Portable console may not regain market share

Handheld games consoles will prevail amid increasing pressure from mobile games, says analyst, but notes it's uncertain if the dedicated devices can take back market share.
Written by Liau Yun Qing, Contributor

The growing popularity of smartphone-based games is stealing limelight away from portable games consoles, which will prevail but may not be able to regain lost marketshare, notes a market analyst.

According to recent reports, smartphones, in particular, the Apple iPhone, are becoming a "viable threat" to dedicated games handhelds and eating into the portable games devices marketshare.

This shift is also evident in sales generated by games publishers.

In an e-mail interview with ZDNet Asia, Daniel Ashdown, research analyst at Juniper Research, noted that video game publisher Electronic Arts (EA) saw its revenue for wireless device games, which include games for mobiles, Sony PlayStation Portable (PSP) and Nintendo DS, drop in its financial year 2010. In contrast, revenue for the company's mobile games rose.

Despite the figures, Ashdown said portable games consoles will continue to prevail although it remains uncertain if this segment will be able to win back its market share.

"For one, consumers want more than just to be able to play games on a handheld device," he noted.

One gamer, however, told ZDNet Asia that a dedicated gadget is deemed to be better at what it is designed to do than a device that does everything.

In a Facebook interview, Calista Lee, a graduate student at Keio University who owns an Apple iPhone and a Nintendo DS Lite, said she is not planning to give up on her dedicated game console anytime soon.

Lee explained that her portable games console "wins hands down" for the variety of games available on the device. "I find most of the iPhone [games] clones of each other. And there's not much you can do with only a touchscreen [device]," she added.

The battery lifespan is also a key consideration in her preference to play games on a dedicated portable console. "The iPhone [battery] dies really fast when you do stuff on it. [And the battery is gone] when you actually need to use it for its actual purpose--a phone," she said.

Sony: No strategy to convert casual gamers
According to an Ovum analyst, mobile games have opened up a new market of consumers who will not buy a dedicated games console but are willing to spend a few dollars on mobile games.

Sony did not reply to queries on whether it has a strategy to convert casual gamers to its PSP platform, but the company did note that it implements its business objectives in line with its strategy and is not affected by other products. "We are proud of our products while continuing to maintain trust with customers by enhancing our content and services," a company spokesperson told ZDNet Asia in an e-mail.

Asked if Sony sees mobile games as a competitor, he said the company does not compare its product to other categories but believes that "everything is possible in this fast-changing diversified world".

He added that Sony will continue to expand and create "a new world of computer entertainment with the PSP handheld entertainment system".

While the spokesperson remains mum on whether the company sees mobile phones as potential threat, a TV commercial aired in the United States for the PSP indicates Sony is taking notice of this emerging market segment. In the TV ad, a PSP gamer is seen mocking mobile phone games, saying: "That ain't for big boy games. That's built for texting your grandma and calling your girl."

Meanwhile, mobile phone platform makers such as Microsoft, which will soon release its mobile operating system Windows Phone 7, are touting support for games among other multimedia features.

For instance, a new games hub feature will allow Windows Phone 7 users to continue playing the games they started on their Xbox console even after they leave their house, Natasha Kwan, Microsoft's mobile communications business general manager for Asia, said in an e-mail.

The software giant is the only one among the top three game console makers that does not offer a portable games console, but Kwan said the Windows Phone 7 was not designed specifically to address this market segment. She explained that the mobile OS is built to cater for all categories of gamers.

"With top tier development studios both locally and internationally building games for Windows Phone 7, gamers both hardcore and casual can be assured there will be something for them," she said.

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