Sony, Not Nintendo, Should Be Very Afraid of the iPhone

June 23,2008 - The recent announcement of the iPhone 2.0 software, App Store, and $199 3G iPhone hardware models has caused a lot of discussion within the gaming community on the impact Apple may have on the handheld gaming market. Forbes has shown its misguided enthusiasm by erroneously predicted the death of the Nintendo DS with its sensational article, "Why Apple Could Kill The Nintendo DS," while gaming sites have attacked Forbes in droves, showing their short sightedness in evaluating the potential of the iPhone as a gaming platform.

Many who defend the DS say there really isn't much crossover between potential iPhone/iPod Touch gamers and DS gamers since portable gaming devices, by the very virtue of their specific purpose, can deliver more compelling and deep games that cannot be replicated on the iPhone because of the development cost outweighing profit potential. It's a solid argument that because iPhone/iPod Touch owners don't see it as a pure gaming device they would be unwilling to pay more than $10 for a game, severely limiting the potential depth of games available for the platform. That argument says no publisher in their right minds would commit a substantial budget to development of an iPhone game if they can only sell that game for $10, even if they keep $7 per unit (Apple keeps 30% of iTunes' revenue).

But if you look at some of the best selling DS games, a lot of them offer fairly simple gameplay that could definitely be seen on the iPhone for $10 to maybe even $15. The biggest safeguard for Nintendo isn't the fact that people don't view the iPhone as a gaming platform, or the relatively low sales tag for iPhone games, but rather the simple fact that the best selling DS games have been published by Nintendo. Of the top 20 best selling games of all time on the Nintendo DS, only one, Cooking Mama, has not been published by the Big N. So it's obvious that the games in highest demand for the DS are exclusively available for it, shielding its biggest money makers and system sellers from competitors including Apple's iPhone.

Those exclusive properties are a big reason why Nintendo has dominated the portable gaming scene for nearly two decades, easily dispatching foes of all sorts throughout the years including the Game Gear and N-Gage. It is even in the process of hammering the PSP into the ground despite valiant efforts by Sony. Surely there will be stalwart Sony defenders ready to back the PSP by promoting impressive hardware sales figures - and they are impressive - but it doesn't change one simply fact.

Sony should be afraid, very afraid.

The Sony PSP is already in troubling waters, staring at the writing on the wall and trying everything it can to wash it all away. Despite impressive hardware sales, the Sony PSP is facing a huge identity crisis. Is it a media device or a gaming device? That question is further amplified by its consumers' behavior. Countless PSP owners on the Internet claim using the PSP more as a media device than a gaming one, and sales figures back that up.

Global PSP hardware sales for 2007 jumped 45.8% while PSP software sales only rose a measly 1.5%. That hardware sales bump also may have been fleeting, as it was recently announced that PSP sales decreased 17% from May 2007 to May 2008. Such astonishing numbers lead to the inevitable question, for what purpose are all of these new PSP owners using the portable? There are a lot of non-gaming applications for the PSP including music and movies - a huge selling point for the PSP for some time because of its sizable screen - homebrew applications, and Web browsing. There is also a frightening amount of piracy going on, not exactly something any game publisher is happy about.

The iPhone, even before its recent SDK release and hardware upgrade, already had all of these uses out of the gate, backed by the number one provider of digital music downloads, Apple and its mighty iTunes store. It also does it with a sleeker device and a touch screen, built in flash drive, and as of July 11, a competitive price tag at $199 - only $30 more than the PSP. When the 3G iPhone comes out it'll also have high speed internet available anywhere 3G is provided, powerful gaming and non-gaming applications on the App Store, and the ability to download them wirelessly. This is all without mentioning that the iPhone has the same screen size, roughly twice the processor speed, and twice as much RAM. Additionally, the iPhone has a huge development community who have been building applications for hacked phones since day one, including the much coveted emulators available on the PSP.

The only downsides for Apple are the exclusive contract with AT&T, limiting the device's audience, and the company's lackluster gaming image coupled with the typical perception of mobile games as very simplistic affairs not just control wise, but visually as well. Even those who wish to have most of the capabilities of the iPhone without the phone part can only turn to the iPod Touch which boasts a steep sticker price of $299 for its lowest end model. It would be naive to think, however, that wouldn't change over time, as it is very likely the iPod Touch would see a price drop sometime in the forseeable future.

Apple has also never really pushed the gaming capabilities of its devices, though it also has never had a platform so inherently capable of handling interesting games. Perhaps that's why during the application demonstrations at Apple's keynote at WWDC this year there were so many games shown off from Sega's Super Monkey Ball to Pangea Software's Enigmo.

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