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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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RE: Looking down the road.
By Bubbacub on 6/11/2012 12:03:26 PM , Rating: 1
errr a modern smart phone cpu/gpu has vastly more computational power than all previous hand held gaming machines.

a galaxy s3 or 3rd gen ipad (or insert equivalent) can compute more than a nintendo wii. tbh they arnt that far off from having more grunt than an xbox/ps3 (not too surprising since the hardware they shipped with was out of date on release seven years ago).

nintendo have lost the plot in thinking that people will start using their proprietary social network over existing ones. they could just integrate wankbook, twitter support into the console. the increased handset complexity is just an excuse to increase the price of the controller which is where they made the lions share of their profits on the wii.

the biggest restriction on smartphone/tablet gaming is the diabolically bad interface. touchscreens are pretty crap for most games other than angry birds.

slow grown mouse driven games would port well but nobody seems to want to make a full version of panzer general/civ3 for android :-(

RE: Looking down the road.
By drycrust3 on 6/11/2012 12:01:07 PM , Rating: 2
errr a modern smart phone cpu/gpu has vastly more computational power than all previous hand held gaming machines.

It does? My apologies for my error. I should have done some research.
I still think the way forward for Nintendo and Sony is to put enough mobile connectivity into a gaming machine so users can play online.

RE: Looking down the road.
By MindParadox on 6/11/2012 12:41:02 PM , Rating: 1
tbh they arnt that far off from having more grunt than an xbox/ps3 (not too surprising since the hardware they shipped with was out of date on release seven years ago).

may wanna check those statements out before ya make em, the xbox had a custom processor in it that was worlds above what computers were shipping with, as well as the PS3 having the cell processor which was just as powerful, if not more

RE: Looking down the road.
By aliasfox on 6/11/2012 12:36:42 PM , Rating: 3
If I recall, the XBox had a variant of the Pentium III, and the XBox 360 has a tri-core variant of the PowerPC G5 chip. In terms of straight up processor performance, portables can likely eclipse the PIII based chip, but still be a ways off in terms of processor horsepower compared to the XBox 360. Where these systems excelled was that they could focus the system on just running games and not have to worry about a complex OS in the background that had to take care of half a million other things as well.

Now, if we're to compare GPUs, the iPad3 has the same chip that's in the new PS Vita. If the SGX543MP4 (is that right?) in the Vita makes it the most powerful portable system to date, then it should reason that an iPad at least has more powerful GPU hardware than anything that came before Vita, and the SGS3 isn't too far behind.

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