The Future of Dedicated Portable Gaming

Blog

Death.

That is what experts predict the future of dedicated gaming portable devices will be. It’s an argument that seems to hold water: PS Vita has a user base of around 10 million units worldwide, while 3DS has a more robust 50 million units. That’s respectable, but even those two combined don’t come close to the PS3’s 80 million worldwide units. Even the PS4’s 20 million units since its launch in November 2013 doubles the Vita’s sales to date (Vita having had 2 years more than PS4 in the market), and almost reaching half of the 3DS sales (3DS having been on sale since February 2011).

What’s even scarier than the dedicated portable devices’ showing against their home console counterparts, however, are the numbers from the ever-growing smart-device market.

It is predicted that by 2016, two billion people (a quarter of the world’s population) will own a smartphone. Not only that, but it seems that around 50% of people who own a smartphone use it occasionally for playing games.

This means an install base of one billion across the world. And the bad news doesn’t end there.

Profitability is a big word in entertainment and gaming is no different. However, profit margins seem to be much higher in the smartphone gaming market than in the dedicated gaming market.

While “World of Warcraft” (which can easily be considered a statistical anomaly) continues to be the world’s top-grossing videogame, the runner up (at least by 2012’s standards), 2010’s “Call of Duty: Black Ops” has raked in $1.5 billion. [GTA V has since gone up to second place, surpassing Black Ops and selling well over $2 billion. The point still applies, however].

That may sound like a lot (and according to my bank account, it is), we have to take into consideration Black Ops’ $25 million production budget. While this still yields an over 4000% return on investment, let’s take a look at another success story.

By 2013, “Clash of Clans” reported almost $900 million in profit, or over half a million dollars a day. That’s mighty close to Black Ops’ $1.5 billion. What’s more, the development budget of “Clash of Clans” was probably between $25.000 and $250.000, at least at first.

If my math serves correctly, that is a 40000% return on investment, at least. So, it is 10 times more profitable (in relation to its production budget) than Call of Duty: Black Ops.

If you’ve read this far, you’ve probably reached two conclusions: I like numbers, and you might as well say goodbye to dedicated portable gaming devices.

But! Hold your horses.

Sony reported during their 2013 E3 Conference that Vita has an estimated attach rate of 10 (meaning, in average, each Vita user purchases 10 games). To put that into perspective, the attach rate of the PS3 is just 4. [Note to the reader: you can watch the entire conference where they announce the Vita attach rate, HERE. You can thank IGN for the video. I do].

Also, developers who are looking to making games for their creative kick (rather than the more mobile-market, revenue-oriented IAP system) seem really happy with both the variety of the ecosystem and the return on their investment for the platform.

3DS is doing the Nintendo thing (by “the Nintendo thing” I mean not really caring and doing well with, mostly, first party games), and while it may seem underwhelming by DS standards, it’s still pretty solid.

At the end of the day, however, developers and gamers talk to each other via the latter’s wallet.

And while it may seem like the market share for dedicated portable gaming devices is shrinking compared to the glory days of the aforementioned DS or even the GameBoy and PSP, gamers have spoken again and again in unison (again, by purchasing games on these platforms) about the undeniable charm of dedicated gaming on the go.

A hybrid may emerge, however, where smartphone technology and dedicated portables unite.

There have been attempts at this, of course, from Nokia’s N-Gage to even Nvidia’s Shield (which of course wasn’t a phone but used smartphone software), neither of which were commercially successful. You can always try your hand at one of the many Chinese offerings, too, some of which seem to be quite good.

What does the future hold, then, for dedicated portable gaming?

It may seem that the answer is not death, but uncertainty. Uncertainty, however, not as to whether or not dedicated portable gaming will exist or not, but rather what shape it will take.

And you know what? I can live with that.

Share this...

Facebook Comments

About Marcos Codas 302 Articles
Lover of portable gaming and horror cinema. Indie filmmaker and game developer. Multimedia producer. Born in Paraguay, raised in Canada. Huge fan of "The Blair Witch Project", and "Sonic 3D Blast". Deputy head at Vita Player and its parent organization, Infinite Frontiers.Like what I do? Donate a coffee: https://www.paypal.me/marcoscodas

2 Comments

    • Hi Gregory!

      Thanks for your comment!

      I did not mention the Xperia Play because it wasn’t any more statistically significant than the examples I did use. While the technology was really great, it wasn’t a huge seller.

      I used the N-Gage and the Shield as examples because one (the N-Gage) represents early attempts at doing the hybrid thing, while the other (the Shield) represents a somewhat recent attempt at using a mobile OS on as a gaming platform. So I used them as sort of “bookends” for the phenomenon of creating hybrids.

      Sadly, we can’t include everything we’d like in these things because they become too long and boring to read (I kind of think this article is already on the long side).

      While some might argue that the Xperia Play is more significant than the Shield, the fact that it’s been a while and it hasn’t been replicated (due in part to poor sales both on the hardware and software front) made me go with the Shield.

      It’s a completely valid point, though, and thanks for pointing it out! For people who want to know more about the Xperia Play, you can visit this page: Xperia Play.

      Thanks again for your comment, Gregory! Hopefully I cover all the content you want from us in the next article, and I hope you enjoyed this one despite my omission of the Xperia PLAY.

1 Trackback / Pingback

  1. Android handheld gaming: Not quite there yet | Vita Player – the one-stop resource for PS Vita owners

Got any thoughts on this? Let us know!