With the continually growing App Store, which is filled with tons of games, how does Apple's iPhone and iPod touch fare in the world of handheld gaming against the kings, Nintendo's DS and Sony's PSP? The answer: very well.
Both Nintendo and Sony have sold 70 and 35 million units, respectively, and both have their dedicated gamers that yearn for the high-quality franchises and system exclusives. But these apparently still aren't enough to keep Apple away from cutting into the market. Micheal Pachter, managing director at Wedbush Morgan Securities and a top game industry analyst, says it's a "fait accompli."
According to Pachter, "iPod touch game sales are already cutting into the handheld market, particularly at the low-end," he wrote to a writer at The Apple Blog. “The iPod touch’s market share will continue to grow, I suppose to around 10 percent to 15 percent of all handheld game sales."
The iPod touch market share will continue to grow to about 10 to 15 percent of all the handheld game sales, according to Pachter. He sees the iPod touch as much more of a competitor in the handheld market than the iPhone since prices for the device will drop and parents will see them as viable substitutes for a DS or PSP. He doesn't think the iPhone will grow like the iPod touch in the gaming market though, since it requires an expensive data plan, which most parents are hesitant to pay for a child younger than 18.
The main challenge for the iPod touch gaming market though, is the pricing for games. “The sticking point is whether we’ll see these games offered at $9.99 or at $29.99. If at the lower price, the developers/publishers would take a profit hit; if at the higher price, the popularity of the iPod touch as a gaming device will suffer," claims Pachter. It should be noted that currently top-selling games in the App Store, even from the major publishers, sell for even under $10.
Still, Nintendo and Sony have the better games and exclusive first-party titles that we will most likely never see in the App Store. This seems to be the only advantage they have over Apple in the portable gaming market, but only time will tell if that will change.
