iOS and Android disrupt portable gaming market

Posted by Trent Nouveau

iOS and Android devices are apparently disrupting billions of dollars of gaming revenue that were previously spent on portable consoles. 

As Peter Farago of Flurry Analytics notes, portable gaming has traditionally been dominated by Sony and Nintendo for well over two decades.

iOS and Android disrupt portable gaming marketIn this "classic" model, consumers paid around $200 for the gaming device and up to $40 for popular game cartridges.

However, the advent of Apple's iOS and Google's Android is causing a paradigm industry shift, with thousands of free/inexpensive mobile games distributed across a massive installed base of powerful and networked form factors.

"The most striking trend is that iOS and Android games have tripled their market share from roughly 20% in 2009 to nearly 60% in just two years," said Farago.

"Simultaneously, Nintendo, the once dominant player, has been crushed down to owning about one-third of market in 2011, from having controlled more than two-thirds in 2009. Combined, iOS and Android game revenue delivered $500 million, $800 million and $1.9 billion over 2009, 2010 and 2011, respectively."

According to Farago, the abundance of digitally distributed free and $0.99 iOS/Android games "better appeals" to many consumers. Meaning, the days of paying $25 or more for a cartridge at a retail store may soon end.  

The analyst also confirmed that Nintendo's demise in the portable game category, along with slumping Wii sales, is causing the Japanese-based corporation to struggle.

"In addition to tablet form-factor competition, the console game industry, which currently pits Microsoft, Sony and Nintendo against each other, will also face competition from Apple and Google TV initiatives.

"Beyond 2011, if Nintendo continues to face financial hardship, it may be forced to consider difficult choices such as divesting its hardware business and distributing its content, for the first time, across non-proprietary platforms... [Yes], Nintendo may truly face a Nokia-like decision to jump or perish in the flames of its own burning platform," he added.