It's a common topic among technology and video game analysts. I'm talking of course about the classic debate of smart phones verse gaming consoles. Now there is new information to add to the fire, and once again it doesn't look good for Nintendo, or Sony for that matter.
iOS and Android gaming has rapidly been gaining popularity over the past two years. According to analyst group Flurry, game revenue for iOS and Android devices has risen 39% since 2009. Contrarily, game revenue for the Nintendo DS has fallen 34%, and likewise with Sony's PSP, which saw revenue fall 5% since 2009. So, while iOS and Android have nearly tripled their combined market share to a staggering 58%, Nintendo has been reduced to 36% of it's once 70%, or currently about 1/3 of the market share. Flurry Analytics put together a chart of the percentages seen below.
To help put this in perspective, I'll put these percentages into more understandable dollar amounts. In 2009, 2010, and 2011, iOS and Android devices generated game revenues of $500 million, $800 million, and $1.9 billion respectively. If we combine Nintendo and Sony's posted revenues for 2009, 2010, and 2011, they generated $2.2 billion, $1.6 billion, and $1.4 billion respectively.
As you can see by the numbers for 2011, iOS and Android devices actually surpassed the generated game revenue of both Nintendo and Sony combined. There is a very clear increasing revenue trend for iOS and Android, while both Nintendo and Sony are following very clear decreasing trends.
So you're wondering what this means for Nintendo. Simply put, it's deepening the hole they are already in. Nintendo is finding that it's very hard to market $40+ games along side the $.99 games available in the iOS and Android app stores. Combine this with the growing user base of smart phones, and the fact that smart phones are growing much more powerful in terms of hardware, and you see the unfortunate situation Nintendo faces.
As Nintendo moves into 2012, they face new competitors like Apple and Google. The launch of the Wii U will not just be competing with new consoles from Sony and Microsoft, but also plans from Apple and Google to launch new televisions that will give users access to many more games. Like I discussed in a previous article Nintendo faces a real possibility of becoming a software only company, much like Sega, if they cannot figure out a way to face this new competition and become profitable.