Forget PSP, DS: Apple enters handheld gaming

It's becoming apparent that Apple's iPhoneand iPod Touch are well on their way to becoming an important force in handheld gaming, combining the ease and reach of distributing games via iTunes, a working library of 1,500 titles and a piece of hardware that everyone can't stop talking about.

Sony and Nintendo? Get ready for some big headaches.

In a unique perspective on the issue, BusinessWeek's Arik Hesseldahl writes that Apple's come a long way in the three months or so since the iTunes App Store opened for business: "It's already home to some 1,500 games, compared with fewer than 300 titles for Sony's PlayStation Portable and about 600 for Nintendo's handheld console, the DS."

THE UPSIDE

Hesseldahl lists the advantages Apple has versus the competition: For one, Apple is on track to sell 40 million of its devices this year, all capable of playing games. (According to a market research firm, Nintendo sold 42 million DS consoles from January 2007 to June 2008, which is 18, not 12, months.) Apple already has more titles for its games than both Nintendo and Sony combined. Aside from the free ones, games on the App Store sell at around $9.99, more or less. In comparison, it's $20 to $40 for Nintendo DS games and the $10 to $40 for games on the PSP. Finally, with iTunes, there are no brick-and-mortar costs, and all games are downloaded directly to the device. The developer gets 70 percent of the sale and Apple keeps 30 percent.

THE DOWNSIDE

But there are disadvantages, too. According to the article, a survey by iSuppli's ConsumerTrak found that U.S. cell-phone users report spending less than 3 percent of phone-use time on games, but that figure jumps to 9 percent on the first iPhone and 6 percent on the iPhone 3G.

Then there's the question of whether Apple can sell enough lower-priced games to outrun the higher-cost-per-game model that Sony and Nintendo have.

To boot, the iPhone and Touch aren't ideal gaming devices: they're optimized for communication and they lack buttons and thus control. On the other hand, there's a multitouch screen and the accelerometer at gamers' disposal.

Finally, there's the price of the hardware: Sure, the games are cheap, but the iPod Touch starts at $229 and the iPhone 3G sells for $199 and requires a two-year service contract. In comparison, the Nintendo DS sells for $129 while the PSP goes for $170 to $200.

THE BIG THREE?

So will Apple turn Sony and Nintendo on their respective heads? I, for one, am not entirely sure the world is ready to drop a phone, iPod AND handheld gaming device for one. Let's see how holiday sales work out first.

What do you think? Can Apple compete? Tell us in TalkBack.