IOS and Smartphones: The Newest Threat to Portable Gaming?

First it was Capcom Interactive's president and COO Midoori Yuasa's declaration that hand-held console gaming was dead (Capcom Announces 3DS Lineup Despite Opinion Portable Gaming Dead, 20 Jan 2011 Gaming Update), and her claim that current trends showed that gamers were abandoning the traditional hand-held consoles and PC gaming for casual gaming on smartphones like Apple's iPhone.

Next it is Nintendo's President, Reggie Fils-Aime, declaring that the inexpensive and simplistic titles that largely appear on the iPhone and other smartphone platforms pose a risk to the digital entertainment industry in general, and hand-held gaming in particular.

Together the two related claims have generated considerable buzz in online gaming forums, and even legitimate concern among neophyte gamers, who worry that they may be entering the traditional gaming community at the end of its life rather than what should be its middle age. Speculation abounds on chat boards questioning the wisdom of buying a Nintendo 3DS, since Nintendo itself seems to be convinced that the threat is real.

In a recent interview with Gamasutra, Fils-Aime said that the plethora of cheap games on the iPhone are taking their toll on the industry, saying that mobile games that sell for one or two dollars "create a mentality for the consumer that a piece of gaming content should only be $2."

Taken out of context that could be construed as a general warning that the economics in portable gaming are trending, but the nature of the threat this poses has more to do with the demographics than any real factoring of numbers on one side or the other -- and that is a critical distinction.

Roughly translated, the concern is that the widely available mini-games on smartphone platforms that are priced at a dollar or two will have the effect of eroding the willingness of gaming consumers to pay the standard $29.99 to $49.99 sticker price that most hand-held console games sell for.

This concern presumes that the gamers cannot tell the difference between the cheaply made mini-games and the higher-value longer-content traditional portable game titles that are produced by the established studios. It also presumes that they place the same basic value on both types of game regardless of quality or depth of content -- two factors that we know are not true.

Perhaps it is a reasonable presumption when it is the non-gamer who has only experienced gaming on the smartphone that is the group being considered, and indeed if the small bite-sized titles like Angry Birds and Doodle Jump are the basis of the trend in that direction, casual consumers who are not part of the traditional gaming community match that trend, but these are consumers who would not have purchased a traditional game anyway, so how important is their spending pattern to the overall health of portable gaming?

The Anatomy of Threat

Over the course of the past two decades numerous "threats" have arisen within the gaming industry, often being treated as legitimate despite the fact that their potential for damage was either exaggerated or transient.

The obvious example for this phenomenon is the perennial declaration that PC Gaming has killed Console Gaming that regularly changes places with the threat of Console Gaming having killed PC Gaming -- though in the end both survive very well.

In the Fall of 2010 the new threat was Social Gaming, which was to have overtaken both PC and Console Gaming to their detriment, the "threat" being based upon the large numbers of players "converting" to the new platform and genre. That this threat also failed to have the impact that the experts and pundits alike were certain that it would is less a product of the threat itself, but more an example of the natural ebb and flow of gaming culture within the gaming community.

The newest threat to gaming -- hand-held smartphones -- with its cheap but simple games that are the bread and butter of the cottage industry of small and independent game companies that have sprung up to serve that market, has illustrated that once again The Sky is Falling. But is it?

When we discount the hype that is a natural product of this sort of announcement and look at the hard numbers, we see an entirely different pattern emerging that -- far from supporting the notion that the threat of the day is having a real impact -- indicates that the trend is no trend at all; PC Gamers are still buying PC Games, Console Gamers are still buying Console Games, and Portable Gaming is, contrary to the fears of people in high-places at the game companies who should know better, still a healthy and viable market.