It's an accepted fact these days that smartphones are rampaging through the handheld industry, wiping out single-use products one after another, including portable media players, GPS, and satellite radio. Are handheld games next?
Handheld gaming has had problems over the last few years because high startup costs keep competition at a minimum. Microsoft, Nokia, and a score of small companies have tried, but only Sony has managed to compete against Nintendo.
This lack of competition could be a reason why this industry was so prime to be taken over by smartphones. The most popular Nintendo games can sell between 15 million and 25 million units; Angry Birds has had 200 million downloads. Here's a list of the best smartphone games of 2011, the operating systems behind them, and prices (in British pounds sterling), according to the UK's Guardian newspaper:
Though this list is based on nothing more than the preferences of the Guardian's readers, it is a good indication of the differences between the types of games available on phones and those available on handhelds, especially the price difference. The average price for a handheld game is between $10 and $40, with newer games closer to $40, a significant difference from the listed smartphone games. For handheld games, Japanese game magazines publisher Famitsu lists the best-selling handheld games -- and the corresponding platforms -- for the first half of 2011 as follows:
Monster Hunter Freedom 3 (Capcom), PSP
Dragon Quest Monsters: Joker 2 -- Professional (Square Enix), NDS
Dissidia: 012 (Duodecim) Final Fantasy (Square Enix), PSP
Dai-2-Ji Super Robot Wars Z: Hakai-hen (Bandai Namco), PSP
Phantasy Star Portable 2: Infinity (Sega), PSP
SD Gundam G Generation: World (Bandai Namco), PSP
Pokemon Black / White, (Pokemon Co.), NDS
Professor Layton and the Miracle Mask, (Level 5), 3DS
Tales of the World: Radiant Mythology 3 (Bandai Namco), PSP
Nintendogs + Cats: French Bulldog/Shiba /Toy Poodle & New Friends, 3DS
The Legend of Zelda: Ocarina of Time 3D (Nintendo), 3DS
Ni no Kuni: The Ebony Wizard (Level 5), NDS
Ace Attorney Investigations: Miles Edgeworth 2 (Capcom), NDS
There are two types of gamers out there: casual and hardcore. Casual gamers represent a huge market, and with the Wii, Nintendo specifically targeted this demographic. But for handhelds, smartphones did a great job of grabbing this market with easy-to-play games that used the phone’s touch screen to innovate game play. Casual gamers have made the smartphone the No. 1 handheld gaming device, bumping the Nintendo line down to No. 2.
According to the head of a casual gaming household: "My 7-year-old has wanted a DS for the past few years and may just get one for Christmas this year. However, we've been thinking that an iPod touch might make more sense; not a lot more money and the apps are so inexpensive (free to $5) compared to the DS games ($15 to $35). By the time we purchase a few games for him we'd be at the price of an iPod Touch. And the DS still uses a stylus?! A stylus and game cartridges are just more things to lose. Plus we already know he loves Angry Birds."
Her viewpoint ends by referencing a game that really draws her kids to the smartphone platform. So is there a game on the Nintendo side kids are anxious to play? Not at the moment, though in the past there have been Nintendogs, Pokemon, Animal Crossing, Mario, Zelda, etc.
In the concluding part of this series, we will focus on how the slump in handheld gaming is affecting the sales of hardware at the leading vendors, including Nintendo.
There's a chance that smartphone gaming may become better than handheld gaming. PC gaming is already leagues better than console gaming and has been for decades..
Hard core gamers would rather invest to handheld gaming/consoles because it would take to another dimension in where they can live in their own fantasy compare to the small screens in your phone.
I noticed something with the popularity of the mobile phones and that was the segmentation of the phones. Some mobiles were targeting music lovers, some camera and video while other internet etc. This segmentation is still to happen in smartphones. A smartphone can have all the capabilities but i wonder whether making smartphone specialized in one segment make sense.
The articles deals very clearly with the subject to make it easily understand why the smartphones are eating the handheld gaming device market. What I would like to see is, if the smart phones are also going to affect the sales of gaming consoles in the near feature making smart phones an alternate. Any views on this?
May be the casual gamers will be just happy with smart phone games rather than buying a console.
I think smartphone games aren’t as deep or as fully featured as the current games you get on the Handheld Video Game machine. But that could change as smartphones become more powerful plus more entrenched.
this phrase say it all :"not a lot more money and the apps are so inexpensive (free to $5) compared to the DS games ($15 to $35)." As you mentioned in the article the casual user is the user who determine the gaming market. And for a casual user the price per game is a high priority. The story with the crazy birds game show us that a small (few lines of code ) but a well written program can be more popular even from a program that the programmers team spent the double time to create it.
@Anandvy, You're absolutely right, access to games on smartphones by young children is a concern. Many of these younger players are addicted and are lacking in social skills.
However, from electronics industry it is business. It is development and advancement and is yielding revenue - great!
I think whilst, I encourage innovation, advancement and good market targets, electronics industry, parents and all involved should step back and evaluate the impact such devices are currently having on these young ones. We are all responsible to ensure that these kids are not severely damaged, in a quest for huge profit making venture.
The age for getting electronic gadgets is getting younger and younger.
@eemom, I agree with you that age for getting electronic gadget is getting younger but surely this is not healthy trend. Kids spend more time using these handheld devices rather than get involved in physical exercises. But from electronic industry point of view this is good news because they will get younger audiences also to whom they can target their products.
The traditional companies like Kodak, canon will have to rethink their strategy.
@hwong, you are right these companies should rethink their strategy but unfortunately they dont have much option. Only way they can compete with handheld devices they should slash their prices so that people prefer their products instead of handheld devices.
I believe the answer to the article is a sounding yes from everyone. It's inevitable that the gaming handheld markets will vanish sooner or later and will be replaced by the smartphones. If you think about it, many of the items like handheld dictionary, handheld camera, video camera...all will be replaced. The traditional companies like Kodak, canon will have to rethink their strategy. Otherwise, it'll become another Borders book
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Peter Drucker famously said "Trying to predict the future is like trying to drive down a country road at night with no lights while looking out the back window." Yet in the razor's-edge world of electronics—with a lean supply chain and just-in-time demands—the need to know the future is vital.
While no one really can accurately predict the future, we can take guidance from another Drucker saying which is the best way to predict the future is to create it.
You've heard the saying "the No. 1 supply chain risk is your people." That hasn't always been the case. But today's complex global supply chain requires a new type of multitalented employee. It's one who understands, finance, marketing, economics, is savvy with technology, graceful with relationships and can think analytically.
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