Business Week: iPhone gaming a threat to eliminate Nintendo and Sony mobile!

Discussion in 'iPhone' started by Rybold, Nov 4, 2008.

  1. Rybold macrumors 6502a


    Jun 23, 2008
    California, USA

    Article Link:

    "Watch out, Sony and Nintendo; overnight, the maker of the iPhone is making a mark on the handheld gaming industry
    "I didn't expect much from games on the iPhone. I had visions of casual games, perhaps a fancy take on solitaire or a version of poker that takes advantage of the handset's touchscreen. Surely not a true mobile gaming experience.

    Boy, was I wrong. For the last few days I've been sampling some of the games available from the iTunes Store on the iPod Touch, and I've been stunned at how elaborate and involved they are. On the iPod Touch I've played a version of Gameloft's Real Soccer 2009 that rivals the version of the game on the Nintendo DS, and I didn't even miss the buttons. I've seen demonstrations of Sim City, forthcoming for the iPhone and the Touch from Electronic Arts (ERTS), that look more elaborate and sophisticated than any versions I've played before on a desktop PC or console.

    They're immersive, addictive fun. And it's now readily apparent to me that the iPhone and iPod Touch are well on their way to becoming an important force in handheld gaming. When you consider the ease and reach of Apple's online method for distributing games, Apple could do in this category what it did in online music, causing big headaches for the genre's established players, Sony (SNE) and Nintendo.

    Apple's come a long way in short order. In the three months and change since the iTunes App Store opened for business, it's already home to some 1,500 games, compared with fewer than 300 titles for Sony's PlayStation Portable and about 600 for Nintendo's handheld console, the DS.

    Apple's Gaming Advantages

    The iPhone maker is also holding its own when it comes to units sold. Based on sales data and analysts' projections, Apple is on track to sell an easy 40 million devices or more a year that are capable of playing games.

    Nintendo sold 42 million DS consoles during the 18 months from January 2007 to June 2008, according to market research firm iSuppli. So Apple is on pace to sell about as many game-capable handhelds in a single year as Nintendo, the market's current leader, has sold in the most recently reported 18 months. This suggests that Apple could be on the cusp of claiming the crown as the world's market leader in handheld gaming.

    Now look at Apple's advantages over competitors. Apple already has more titles for its games than both of the other two combined. And aside from the free ones, games on the App Store sell at prices ranging up to $9.99 and sometimes a little more. Compare that with the $20 to $40 for Nintendo DS games and the $10 to $40 for games on the PSP.

    And with Apple selling via iTunes, there are no costs associated with the distribution of physical media. All games are downloaded directly to the device. And in the event the game is buggy, the developer can easily issue an easy-to-download fix. The developer gets 70% of the sale and Apple keeps 30%, with no one else to get in the middle. Nintendo and Sony partners have to worry about shelf space at stores, shipping, returns, defective merchandise, and even the occasional shoplifter.

    On a revenue comparison, Apple's gaming sales will be much smaller than at Sony or Nintendo because the price of individual games is so much lower. What's more, not everyone who buys an iPhone or a Touch will also buy games. But the potential game sales per iPhone user will be higher because of the price differential. In its most recent quarter, Sony sold 3.18 million PSPs and about 12 million games for an average of fewer than four games per device.

    Apple's Impact on the Gaming Industry

    While there's no data yet on specific iPhone game sales, users of the iPhone are heavier gamers than those of other phones. A survey by iSuppli's ConsumerTrak found that U.S. cell-phone users report spending less than 3% of phone-use time on games. But that average shoots up considerably to more than 9% on the first iPhone and 6% on the iPhone 3G. (That's still less time than iPhone owners spend on e-mail, texting, or talking.)

    How big an impact can Apple have? "They're not going to put Sony or Nintendo out of business," says Van Baker, a gaming analyst at Gartner Group (IT). Both companies have strong and thriving home-console businesses.

    And the iPhone and Touch aren't ideal gaming devices. They're also made for calling, Web access, and e-mail. And both lack buttons, which arguably would give players more control over complex in-game moves and maneuvers. (But the iPhone and the Touch have the multitouch screen and the accelerometer, which allow for some pretty fancy moves of their own).

    Nor are Apple's newly spawned gaming devices cheap. The iPod Touch starts at $229 and the iPhone 3G starts at $199 and requires a two-year service contract. The Nintendo DS goes for $129 while the PSP goes for $170 to $200. But once you add the cost of games, and in the case of the PSP, a $30-to-$40 Memory Stick, the iPhone's price begins to look competitive. Then the iPhone also has iTunes, which includes easy access to music, movies, TV shows, and more games all the time.

    It's enough to make me wonder whether Apple is on its way to conquering yet another sector of the consumer-technology business from out of nowhere. We'll certainly know more after the holiday season, but if I worked for the Sony or Nintendo handheld gaming divisions, I'd be watching the holiday sales figures closely.

    Hesseldahl is a reporter for"

  2. Dr. Cabrera macrumors 65816

    Aug 25, 2008
    Los Angeles
    puahaha yeah right, the Iphone/ipod will never be a serious threat until they fix the stability of the platform

    how many times have you had a game on a nintendo DS or PSP crash several times on you before it actually decides to play
  3. tinfai macrumors member

    Aug 27, 2008
    Wow, very interesting. Work and general lack of free time prevent me from using the iPhone as a gaming device, but I've been very impressed with the quality of the two games I do play from time to time: Hold 'Em and 21 Pro. I think Apple would do well to emphasize the gaming angle in some of their marketing efforts.
  4. -Dark Angel- macrumors 6502

    Nov 13, 2007
    Mwhahahaha, wth. Powerful isn't anything if you don't have the battery to back that up. Gamegear and the atari lynx were both more powerful than the gameboy/GB Advance and ya know what, they both failed. Gameboy kept on living. Seeing this just made me not read the joke of the day, this post made me lol so hard I had tears streaming. Yes, the battery life is pretty horrible, I like to play the casual games (no way I'm playing the soccer or racing games on this thing, give me sudoku, tetris and puzzles and I'm happy) and it still doesn't last as long as the DS or PSP.
  5. notjustjay macrumors 603


    Sep 19, 2003
    Canada, eh?
    I think it does stand to capture a certain market, granted not the majority of it. It seems 9-year-old boys and their Nintendo DS units are inseparable, for example, and that will probably not change. Nor will it affect the hard-core or even the "relatively determined" segment of gamers. But I could picture high school or college students or travellers of any age wanting to pull out a device and play a quick game for 5-10 minutes while waiting for a bus or a flight or in a waiting room, and I think it will become more likely that this person will pull their iPhone out of their briefcase than a DS or PSP.

    I fit perfectly into this segment. I don't play games much, and when I do, it's a quick arcade puzzler, Solitaire, a few laps around the racetrack, etc. Flash games work great for me despite their relative simplicity. I own a PS3, primarily for Blu-Ray playback, and haven't had to buy any games yet because I can download the free demos of various titles, and the trial levels are generally enough to entertain me for a few minutes at a time.
  6. kkat69 macrumors 68020


    Aug 30, 2007
    Atlanta, Ga
    1500 games for the iPhone... Sure.. but have you seen most of them? iPhone/iPod Touch may have a 'slot' in the portable gaming market, but I doubt they'll even dent sales from Nintendo or Sony's portables. NDS has a unique design that sets it apart from any other, input on one screen, outcome on another, you can't get that with iPhone or PSP. PSP has some of the better graphics than the other 2.

    It'll have it's place, but it won't be that much of a competitor that Nintendo and Sony will even consider it in R&D.
  7. grantsdale macrumors 6502a

    May 11, 2008
    Writer is clueless.

    Yes, it takes some of the 'casual gaming' market, but there is no way it will ever compete with the games that take many hours with a single storyline, such as Legend of Zelda.
  8. lakaiordie macrumors 65816

    Jun 17, 2008
    lol that'll never happen. a real gaming system needs physical buttons.
  9. CocoaPuffs macrumors 68010

    Aug 23, 2008
  10. yalag macrumors 65816

    Nov 18, 2007
    iphone is a pathetic device for gaming without buttons.
  11. rotobadger macrumors 65816


    Sep 18, 2007
    I agree completely. I have NES, Gameboy, Super NES and Gameboy advance emulators on my iPhone. Without buttons the games are only entertaining for a few minutes as it is impossible to play the game for any extended amount of time without your fingers missing the virtual buttons.
  12. jlake02 macrumors 68020


    Nov 2, 2008
    I think we'll see an iPhone "controller" of some type soon. Then, iPhone will dominate.

    With millions of units in play, Apple could make a fortune with a $50 controller and apps that support it. ;)
  13. rotobadger macrumors 65816


    Sep 18, 2007
    I'd buy one in a second!
  14. yalag macrumors 65816

    Nov 18, 2007
    jobs doesn't like buttons. sorry it'll never come.
  15. daisuke07 macrumors regular

    Oct 25, 2008
    I want to see like mario and zelda come to iPhone then...
  16. hazza.jockel macrumors 6502

    Aug 2, 2008
    in a swag
    #16 if the DS only has 600 games. I would say it has at least 1200 games and most of them would be better games then those on the iPhone. Just look around for DS roms. There are no games on iPhone that i would be willing to pay $10 for. However i would gladly pay $50 for a quality game on the DS like Mario kart.

    Also i agree with others that the battery life of the iPhone will limit its potential of its gaming ability. It only last about one day as it is, imagine how long it would last if you were playing games on it.

    I doubt the iPhone or the iPod Touch will make it as a gaming device.
  17. TurboSC macrumors 65816


    Aug 4, 2007
    Unlikely a formidable challenge to Sony / Nintendo portable gaming... but it does have the power to sway casual gamers ( a la Wii ) so don't underestimate the sleeping giant.
  18. Michael CM1 macrumors 603

    Feb 4, 2008
    That article reeeeally didn't point out how most of the bazillion games for iPhone are ones that you get bored with after about 10 minutes. Put something out there as deep as the Mario or Zelda titles, then we can talk about the iPhone as a "gaming" device. Until then, it's a great time-waster.

    I think the real innovation is the iTunes distribution method. The latest-generation game systems have been dabbling in that with their downloadable games, but they really lack good stuff. Hopefully, those big three will make the online stores a lot better with the next round of systems in a few years.
  19. PowerFullMac macrumors 601


    Oct 16, 2006
    Ha! Apple have done what Nokia couldnt years back!

    The grahpics are amazing, too! :)
  20. Rybold thread starter macrumors 6502a


    Jun 23, 2008
    California, USA
  21. tylertech macrumors regular

    Oct 24, 2008
    That'd be awesome, and I head of a lot of awesome games that might come out for the iPhone :D
  22. Inukami macrumors 6502

    Jul 11, 2008
    ipod touch maybe but iPhone? no.

    The iphone is just way to expansive, it will never match the DS in terms of portable gaming console as long as it remains an accessory and the TRUE gaming library stays small. Sorry but i don't consider 50% of the iTunes game real games that can be compared to the DS. As for the PSP it's dead.
  23. Small White Car macrumors G4

    Small White Car

    Aug 29, 2006
    Washington DC

    The only people who write articles like these are people who don't play games very often. Whenever I see the lack of buttons mentioned, you know what they say? "Look at how successful the Wii was, and they invented a whole new wand-thing instead of having a traditional controller!"

    Yeah, you know...that wand that has a half-dozen buttons all over it! :rolleyes:

    They just don't get it. The iPhone is a GREAT casual gaming device, but it will never replace things like the DS or the PSP.
  24. Rybold thread starter macrumors 6502a


    Jun 23, 2008
    California, USA
  25. allmIne macrumors 6502a


    Sep 17, 2008
    United Kingdom
    I love my iphone, but I'll not be throwing away my DS just yet.

    The DS epitomises stability and ease of use, whilst the the iphone... well, not so much.

    OP - I think buying a kid an iPod touch would, depending on their age and propensity to destroy delicate electronics, be a nightmare. The DS is pretty robust by comparison.

    Edit: OP, what does that link you posted above prove? This the summary statement at the bottom.

    To me this says that rather than erode DS and PSP market share to a great extent, the iPhone has created its own, virtually separate games market, which will have likely only a very small effect on Nintendo and Sony. In fact, that link really suggests the opposite of your thread subject - it's not a threat.

    Meh, I dunno :)

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