Devices like Nintendo's 3DS and the Sony PlayStation Vita are fighting an uphill battle in the mobile-gaming market, according to one analyst.
Nintendo's Game Boy and its ilk were once all the rage in the mobile-gaming market. Now gaming handhelds are little more than niche products, according to one analyst.
"Mobile devices will compete with dedicated handheld gaming devices, but select consumer segments like core gamers and those individuals who do not want or have a smartphone or tablet will still provide some demand," ABI Research senior analyst Michael Inouye said in a statement on handheld gaming.
ABI Research believes that Sony and Nintendo will ship about 38 million gaming handhelds in 2013. In 2008, the handheld business hit a peak of 47 million units shipped. What's worse, ABI Research believes that shipments will continue to decline slightly over the next five years.
That handhelds are having trouble is nothing new. After launching the 3DS last year, Nintendo was hit by extremely sluggish demand for its then-AU$349.95 handheld device. After cutting the price to AU$249.99, the device started to pick up some steam. And, as ABI Research pointed out, the PlayStation Vita got off to a strong start earlier this year, but overall its sales have been "decent" at best.
The issue for handhelds is that they're competing against increasingly sophisticated smartphones and tablets that combine a host of functions into one. Users playing a simple game, like Angry Birds, or even more sophisticated titles from major developers, can use the same device to take a call, send an email and check their Facebook. And although the PlayStation Vita and 3DS offer additional functionality beyond gaming, they're by no means as capable as smartphones.
As ABI Research pointed out, price is also a consideration. Consumers are generally doling out a few hundred dollars just to get their hands on a gaming handheld, and games can cost as much as $80 apiece. Compare that to the iPhone, which can be acquired on AU$0 upfront contracts, and games that are both offered for free or available for 99 cents and up, and it's clear why many folks are choosing the latter option.
"The mobile and tablet markets have increased consumers' price sensitivity," Inouye said. "First-party developers and key game franchises will be vital cogs for the industry in the future, since hardware alone is not going to cut it, given the shorter upgrade cycles for mobile devices."
Luckily, for gaming handhelds, however, Inouye doesn't think that they'll go away, as theyshould be able to coexist with smartphones and tablets. However, they can't expect to succeed to the same level that they have in the past.
"The addition of mobile gaming is not necessarily a zero sum situation," Inouye said. "In fact, many feel there is plenty of room in the gaming market for both portable and mobile gaming."