Interesting article thats sure to get reaction from all fronts:
When the iPhone was unveiled a year ago, it was obvious that it would outclass the status quo in mobile phones, particularly in the US where mobile operators have been holding back innovation. Far less obvious was the potential for the new phone to rival dedicated handheld gaming consoles. Here’s how well the iPhone stacks up against the Nintendo DS and Sony PSP in both hardware and as a business model.
Not a Fair Fight.
At first blush, one likely wouldn’t think of the iPhone as being in the same league as handheld gaming consoles. However, when Apple showcased a half dozen prototype apps at the SDK launch, fully half of them were games. Clearly, Apple isn’t going to be ignoring games on the iPhone.
The most obvious competition the iPhone faces is the leading Nintendo DS and the distant runner up, Sony’s PlayStation Portable. Incidentally, both gaming units appeared on the market in late 2004; the iPhone benefits from being nearly three years younger, and therefore based on considerably more modern technology. However, gaming isn’t an easy market to break into.
In addition to the very popular DS and the runner up success of the PSP, there have been notable failures in mobile gaming. Nokia’s Symbian-based “side talking” N-Gage, released in late 2003, fell dramatically short of sales goals and turned into an embarrassing joke for the company. In early 2005, Microsoft worked with Gametrac to deliver a WinCE based gaming device called Gizmondo; that company fell apart after scandals erupted involving executives’ ties to a Swedish crime ring and massive embezzling and reckless spending resulted in its bankruptcy. It didn’t help that Gizmondo was branded the “worst console of all time” by gamer magazine writers.
The Spectacular Failure of WinCE and Windows Mobile
Playing the Console Game.
Successfully deploying a game console is a lot of work and a lot of risk. The hardware has to deliver competitive features while also being priced low enough to attract a large audience of buyers. There’s also the catch-22 of selling units before enough game titles exist, or alternatively, lining up developer support before having sold any units to players.
Gaming heavyweight Sega pulled out of the living room games console business entirely after the tepid launch of the Dreamcast in 1998. Despite pioneering hardware, the Dreamcast suffered from poor marketing and was subsequently blindsided by the smash success of Sony’s PlayStation 2 nearly two years later.
However, Sony’s own efforts to enter the handheld gaming world, long dominated by Nintendo, didn’t materialize as planned either. Despite attractive hardware and its association with the most popular series of living room consoles ever, the PSP has fallen short of selling half as many units as the DS: 31 million PSP units versus 65 million DS. Nintendo also still sells the earlier generation Game Boy Advance, which has sold an additional 81 million units since 2001. Combined, Nintendo has sold nearly as many handheld gaming units since 2001 as Apple has sold iPods.
Microsoft similarly proved that its desktop PC monopoly power was no match for the entrenched players in the games console business, losing tens of billions on the original Xbox and Xbox 360 while remaining in a distant also ran position. Just two years into its massive investments in the 360, the console has already seen sales fall of dramatically in its second year, and entering 2008, it has consistently slipped behind the PS3 in monthly unit sales.
Video Game Consoles 2007: Wii, PS3 and the Death of Microsoft’s Xbox 360
Apple’s Quiet Gaming Strategy.
Apple seemingly wouldn’t stand much chance in throwing its own ring into the rough and tumble games console business. Its last effort, a licensing deal with Bandai to resell a low end PowerPC Mac as the 1995 Pippin entertainment system, was a notable failure.
Rather than directly competing against the big players, Apple has been developing games for the iPod in what has appeared to be a Steve Jobs Hobby since late 2006. However, those efforts translate directly into the new iPhone development platform, as Apple has used iPod games to perfect a system for secure digital software delivery through iTunes.
When the games appeared, it was a bit of a surprise to see what the iPod could deliver. It shouldn’t have been; the 5G iPods have the same ARM7TDMI processor as the Game Boy Advance (the iPod actually has two), a higher resolution 320×260 screen compared to the GBA’s 240×160, far more RAM (64MB) and plenty of disk storage to avoid needing to carry around any cartridges.
The iPod could deliver these major hardware advantages over the GBA because it was designed to be sold for around $400; the GBA was intended to retail for around $200. The iPod certainly wasn’t designed to compete as a gaming device, but its latent capacity makes it a viable alternative for the tens of millions of users who already have an iPod and want to use it for new things. Apple’s pioneering $5 game market also lowers the threshold for impulse buying.
Hacking iPod Games: How Apple’s DRM Works
Can a Phone Play Real Games?
The iPhone has similar hardware advantages over the DS and PSP, both of which were engineered to sell at much lower price points. The DS originally sold for $149 (and is now $129), and the PSP debuted in the US at $249 (now sells for $169). The 8GB iPhone debuted at $599 (and now sells
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