By: John Parry
Portable gaming has recently seen a storm of blogging investors and even gamers who think dedicated handhelds are doomed. Nintendo is especially doomed, in case their projected 2013 profits and the Wii beating out PS3 and Xbox 360 in global sales fooled you. We’re taking a good hard look at some numbers that suggest dedicated handhelds aren’t going extinct. At least, not any time soon.
6. Smartphones Themselves
Have you ever tried typing on an iPhone? It can be any phone without a keyboard. Was it a good experience? We didn’t think so. The iPhone’s God-awful touchpad plus autocorrect combination has inspired a whole website about how much it sucks to communicate via text on an iPhone.
It’s unsurprising that a device trying to do so many tasks will perform some of them poorly, but touchpad-only smartphones seem to have it especially bad. What kind of phone doesn’t have a number pad? What kind of gaming device doesn’t have buttons or joysticks? What kind of MP3 player needs to be “unlocked” before it will let you skip to the next song?
The only advantage these smartphones offer is the ability to seamlessly glide between a plethora of tasks and perform all of them poorly. It’ll fit in your pocket, but wouldn’t you rather carry a second device than make DamnYouAutoCorrect mistakes all day?
Bear with us, smartphone people, we’re about to go way back in the history of console games. The year was 1983. Atari had recently flooded the market with “shovelware” (heaps of low-quality games) when they allowed anyone and everyone to make games for their console.
Wait, why does this sound familiar? Because anyone can develop apps, so smartphone games are well on their way to ruining their own popularity much like Atari did in the 80s. To be fair, no one is passing off their indie apps as $60 titles, and it’s unlikely we’ll see the same fallout that produced the video game crash of 1983.
Should there be even the slightest hiccup, however, Nintendo will be first in line to benefit. Oh? You mean you didn’t know that Nintendo was responsible for ending the crash of ’83? When Nintendo rolled out the NES in 1985, they put strict limits on who was allowed to release games for the machine. Perhaps it’s all just a little bit of history repeating. Who buys this cheap shovelware crap, anyway?
You might have missed it amongst the craze about Call of Duty or World of Warcraft, but the fastest-growing group of gamers is the 2-5 age group. How are these kids going to play games? It’s all about what their parents will buy for them. Frugal parents can find app-priced games available for download on the Vita or 3DS, too. Hear us out.
Let’s say you’re a parent who wants cheap shovelware for your kids. You could let your child borrow your $600 iPhone that’s tied to your credit card–that one doesn’t seem very appealing, and they’re certainly too young for an iPhone of their own. Your $500 iPad is another avenue.
Faced with those options, a $170 Nintendo 3DS or $250 PlayStation Vita, seems like a bargain deal (remember, you don’t have to buy the $40 games). Sure, the Kindle Fire is only $200, but that’s still more than a 3DS, and the Vita does everything the Fire can and then some. Thinking about a cheaper tablet? Nice try, kids know a fake when they see one.
And we’re not talking about the 3D slider, either. When you plunk down $40 for Super Mario 3D Land, you truly get $40 of gaming, where iPhone games deliver two bucks’ worth. It’s the difference between eating a meal and settling for a snack. You grab the iPhone game because it’s there and it keeps the hunger pains away; the Super Mario 3D Land is your expensive night out at a restaurant. The latter will leave you with fond memories for Nintendo to exploit later.
At this point, smartphones aren’t capable of delivering that kind of quality experience. The graphics lag behind, but that will shore up with time. The real flaw is the lack of game-enhancing hardware. Both the 3DS and Vita have touchpads, so any smartphone gameplay can be matched there. Then when you throw in 3D effects, a second screen, three cameras (3DS), a second touch pad, or dual analog sticks (Vita), there’s no contest as to which machines can provide a better gaming experience.
Settle for a snack while you ride the subway, by all means, but don’t tell us that it’s almost as good as the meal we ate at P.F. Chang’s last night.
Angry Birds. You knew we had to say it eventually. You can’t find a single article about the rise of smartphone games–or impending death of dedicated handhelds–that doesn’t mention Angry Birds. Angry Birds this, Angry Birds that, an Angry Bird once bit my sister. Let’s talk about how much money those Angry Birds have generated.
The entire Angry Birds franchise (including posters, shirts, you name it) brought in $106.3 million in revenue for 2011. Super Mario 3D Land, released in November 2011, brought in $233 million ($40 x 5.86 million in sales) in revenue in four months. One major Nintendo release can dwarf the revenue of “the largest mobile app success the world has seen so far.” Even if smartphones had the hardware to compete with something like the Vita, that market wouldn’t buy a $40 game. Apps can’t touch that kind of revenue.
By the way, can you even name another successful mobile game? For every Angry Birds there are a hundred flops. We’ll give you one more success: Epic has called Infinity Blade its “most profitable” game. In revenue, though, the franchise has only made $30 million. Smartphone games are a good way to turn a profit, but the fact is that people are still willing to spend significantly more on traditional games. The dollar signs say so.
Nintendo came under fire for lagging 3DS sales in mid-2011, when they ultimately announced a price cut starting two months later. What people neglected to remember is that the 3DS had a stellar launch. Nintendo’s initial sales pitch was so good that all their hardcore fans bought one right away. Everyone else waited for the holiday season’s first-party gold (Super Mario 3D Land and Mario Kart 7). In between, it looked like sales jumped off a cliff.
Satoru Iwata has also been quick to point out that 3DS has been outselling the Nintendo DS when you align their launches, even though the DS has the benefit of two holiday seasons during that period, whereas 3DS has only had one. At least one investor scoffed at that comparison, noting that “If Ford told you its 2011 model was selling better than the 2004 version did, you’d laugh, right?” Good point, sir, we should be comparing the 3DS to the first year of the DSiXL. It makes far more sense to draw the connections to the original DS, which Iwata notes also took a while to gain momentum outside of Japan.
PlayStation Vita is also being blasted by know-nothing investors because sales slowed down after week one. Things haven’t improved, with Vita at 2.2 million, putting Sony well behind Nintendo. This is not a repeat of 2005. Sony is definitely suffering the same software deficienty the 3DS had, and it’s too soon to tell whether the Vita will fizzle–heck, it hasn’t even had a US Christmas yet.
So what does this all mean? Smartphone games are constantly improving, and they’re certainly taking a bite out of the casual audience Nintendo found with the Wii. But that’s the thing–Nintendo practically invented that audience in 2006. Before that, those people just didn’t play games. Now they’re playing Angry Birds. This is not a seismic shift in the video game industry; it’s a fledgling group of casual gamers who are still feeling out the space. They’re not likely to pick up a dedicated handheld, but similarly, people who have owned dedicated handhelds (and there are 150 million people who own a DS) aren’t likely to set them down to go play Infinity Blade. As long as that’s true, dedicated handhelds aren’t going anywhere. Sorry, investors.
“6 Reasons Handheld Gaming Isn’t Dying” by John Parry is licensed under a Creative Commons Attribution-NoDerivs 3.0 Unported License.