While casual gamers may opt for a smartphone with built-in games over a portable games console, there will continue to be a market for the dedicated games device for the "foreseeable future", according to an industry analyst.
Tim Renowden, London-based devices analyst at Ovum, told ZDNet Asia in an e-mail interview that dedicated portable games consoles for now maintain advantages such as optimized game controls, game variety, battery life and price.
In a recent Wall Street Journal report, Apple's head of marketing Phil Schiller challenged the portable games console market by noting that dedicated devices like Nintendo's DS and Sony's PlayStation Portable "seemed so cool" at first but currently "don't stack up" to the iPod Touch or iPhone.
Renowden said there is not enough evidence to suggest that people are substituting smartphones for portable games consoles. A lot of the hype over smartphones being able to provide gamers their entertainment fix, he added, is from Apple's own marketing which "should be taken with a pinch of salt".
On the other hand, Apple has made consumers more conscious of the option of mobile games, according to a study by Gartner. Tuong Huy Nguyen, Gartner's principal research analyst, said in a report on the hype cycle for consumer mobile applications released in July 2009, that Apple's iPhone and its App Store have "given mobile gaming the final push it needed to hit the mainstream" and "peaked consumer awareness of mobile games".
Ovum's Renowden noted that sales of mobile games are strong on Apple's iPhone platform but no other smartphone platforms have yet the ability to compete with dedicated portable games consoles in terms of quality of games.
"The style of [game playing] on a smartphone is different as some game genres are fundamentally unsuited to current smartphones which may lead to bad user experience," he said. "Plus most phone users aren't willing to play games for an hour at the expense of a flat phone battery."
However, Renowden pointed out that smartphones have the potential to deliver a high quality games experience as its hardware is significantly more powerful than that of portable game consoles. "We are already seeing smartphones with very powerful processors like Snapdragon and ARM Cortex A8 as well as 3D acceleration technology getting more traction in the market," he explained.
"Attracting top quality games developers will be the sticking point," he said. According to Renowden, among the reasons Nokia's original N-Gage had failed was because it could not attract top developers to bring "AAA game titles" onto the platform. The hardware was also "awkward and unattractive", he added.
Price plays an important factor too. According to Renowden, many portable games consoles are bought by parents for children and they may not want their children carrying expensive smartphones around.
Games on mobile phones
Mobile phone developers have attempted in the past to wrestle with portable games consoles. With N-Gage, Nokia in 2003 launched a device that combines a mobile phone with a Game Boy-like handheld games console.
According to Anshur Gupta, principal research analyst at Gartner, devices such as N-Gage had not proved successful as consumers had to compromise too much, either from the perspective of a phone or in terms of console features.
"However, mobile devices lend themselves well to occasional play," he noted in an e-mail to ZDNet Asia. "We should see more interesting developments in this area as screen technology improves and accelerometers and touch interfaces are added to devices."
Ovum's Renowden said game developers and publishers should still look carefully into the smartphone games market as it opens up a new market of people who "would never have purchased a dedicated portable games console but might be willing to spend a few dollars on decent games for their phone".
"The distribution and billing system built into smartphone platforms through app stores is a straightforward channel to market [games]," he added.
Although not specifically for smartphone games, Gartner's Nguyen said in the report that free demonstrations and content subsidized by advertising should be used to market mobile games.
For developing markets, mobile games publishers should leverage consumer interest in data services by making applications more affordable, said Nguyen. Publishers should also work with channel partners to target particular consumer segments, such as those Gartner defines as "aspirers" and "tech savants".
On the operator end, barriers to entry for mobile games publishers and developers should be lowered to foster application availability, added Nguyen. Operators, he said, should also align application and data pricing with consumer expectations to foster usage.
In a separate report in 2008, Gartner predicted that worldwide mobile games revenues will US$6.3 billion by 2011.