Is the end of dedicated mobile gaming devices beginning?

WorldWide Tech & SCience. Francisco De Jesús.

Is the end of dedicated mobile gaming devices beginning?

The latest results from Nintendo suggest that the dedicated mobile gaming device may go the way of the dedicated mobile music player, with the smartphone ruling all. Guy Daniels reports.

If the latest half-yearly results from Nintendo are anything to go by, the days of the dedicated portable games device may be numbered. The results from the computer gaming company showed a $900 million loss for the period, with a pessimistic forecast for the future – despite the new Wii U that will be launched later in 2012. Its latest DS and 3DS portable hardware and software produced far weaker sales than the company expected.

Dirk Schmidt writes on the mobile analyst website Asymco that Nintendo’s actual sales started to fall behind forecasts from 2009 and the margin is widening. As for the reason, he says look no further than the iPhone (which launched in 2007) and Android:

“By Q1 2009, iOS reached an installed base of about 38 million, half the number of Nintendo portables in the same period. Furthermore, in Q1 2009 Android phones came to the market. Portable gaming devices from Nintendo and Sony declined ever since: 17 per cent in 2009, 31 per cent in 2010 and already 16 per cent in the last twelve months.”

He says that iOS and Android have outsold Nintendo portable units by a factor of 2.1 times and 1.6 times respectively, with one of the reasons being that there are a staggering 26 times more games available for the phone platforms than for Nintendo or Sony’s portable consoles.

Angry Bird alone (with over 500 million downloads to date) has sold more than twice the amount of Sony’s cumulative portable game titles and almost as many as Nintendo’s cumulative games titles since 2007. The dedicated devices are just not attracting the number of games developers – they may have the graphics firepower, but they just don’t have the reach and potential profitability of iOS and Android.

Although Sony is also playing in the smartphone space – and more aggressively now, given that it’s buying complete control of SonyEricsson – Nintendo shows no signs of following. Microsoft is bringing its Xbox console titles to mobiles via its latest Windows Phone operating system. And even Facebook, with over half of its 800 million users playing games within the desktop application, has set up Project Spartan to bring this game play to its mobile users.

Here’s what Nintendo CEO Satoru Iwata had to say in an interview with Nikkei (translated here) about extending its software games library to other mobile platforms:

“This is absolutely not under consideration. If we did this, Nintendo would cease to be Nintendo. Having a hardware development team in-house is a major strength. It’s the duty of management to make use of those strengths. It’s probably the correct decision in the sense that the moment we started to release games on smartphones we’d make profits. However, I believe my responsibility is not to short term profits, but to Nintendo’s mid and long term competitive strength.”

Nintendo is slowly adding other functions to its portable devices, such as a browser and games store, but this is a long way short of turning them into multi-use devices, let alone smartphones or portable computers.

Source: Asymco