Study: iPhone market growing at expense of DS, PSP

iPhone games may have had an even more significant impact on the handheld gaming market than previously thought, growing share at the expense of the DS and - more drastically - the PSP.

That's according to calculations made by analytics site Flurry using sales data from NPD and Apple, which note that iPhone games accounted for five per cent of the total US portable software market in 2008, while DS took a 75 per cent slice, and PSP 20 per cent.

By 2009, iPhone's share looks to have grown to 19 per cent of the total portable market, while PSP shrunk to just 11 per cent, and DS declined to 70 per cent.

That portable category was thought to be worth an estimated $2.25bn in 2008 and $2.55bn in 2009. The site estimates iPhone game revenue accounted for $115m and $500m in each year respectively.

Pitting the Apple device's standing in the overall console market, the site calculates iPhone took an estimated 1 per cent of overall share of the console market in 2008 and 5 per cent in 2009.

That revenue excluded any made through online services such as virtual goods, social network games and subscription fees.

In comparison, the portable sector took a 20 per cent share of the market in 2008 and a 24 per cent share in 2009, while the home consoles accounted for 79 per cent in 2008 and 71 per cent in 2009. Figures that indicate a loss in ground by the home consoles to the portable category.

Overall revenue made from console software in 2008 was $11bn, while in 2009 it was $9.9bn.

"Controlling 5 per cent revenue of a $10 billion industry in just a year and a half is significant," noted the site.

"Our main finding is that iPhone (and iPod touch) is a gaming platform to be reckoned with," it added.

"From a market share perspective, console games lost ground to portable platforms and iPhone. While the downturn in the economy may have dampened sales of the more expensive console games category, there is no denying that iPhone has generated substantial revenue and entered strongly into a mature industry.

"As prices come down for the iPod Touch, and games sold through the App Store continue to have lower price points, more of the young gaming generation may switch to Apple devices over Sony PSP and Nintendo DS for gaming."

Nintendo has previously denied that Apple's business is impacted on the DS, saying it doesn't go after the same "affluent" consumers as Apple.

"It is true that the current Nintendo DS business is not that heated up as it used to be sometime ago, when no one could tell how far ahead DS might be able to grow," Nintendo president Satoru Iwata said at the end of 2009.

"On the other hand data [has shown] that DS has not lost its footing at all. Actually it has been even increasing its footing all around the world."

"Because the original iPod business itself was big, my view is that Apple was able to leverage a very good timing to expand its business to telephones just when the original iPod business was nearing its saturation point.

"In other words, in my opinion, iPhone did not grow itself to a huge business, but something already grown up was able to prevent its growth speed from slowing down," he added.

It is estimated that over 30,000 games have been released onto the App Store since its launch in 2008.
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