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Handheld gaming device shipments are expected to slow and even decline in 2013 and beyond while tablet/smartphone shipments continue to soar

Mobile devices are certainly taking over the tech world, but not just any mobile devices -- smartphones and tablets are slowly pushing handheld gaming devices out of the spotlight.

A new study conducted by ABI Research shows that more portable gamers are looking to smartphones and tablets for their gaming needs rather than handheld gaming devices like Nintendo's 3DS and Sony's Vita.

According to the study, both Nintendo and Sony are expected to ship over 38 million portable gaming devices in 2013. After that point, unit shipments are expected to continue declining slightly and then remain "flat" through 2017.

The 38 million-unit shipments in 2013 is a dramatic fall from the 47 million-unit shipments in 2008. Expert analysts say that smartphones and tablets are moving in on this sector, offering mobile games that are much cheaper right on the devices they use on a daily basis. However, core gamers will still keep Nintendo and Sony's gaming sales afloat.

"Mobile devices will compete with dedicated handheld gaming devices, but select consumer segments like core gamers and those individuals who do not want or have a smartphone or tablet will still provide some demand," said Michael Inouye, senior ABI analyst. "The addition of mobile gaming is not necessarily a zero sum situation; in fact, many feel there is plenty of room in the gaming market for both portable and mobile gaming.

"The mobile and tablet markets have increased consumers' price sensitivity. First party developers and key game franchises will be vital cogs for the industry in the future, since hardware alone is not going to cut it given the shorter upgrade cycles for mobile devices."

This was clearly demonstrated last year when Nintendo's 3DS launched for $249.99 and initially didn't sell very well. In July 2011, the gaming company reported poor financial results, posting a net loss of 25.5 billion yen ($324 million USD) and decided to slash the 3DS' price to $169.99 starting August 12.

In April of this year, Nintendo posted its first annual loss ever with an operating loss of 37.3 billion yen ($460.9 million USD) and a net loss of 43.2 billion yen ($532.5 million USD).

However, it looks like Nintendo is still doing all right. In March of this year, the company celebrated the 3DS' birthday with a 4.5 million sales milestone. Sales for the device picked up after the price slash and when more impressive titles were released. 

In addition, Nintendo recently introduced its own social network, "Miiverse," which is to be released with its upcoming Wii U console release.

While gaming companies like Microsoft's Xbox division and Sony's PlayStation unit still seem to attract core gamers, mobile devices have a bit of an advantage in that they can capture the attention of both casual and core gamers. Smartphones tend to be used by a larger audience, since carrying a cell phone on a daily basis is more common than someone carrying a 3DS. When we're not using it for phone calls or the Internet, gaming apps are a popular pastime, and they're convenient because they're right on our phones. They're also cheap, and many times even free.

Also, many new tablets and smartphones are released annually, giving consumers many choices for different price ranges. For instance, Apple has released a new iPad each year since its initial release in 2010. During the first quarter of this year, Apple's iPad had 11.8 million total shipments.

Last year, Rovio CEO Peter Vesterbacka, creator of mobile game Angry Birds, said that console games were dying in favor of mobile games because of how expensive console games are and the slow rate of system upgrades.

Source: ABI Research



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Not surprising...
By retrospooty on 6/11/2012 11:41:00 AM , Rating: 3
Smartphones are pushing everything aside in the consumer sector and its a good thing.

I think of it this way... My smartphone has replaced the alot of things I no longer have to carry. Watch, penlight, GPS, portable gaming toys, laptop (under most cases, unless travelling for work) and wireless internet PC card. While of course giving access to apps that can do just about anything.

A few more years down the road if NFC takes off it will even replace my wallet.




RE: Not surprising...
By Nortel on 6/11/2012 11:43:12 AM , Rating: 2
North America has started adopting NFC in phones. Rogers in Canada will support it within a few months.

Smart-phones are the modern Swiss Army knife. They can do just about everything.


RE: Not surprising...
By JediJeb on 6/11/2012 3:26:14 PM , Rating: 2
quote:
They can do just about everything.


Except make a phone call.

Honestly the few I have borrowed from someone to make a call on have all had terrible sound quality and often seem to drop signal. I have had my Moto V3 since 2005 and have only used the calculator a hand full of times and the alarm maybe 5 times, the rest of the time I use it to make phone calls. I don't see any reason to even upgrade from that for myself.

Not sure what NFC is really, I am guessing electronic currency, but I still prefer to carry cash mostly since there are times I really need it. A recent ice storm here brought that home when the power was out for 30 miles around for a week and the only way to purchase anything was with cash since there was no way to process credit cards and all the ATMs were down.


RE: Not surprising...
By Mint on 6/12/2012 7:04:15 PM , Rating: 2
Damn, no power for a week? I know we had that 2003 mega failure in the northeast, but losing power like that should only happen once every few decades. Where are you located?


RE: Not surprising...
By Nortel on 6/11/2012 11:43:12 AM , Rating: 2
North America has started adopting NFC in phones. Rogers in Canada will support it within a few months.

Smart-phones are the modern Swiss Army knife. They can do just about everything.


RE: Not surprising...
By zozzlhandler on 6/11/2012 12:02:14 PM , Rating: 2
Here is my list of the devices a "smartphone" replaces:

Phone, PDA, Watch, Stopwatch, Flashlight, Calculator, Camera, Camcorder, GPS/map display, Alarm Clock, Music Player, Handheld Game Console, Radio, Voice Recorder, Electronic Book Reader, Wi-fi hotspot, Barometer/altimeter

Note that with relatively inexpensive hardware add-ons, there are many more possibilities (such as OBD reader).

Even if you use only half of those items regularly, the smartphone starts looking like a bargain.


RE: Not surprising...
By Paj on 6/12/2012 8:23:18 AM , Rating: 2
Also:

Maps, Compass, Tape Measure, Ruler, Metal Detector, Spirit Level, Remote, Books/Magazines


RE: Not surprising...
By Mint on 6/12/2012 7:07:05 PM , Rating: 2
This is only the beginning. Wait until software starts taking full advantage of devices like the Galaxy Note...


RE: Not surprising...
By Omega215D on 6/11/2012 12:45:52 PM , Rating: 2
I still prefer having a separate (but smaller) mp3 player as I don't drain the battery on my phone. Not to mention I can use it at the gym without worry.

I also still wear a watch because it's easier to just look at my arm instead of pulling out my phone and switching on the screen.

As for gaming... it's a toss up. I do like the controls and quality from the dedicated portable game console but I don't like carrying such things around as often.

Overall I don't think it's a good thing. I like to have a choice and it would be a shame if such dedicated products are no longer produced (mp3 players but watches are mostly here to stay).


RE: Not surprising...
By Mitch101 on 6/11/2012 2:16:56 PM , Rating: 2
Everyone is different.

30 $1.00 Games or 1 Game for $30.00
Without mentioning all the free ones on a Phone/Tablet its easy to see why gaming on a phone/tablet can fill the need.

Some games cant transfer over without buttons but I can find plenty of touch games that keep my interest and money in my pocket.

Watch? Ive got one wore it once in 10 years.

I too prefer a smaller MP3 player I use a sansa clip. Better than a brick hanging off your arm.


RE: Not surprising...
By JediJeb on 6/11/2012 3:29:16 PM , Rating: 2
quote:
Watch? Ive got one wore it once in 10 years.


I still carry my 120 year old pocket watch I bought a few years back. Use it every day and it never needs batteries. It is also more accurate than even the clock in my cellphone it seems, just have to wind it each night before bed.


RE: Not surprising...
By retrospooty on 6/11/2012 3:38:06 PM , Rating: 2
"I still carry my 120 year old pocket watch I bought a few years back"

LOL... cool. Digital KMA!!!


RE: Not surprising...
By Mitch101 on 6/11/2012 4:55:21 PM , Rating: 2
Sundial?


RE: Not surprising...
By Mitch101 on 6/11/2012 4:59:02 PM , Rating: 2
Does it tell time simultaneously in Monte Carlo, Beverly Hills, London, Paris, Rome, and Gstaad?


RE: Not surprising...
By nikon133 on 6/11/2012 5:11:35 PM , Rating: 2
Do you exist simultaneously in Monte Carlo, Beverly Hills, London, Paris, Rome, and Gstaad?


RE: Not surprising...
By Mitch101 on 6/11/2012 9:55:03 PM , Rating: 2
RE: Not surprising...
By Paj on 6/12/2012 8:24:45 AM , Rating: 2
"In Philadelphia, it's worth fifty bucks"

^5


RE: Not surprising...
By Mitch101 on 6/12/2012 11:51:51 AM , Rating: 2
Thankyou for getting the reference. Was feeling Old probably because I am now.


RE: Not surprising...
By theapparition on 6/12/2012 10:56:53 AM , Rating: 2
quote:
It is also more accurate than even the clock in my cellphone it seems

No, it's not even close. Even a $5 quartz Walmart closeout will keep better time.

Still, I'm a big fan of old watches and movements. Nothing like the true craftsmanship that went into making them. They keep time decent enough to still be functional, but for the most part they are now jewelry.

Guessing 120yo mechanical watch tech will be accurate to about 10 sec/day at best. Cell provided times are accurate withing milliseconds and constantly get updated by network provided values, so no compounding inaccuracy.


RE: Not surprising...
By Adam M on 6/11/2012 5:18:25 PM , Rating: 2
This is a better article then those I have read comparing tablets to full on consoles. Consumer technology is movie to a unified experience and I see new evidence of this every day but we still have a ways to go. At one point there will be a single device that adjusts to any display it can interact or wirelessly dock with to preform the task at hand.


RE: Not surprising...
By inperfectdarkness on 6/12/2012 3:34:31 AM , Rating: 2
sorry, but mobile gaming systems are here to stay:

1. parents aren't going to buy an iphone for $500 to give to their 6-year-old to keep him entertained on road trips--they'll splurge $200-250 on a portible hand-held.

2. as noted elsewhere, control interface is a key factor between a touch-only interface & something with buttons. there's quite a bit more limitation on what types of games can be played with a smartphone's limited interface.

3. 30 $1 games can't provide the depth and draw of a 1 good $30 game (less if you buy used). i can guarantee that a zelda game will give you many more hours of enjoyment than 30x $1 throwaway games.

4. putting all your "tools" in one "smartphone" means that you're making yourself a victim to the stupidly short battery life on said phone. how are you supposed to make calls or pay for something with your phone...when the battery has died yet again? my old DS-Lite can play for 17+ hours per charge--and i don't have to worry about being stranded if i drain the battery and can't call a tow-truck.

5. google, apple and microsoft would have to convince ALL the 3rd party developers to develop primarily for their smartphones--at trivial profits ($1 games, remember?), rather than for portible gaming systems where the profit margins are higher & there's more freedom to develop without the hinderance of limited controls.

so no, i don't think DS/PSP is dead. i think you're probably going to see more overlap between the two--but remember kiddies, being a jack of all trades = master of none.


RE: Not surprising...
By WalksTheWalk on 6/12/2012 4:54:03 PM , Rating: 2
The PSP and other dedicated potable devices will appeal to the more hardcaore users where the system has a good control mechanism and so on.

For everyone else who is a casual gamer a smartphone falls in the "good enough" category. Most people aren't willing to spend $250 on a portable system, plus $30-40 per game when a smartphone can give them some kind of portable experience for a few dollars per game when they already have the device.


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