Source: http://blog.flurry.com/bid/60307/Apple-and-Google-Capture-U-S-Video-Game-Market-Share-in-2010Last year, Flurry reported that iPhone and iPod touch game sales surged from 2008 to 2009. From a standing start, and in just one year, iPhone games captured 5% of the mature U.S. video game market. A year later, we revisit how the increasing popularity of iOS (iPhone, iPod touch and iPad) and Android games continue to increase their U.S. video game market share. With an additional year of trend data, the magnitude of disruption is increasing, in particular within the portable gaming category.
For this years report, Flurry once again leverages publicly available market data in the news, released by companies such as the NPD Group (e.g., Gamasutras Behind the Numbers series). We combine this data with our own estimates of game category revenues from iOS and Android devices. Flurry Analytics, the companys mobile application analytics service, tracks more than 12 billion anonymous, aggregated use sessions per month across more than 80,000 applications. Of this, nearly 40% of all consumer app sessions are spent on games.
For 2010, we expanded our iPhone and iPod touch numbers to include revenue delivered by tablets and Android devices. When running this analysis a year ago, the iPad had not yet launched and Android gaming revenue from 2008 and 2009 had not yet contributed enough revenue to meaningfully affect industry market share. For the sake of a consistent year-over-year comparison in all other aspects of this analysis, we continue to exclude retail PC game revenue, and once again do not include online digital game sales.
Apple and Google Platforms Push Forward into Video Gaming
From 2009 to 2010, iOS and Android game sales increased from 5% to 8% market share within the U.S. video game market. Specifically, we estimate that iOS and Android game revenue increased from $500 million in 2009 to more than $800 million in 2010. Of this, the significant majority of revenue was generated by iPhone games. And while we do not include retail PC game revenue in our total snapshot, which we estimate was $700 million in 2010, its worth noting that smartphone and tablet game revenue surpassed the U.S. PC game category for the first time in 2010.
Studying the chart above, console and smart-device games have increased at the expense of portable gaming. Overall, total U.S. game revenue from 2009 to 2010 is relatively flat, totalling $10.4 billion and $10.7 billion, respectively. However, while console game revenue increased slightly, from about $7.4 billion in 2009 to $7.8 billion in 2010, the combination of declines in portable gaming software and a jump in smart-device app sales has squeezed the portable game category down from 24% market share in 2009 to just 16% in 2010. Its clear that prolific intalled base gains by Apple and Android devices, low priced games (including a very robust free-to-play model enabled by in-app purchases) and seamless digital distribution to games on devices so near to consumers 24-hours-a-day, is driving potent industry-disruption.
Over 2011, we expect to see continued and significant smart-device game growth fueled by the recent launch of iPad 2, iPhone coming into distribution on Verizon, the expected release of iPhone 5, a relentless expansion of Android devices by leading OEMs across all major U.S. carriers, and Googles enablement of in-app purchase billing, a proven key driver in iOS game revenue.
U.S. Portable Gaming: Marios Burning Platform
Recently, Nokia CEO Stephen Elop, passionately described a burning platform Nokia had itself set ablaze, largely as a result of its own strategic choices. Allegorically, despite Nintendo CEO Satoru Iwatas stated concern that these [mobile] platforms have no motivation to maintain the value of gaming during his keynote at the most recent GDC conference, Nintendo may also be struggling with its own burning platform: Nintendo DS. Lets look at the numbers.
From 2009 to 2010, iOS and Android game sales have spiked significantly, resulting in nearly a doubling of their market share. With both Nintendo DS and Sony PlayStation Portable shrinking in sales, while smart-device game sales simultaneously grew by more than 60%, iOS and Android games now represent more than one third of the portable game category. The net effect is that the U.S. portable gaming category, as we define it, has declined from $2.7 billion in 2009 to roughly $2.4 billion in 2010.
Wedbush Morgan Securities video game analyst, Michael Pachter, points out that the onslaught of $1 games is going to continue and that "[Nintendo and Sony] are going to have to share the market with Apple and Android. Our numbers quantify just how much. Further, as iOS and Android continue to change the paradigm of casual gaming, the battle between Nintendo against platforms such as iOS and Android will intensify. Mario may indeed be standing on a burning platform.
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Apple and Google Capture U.S. Video Game Market Share in 2010
- Thread starter Gowans
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Nuclear Muffin
Banned
The market has expanded, this does not mean that Apple or Google has stolen revenue from Nintendo (marketshare changes do not mean anything when a market that has nothing to do with one competitor is rapidly expanding). All it means is that Apple's market is expanding faster than Nintendo's.
Watch everyone ignore this fact again and start using it as proof that Apple is enroaching on the traditional handheld market. Incoming sensationalist article on Kotaku in 3... 2... 1...
Or you could try reading the article.Nuclear Muffin said:
With both Nintendo DS and Sony PlayStation Portable shrinking in sales, while smart-device game sales simultaneously grew by more than 60%, iOS and Android games now represent more than one third of the portable game category. The net effect is that the U.S. portable gaming category, as we define it, has declined from $2.7 billion in 2009 to roughly $2.4 billion in 2010.
Shard said:
Yes, but they are approaching it in a completely different way, by not only having a horse in the race, but also having stakes on the other ones (Nintendo aside).
Nintendo is even slower than Sony to implement systems, just look at their online service. The intense demand for games on the fast growing smartphone industry poses the greatest treat to Nintendo. It ll be very interesting to see what they do.
Nuclear Muffin
Banned
Sage00 said:
Correlation does not imply casuation. The DS market is shrinking because of a lack of new software titles, the effects of saturation and the fact that it was being replaced by it's successor.
The PSP is in decline because software sales fell off a cliff in 2007-2008 and have continued to do so since (yes that was before the App store even launched)
There is still no proof that the App store is in direct competition with traditional handhelds.
Edit: Also why the inconsistancy? Why is it that they've listed iOS VS PSP and DS in 2009 but now they've suddenly lumped Android in with iOS in 2010, as if they're the same platform?
Look, why don't you actually read the article? Stop living in dreamland.Nuclear Muffin said:
For 2010, we expanded our iPhone and iPod touch numbers to include revenue delivered by tablets and Android devices. When running this analysis a year ago, the iPad had not yet launched and Android gaming revenue from 2008 and 2009 had not yet contributed enough revenue to meaningfully affect industry market share.
Edit: Ah, he's banned. Oh well.
jump_button
Banned
share dont = lost to others it just got better
m.i.s.
Banned
I've probably made this point before but here it is again -
ios / Android - low end of the market; puzzle, strategy, action, sports, action, adventure games.
Handhelds [Sony / Nintendo] - mid-market as above but with unique specialisation and IP unique to their respective platform holders.
Consoles [Sony / Nintendo / Microsoft] - High end of the market; "AAA" IP and blockbuster franchises.
Like many sectors of other industries eg clothing you have your low-end (eg in the UK Tk Maxx, H&M etc) and the high end (designer clothing) but the mid-market is an almost complete wasteland. So, what you have in gaming is consumers moving downstream to smartphone and tablets and upstream to consoles. ie a permanent shift in consumer tastes.
As Nintex says, no wonder Nintendo is prepping their next home console.
ios / Android - low end of the market; puzzle, strategy, action, sports, action, adventure games.
Handhelds [Sony / Nintendo] - mid-market as above but with unique specialisation and IP unique to their respective platform holders.
Consoles [Sony / Nintendo / Microsoft] - High end of the market; "AAA" IP and blockbuster franchises.
Like many sectors of other industries eg clothing you have your low-end (eg in the UK Tk Maxx, H&M etc) and the high end (designer clothing) but the mid-market is an almost complete wasteland. So, what you have in gaming is consumers moving downstream to smartphone and tablets and upstream to consoles. ie a permanent shift in consumer tastes.
As Nintex says, no wonder Nintendo is prepping their next home console.
Graphics Horse
Member
Wow that Pac-man is looking rather famished.
Considering Japan's seemingly growing interest in handheld platforms, Nintendo can't really choose to focus solely on consoles to keep the U.S. happy, things are going to get tough out there.
And whatever Iwata says, the mobile market will be shaped by market forces into something worthwile, it might mean less devs or doubled prices, but it will still work as a competing and Nintendo-threatening market.
Oh noes!
Considering Japan's seemingly growing interest in handheld platforms, Nintendo can't really choose to focus solely on consoles to keep the U.S. happy, things are going to get tough out there.
And whatever Iwata says, the mobile market will be shaped by market forces into something worthwile, it might mean less devs or doubled prices, but it will still work as a competing and Nintendo-threatening market.
Oh noes!
M.I.S. said:
Except the japanese companies are supporting the handheld market as it is where gaming is moving towards to. Capcom with Monster Hunter, Sega putting VC 2 and 3, Kojima giving the PSP not only 2 spin-off titles, but also almost giving the PSP MGS5. And don't even let me get started with Square.
Sorry, but calling Sony's NGP "mid market" is very naive. Hell, even the 3DS, Resident Evil, Metal Gear, and who knows what else.
m.i.s.
Banned
Noshino said:
Thats's where the Japanese gaming industry is moving to but why was that? Is it because that's where most JRPG's were found this gen? Furthermore, there's no guarantee that handheld growth will continue into the future even in Japan (though I do admit it's early days).
I classed NGP as "mid-market" in terms of it's market hierarchy because, after all, its still a handheld (not that I'm sying that that's either a good thing or bad thing).
The data still fails to take into consideration that sales are not constant. The DS has not had a very strong lineup compared to recent years and as such software sales reflect that.
When the 3DS and NGP explodes and softwares flying off the shelves like during the record years of the DS the Pie is gonna shift again yet I doubt we will see many articles saying Apple losing ground against Portable Gaming devices.
A $1 iOS game would have to be downloaded like 875 Million times just to equal the total cash Mario Kart DS alone has brought in
When the 3DS and NGP explodes and softwares flying off the shelves like during the record years of the DS the Pie is gonna shift again yet I doubt we will see many articles saying Apple losing ground against Portable Gaming devices.
A $1 iOS game would have to be downloaded like 875 Million times just to equal the total cash Mario Kart DS alone has brought in
m.i.s.
Banned
antonz said:
The Ds is in it's winding down phase, it remains to be seen if and when 3DS picks up the sales slack (I'm thinking in Japan it almost certainly will barring some unforeseen development).
A $1 ios game would incur just a fraction of the development and publishing cost of Mario Kart: DS. Incidentaly, would an ios developer really care about Nintendo's "evergreen" titles? Surely, that doesn't benefit anyone but Nintendo itself?
Stumpokapow
listen to the mad man
Nekofrog said:
I think younger and younger kids are getting smartphones more and more often. I don't think it'll ever hit the 3-5 year old demographic, but there will be a time where 10-11 year olds all have cell phones and most of them will be smartphones
That's where the iPod touch poses the biggest risk to Nintendo, though. Kids want to play games, but they increasingly also want internet access and good music capabilities. The iPod touch can deliver all of that, and do it well, and is actually more affordable than the 3DS is at the moment. The 3DS has great potential as a console, but will never be worthwhile as a convergence device. Parents would rather buy one than two.Nekofrog said:
Quadrangulum
Banned
I've become quite out of touch with the mainstream. I can't tolerate the wireless data and texting fees so I've never bothered with a smartphone. The pervasiveness of all this extra functionality just astounds me.
If you want to get technical The various I devices pose a threat to every hardware maker in the game industry. You already get people saying I rather pay a dollar for some rip off flash game than pay whatever amount for a normally developed game.Yoshiya said:
How long before that starts happening for console titles? Its not just a Nintendo issue.
I think the various DD services do a better job than the handhelds at delivering mid-market games at mid-market price points, in the west at least. Smartphones will take the more casual handheld users that Nintendo wooed with Brain Training and Nintendogs. I think that leaves "highend handhelds" as a niche of it's own. It's up to the platform holders as to whether they can make that niche profitable. They definitely don't own the whole space between the App Store and $60 retail games though.M.I.S. said:
Londa said:
Does it really count, though? In both instances, a good deal of people bought a Wii for Wii Sports and MAYBE a few other offshoot Wii -whatever- titles, and then never really branched beyond. For smart phones, I guess the equivalent would be Angry Birds. Are these people actually into gaming or are they just playing some games?
Is there a difference?
Nekofrog said:Does it really count, though? In both instances, a good deal of people bought a Wii for Wii Sports and MAYBE a few other offshoot Wii -whatever- titles, and then never really branched beyond. For smart phones, I guess the equivalent would be Angry Birds. Are these people actually into gaming or are they just playing some games?
Is there a difference?
Well it looks as if the article is only focusing on which consumers iOS and Android took from the big three. It would be nice to see if some of those numbers are new people to gaming, or gamers migrating to the iOS and Android. Or if these people have played games on their old phones before, and if they are really "new" to cell phone gaming at all?
Plenty of more than worthwhile games on the App Store, Sword and Sworcery being my recent favourite. As time goes on iOS is coming to compete on content grounds more and more and not just on price. It's hard to predict in the long term, but it seems naive for anyone to think the incredible success of all the iOS portables somehow exists in a vacuum. So far Android has failed to attract the same attention as a game platform, and probably isn't all that relevant on this chart.antonz said:
Stumpokapow said:
Until smartphones are the only phones available, I don't see the 10 - 13 years olds having them. They all have phones, yes, but the parents that buy these ages phones won't necessarily trust them with a expensive phone. Some will, but most will go with a "learner phone" in the beginning and let them get a little older before buying them a complicated smart phone. The 15 + age group is going to be mostly smart phone, if it isn't already.
Mailenstein
Member
I'm sure soon enough I'll will ask myself why I should shell out ~50 bucks for a 3DS/NGP game if I can get enough fun out of ~5 bucks or even less.