iOS and Android have done just that. Traditionally portable gaming software revenue was fueled by physical game purchases, often in the form of a cartridge or a UMD, for around $40 a piece. Now, that revenue stream is also being powered by digital downloads. Both Android and iOS offer a significant amount of high-quality, premium games for $0.99 as well as games which are distributed using the ‘freemium’ model, which is when a game is free to download but offers in-app upgrades and purchases for additional content.
Flurry, a mobile applications analytics company, released a report today that shows the distribution of U.S. portable game software revenue over the last three years. Even though iOS and Android games typically cost much less from a price per unit standpoint, they have managed to expand from comprising 19% of the revenue in 2009 to a whopping 58% in 2011. Conversely, Sony and Nintendo have dropped from 11% and 70% in 2009 to 6% and 36% in 2011, respectively.
This dramatic shift in revenue source has caused some to question whether or not Sony and Nintendo can remain viable in this space at all. Despite including a 3DS store with its latest portable system for digital downloads, poor sales caused the manufacturer to slash the retail price of the 3DS and now Nintendo is anticipating posting their first fiscal year loss in over 30 years. The PlayStation Vita, which is set to be released in the U.S. on February 22, 2012, will feature a reduced rate, digital download option for all of its retail games.
It is not all doom and gloom for these two companies. While the hardware and software distribution models seem to be failing, there is still a lot of interest and desire to play games that feature IPs from both companies. Only time will tell if classic franchises such as Mario, Zelda, God of War, and Uncharted, to name a few, will eventually make their way to Android and iOS devices or if Nintendo and Sony will continue to manufacture hardware and release IPs exclusively to their own devices.
source: Flurry via Electronista