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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: 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
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

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"


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
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.

“So far we have not seen a single Android device that does not infringe on our patents." -- Microsoft General Counsel Brad Smith

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