According to a study by mobile analytics firm Flurry, the iPhone platform appears to be gaining market share in the gaming industry, while the DS and PSP are both losing out. The study used NPD sales numbers between 2008 and 2009 and did not account for online gaming revenue, such as subscription fees and virtual goods.
These numbers show some interesting trends. While the mobile gaming sector grew 8 percent from 2008 to 2009, the iPhone platform itself accounted for half of that increase. With the iPhone's market share at 5 percent in 2009, it accounts for approximately US $500 million in total revenue out of the $10 billion total revenue of the entire games industry. Even though 5 percent may not seem like much, the fact that it only took the iPhone platform a year and a half to obtain such a number is quite significant.
Looking at portable gaming revenue specifically, we see just how much damage the iPhone platform is doing to the DS and PSP. In 2008, the iPhone was at just 5 percent, with the PSP at 20 and the DS at 75 percent. Going to 2009, however, the iPhone's market share increased to 19 percent, almost one-fifth, while the PSP and DS dropped to 11 and 70 percent, respectively.
Say what you will about Apple, but clearly they are doing something right with respect to the games industry. Traditionally, most platforms have a normal price point for games, with the DS and PSP both being around $30 to 40. With the iPhone platform, however, developers set their own price, with a vast amount of games as low as 99 cents, and most not exceeding $10. With these price points being so much lower, more and more people are not only able to purchase the games, but will much more freely spend these lower amounts of money, even if they actually end up spending more money over time. Apple is reaping the rewards from creating such a winning formula, and perhaps we'll see more platforms following suit in the future.