It’s an accepted fact these days that smart phones are rampaging through the handheld industry, wiping out single use products one after another. Portable media players, GPS, satellite radio… are handheld games next?
Handheld gaming has had problems over the last few years because high start-up costs keep competition at a minimum. Microsoft, Sony, Nokia, and a score of small companies have tried, and 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 smart phones.
The most popular Nintendo games can sell between 15 – 25 million units. Angry Birds has had 200 million downloads.
According to Guardian, some of the best smartphone games of 2011 (with their prices) are:
- Chillingo, iOS (link here), £1.19
- Namco Bandai, iOS (link here), 59p
- Simogo, iOS (link here), £1.79
- Ragtime Games, iOS (link here), 59p
- SilverTree Media, Android, free (with in-game payments – link here)
- EA, iOS (link here), £3.99
- IdeaWorks Game Studio, WP7
- Nyarlu Labs, iOS (link here), £1.19
- Spilt Milk Studios, iOS (link here), £1.19
- Kairosoft, iOS (link here) Android (link here), £2.39
- SouthEnd Interactive, WP7
- Gamevil, iOS (link here), Android (link here), 59p
- YoYo Games, Android, iOS (link here), Android (link here), £0.59
Though this list is based on nothing more than the preferences of their 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.
Meanwhile, for handheld games, the Japanese magazine Famitsu lists the best selling handheld games for the first half of 2011:
- [PSP] Monster Hunter Freedom 3 (Capcom) – 968,269 (4,449,258)
- [NDS] Dragon Quest Monsters: Joker 2 – Professional (Square Enix) – 469,469
- [PSP] Dissidia: 012 (Duodecim) Final Fantasy (Square Enix) – 454,522
- [PSP] Dai-2-Ji Super Robot Wars Z: Hakai-hen (Bandai Namco) – 364,881
- [PSP] Phantasy Star Portable 2: Infinity (Sega) – 352,511
- [PSP] SD Gundam G Generation: World (Bandai Namco) – 332,278
- [NDS] Pokemon Black / White (Pokemon Co.) – 303,299 (5,218,112)
- [3DS] Professor Layton and the Miracle Mask (Level 5) – 301,156
- [PSP] Tales of the World: Radiant Mythology 3 (Bandai Namco) – 275,202
- [3DS] Nintendogs + Cats: French Bulldog / Shiba / Toy Poodle & New Friends – 244,048
- [3DS] The Legend of Zelda: Ocarina of Time 3D (Nintendo) – 223,260
- [NDS] Ni no Kuni: The Ebony Wizard (Level 5) – 217,847 (550,158)
- [NDS] Ace Attorney Investigations: Miles Edgeworth 2 (Capcom) – 214,994
The average price for a handheld game is between $10 – $40, with newer games closer to $40, a significant difference from the listed smart phone games.
There are two types of gamers out there – “Casual” and “Hardcore.”
Casual gamers are a huge market, and with the Wii, Nintendo specifically targeted this demographic. But for handhelds, smart phones 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 smart phone the number one handheld gaming device, bumping the Nintendo line down to number two.
According to Adrienne, 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-$5) compared to the DS games ($15-$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.”
Adrienne’s point of view ends by referencing a game that really draws her kids to the smart phone platform. So is there a game on the Nintendo side kids are anxious to play? Not at the moment, though in the past there has been Nintendogs, Pokemon, Animal Crossing, Mario, Zelda, etc.
If we look at the line-up above, we can see that Nintendo is in a big gaming slump, with none of the best selling games for 2011 coming close to the 15 – 25 million units previous best sellers have sold. This slump is making the handheld market look bleak, but if Nintendo can push out a best seller within the next year, then Semico believes they’ll maintain a significant portion of the market share.
On the other hand, Nintendo is facing a lot of pressure to start porting their games to the iPhone. If they give into pressure, then their hardware sales might as well be finished.
And while content is still king – it’s not the full story – how has the hardware side been fairing?
Japanese hardware sales are usually a pretty good indication of what is going on in the market, though their recent numbers have been affected by the earthquake – sales are down and slightly off from usual.
Shipments between the 1st and 8th of August:
- PSP: 35,619 [DOWN] 1,040 (2.84%)
- PS3: 18,338 [DOWN] 2,366 (11.43%)
- Wii: 17,004 [DOWN] 1,228 (6.74%)
- DSi LL: 4,176 [DOWN] 1,091 (20.71%)
- 3DS: 4,132 [DOWN] 12,283 (74.83%)
- DSi: 3,900 [DOWN] 725 (15.68%)
- Xbox 360: 1,406 [DOWN] 210 (13.00%)
- PS2: 1,529 [DOWN] 65 (4.08%)
- DS Lite: 102 [DOWN] 36 (26.09%)
- PSP Go: 0 [DOWN] 7 (100.00%)
The main thing to take away from that list is everything is down down down.
PSP is doing great in Japan, a more recent trend, with almost all PSP sales now shipping there. The DS line in total is 12,310 units, about a third of the PSP shipments. The recent release of the 3DS has been a complete let down for Nintendo, partly because the earthquake happened so close to its release date, and partly because it has too high a price point and too few games. When this changes, these numbers should bump up, something Nintendo is counting on as they continue to slash the 3DS price.
So, the complete story is – don’t give up on Nintendo yet. Semico’s forecast leans to the more optimistic outcome for handheld gaming, because Nintendo has a history of turning things around after most everyone has given up on them.
But we need to keep in mind two caveats:
- If Nintendo lets smart phones dictate the game release line-up, then in a few years Nintendo will be at current PSP numbers worldwide, with the decline continuing thereafter.
- If Nintendo ports their games to smart phones, then the decline is going to happen even sooner.