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Mobile Gaming Knocks Handheld Consoles Out of the Competition

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The Gameboy is arguably one of the biggest success stories of gaming history. Within weeks of being released in the US, the handheld console had sold its entire shipment of one million units, and the iconic device has since gone on to evolve into other equally popular incarnations.

However, recent research by App Annie and the IDC could signal the beginning of the end for gaming optimised handhelds, such as Nintendo’s 3DS and Sony’s PlayStation Vita. The competition is not coming from next-gen home consoles, with both the Wii U and Xbox One experiencing disappointing sales figures. Instead, the threat is from the mobile platform, which is cannibalising portable console revenue with its increased accessibility and affordability.

In the third quarter of 2013, game revenue from the iOS App Store and Google Play were a whopping three times higher than all revenue generated from these gaming handhelds. This occurred despite the fact that console titles are significantly more expensive than app equivalents. It also marked the first ever time that the mobile gaming market had exceeded traditional portable console game consumption.

Marcos Sanchez, App Annie’s Vice President of Corporate Communications said: “Smartphone’s ease of use, low price point (due to subsidies), and multi-functional use as gaming and primary communications device have given them a ubiquity across a broad demographic that portable consoles will never have.”

Analysts are also pointing towards the vast library of affordable or free game content as a primary explanation for this platform migration. With such a varied selection of game content, including everything from AAA console franchises such as GTA to online casino products such as Rush Poker, it’s easy to see why casual players would choose to pick up their phone and play for pennies.

Understandably, this shift in gaming dynamic has raised major concern amongst handheld gaming fans. Sony’s flagship portable console, the PlayStation Vita, has been experiencing declining sales. PlayStation’s UK Managing Director, Fergal Gara, has pointed the finger towards mobile gaming, saying: “Games on tablets and phones have changed the marketplace and people can’t carry too many things around at one time.”

Similarly, Nintendo have been put under pressure to move away from hardware production and instead focus on porting their popular software titles onto the mobile platform. Nintendo President, Satoru Iwata has so far remained committed to console production, stating “our approach is not to put our games on smartphones.”

While many Nintendo fans and developers have appeared pleased with this decision, others have heavily criticised the move. IDC Insights analyst Spencer Izard noted that a refusal to move into the mobile market will effectively isolate Nintendo from potential revenue generation. “With the continued adoption of smartphones as gaming platforms in the mobile space I believe that Nintendo will see a further erosion of their market position in this space,” he said.