Thursday, November 10, 2011

Smartphone gaming revenues to surpass Nintendo, Sony’s Gaming Consoles

Image representing Android as depicted in Crun...It’s been a rough year for Nintendo, which saw a weak debut for its 3DS handheld player, forcing it to slash the price by a third less than six months after its release. One big factor behind the soft launch has been the rise of mobile gaming on smart phones and tablets, especially on Apple’s iOS platform. iOS games typically cost a buck or two at most, compared to $40 for big 3DS games, and can be played on devices that increasing numbers of Americans already own.
Meanwhile, sales of Sony’s PSP are slowing in the run-up to the February launch of the Vita, its next-generation handheld console, and observers are questioning whether it will face a 3DS-like reception.
It turns out that 2011 will be a tipping point for mobile gaming. According to market research firm Flurry, sales of  iOS and Android games will exceed sales of games handheld consoles by Nintendo and Sony for the first time. iOS and Android are expected generate $1.9 billion in revenue, compared with $1.4 billion for Nintendo and Sony.
“An abundance of digitally distributed free and $0.99 games, available on hardware that is both comparably priced and more powerful than traditional portable game devices, better appeals to many consumers,” Flurry noted in its post. “As a result, the days of paying $25 or more for a cartridge at a retail store may soon end.”
Perhaps the most surprising detail in Flurry’s report is how rapidly smart phone games have overtaken Nintendo and Sony, which have dominated the mobile gaming market for more than two decades. As recently as two years ago, Nintendo alone had 70 percent market share in the portable gaming market. Today, its market share has fallen to 36 percent.
Nintendo is bringing out its biggest guns for the holiday season, including “Super Mario 3D Land” and “Mario Kart 7.” But the company is now swimming against a tide that has turned against it.
iOS and Android have taken the market share lead from Sony and Nintendo.
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