Is Traditional Portable Gaming Dying?

When I was a lot younger and a lot less inclined to look at charts, I borrowed a friend’s Gameboy for a week when I was going to be taking a long car journey. I spent many hours playing Tennis and Super Mario Land while sitting in the passenger seat of my Dad’s car. I decided to myself, without any hard data, surveys or pie charts, that portable gaming was the future.

Various other flirtations with iterations of Gameboy, Sega’s battery munching Game Gear and even very brief dalliances with the mammoth Atari Lynx all confirmed my hastily made judgement. More recently, I’ve enjoyed portable gaming on the PSP, DS and now 3DS. I also have an iPhone and iPad.

Shortly after getting my 3DS, I was looking for something to play on it. While perusing the shelves of my local Game store, I spotted Plants Vs Zombies for the DS. It was £25. I’d recently played it on my iPhone, buying it from the AppStore for, I think, around £2. At that moment, I was struck at how obviously endangered the traditional giants of portable gaming were.

Here was a cartridge for a standalone gaming system that cost more than ten times the price of the App for an iOS device (iPod Touches are probably the most relevant here). How could that sales model possibly last when the world was suddenly going App mad?

The short answer, of course, is that it can’t last. At least, it can’t last in isolation. I should point out that this is purely my opinion, although it is backed up by every relevant study done on the subject in the last two years.

The simple fact of the portable gaming matter is that while Sony and Nintendo jostled for position in the past, Apple has created the future. That’s not to say that things are all rosy in the world of AppStore development – and especially not in AppStore marketing but, in recent years, that’s where the money has been going.

Late last night, I was shown a series of three charts which were created by Flurry using data from the North American charting organisation, the NPD. The figures these charts originate from are certainly not perfect, there is currently no way of precisely tracking software sales in North America. It’s also tricky to accurately track revenue from AppStore purchases so figures have a little swinging room. But this data is the best we’ve got and with the margins involved, even with a healthy margin of error, they’re pretty damning.

It’s also important to note that some estimation for total revenue in 2010 and 2011 was used and that figures for the last two months of this year have been calculated based on their ratios in previous years.

Either way, these charts give one of the best representations of how the portable gaming market is slicing up and it doesn’t look pretty for Sony or Nintendo.

Of course, some would rightly point out that this period counts the Apple operating system at the top of its popularity while Nintendo has an ageing machine that has just been replaced with one that is slow getting quality software support (although consider the reasons for that). You might also note that these figures are counted against Sony’s PSP at the very worst possible time to count them. Sales of software for it will be well down as a successor is expected.

There are some who are crying that this is the end of the road for Nintendo and Sony in the portable market. I certainly think it vindicates the suspicions I’ve had for a while and demonstrates a massive shift in how people enjoy their portable gaming.

But I’m not ready to count out the old guard just yet.

Nintendo’s 3DS has had a disappointing start to its life. Nobody would argue against that, although sales figures are not as dire as many would insist. The confusing nomenclature, reliance on an unpopular gimmick and lack of quality software were all, I believe, contributing factors in a slow beginning for Nintendo’s latest contender. Mario is on his way, though, and the recent price drop has seen sales of the hardware rocket. Counting out Nintendo before Christmas would be very naive.

[drop]What about Sony? Well, the PSP is all but dead now and there won’t be too many that mourn its demise for too long. The Vita is just over the horizon and Sony has made some very interesting decisions with that hardware, clearly based on Apple’s successes, which I think might just save the day.

The Vita is all about the touchscreen. As much as you or I, we seasoned gamers, will insist that buttons are needed for a really engaging game experience, the masses want a touchscreen. My four year old nephew is better at Angry Birds than I am but he couldn’t even reach all of the controls on a PSP. That’s where the battleground has moved to and that’s where the lion’s share of the revenue stream will come from.

Did you think Sony added touch controls to the Vita so you could stroke it sensually to make Drake climb up vines? No way, that’s an added gimmick (which will probably not be popular). The touchscreen is there so that there’s an intuitive control scheme for the tiny little downloadable games which will, hopefully, appear on the PSN as soon as the Vita is launched.

It seems that the argument over the AppStore’s impact on the portable gaming market is now pointless. The question now is: How well are the traditional giants of portable gaming set up to exploit the new growth? The 3DS might have missed a trick so far but the Vita is most certainly being aimed, at least partially, at the AppStore loving casual purchasers. And that might just make the Vita the best thing to happen to my portable gaming future since that long car trip and my generous friend.

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38 Comments

  1. This is something I’ve been thinking about for a while too, and it’s nice to see some data which backs up what I already though.

    Also… “for the tiny little downloadable games which will, hopefully, appear on the PSN as soon as the Vita is launched.”
    correct me if I’m wrong… but isn’t that what the “minis” were supposed to be?

    • Yes, but it’s allowing minis to be even more like iPod’s apps and maybe allow easier porting to Vita, too

  2. These charts tell a story, but not the full story…
    People could be buying the same number of PSP/3DS games, but also buying a LOT more iOS/Andriod games.
    I suspect it’s a bit of both – phone games are cheap so will sell well, but nothing compares to God of War on the PSP
    Although there’s no doubt Apple have changed portable gaming I’m still saving up for the PSVita.

    • How are PSN sales accounted for? I haven’t bought a game for my PSP for the last 2 years from anywhere other than the PSN store. Do PS1 games and minis count? How does PS+ get taken into account?

      • It would have been good to see actual numbers as well. The number of smartphones has clearly increased massively over the last two years. Software sales on the DS and PSP may not be in such decline as these charts could suggest. What stands out most is that the PSP hasn’t lost more market share. With barely any games released in the last two years it’s lost less than half its share when smartphones must have more than doubled in number.

        How much of this is actually just an increase in the size of the market? To me these seem like charts made to support a particular view.

  3. i’m gonna sound like a broken record here but a dedicated gaming device needs buttons.
    touch screen is nice for some games, but some like that Gangstars game really need buttons.

    but then that’s where the Vita is well designed, touch screen and traditional controls, and a touch control on the back which i don’t think i’ve seen on any other device.

    so they’re ready for the more sophisticated full games that only a device with proper controls can offer and it will have the ability to play the kind of games the ios devices excel at.

    of course sony will have to provide a comparable set of development tools to those available to ios/android devs if they want the same wealth of titles.

    one thing i don’t like about the vita though is they didn’t put any built in storage in it.
    and with it using a new format for the memory cards buying them is going to be pretty expensive for a while.

    kind of a glaring omission from a machine that will cost as much as a ps3.

  4. I really hope that touch screen Apps aren’t the future of portable gaming. I really don’t get the same feel for a game without buttons like Hazelam has said. No “full” game I have purchased as an app has been that great with that control system, but that is why I’m ok with only spending a couple of quid on something like that.
    Maybe I’ve just been missing the good games?

  5. My biggest question is not whether Sony and Nintendo can still compete in the portable market. My biggest question is, even accounting for the licensing fees incurred on consoles, why do devs think that it is okay to charge vastly more for a console version than an Android/iPhone version? It reeks of a rip-off.

    While it may be easier/cheaper to code for those devices, the actual development of a game still costs what it costs. The price of those phone versions must surely be heavily subsidised by those buying the console versions.

    Okay they’re digital with no media, manual etc. But as recent releases of older games on the PSN store and Xbox Live have shown, publishers are more than happy to rip console owners off on price even for digital only – and it’s the publishers who decide on those prices.

    So yes, there are questions to be asked about the future of mobile gaming. But perhaps we should be asking why publishers are ripping off console owners for the same product, rather than whether Sony and Nintendo can compete.

    • Licensing, manufacture, distribution and retail overheads make packaged software on consoles massively more expensive to produce.

      Digitally, it’s a different story. I assume you’re alluding to things like Plants Vs Zombies being so much more expensive on PSN and XBLA than on the AppStore? That’s largely down to licensing and hosting fees and also because the bottom hasn’t dropped out of the pricing structure on those stores yet so they can get away with it. There’s a perceived value to the software on those devices which quickly disappeared from iOS. In short, the main reason that those games are more expensive on PSN/XBLA is probably because Sony and Microsoft demand their licensing cut and fees for hosting it but there is likely a little bump because publishers know they can get away with it. A fairer (although still unfavourable) comparison is with Steam where things are usually much cheaper because there’s no licensing fee.

      • Not just things like Plants v Zombies, but even digital versions of older ‘proper’ games like Assassin’s Creed and CoD… at £40+ when you can buy for under £20 in the shops.

        Even if you take off related licensing/hosting fees, the price of the games is still many time that of the Android/iOS versions. I like your phrase “perceived value”, but I prefer to call it “sheer greed” on the part of publishers.

        In many cases, if these games were sold at half the price, they’d probably sell more than twice as many, which would increase their profits. But as with so many things, it’s all about screwing as much money as you can out of people in as short a time as possible.

        Even assuming everyone has brilliant internet speeds, if devs and publishers really want to get digital distribution to take off, these pricing issues need to be looked at. Even with hosting fees, they’re still saving a fortune on discs, cases, printed manuals and distribution – there’s no way digital versions should cost anything other than significantly less than a retail version.

  6. I have felt for a while now that PSP and DS games are overpriced. I have had both, and rarely bought games for them, especially at £35-£40 a pop. I know that 69p games would be out of the question, but if games were a maximum of £20 it would certainly tempt me more, particularly the big releases such as FIFA or uncharted.
    Paying the same as a full PS3 title doesn’t make sense to me.

  7. Just my two cents, but I think that something has been overlooked by Flurry. There is only so much a pie chart can show…

    While I am not disputing that portable gaming might be on the decline, I question the format the data has been presented in.

    In simplistic terms, lets have a look at Sony. 11% share in 2009, 6% in 2011 (albeit estimated).

    But would you rather have 11% of £100 (£11) or 6% of £200? (£12)? A crude example, but if the market was to be growing, these pie charts are meaningless. It just means that the proportion of money going to iOS/Android is increasing

    • Oh, I don’t think for a second that portable gaming is in decline. I think it’s massively on the increase. It’s just the market share that’s declining but that might be a real world increase, as you say, when faced against the massive growth of the other slice of that pie chart.
      Either way, there’s a big shift going on in the market and Sony seems to have noticed and are trying to address it in a new and interesting way with the Vita.

    • Yep – my point (above) exactly.
      Would be nice to see the actual numbers behind the charts.
      Lies, damned lies and statistics.

  8. It’s a valid point, but as the DS & PSP have aged, iOS/Android gaming has taken up the slack, but I don’t understand criticism of the 3DS, is it just people commenting with an agenda or perhaps Sony fanboys. The 3DS is selling faster than the DS, the most successful handheld of all time & that was without Mario Kart 7 & a Super Mario Bros title, thanks to Sony’s staggered worldwide release schedule for Vita the 3DS has the busiest quarter to itself worldwide & that could be a very big mistake indeed, especially as the market for a handheld costing 230 & 280 is unknown & the 3DS is already at the consumer friendly pricepoint, the price where dedicated handhelds are proven to sell.

    I think it’s possible for the 3DS & maybe the PSV (although I’m not sure once you’ve sold to the existing fanbase, £300+ for a handheld, memory card & a couple of games may not work in this economy) to maintain or grow their revenues AND for the rise of mobile containing to continue as that is selling to a whole new market, much like the DS’s astronomical success didn’t stop the PSP being success in its own right.
    Although Android’s USB Host support & control pad compatibility it brings could start to see core gamer’s attentions diverted

    • I can’t see any figures to support that the 3DS is selling faster but they do seem fairly comparable. The big thing is that the mobile gaming market has increased (with the likes of Apple coming on-board) and that Nintendo and Sony now have a massive player to contend with. We’ve seen the same thing with the home consoles. We’re now in a generation where casual gamers forged the way (with sales) and business models for the ones playing catch-up have surely been scrutinised and then some!

      The other thing is so many of us are on contract, it really does get tricky to justify such an initial expense instead of a contract cost coming out of our accounts every month (for my iPhone 4, £35 feels reasonable).

      • They’re fairly comparable. The 3DS launched everywhere at the beginning of this year in March, and is up to around 6 million, as of the end of September. Most of this at a much higher price point than the DS had.

        The DS had a staggered launch, starting off in November and December in the US, that gave it the Christmas boost to proceedings, and also an extra 3 months in two regions, reaching around 9 million by the 30th of September.

        In other words, it’s far too soon to call the difference between the two, and we’ll know much better after Christmas, but the problem is that the 3DS hasn’t met Nintendo’s projected sales, despite being a big seller, and they’ve had to admit failure on that and drop the price point.

        After years of uncanny success, Nintendo are now struggling a bit again.

  9. I would say it’s a little ignorant to believe that people just want a touchscreen, I mean it is a useful input device in certain instances. Phones are just better with touchscreens, so buttons became absent and developers have to work around it’s new limitations. The mass market is not as stupid as people seem to treat it, the console and computer gaming audience is pretty large and inclusive. It’s not like developers are even really making a point of adding front touch controls to PS Vita games anyway, and apart from ones that use it appropriately, such as LittleBigPlanet, it doesn’t work well.

    Part of the problem I believe is ease of development and the ability to respond quickly to consumers. The reason the App Store bacame popular in the first place is because it is so open and inclusive, allowing anyone who thinks they have a good idea to make a product and sell it, so although you get retarded developers looking to make a quick buck (*cough*, Gameloft), you also get some really awesome games like Sword and Sworcery, that the developer would probably have a tough time releasing on other platforms, especially with its quirky style and online features. Additionally with all the risks involved in console development with development kits, publisher/manufacturer contracts and fees and other considerations, it’s not even an option for a lot of developers, and with current industry conditions, such as the reckless and careless nature of quite a few publishers, it is perhaps making console development too risky. I think in the future console manufacturers may have to re-evaluate the way they work with developers (as well as publishers) if markets like this are going to survive.

    • I don’t think Peter mentioned that “people just want a touchscreen” but it’s something Sony had to address. It’s a wonderful input device and hopefully Sony devs are smart enough to see how it can supplement the buttons/sticks we so enjoy.

  10. Buttons or gtfo.
    Touchscreen based games have their place but trying to force games that work perfectly fine with buttons into that market is just sad and makes my gamer soul cry. If Apple succeeds by killing the market for dedicated portable gaming devices then we hardcore gamers will have quite some trouble in the future filled with frustrating controls.

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