Mobile phone gaming makes more money than portable consoles

Flurry Analytics announced Wednesday that revenue from games on mobile phones, such as iOS and Android devices, has surpassed the combined revenue of more traditional portable consoles like the Nintendo DS and Sony PlayStation Portable for the first time. Since 2009, mobile phone game revenue has tripled from approximately 20% market share to a projection of almost 60% in 2011, mainly at the expense of Nintendo.

Credit: Flurry Analytics

Games on Apple and Android platforms are projected to earn $1.9 billion in the USA this year, compared to Sony and Nintendo's combined $1.4 billion. Flurry calculated $2.7 billion in total U.S. portable game revenue for 2009, $2.5 billion for 2010, and $3.3 billion for 2011. In those years, game revenue from iOS and Android platforms combined to $500 million, $800 million and $1.9 billion in 2009, 2010 and 2011, respectively. This large jump stands in stark contrast to the combined revenue for Nintendo and Sony in those years, totaling $2.2 billion, $1.6 billion and $1.4 billion for 2009, 2010 and 2011, respectively.

According to Flurry Analytics, the main contributor to this huge growth is the freemium business model that's become the forerunning method for driving revenue in mobile phone games. Consumers are obviously responding positively to free or $0.99 games that include microtransactions for unlocking more game content, opposed to the old traditional price model of $30-$40 games on the Nintendo DS and Sony PlayStation and their subsequent iterations. The cool consumer acceptance of Nintendo's struggling 3DS is surely not helping matters for traditional portable consoles.

Flurry notes that while the rise of mobile phones in the portable gaming space is of grave concern for Nintendo and Sony, of equal concern to these companies is that Apple and Google are both entering the TV battlefield as well - a market currently dominated by home consoles backed by Nintendo, Sony and Microsoft. It might be hard right now to imagine a future where Apple and Google platforms have gained a strong footing in living rooms, but as the data from portable gaming has shown, the future can change very quickly.

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