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Apple to Sony & Nintendo: Let the Games Begin

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Steve Jobs, as he was launching the latest version of Apple’s iPod, declared war on game console makers Sony and Nintendo. “It’s the best portable device for playing games,” Jobs said of the new iPod touch. Using the touch and the iPhone, Apple hopes to do battle with the Nintendo DS and PSP. But it’s a battle they will likely lose, for two reasons: One, the hardware isn’t optimized for gaming, no matter what Jobs says; and two, Apple lacks any killer apps when it comes to games.

These are uncharted waters for Apple, a company that hasn’t historically been game-friendly. Now, of course, they have something that both Nintendo and Sony surely envy: the direct distribution channel of the App store. Rather than ordering a game online and waiting for it to be delivered, or visiting a physical store to pick it up, consumers can buy and be playing games on their iPod touches and iPhones with a mere few clicks. Nintendo doesn’t offer this at all, and Sony’s efforts through PlayStation Network are medicore at best. Cutting out the middlemen not only means more money for Apple, but also for the games publishers and developers — so ostensibly, everyone wins.

But for gamers, usability is key. And while the big screens and fairly powerful hardware found on Apple’s latest devices sure can make things look good, their touch screens are limiting, game play-wise. Just look at the Nintendo DS, a touch screen device that has proven very popular, but one that includes both a stylus and directional pad, as well as opposite buttons, to back it up. Apple’s devices lack both. And “pushing” a touch screen-rendered button is a far different experience than that of pressing an actual button.

So far the hardware hasn’t scared off publishers. There are already several heavyweight publishers with games in the App store, with more to come. Sega has Super Monkey Ball, and Electronic Arts just launched Spore Origins. Gameloft, which is known for their mobile phone games, has Asphalt 4 and Real Soccer 2009; and Vivendi Games Mobile didn’t waste any time getting their Crash Bandicoot’s face in there, in a family-oriented 3D go-kart game at that. Add classics like Pac-Man from Namco Bandai, and revamped versions of the classics, like Bomberman Touch from Hudson Soft, and you’ve got a pretty strong lineup. Problem is, these games are available on other formats as well. And the conversion of games originally developed for the competing formats will mean poor optimization, and frustrated gamers. What Apple needs are original titles optimized for its devices, key titles that aren’t available elsewhere.

Another stumbling block for Apple is pricing. Your basic PSP system starts at around $170, and the Nintendo DS is at $130 or so. The 8GB iPod touch, meanwhile, the cheapest of the two Apple devices, sells for $229. And it’s not available to try in game stores.

Nintendo and Sony can sleep soundly, at least for now. While Apple can expect publisher support thanks to the App store model, in order to truly distinguish themselves, they’ll have to offer something original, something that neither Sony nor Nintendo can offer on their own, well-entrenched portable devices. (Ideally, they’d snare Blizzard to make an exclusive World of Warcraft client available; with its reach beyond traditional gamers, it could be the killer app.) And those titles will have to truly make use of Apple’s devices in order to convince gamers that they are, in fact, the best ones on which to play games. Until then, Apple should retreat from this battle.

19 Responses to “Apple to Sony & Nintendo: Let the Games Begin”

  1. Thanks for all the comments, some interesting thoughts and points here! :)

    There is indeed a lot of things to like with playing games on both the iPhone and the iPod touch. Problem is, these games are not as good as they are on dedicated portable games machines, like Nintendo DS and PSP. Perhaps there will be some that are, but unless it is something huge that will get the press going (like a World of Warcraft iPhone client, that would work), it’ll just drown in the other hundreds soon to be thousands of games that just won’t cut it.

    Sure, App store games are cheap, but so are games for mobile phones, and they’re a border market compared to the big player. If the reasoning is that the install base of iPhone and iPod touches will be huge, it’ll still be small if you compare it to mobile phones overall, and that’s a format that has been heralded as a player in the portable games industry for years. Nokia even did a dedicated mobile phone for games (the N-gage), and that failed miserably.

    It all boils down to having great games and an affordable device, otherwise it’ll just be another nice little feature on your gadget. Sort of like mobile phone games are today, I’d say. They don’t cut it in the long run, despite the truly massive amount of choices, and neither will the App store games category unless Apple does something truly drastic.

    Finally, yes, both Nintendo DS (touch screen) and Wii (motion control) was said to not being able to work in the long run, the novelty will wear off, and so on. The difference between these two and the iPhone/iPod touch is that they offer alternatives, with opposite buttons on the DS and traditional controls on the Wii, whereas you’re stuck with that touch screen on the iPhone/iPod touch and that’s it.

    Don’t get me wrong here, you can most certainly play games on Apple’s devices, just as you can play games on your mobile phone. But waging war with Nintendo and Sony is something Jobs & Co. just won’t pull off right now.

  2. Sure, there are limitations to the iPhone/Touch platform as a gaming device, primarily the control surface. But there are some interesting advantages:
    • the iPhone/Touch is almost always with the user, as it is a cellphone first, game device second or third or what have you. The DS and PSP are not always with a user.
    • the installed base is growing rapidly. Probably 12M right now, and if estimates are correct, may be over 60M by end of next year.
    • expands the user base. The DS and PSP appeal to a specific market. Mostly young, mostly boys. The iPhone/Touch are mostly being carried around by adults with plenty of disposable income. This is a new demographic.
    • low prices. The average game is less than $5. The top games are about $10. This is far less than games for the DS or PSP.
    • easy access to customers. With the AppStore right on the iPhone and Touch, an impulse buy is very easy, when the average game costs about the same as a Starbucks latte.
    • 65M registered customers; this makes impulse buying even easier, as it’s one-click.
    • incredible amount of built-in storage, for hundreds of apps. I’ve got about 70.
    • powerful OS SDK tools that allow for relatively easy and quick app building.

    The fact is the iPhone and Touch are popular devices. The fact is, it’s incredibly easy to buy apps, particularly games. The fact is, those games are cheap. The fact is, it’s relatively easy for developers to build great apps. The fact is, the DRM on apps is good enough that pirating is virtually unheard of. The fact is, developers can charge less for good apps, because of the lack of piracy. The fact is, this is a great market for developers and a great market for customers. What’s not to like?

  3. Michael Teuber

    The premise of the article seems to be that Apple is competing head on with Nintendo and Sony for the dedicated handheld game console market. At least that’s what I took away from the medieval knights hacking at each other. The iPhone is a cell phone, pda, and music player with a full featured web browser that also plays games. For the casual gamer unlikely to carry a cell phone, iPod, pda, and a dedicated handheld game device in her purse (god help men who run out of pockets), the iPhone is an ideal casual game platform. For those that need hardcore console style game action the lack of buttons is an issue, for a casual gamer for whom Super Monkey Ball and Cro-Mag Rally are brilliant, dedicated ‘game’ buttons would be a drawback, not a feature.

  4. Have to join the smirkers. Do you really think Apple WON’T offer games optimized for their devices?

    The secret to selling starts with picking out a market. I doubt if Apple is out to capture the miraculous world of LAN-fanatics.

    Take every critical bit of analysis in the article – and I don’t mean to sound too harsh – and substitute the word iPod and published back when Rio and Real were in command. Then, follow along through what Apple decided to do. And did.

  5. I don’t think Apple intended for the iPhone or Touch to be Nintendo/Sony killers. But they’ve stumbled upon a business model that may yet prevail. As publishers and studios come to realize the massive market they can reach with the two devices, I wouldn’t be surprised to see them take full advantage of everything they have to offer and start optimizing games to work on that platform.

    Additionally, I don’t think the majority of iPhone/Touch users purchased that product as a gaming device. However, once they figure out that the games are fun and easy, they may be inclined to continue to purchase them since it is so easy.

    Just my $.02

  6. Actually, I think the opposite is true. With the huge installed base of iPhones and iPods, an easy-to-use marketplace, good SDK’s (so I understand, haven’t used it personally), a userbase that is fairly apt to buy software (when it’s good), and low barriers to entry (try to get an indie project published on a DS or PSP), and I’d say the game is over — for Sony PS and Nintendo DS (eventually).

    Bottom line: It is a _lot_ easier for the iPhone to add games to its repetoire than for the DS/PSP to add the iPhones functionality.

    Last word: Google Android will eat iPhone’s lunch.

  7. Just read your post and had to smirk. Do the math. There will probably be 60-70 million iPhones and iPod Touch product in the marketplace within the year. Already, the Apple iTunes APP store has about 850 games posted. And the game category is growing by about a dozen titles a day. And outside of the big gaming titles (EA, Gameloft, etc…), the average game is below $5.00, with many of them free or at .99 cents. On a 8 Gig Touch, you probably can store over 300 games (without storing music or video). And lest we forget, the Touch has “true” WiFi and the iPhone has 3G. Now compare that to the Nintendo DS universe of 70 million units since late 2004 and average game cartridges selling for $19 – $39. I can go on, but this argument is getting silly. Apple has unleashed the Trojan Horse of mobile gaming. The killer app may not have arrived yet, but gamers and iPod / iPhone customers will sure have fun waiting in the meantime.

  8. Chris Stivers

    Haw! iPhone/iPod is not for playing games. Its touchscreen-giroscope combo is not responsive enough for many games. I will doubt most will give up their DS/PSP for an iPod touch.

  9. And people used to say that Nintendo Wii would fail since it; was not powerful as Playstation 3 or Xbox 360, the motion input controllers was just a fad. I say the iPhone do not need to be as “powerful”, and I say that the input controls can only be judged by what game creators do with them, not by tech-analysts comparing them to “standards”.

    If the iPhone can attract the masses, it is a winner. With the iPod brand as a starting point, I sy it has a very good chance of attracting customer. Customers looking for a phone, or music player will automatically get a handheld gaming device, with games one tap away. The potential is huge.

  10. Perhaps there are peripherals that can be used on the iPod touch? I was thinking small tactile sticky items that could allow for a touch pad?
    Or even a piece of hardware that plugs in. I think a smart game developer will make the hardware and move units!