The Big 5 Gone Mobile: A Strategic Comparison

    

     There are five major players in the mobile gaming industry with distinct, competitive hardware. Split between those companies sticking to dedicated handhelds and the smartphone Operating System (OS) vendors, Google, Apple and Microsoft, Nintendo and Sony have each planted a foot firmly in the rink as they compete for market share. These companies take different approaches to mobile gaming and their interplay will ultimately shape what games end up in the palm of our hands. Let us consider each of these companies in turn.

Nintendo: Riding the DS Legacy
     Nintendo has long enjoyed being the leader of mobile gaming and the 3DS continues to take the lion's share of sales of the dedicated handheld market. Although its lead over Sony's Playstation Portable line is not as pronounced this generation (yet), Nintendo looks like it has nothing to fear. The new challenge is that fewer developers are looking to Nintendo when they can release on Google's Android or Apple's IOS for a fraction of the cost and potentially reach a larger audience. The difference though is quality. Much of the cheaper market may have been siphoned off to other mediums, but some experiences simply can't be ported. Nintendo is counting on the quality of its third party titles to differentiate the 3DS from the competition.
     This puts the 3DS in direct competition with Sony's PS Vita, but competing with Sony is hardly a new experience for Nintendo. No one can say for sure what will happen in the future between these two handhelds, but as of now Nintendo has two advantages. First, it beat Sony to the market by a year. This translates into better initial sales and more titles. Sony was unable to release the PS Vita in time for the holiday season, which cost Sony another two months. Second, the 3DS costs less than the PS Vita, in terms of manufacturing cost and retail value. The DS line has a reputation, and especially for kids and parents, the price seals the deal for Nintendo. Nintendo will soon be able to sell the 3DS at a profit, but in order to equal the 3DS's price, Sony would have to sell the Vita at a steeper loss. In order to perform well, all Nintendo would have to do is continue to attract third-party developers to ward off the threat of losing sales to smartphones while underselling Sony to stay on top of its own market. As Nintendo turns its focus to the Wii U, it can be confident that it has the upper hand in the mobile console market.

Sony: Quality Over Quantity
     As seen from the above section and by market share, Sony is not outperforming the 3DS. Their mobile offering, however, is not weak. While the 3DS appeals to a broader audience, from the casual gamer to the core gamer, the raw horsepower and superior controls (analog sticks shouldn't be a peripheral, Nintendo) make the PS Vita the console of choice for a more core audience. For evidence of this, look at the titles of some of the current most popular games for each: Super Mario 3DS and Uncharted. Sony knows that it's unlikely to steal the younger market from Nintendo and is instead shooting for more core, graphically intensive titles that play to the strengths of the Vita.
     Yet, superior technology is not a cruise control for success. As with the Sega Game Gear and the Neo-Geo Pocket Color before it, the Playstation Portable failed to rival Nintendo’s DS for key reasons. The DS sold for $150 while the PSP sold at $250. The DS’s games were usually priced at $35. The PSP sold games ranging from $40 to $50. The DS used cartridges that were cheap to manufacture and easy to carry around, unlike the expensive and bulky UMDs. The PSP required special memory sticks that were priced higher than standard SD cards. Developers tried shoehorning the console experience into the PSP instead of making a game fitted for the system like the DS. The PS Vita has switched to cartridge games but you still see PS Vita games hitting $50 compared to the 3DS’s $35 to $40 range. Those $50 games are high quality but when Resident Evil: Revelations can sell for $40 on the 3DS one has to ask why Vita games can’t be priced that low. The Vita still outperforms the 3DS in the multimedia department but when their audience is core gamers, it’s hard to have that as a selling point when phones and iPods can do the same things. For the Vita to put its chops to use it needs a wide variety of games.
     Sony still has a card hidden up its sleeve: cross-platform compatibility between the PS3 and PS Vita. It is unlikely, however, to gain much ground as long as it requires the consumer to purchase two copies of the same game. Sony does offer a free Vita or PS3 download for MotorStorm RC, Hustle Kings and Top Darts, but for every other title that supports cross-play a separate copy is needed. It is unclear whether this potentially revolutionary feature will gather dust or be picked up for mass consumption. As of now it is little more than a gimmick.

Microsoft: A Late Challenger Approaches
     Microsoft is no stranger to the gaming industry, but they have yet to make a name for themselves in terms of mobile gaming. With the least popular of the main smartphone OS (sorry RIM, but the days of the Blackberry are long gone), Windows Phone 7 is a strong mobile offering, but its slim market share has severely restricted its potential when it comes to grabbing exclusives. This perhaps explains why games are usually released later for it and why they are sometimes more expensive. Microsoft isn't ignorant of this and has come up with a way to compete: Smartglass. The ability to turn your mobile device into a peripheral on demand is an exciting prospect, but has yet to prove its mettle in the arena. Still, this represents a challenge to the powers-that-be.
Tablets Aren't Just Large Phones Anymore: Windows 8
     Rather than trying to compete directly with the current leaders by starting from the bottom (a tactic that has proven ineffective at grabbing market share with Windows Phone 7), Microsoft has brought its already powerful ecosystem of Windows and Xbox machines down into the mix. This will fuel development for its new ecosystem and Windows 8 for ARM, the version of the OS likely to appear on lower-end slates, restricts access to the now-standard Win32 APIs (Application Programming Interface). Translation: Developers will be forced to adopt Microsoft's Metro interface on the lower-end hardware, forcing them to choose between tossing large parts of their code base to fully adopt Microsoft's Metro UI and philosophy or else settle with a smaller user base. It may be a hassle now, but in the long run these developers will enjoy compatibility on tablets, phones, and traditional desktops within one ecosystem. Microsoft may be losing the short-term battle, but it seems to be looking far into the future and making strategic decisions that will put it ahead in the long term.

The Smartphone Leaders: Google and Apple

     Unlike the dedicated console manufacturers, Apple and Google had the advantage of not having to care about games; originally, games were not an essential part of their business strategy. However, games have become a larger part of their overall strategies if the App Store and Android Marketplace are any indicators. It has introduced more people into games with social games such as Words With Friends and addictive games like Angry Birds. Games on these markets don’t have the high price barrier of traditional consoles, most games either cost a few dollars or use a free-to-play model. With a wide variety of users, these low cost games are quite lucrative, especially free to play games with their micro transactions. Already, we see that IOS and Android have gobbled much of the mobile market.

     While those games are currently the bread and butter of those markets, more money is being invested to create richer experiences and bring in the core gamer. Games such as Final Fantasy III (Square Enix) and Phoenix Wright: Ace Attorney (Capcom) have been re-released on mobile phones, and games such as Infinity Blade (Epic Games), Dead Space (EA) and Mass Effect: Infiltrator (BioWare) show that game companies are willing to invest the time and effort into creating AAA quality games into the market place, and that these investments can pay off handsomely.

     The App Store and Android Market are in a Wild West period; it’s all new and exciting with new developers coming onto the scene and making a name for themselves but it is a struggle to shine because of the lack of quality control; it’s not strong in either market. This year there was a fake Pokemon game released for the App Store which climbed up the sales charts before being removed. There are 250 zombie games that are not very different from each other in the App Store. The App Store has a disjointed approval process but the Android Market has no quality control. Games and apps can just be put on the market by anyone regardless of whether or not it works properly. This alleviates the stress of having things approved but it floods the market full of lots of terrible games and apps. User reviews help both markets inform other customers what is good or not, but others would argue that user reviews can only go so far and that the Google and Apple need to protect customers.

Apple: The Upper Hand
     While Google's and Apple's phones are comparable in many respects, Apple wins two major victories in this particular arena: cross-device compatibility and profitability. First, the smaller selection of form factors and hardware capabilities of Apple devices make games simpler to develop. The smaller selection means that a developer can test their device on only a few devices and be confident that his customers will get a consistent experience. While this is certainly a nicity, the numbers show that IOS developers tend to make more than their Android counterparts.

Touchy-Feely Controls
     Touch controls work fine for most games but there is a demand for a controller. While some developers have embraced the touch screen and made their games benefit from the new interface, many have not been so successful. Instead, workarounds like on-screen buttons, directional pads, and even analog sticks have become commonplace, and quite frankly, the games suffer for it. Quite frankly, the screen is small enough already without the user's thumbs obscuring half of it. Thus, the demand for solid, dedicated controllers has steadily risen. A few examples include the SteelSeries Ion for Androids with the layout of a Dualshock, the iCade for iPad arcade games and it is rumored that Apple is preparing a controller for the iPad and iPhone.

Upgrades: The Elephant in the Room
     While dedicated handhelds arguably offer the superior gaming experience right now via a combination of control options and graphical superiority, this lead is not likely tremain. Control issues have already begun to be addressed and graphical superiority may not last. Dedicated handhelds have long lifetimes with both the Nintendo DS and Sony PSP lasting seven years. Smartphones are lucky to last two years and will be replaced. At the rate smartphones have improved and with the availability of better control schemes, current handhelds will no longer lead technologically. Two years down the line, which consumers will drop hundreds of dollars on a dedicated handheld when their new phone will blaze past Sony's and Nintendo's finest? Even if the difference isn't that pronounced in two years, if we expect the current handheld generation to last even half the amount of time as the previous generation, most people will have upgraded their phones twice. The 3DS and PS Vita are effectively frozen in time, unable to substantially improve before the next generation. While firmware updates will undoubtedly abound, there is an upward limit to the hardware. Meanwhile, Google and Apple, who already have a lead in market share, will blaze past. People still played their DS and PSP six years past its release because they offered the best gaming experience to be had. The 3DS and PS Vita won't have that luxury. The latter though may have the luxury of price. Even with smartphones subsidized by carriers, a top of the line smartphone will cost around $200 with a plan. Based off the assumption of a life cycle comparable to the previous generation, if consumers do upgrade their phones every two years they will spend near $800 compared to $180 (3DS) or $250 (Vita) for a dedicated gaming handheld that developers will have had the time to practice with and improve upon.

     Whatever may occur, it is an opportunistic time for the handheld scene. Smartphones and Windows 8 are challenging the status quo touted by Nintendo and Sony, and competition breeds innovation. While subsidized smartphones and free-to-play pricing force the cost of mobile gaming lower and lower, the big five attempt to compete in their own style. Apple and Google will rule the smartphones, Microsoft will unite its ecosystems, Nintendo will cater to its younger and dedicated audiences, and Sony will do the same with its core gamers. As gamers, we’re excited.

*This article was co-authored by Sami Elahmadie, a computer-science major at Carleton College. He has a deep love for all things tech, and looks forward to future contributions with Arnie.


*This article was co-authored by Arnie Hermes, a Literature/Creative Writing major at Franklin College Switzerland. He has played video games all his life and aspires to be a novelist. He runs a blog on GameInformer under the name Glasses.