State of the Industry - The handheld Market (Post 2)

[JoFTWin]

Be that as it may, the industry is changing and the iOS IS intersecting the handheld market while not being a "direct competitor." They are alternatives. And they seem to be alternatives in high demand.

I'll find the link some how. Because I was sure I read that the iOS now accounts for more than 20% of the handheld marketshares.

Alternatives? So you're telling me there are people saying "I want some portable gaming...let me get an iPhone instead of a 3DS/DS/PSP"? And even at that...wouldn't those people get an iOS device regardless?? Those are kinda rhetorical but if I'm missing something let me know. I'd say we have to focus on the reason people buy iOS or Android. We can't assume that every person who bought Angry Birds or any other game on a smartphone would've wanted a 3DS if iOS didn't exist. They are still phones first and foremost. Every teen/adult needs a phone. I'm not saying the intersection doesn't exist, but I think analysts are overestimating how significant those cases are.

Plus, most if not all DS owners or PSP owners I've seen and/or met have either been really hardcore gamers or children or in a few cases, elderly (for the DS). I don't know who's the majority in that case, but I'd assume the children. Either way, the hardcore gamers (or hardcore portable gamers) are still a large chunk of that market, and I definitely don't see them switching over to iOS or Android for their handheld gaming fix anytime soon. Honestly, the hardcore is what matters most anyway because they are a less fickle market. The "casual", as we've seen with the Wii, are a very unstable bunch as far as the gaming market goes.

However, it is a possibility that iOS and Android could catch up with PSP and DS. Controllers, more potential depth in their games..the whole nine. But by that time, I think DS/PSP will be in a position to be able to adapt.

 

[ZIO]

http://news.cnet.com/8301-13506_3-20054217-17.html

The battle grounds are shifting. There's people with money in their pocket. But can buy only one thing. Folks are looking for multifunctional devices.

I understand there will be that market of hardcore gamers that will specifically purchase these handhelds. But that doesn't stop the industry from changing focus.

 

[JoFTWin]

Wow, those are some very interesting statistics. I'll admit I didn't know Nintendo's handheld market revenue dropped that much last year, but let me ask you this. Do you think the drop in software revenue was a direct result of iOS games or do you think it could also be Nintendo's casual DS market peaking (or maybe a lack of mainstream appealing software outside of Pokemon during that year)? I won't deny the fact that given those statistics, iOS has had an effect, but I'd question if it was the main thing affecting Nintendo's drop. I also find it interesting that PSP's revenue only dropped 2%. Granted, it's pretty low already..but it's steady. Which is a point I was making about hardcore dedication vs. casual instability.

All I'm saying is iOS is definitely making waves, but we can't know for sure yet if it's as big of an emergency for dedicated handheld game devices yet.

 

[metalmonstar]

Here is a little something I wrote for my economics class. I just don't see a cross elasticity between smartphones and handhelds. It may take away from software sales but that would be really hard to reliably prove. Sometimes it seems that apps are destroying gaming is a good story and scapegoat.

Subsitution the Iphone vs Handheld debate
http://gamrfeed.vgchartz.com/story/82922/psp2-will-be-dead-on-arrival-says-pachter/
Two things get on my nerves about this article, first of all it is written by analyst Michael Patcher who seems to write more for his own publicity rather than analyzing the market accurately. Secondly it is about the long predicted gloom and doom to the handheld market due to the iphone. The argument has and will continue to be that the iphone is a better choice than handhelds due to its cheaper to purchase games and the fact that iphone is immensely popular. The Iphone has been around since 2007, yet there has been no noticeable drop in the sales on handheld gaming since its launch. In fact DS hit numbers over 30 mil in 2008 and 2009. Wouldn’t it make sense that when a new Iphone came out we would see a drop in DS and PSP sales? Since I have been following NPD and Vgchartz, I have noticed no drop in DS sales due to any change in Iphone model or pricing. Patcher isn’t the first to make this argument. It has been going on for years yet the results are the same.
Why won’t cellphone gaming replace handheld gaming? First of all cellphone companies are concerned with outselling other cellphones they aren’t concerned with the gaming market. Secondly cellphone games lack quality. Angry birds, doodle jumpers, and other popular iphone app games are less than 5 dollars but are mainly for fun and short spurts. The design of the handheld since early years has been entertainment for the go. In the early year the main draw of the gameboy was for gaming while on a trip where you didn’t have access to a console. Handhelds still have this market but they are seeing increasing quality which allows them to be relevant anywhere. Handhelds have better battery life. Handhelds are made for gaming so while gaming you have 6-10 hours of battery life. Cellphones are made for texting and calls they have long battery life when used for those purposes. When used for gaming or internet Cellphone battery life is reduced dramatically.
http://www.huffingtonpost.com/2010/05/25/walmart-iphone-3gs-price-_n_588333.html
According to this article walmart cut the price of the iphone in half so it went from 200 to 100 dollars. An official pricecut was made in june when the iphone 4 was announced.
http://www.vgchartz.com/hwtable.php?cons[]=DS&reg[]=America&start=40356&end=40356

According to Vgchartz around this time the DS was selling 101 thousand to 110 thousand units a week in America. The number doesn’t fluctuate much at all around the pricecut or the release of the new Iphone4. From June 13th to 19th the DS sold 110,593 units. The week of the iphone 4 launch and full swing on the iphone 3gs pricecut the DS sold 111,292 (June 20th-26th). From that we get a .0063 percent change in the quantity demanded of DSes. We get a -.5 percent change in cost of iphone 3gs. From that we get a cross elasticity of -.0125. Thus showing us from an economic standpoint that Iphones and the DS are not related.
So the main reason Handhelds can still hold their own despite the ever increasing presence of smartphones and apps, is quality of games. Having the main purpose of gaming gives them an advantage. Next time an analyst decides to make this bold statement someone needs to do some simple calculations and even see if handhelds and iphones are even substitutes of each other. In my opinion they probably aren’t close substitutes, maybe distant ones though.

 

[JoFTWin]

Here is a little something I wrote for my economics class. I just don't see a cross elasticity between smartphones and handhelds. It may take away from software sales but that would be really hard to reliably prove. Sometimes it seems that apps are destroying gaming is a good story and scapegoat.

Subsitution the Iphone vs Handheld debate
http://gamrfeed.vgchartz.com/story/82922/psp2-will-be-dead-on-arrival-says-pachter/
Two things get on my nerves about this article, first of all it is written by analyst Michael Patcher who seems to write more for his own publicity rather than analyzing the market accurately. Secondly it is about the long predicted gloom and doom to the handheld market due to the iphone. The argument has and will continue to be that the iphone is a better choice than handhelds due to its cheaper to purchase games and the fact that iphone is immensely popular. The Iphone has been around since 2007, yet there has been no noticeable drop in the sales on handheld gaming since its launch. In fact DS hit numbers over 30 mil in 2008 and 2009. Wouldn’t it make sense that when a new Iphone came out we would see a drop in DS and PSP sales? Since I have been following NPD and Vgchartz, I have noticed no drop in DS sales due to any change in Iphone model or pricing. Patcher isn’t the first to make this argument. It has been going on for years yet the results are the same.
Why won’t cellphone gaming replace handheld gaming? First of all cellphone companies are concerned with outselling other cellphones they aren’t concerned with the gaming market. Secondly cellphone games lack quality. Angry birds, doodle jumpers, and other popular iphone app games are less than 5 dollars but are mainly for fun and short spurts. The design of the handheld since early years has been entertainment for the go. In the early year the main draw of the gameboy was for gaming while on a trip where you didn’t have access to a console. Handhelds still have this market but they are seeing increasing quality which allows them to be relevant anywhere. Handhelds have better battery life. Handhelds are made for gaming so while gaming you have 6-10 hours of battery life. Cellphones are made for texting and calls they have long battery life when used for those purposes. When used for gaming or internet Cellphone battery life is reduced dramatically.
http://www.huffingtonpost.com/2010/05/25/walmart-iphone-3gs-price-_n_588333.html
According to this article walmart cut the price of the iphone in half so it went from 200 to 100 dollars. An official pricecut was made in june when the iphone 4 was announced.
http://www.vgchartz.com/hwtable.php?cons[]=DS&reg[]=America&start=40356&end=40356

According to Vgchartz around this time the DS was selling 101 thousand to 110 thousand units a week in America. The number doesn’t fluctuate much at all around the pricecut or the release of the new Iphone4. From June 13th to 19th the DS sold 110,593 units. The week of the iphone 4 launch and full swing on the iphone 3gs pricecut the DS sold 111,292 (June 20th-26th). From that we get a .0063 percent change in the quantity demanded of DSes. We get a -.5 percent change in cost of iphone 3gs. From that we get a cross elasticity of -.0125. Thus showing us from an economic standpoint that Iphones and the DS are not related.
So the main reason Handhelds can still hold their own despite the ever increasing presence of smartphones and apps, is quality of games. Having the main purpose of gaming gives them an advantage. Next time an analyst decides to make this bold statement someone needs to do some simple calculations and even see if handhelds and iphones are even substitutes of each other. In my opinion they probably aren’t close substitutes, maybe distant ones though.

Very, very well put.

 

[ZIO]

Sounds like you're speaking of statistics from back two years ago.

Anyway - quality of games.

The iOS just received Final Fantasy tactics. The games are improving. And as fast as the next tablet/smartphones have been releasing, I'm fairly certain things will only improve.

People may not see it yet. But I believe they will make a significant, indirect impact to the market. Maybe not in hardware, but definitely in software.

The idea of handheld game, I always understood it to be, was gaming first. And how does a person on the go enjoy games? In short bursts. I find it ironic that games like RPGs have found a market in handhelds, though.


I suppose you also take my link with a grain of salt? Well. This is just how I feel things are going to run. I feel that if Sony and nintendo don't offer MORE than games, their sales may suffer.

But the future is an unpredictable, moody woman. Things can go either way.

 

[JoFTWin]

Sounds like you're speaking of statistics from back two years ago.

Anyway - quality of games.

The iOS just received Final Fantasy tactics. The games are improving. And as fast as the next tablet/smartphones have been releasing, I'm fairly certain things will only improve.

People may not see it yet. But I believe they will make a significant, indirect impact to the market. Maybe not in hardware, but definitely in software.

The idea of handheld game, I always understood it to be, was gaming first. And how does a person on the go enjoy games? In short bursts. I find it ironic that games like RPGs have found a market in handhelds, though.


I suppose you also take my link with a grain of salt? Well. This is just how I feel things are going to run. I feel that if Sony and nintendo don't offer MORE than games, their sales may suffer.

But the future is an unpredictable, moody woman. Things can go either way.

Fair enough, we'll just have to see.

And regarding the statement I put in bold, what do you think of the Vita? Do you think it's going in the right direction with all of the features it offers and it's price or do you think it's trying to do too much? Personally, I'm not even sure.

 

[ZIO]

In all honesty, I feel it's a step in the right direction.

It's always a great selling point to say it does more than just games. It's why Sony pushed that their products in the Playstation brand were MULTIMEDIA devices, not just something for gaming.

 

[finalark]

It's always a great selling point to say it does more than just games. It's why Sony pushed that their products in the Playstation brand were MULTIMEDIA devices, not just something for gaming.

Interesting in that the PSP got flak for trying to be more than a portable at launch. I guess the PSP was just released too early.

 

[theeboredone]

I think that's similar to what happened to the PS3. No one was ready for Blu-Ray, and with the high price, it thwarted their sales.

As far as the PSP goes, yes it had a lot of benefits, but I mean...sometimes shape and appeal matters too. For a portable system, PSP imo wasn't that charming.

 

[Fuelbi]

Eh, I didn't like the PSP as a multiuse system. I felt like all the features it had were basically crammed in there. I was never around wi fi back then, the music player was meh at best and was too bulky to function properly as one anyways, videos always take up a large chunk of your memory so there goes DLing movies, the internet browser sucked because of how hard it was to use and how slow, and the battery got eaten up too quickly for it to function for any extended period of time.

Literally the only thing I ended up liking about the PSP is the fact that you can put it on sleep mode on most games