iPhone 3GS, 3G iPod touch Could Make Apple a Major Mobile Gaming Player

| Oh the Games You'll Play

In a little over a year, Apple has gone from an after-thought in mobile gaming to a major force that could dramatically change the direction of that market segment, according to a few industry folks I spoke with recently. While click wheel iPod games served a limited purpose -- essentially to check a box on the list of things iPods can do -- the App Store has attracted game developers large and small in droves.

"If you remember well, virtually no one in the games industry would have bet a dime on the iPhone as a gaming platform in its early months of existence. Now everyone is rushing there," Fabrice Lamidey, Head of Online Entertainment at Mad Monkey Studio, told me.

The new iPhone 3GS and third generation iPod touch, which sport similar technical specs, seem poised to build on that momentum with hardware that surpasses their predecessors and rivals Sony's PSP and Nintendo's DS handhelds. Mad Monkey has one 3GS-only title in development, with a free, simple 3GS-only game, Sketch Hop, already available at the App Store, while Eurocenter's Adrenaline Golf Online offers graphics that scale up when run on a 3GS or third generation iPod touch.

"From our experience the older devices (iPod 1G, iPhone 2G and 3G) were only slightly better than DS, but far worse than PSP," said Eurocenter manager Stephane Portha. "On the new iDevices there are still some speed limitations because of the shared memory concept (graphic card uses normal RAM), but in general the iPhone 3GS is now slightly faster than PSP and has a lot more capabilities: OpenGL shaders and much more memory."

He added: "One big advantage for the iPhone/iPod touch is the ease of development, with its memory, disk space (flash memory), OpenGL and BSD sockets it is much more similar to a PC or MAC. On the other side you have DS and PSP with limited memory, limited texture space, limited space for saving game data, specialized graphic and sound hardware, proprietary formats. This alone guarantees a much higher number of games developed for iPhone and iPod touch, and with more developers flocking to the platform, the hardware will also be used to its fullest."

Taking on Sony and Nintendo

But will those advantages translate into Apple being seen as less of a cell phone game provider and more of a major player in mobile gaming on par with Sony and Nintendo?  Mr. Lamidey thinks so: "We believe 3GS iPhone and iPods, and their future evolutions, will take a major share of the mobile gaming market."

Others I spoke with concurred. "Apple is the 'object in the mirror that is closer than it appears,'" said Digital Chocolate founder Trip Hawkins, also an ex-Apple executive and founder of EA. "It’s funny that Nintendo had just passed Sony in the living room when they both felt Apple breathing on their neck in the handheld market."

And Bruce Morrison, producer of games for Freeverse, told me: "I think Apple is very happy where they are, and so are we.  I don't think they could take on Nintendo and Sony.  They ARE taking them on right now.  And in many ways winning.  The number of iDevices will soon easily outnumber the handheld market."

The Next-Gen Transition

However, with the iPhone 3G selling for US$99 and the $199 iPod touch using previous-generation hardware, it will be a while until developers can focus all of their efforts on the current handhelds' capabilities. While Eurocenter and Mad Monkey have begun that process in different ways, other developers plan to move more slowly.

"We are a mainstream game publisher and we aim our games at everyone," Mr. Hawkins said. "We try not to leave anyone out and we want everyone to be able to play.  In some cases that means we won’t be on the bleeding edge of making games that use a new feature that is not available to most of our customers."

"For now, the iPhone 3G is king," confirmed Mr. Morrison. "We are still making games with the 3G as our base model.  It'll be a bit longer before we build for 3G S capable devices."

"There is a big install base of older devices and those devices cannot be ignored," said Mr. Portha, "so if a developer wants to make money he will need to write two engines and choose the right engine based on the device hardware. From what we can see even many bigger developers are currently not doing that additional work and are completely focused on making one engine which works on all devices, so it will take some time until we see games from those developers which use the full power of 3GS and iPod touch 3G."

He added: "The first candidates for being 3GS-only will probably be MMO games and FPS games. We plan to eventually release MMO games in the next year and will require at least iPod 2G or 3GS because of the higher CPU power. Even games of the quality of World of Warcraft are now possible on iPhone and iPod touch and will really be a revolution in the mobile game market."

Other Factors

Of course, there's plenty else to consider beyond raw technical specs and Apple's current cool factor. "We believe the mobile gaming market is at a crossroads today," said Mr. Lamidey. "While Nintendo and Sony's hardware-based mobile platforms are strong sellers, the iPhone and its software-only distribution has not only successfully conquered a massive audience, it has made developers feel more in control."

Mr. Greenstone pointed out: "The first step Apple needs to take is to provide game players with an input mechanism other than a touch screen.  Real games need real buttons and/or joysticks."

Mr. Hawkins noted: "A consumer who wants music, video, movies and lower game prices will certainly get an iPod touch over a PSP that may have more processing power.  And Apple’s usability is superior and appeals to a lot of new customers who are not even in the market for a handheld game, and they end up playing games because Apple makes it so inviting, simple and fun.  On the other hand, Nintendo and Sony have some wonderful proprietary game brands and their devices are more rugged – much less likely to break if dropped by a child."

And Mr. Portha said: "We can see that currently there are a lot more innovative game concepts on iPhone and iPod touch, comparable to the PC games market in the 90s. There are only very low barriers for entry, it is possible to make money, and there is a lot of competition which is forcing developers to be creative and fast and produce quality content.

"It is much easier to make games for iPhone and iPod touch than for DS and PSP - the development itself is simpler because it uses standards such as OpenGL, and you don't need to be a certified partner of Nintendo or Sony to publish games. You will not only see ports, multiplatform-games and small innovative games, but also games made exclusively for iPhone and iPod touch."

However, he had some caveats: "The App Store currently has still some problems to be fully competitive to DS and PSP though. One problem is that the market is not very big - the iDevices are not only meant for gaming, they can also be used for Internet and as a music player. The number of games bought on the App Store is only a fraction of DS games sold, and the average price is much smaller. Big publishers will make more money by doing games for DS, where they have control over the distribution, higher prices and less competition."

Comments

Constable Odo

Sony and Nintendo are going to have a hard timing keeping up with Apple iDevice hardware.  Apple will most likely be upgrading their iDevice hardware to some degree every year and most likely processor upgrades every two years.  And with Apple’s ownership of P.A. Semi to help build custom chips it’s going to be rough ride for those Japanese game companies who basically were coasting with the same hardware for a number of years.  The smartphone industry is changing at such a fast pace so it’s only natural Apple will keep pace.

I would be rather surprised if Apple doesn’t come out with a specifically designed gaming device with buttons, touchscreen, WiFi and Bluetooth.  They’d be able to pull major market share from both Sony and Nintendo in a couple of years since the iDevice ecosystem is already in place and the hardware would likely be the easiest part of the equation.  Neither Sony and Nintendo wouldn’t be able to do a thing about it without blowing major cash amounts.  Both companies should be very frightened by the thought of Apple building a specific gaming device.  I realize that Sony and Nintendo have their own uniquely branded games for each platform and that will keep many gamers from switching.  That’s a good thing.

Within two more years sales of Apple’s iDevices will surpass Sony and Nintendo devices.  If the iPhone catches on in China, it’s a guarantee.

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