Apple iPhone is handheld gaming’s future?

We looked at the growing importance of video games in terms of dollars earlier on today. Now a clutch of reports underline Apple’s growing impact on that sector as the company surfs the digital tidal wave.

With sales of the device already creating a global audience in excess of 10 million users developers have a viable potential audience to which to sell their advanced mobile gaming experiences.

“Apple has become our biggest customer. We also believe we are the biggest or second biggest publisher on the iPhone in terms of revenues generated,” Gameloft CFO Alexandre de Rochefort said.

de Rochefort sees strong success ahead for his company’s games on the Apple platform, noting that while huge numbers of titles are already available through the App Store, production qualities vary, giving highly-produced titles an edge in what appears to be a lucrative market.

Independents Day Done?

The iPhone gold rush may be drawing to a close for some independents, he warns, saying, “The window of opportunity for small developers is going to close. From a consumer’s point of view, it won’t make any sense to buy a game even for £1 or £2, if it’s significantly less exciting than a game sold for £4 or £5.”

Apple’s competitors are seeing a slightly different slant. Nokia games boss Jaakko Kaidesoja warns that the open pricing for iPhone apps will hurt the industry.

“They’re using the same dynamics as with iTunes. But with open pricing, where does that leave the industry? What does it mean to have hundreds of games for free, hundreds of games for $1.99, and then a handful of games for $9.99. How sustainable is it for those $9.99 games to be discovered and get commercial success, without seeing the price point drop?” he asked.

He says for Nokia the future focus will be on creating an alternative system for developers on that company’s smart handsets, observing “The companies who went there [iPhone] early made a lot of money, but the ones who came there now will face the challenges of having hundreds of games to battle against..”

Gameloft’s de Rochefort denied that his firm is facing pressure to reduce prices as a plethora of titles appear on the App Store, arguing that high-quality titles hold their value far better than low-budget, low-production, titles.

“Our view is that these games are DS-quality, therefore the price at which we’re selling them is actually a very good opportunity for the consumer – four times less expensive than DS.”

He’s positive looking forward, too, “iPhone is the first next-generation handset to be sold massively into the mass-market, and the usage rates are very high already,” he said, predicting the prevalence of the platform will kick-start games sales.

The advantage-makers

Apple holds some advantages, though: a proven software development company with a market-proven operating system and a large cadre of existing developers – and the company is clearly making a special effort to please games designers.

iPhone developers speaking at the Casual Games Forum in London have praised Apple and the way it does business. “Support has been excellent – more than you might expect from other companies that work in the games sector. Everything they tell us is very useful,” said James Brooksby, head of Kuju’s Doublesix studio.

Games development studios also at Casual Games Forum also confirmed Apple has been actively encouraging them to develop new types of games content for the iPhone and iPod touch.

Convergence and conundrum

All this activity begs some questions: Where competitors truly aware of just how significant Apple’s activity in software development for its mobile platforms would become? And with music and films looking to expand their sales, just what opportunities exist for converged entertainment solutions through this device and the new generations of smarphone competing with it?

– Think about Nine Inch Nails and Tapulous and recent iPhone apps for Snow Patrol and Pink (currently battling atop the US charts) and Bryan Eno’s relatively recent release of his own iPhone software as tangible examples of specific opportunities here.

For Apple’s competitors the challenge seems now much greater: they not only have to convince developers their devices form a viable ecosystem for application development; while at the same time creating device sales by attracting consumers while promising future software titles – which could be a big ask…

Think also on this: with iPhone development based on OS X, games developers clearly also have the opportunity to create titles for the world’s estimated 30 million-plus Mac users.

1 thought on “Apple iPhone is handheld gaming’s future?

  1. Constable Odo

    A bit of price competition is good for the consumer. If there are enough iPhone/iPod Touch users all the developers of decent games will benefit. Why haven’t the major game developers been complaining about Palm or WinMo handset platforms. These platforms also must have had lots of free and inexpensive games to compete against the larger game companies. Open sourcing is good, yet open pricing is bad? Head scratch.

    Apple needs to figure out how to categorize all those apps in iTMS. I can only imagine when the amount of apps reaches about 10,000 or so, how difficult it’s going to be to find specific apps. The present setup just doesn’t cut it for me. The apps need to be broken down by price, developer, type, newest, most popular, etc. Scrolling through pages of apps really isn’t practical.

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