NYTimes: Apple's Shadow Hangs Over Game Console Makers

Apple's recent foray into video games - with the iPhone, the iPod Touch and its ever-expanding online App Store - is causing as much hand-wringing among old industry players as the global economic slump, which threatens to take the steam out of year-end shopping for the second consecutive year.

Among the questions voiced by video game executives: How can Nintendo, Sony and Microsoft keep consumers hooked on game-only consoles, like the Wii or even the PlayStation Portable, when Apple offers games on popular, everyday devices that double as cellphones and music players?

And how can game developers and the makers of big consoles persuade consumers to buy the latest shoot'em-ups for $30 or more, when Apple's App store is full of games, created by developers around the world and approved by Apple, that cost as little as 99 cents - or even are free?

"The next breakthrough in gaming is not going to be in hardware," Yoichi Wada, president of a top Japanese game maker, Square Enix, told Game Show participants. "It's going to be in how to create a successful business model."

[Keith Olbermann]

"And how can game developers and the makers of big consoles persuade consumers to buy the latest shoot'em-ups for $30 or more, when Apple's App store is full of games, created by developers around the world and approved by Apple, that cost as little as 99 cents - or even are free?"

Because...those games are play for 5 min then throw away. The app store has nothing on top notch psp games and real gamers would never be satisfied with just apple games. The new psp minis are going to be small titles like the ones on the app store.

[chrisWhite]

Well, to be fair, not all of them are trash to be discarded right away, just 99.8% of them. I do think Rolando 1/2 by ngmoco:) comes closest to PSP or DS levels. Given a little more time, those guys will produce high-end mobile games. GameLoft is another company to keep an eye on.

That all said, it's ridiculous to say that the iPhone even threatens the consoles. There's a lot of skewed comparisons and wishful thinking there.

There are plenty of issues that will keep big developers from putting the kind of time and quality into an iPhone game that they would for a PSP or DS. Not the least of them is Apple's crazy App Store nightmares, you never really know whether Apple will let your app through or not until you submit it. If it isn't you may never get good feedback on why it's rejected.

I think the prices on the iPhone also scare big developers, very few games are going to sell at even an $9.99 price point, as that continues to drop developers take on more and more risk that the game won't make any money. There's so much luck of the draw.

Not to mention that you're competing with 21,100 other games for attention, it's easy for even a good game to drown when nobody notices it. This wouldn't happen to hot IP, but anything less then an established franchisee has no guarantees.

[IzKyD1331]

I agree with Keith, when I first bought my iPod, I purchased a bunch of games that seemed like they would be endless fun, but I haven't played any of them in months. (I have stopped purchasing apps altogether)

[MAR-TYR-DOM]

the day i can play something as epic as MGS or God of War Chains of Olympus on an ipod is the day i say apple is in the game industry for real

[ReservoirDog316]

The writer doesn't know what he's talking about. It's the difference between canned food and a steak.

You pay more but it's worth it.

[INehalemEXI]

an apple doesn't cast a very big shadow...

[RememberThe357]

Unless it;s a big ass apple.

Just sayin. :)

But I agree, I think Apple has MS/Sony/Nintendo on notice, but that is it. When it comes to content, Apple gets their asses kicked.

[GiantEnemyCrab]

Sorry but the device is great as a little diversion but there has been nothing on my iphone that has come close to the full blown experiences I get on consoles.

[Kushan]

No it doesn't. Gaming on Apple systems was an afterthought on Apple's part. People don't buy the devices to play games on them, they buy them for music, videos, internet and so on.
If Apple released a more powerful one just for games, it wouldn't sell 1/4 of what the PSP or DS does. If they release a games console, good luck - they might get away with badmouthing Microsoft at every turn, but try doing that to Sony and see what happens.

[chrisWhite]

A year ago that was true, but since then Apple has finally woken up and realized that gaming can be an important part of the market and they've really pushed that line recently. Especially when Steve Jobs said he really sees the iPod Touch as a gaming device.

Steve Job's: "Originally, we weren't exactly sure how to market the Touch. Was it an iPhone without the phone? Was it a pocket computer? What happened was, what customers told us was, they started to see it as a game machine. We started to market it that way, and it just took off. And now what we really see is it's the lowest-cost way to the App Store, and that's the big draw. So what we were focused on is just reducing the price to $199. We don't need to add new stuff. We need to get the price down where everyone can afford it."

Via Ars Technica with more details: http://arstechnica.com/appl...

[crazyturkey]

I doubt Apple can pull another Ipod on home consoles, even less on portables the DS would probably kill them like it does to the PSP.

[v1c1ous]

they might have a chance with the casuals in their next hardware edition, but they would have to actually make it a critical point if they wanna move beyond the casual appeal.

and here's the thing. there's 2 different types of casuals IMO.

the "i know of gaming" casual and the "timewaster" casual.

the "i know of gaming" casual is the casual consumer who only associates gaming with "nintendo". this casual buys casual games, but will also buy a DS. this casual might have kids and actually purchase a $60 carnival game for their kids. this is the type of casual that makes up most of the wii's market, and what most people fit into since the wii fad started and they saw it on their favorite tv shows. these can bring in lots of income to game companies.

the "timewaster" casual is the one playing solitaire on their pc, and the biggest gaming purchase they might make is a $5 sudoku version on their phone.

i don't see apple getting out of the "timewaster" casual appeal. it can still make them lots of money, but these are fickle consumers who don't purchase much, outside of their numbers.

[MattOG711]

While I think the iphone and ipod touch are awesome for people who have them, I dont think the current game setup is going to compete with the DS and PSP for people who WANT to game.

When they make the game store more organzied, and make a iphone that has better control options and more deep games then I think it has a chance to capitalize.

The iphone is great for pick up and go gaming, but doesnt have a deep and high quality expierence like seen in games like Zelda and Final Fantasy on the portable consoles.

The iphone has its own market. Which is a percentage of gamers and everyone else. It's a great platform for non-gamers, and people who want to enjoy quick gaming sperts.

[5yN4MWQU]

Apple has less than 5% of the global computing market, less than 1% of the global mp3 player market, and less than .5% (yes, that's half a percent) of the global phone market. Besides, in many other nations (South Korea, Japan especially) they have 14 mP camera phones and 4G. Apple gtfo kthx :)

LET THE FLAMES COMMENCE - though any respectable gamer doesn't play on a $2500 yearly phone. Yes, you do pay that much per year for your PHONE.

[MattOG711]

How do they have only less than 1% of the MP3 player market? How the f**k is that possible? Who is kicking ass overseas?

[ReservoirDog316]

Yeah, the 5% of the global computing market believable enough. The .5% of the global phone market is believable. But I just can't believe the 1% of the global mp3 player market. How is that even possible? What can possibly be bigger than the Ipod?

It's a honest question.

[5yN4MWQU]

Source for statistics: http://brainstormtech.blogs... (MP3/ phone stats)

Source 2: http://gs.statcounter.com/#... (OS stats)

[MattOG711]

But the first report is about worldwide market share of OS. The IPhone OS is .5%, but when it comes to owned MP3 players I didnt see any stats referring to ipod and its competitors.

Here is a article where a company sues apple over a mp3 player monopoly:
http://www.pcworld.com/arti...

[ReservoirDog316]

Yeah, I think the first source is talking about the OS for the Iphone, not the ipod itself.

[chrisWhite]

Don't you mean that the iPhone accounts for 1% of operating systems out there? Here's an article from the same site that says that the iPod had 70% of the MP3 player sales in 2007. That doesn't even account for the iPhone, nor does it really account for the Zune but I think we can—at least—safely say that Apple had upwards of 60% of that market.

http://brainstormtech.blogs...

Here's some more recent numbers: http://www.appleinsider.com...

"However, a snapshot of Apple's overall iPod business during these same time periods isn't so rosy. Combined, sales of all iPod models fell a staggering 38 percent on a year-over-year basis during the week of the 21st, following a 21 percent decline the week prior.

The good news for Apple is that these declines were fairly inline with broader trends in the digital media player sector, which saw sales slip 37 percent and 21 percent, respectively, for those same two weeks. Also noteworthy is that the week of the 21st is somewhat of a tough compare given that Easter Sunday fell on the 23rd last year."

[BWS1982]

read the pie chart wrong, as everyone has pointed out...it's talking about OS's on the iPhone, nowhere does it talk about iPod's purported/assumed domination being debunked.

[red2tango]

If I'm a gamer, I'm not going to play games on an iPod. I play games with a controller, I don't wave a wiimote/wand/dildo/whatever. I take my controller and bust a cap in the enemy tango's brain.

[DailyAddict]

So a gamer is going to walk in to best buy and say, "you know, I think i'll get that iPod over that Wii/PS3/360/PSP/DS because it's just sooo good at gaming and that's what I want".

Sorry, don't see it happening. The iPod is not taking people away from other gaming platforms. It's just another product in this industry that people are also buying.

[MattOG711]

The iphone/ipod touch is going to sell great, the game store is going to be very productive/make a lot of money, and the brand name is going to be huge.

On paper, The ipod looks like a great gaming platform and probably the most successful, but to GAMERS this logic doesnt apply.

The buisness reports will be great, but when it comes to quality there is no comparison between the ipone and a DS/PSP.

Maybe future iphones and ipods will reach a higher level (I suspect this), but at the moment just because it will be a great machine for apples buisness it doesnt mean the quality will match.

Also most people are buying this for phone, internet, and music. Gaming is a added bonus. I can play games on my cell phone, but I wouldnt consider it a gaming platform. I consider it a phone that can play fun quirky games.

[Viper7]

a single iPhone in my area. Not even in stores. I know people here prefer Nokia phones above others but considering that cellphones have always been quite big market here I would at least think that I would have seen a iphone or 2.

Hopefully they'll get their marketing and distribution fixed here, theres newer too much competition.

[chrisWhite]

Really? I probably spot a dozen of them a day in Downtown Denver (especially on the lightrail), I'm surprised you haven't seen any in the wild. I'm pretty attentive to the gadgets but I would guess I'd see more if I were looking. I know I don't notice as many G1's as some of my G1 loving friends.

[dredgewalker]

Oh yeah right.......the iphone replacing the psp and dsi, another delusional writer in is own merry apple filled world. Luckily most consumers know better than he does. Never joined the iphone and ipod bandwagon cause i was never an itoo kinda guy, i can get the same or better gadgets for half the price they offer.

[hoops]

Most of the games are low production quality. The very reason some are free or the majority cost 99 cents or above.
You cannot compare these "games" if you want to call them that to games on real dedicated hand held systems.