PSP World

iPhone Success is no Threat to PSP

Apple's iPhone has been a tremendously successful product. It has facilitated Apple's entry into two challenging new markets: mobile phones and video games. By all accounts, the Cuppertino California company has been successful with both ventures. The iPhone sold more than 10 million units last year, and users have been quick to embrace paid downloadable content through the Apple App Store. Many of the most popular applications downloaded from the store, according to recent statistics, are video games.

According to market research company ComScore, 32.4% of iPhone users have downloaded at least one game. This is a major improvement over the market average, where only 3.8% of cell phone users traditionally download video games. The importance of the iPhone for mobile gaming cannot be denied: iPhone users were responsible for 14% of all mobile game downloads last year.

There is no doubt that the iPhone and iPod Touch have been disruptive technologies in the mobile phone space. But does Apple represent a threat to traditional video game companies like Sony and Nintendo? Some have argued that Apple’s success spells tough times ahead for both of those companies, whose competing handheld game systems the Sony PSP and Nintendo DS could lose market share to Apple.

In its current form, however, the iPhone is probably more of a benefit than a threat to the Sony PSP. If anything, the popularization of handheld gaming through the iPhone could help create new customers when Sony prepares to launch its upcoming PSP 2. Arguably, many of the users who have downloaded games for their iPhones are new to mobile gaming, suggested by the prevalence of casual titles for the system. These users are probably not hardcore gamers, but they might be tempted by a dedicated gaming machine that offered a more streamlined entertainment experience and better, more complex games.

Until the iPhone sports a functional control pad and a library of hit titles, the PSP and Nintendo DS will both be safe in their respective niches. Until then, it represents a threat only to other mobile phone companies, whose games don’t feature touch input or motion controls. Furthermore, as Sony and Nintendo gear up to release the next iterations of their popular handheld game devices, they are free to copy some of the features that have made the iPhone so appealing to new gamers. For example, the PSP Store and Nintendo DSi both feature robust download capabilities similar to the iPhone's App Store. Look for their next devices to also include multitouch screens and motion sensing controls, in addition to the standard face buttons.

Will Apple's iPhone rival the success of Nintendo and Sony in the video game market?

[Source: The Standard]