Hi Sean,
I know you don’t like to talk about the iPhones as serious competition to the DS but I think the way the gaming market is going we have to look at it. Its games mostly perform a price disruption on the DS/3DS by being dirt cheap. They may not be profitable for anyone but Apple itself but as long as the customers are there they’re still a massive threat to Nintendo.
The kind of game that would be suitable for quarter munching has now mostly migrated to the iPhone as it can cost very little there, pretty much like playing an arcade machine would. Very few make attempts at story and most are based on a simple high score approach. They’re fairly crappy games especially when it comes to controls compared to what the industry calls AAA but they’re satisfying many crappy customers who then see no need to buy a DS or especially a 3DS. Nintendo’s reaction almost looks like a regular incumbent reaction: Retreating upmarket. They talk about how they don’t like cheap games and the erosion of the value perception but Apple has no such issues and will gladly allow the market to be cut throat and very hard for developers to thrive in, after all Apple makes most money from the hardware.
However as I’ve heard it expressed on a gaming podcast, it’s like these games are succeeding in spite of Apple, not because of them. Apple does not seem to like games much, their attempts in that market have been halfassed at best (game center is seen as massive garbage). Yet the market keeps trucking on, making more and more games that could easily have been in the (early days of the) arcade and customers buy them. They don’t make much money but they satisfy customers enough who don’t need the upmarket games the DS is offering and are only looking for the downmarket ones anyway. This isn’t good for anybody but it’s how things are moving and the small number of highly profitable games on the iPhone keep the developer motivation up and the supply of games coming.
Don’t like talking about it? I’ve talked about it extensively.
This is a common error. It is wrong today just as it was wrong back in 1985. Ask Trip Hawkins. He knows all about this error.
Back during the post-Atari crash 1980s, it was declared by the Game Industry that game consoles were obsolete. Why would anyone buy a game console if they could buy a computer? Why not buy a Commodore? It could not only play games, but it could do computing.
Above: “Why buy a video game console from Atari when you can buy a computer?”
The question that should be asked is, “Why doesn’t PC gaming disrupt console gaming?”
The answer was settled in the 1980s when the NES came out blew that idea out of the water. Trip Hawkins (founder of Electronic Arts) is still pissed off about this even today.
PC gaming is not console gaming. PC gaming will NEVER disrupt console gaming. If console gaming destroyed itself, as Atari did during the Crash, then it would appear as if PC gaming had disrupted it. But that would be a false assumption. And this assumption single handedly destroyed computer companies in the 1980s.
Smartphones and cellphones are not consoles. They are handheld computers. They are PC gaming. This is why iPhone is the latest darling of PC game developers. Gameboy and DS are not handheld personal computers. They are game consoles. That is the job of the hardware.
There is no overlap. The hardware of smartphones is not designed to play games. They are nothing but handheld computers that can also play games. This places them in the PC gaming camp, not the console camp.
If any game company is to be threatened by Apple, it would be those who have their feet in PC gaming. This is not Nintendo. Nintendo has nothing to do with PC gaming.
But Microsoft does. And so does Sony. Their consoles are neutered personal computers connected to a TV. This is why PC games are easily ported to the Xbox or PlayStation.
Video games are not just one market. Gaming originated in two different places simultaneously: the arcades and personal computers. When arcade games were brought into the home (PONG), they were the consoles.
The argument that ‘Apple is disrupting handheld gaming’ is just flat out wrong because…
-DS sales were roaring back when smartphones became popularized.
-Nintendo is not in the PC gaming market. Smartphones can only be in the PC gaming market.
-Handheld PC gaming is only competing in an indirect sense. Smartphones playing movies is a bigger threat to game handhelds than their flash-like games.
-No one buys a smartphone to play video games. People buy a smartphone for the phone and for the computer aspects.
My annoyance with this subject is that it is made by ‘low information’ people who have no idea that this same exact situation has already occurred back in the 1980s. The only difference today is that instead of the home based systems, it is now handheld based systems.
It is also annoying because this issue was settled with the DS. Smartphones were already quite popular. They had zero impact on handheld dedicated gaming hardware. The iPhone came out in 2007 and was extremely successful. Did that harm DS sales? Not at all.
So if the iPhone didn’t harm the DS, why would it suddenly harm the 3DS? See how this doesn’t make sense? What does make sense is that Nintendo alienated the DS audience with their direction with the 3DS.
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