    • He’s just a market analyst.

      Everything he says these days seems to get blown way out of proportion.

    • It is the power of marketing. Mtv ( pushes him forward for most predictions.

      And to be fair, how many people call themselves ‘video game analysts’ who aren’t journalists?

      Don’t get me wrong, I’m not defending the guy, I was just discussing this exact point with a friend while I was reading this.

    • I have to be honest. I love gaming on my PSP, Ghost of Sparta and Peace Walker are shining examples of what can be done.

      Im on my second iphone and whilst its legendary as a phone, with all it can do, I would never choose it over a PSP.

      The PSP-Phone could really make some room here, it really could. Yeah Apple are doing well in the mobile market, but in may ways they have broken it down, taken it back to basics and in doing so created a field or area to take hold of for themselves. I wouldnt say the Iphone/Ipad have eaten into PSP/DS market. I would always regard them as more ‘throw away’ and just as time consumers…

      Interesting comments from everyone, but I cant do with touchscreen gaming, unless it Cut the Rope ;-)…

  4. I have to admit that I’m not very much excited about any new handheld. Not the PSP2 nor the 3DS.
    The PsPhone (or what seemed to be an android app) is much more exciting. I don’t want to take even another device with me when traveling.
    I also agree, I think most people prefer simple games on a phone or ipod.

  5. Totally with Pachter on this. At this moment in time everyone is chasing Apple for Market share, pretty unsuccessfuly might I add though. The number of 7-15 year olds thats I know getting ipod touch’s for xmas is in double figures. I don’t know anyone at all who is getting a DS or any other handheld.
    Did you know that originally Michael Pachter was going to be called Michael Puchter but they thought people would change the P to an F too easily. ;-)

    • Im a little disappointed that no-one picked up my Scott Pilgrim vs the World reference, or at least no-one mentioned it

      *Finds a quiet corner to cry in* ;-)

        There, you happy?? hah. I only read it, and would def have got it if you had let me.

  6. “It looks to me like young kids are just as happy playing with the iPod Touch”

    Because ‘what young kids want’ is all that matters, right?

    • Handheld wise, yep, pretty much. Ask Nintendo.

      • Terry Wogan’s anything but a young kid ;-)

    • Just perpetuates the “gaming is for kids” myth though, doesn’t it?

      • Not really. Handheld gaming is just embraced more by the younger audience. Not to say that no adults use handheld systems, but the real market is the kids. I have a PSP Go and DSi, and i don’t use them even a fraction as much as my kids. Pokemon games are the the biggest sellers for the DS, and i’d like to think that it’s kids rushing out for the new Pokemon game.

  7. Phone’s have more than caught up hand-held consoles when it comes to capability, the fact that dual-core phones with a gig of RAM will be arriving very early next year proves this, but the real win is in digital distribution and the extraordinarily low barriers to entry, iTunes+App Store pisses all over the PSN & Sony’s Media Go! suite.

    Another thing, because of the low barrier to entry, prices have plummeted to pennies which obviously sits well with consumers but not so well with a company expecting to get £30 for a game. Even at the low end why pay £3-£4 for a mini when the same thing is available free or 59p elsewhere?

    People aren’t fools and Sony have got their work cut-out to make sure the PS Phone is both a commercial success for them, but also competes with Apple & the ever-growing Android threat whose market share will be too much for big devs to ignore for much longer.

    • Obviously the incredibly HIGH entry is the cost of the device itself (eg. a new iPhone) but tuck that into an affordable contract and we soon justify such expenses. This is where a PSP Phone could work well. It might be on a decent tariff (say, £30/month) and you have a PSP and a great mobile phone at your fingertips and in one device.

      My biggest worry is Sony seems to learn the least (from the industry around it) when compared with Microsoft and Nintendo (and to a degree, Apple). I’m concerned that they’re going to be supremely arrogant and short-sighted and not realise what’s already working for consumers at large; go off and do their own thing and then sit there scratching their heads whilst thinking “where did we go wrong?”. :-\

      • Ah, classic Sony! I think you have both hit the nail on the head here, mobile gaming is so much more affordable now and there really is no way to go back. The PSP has already proved that people don’t want showy epic games on a handheld platform (even I tend to shirk away from the PSP because if I want to sit and become immersed in a game, I will do it at home), they want simple, cheap and addictive games that pass short periods of time. The revolution of the 59p game that can keep you occupied for hours has been the death of handhelds as we knew them. And as you said Mike, even the high entry point to owning a powerful phone is negated as you get some very reasonable contracts now. I think the PSP phone is Sony’s best bet, but even then they have to reduce the cost of mini’s, as they are just not competitively priced compared to everything else available. Handheld gaming has changed, and both Sony and Nintendo need to recognize this.

  8. Games on the idevices and defo the minis aren’t worth my time if the true handheld markets dies in favour of the mobile epidemic I will honour the long forgotten fun delivered withe the PSP and DS..

  9. Granted the cost of games are far cheaper, but the price of the device is not with it being £190 for the cheapest one up to £330. Also there’s the issue of whether people are happy to have just downloadable games for a handheld?

  10. The problem with the app store is that the devs have crippled themselves with their mad rush to the bottom of the bucket. At launch most titles were priced not far off PSP minis, but within a month, they realised that pricing lower got them into the top 10, and so more sales.

    Now look at the iPad. For the same games on iPad, they’re much more expensive, and largely back in line with the PSP minis pricing.

    Put simply, the iPhone developer’s over doing it has had a major industry wide effect, making the portable market suddenly very hostile and tricky for new machines that aren’t iPhones/iPods…

    So Pachter’s not too far off the mark here, but he’s forgetting that the DS and PSP are very old now. Their replacements are up, and it depends on whether Nintendo can make their 3D gimmick stick. I’m not sure what Sony can really do, other try and catch everything in one go.

    That means a PSP2 based on a high specced Android platform that can capture both the current PSP market (through back compatibility?) with long, in depth, Polygonal 2D gaming, as well as the casual games that currently thrive on the iPhone.

    I’m interested in what they can achieve, but I’m sceptical of how successful it can be.

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