iPod Touch mounts Handheld Gaming Challenge

A recent article discussed the rise and rise of the iPod Touch (that's the iPhone without the phone). It apparently surged to the top of Amazon's sales charts, and mobile ad firm AdMob reports that ads served to the device more than tripled between November and December to 292m. This growth is said to even shadow growth of iPhone ads served and is being called, well, unprecedented. People are said to shun the forced marriage with AT&T's long-term phone plan that come with the iPhone. Makes you think (if you're an operator).

That's all fine and dandy but I thought this was probably a good time to look at the iPod's role as a handheld gaming device again. This was sparked by a remark from one of the Kleiner Perkins' chiefs (they're the ones who set up the iFund, which invests exclusively into companies active in the iPhone/iPod Touch ecosphere) noting that the iPod Touch was now asserting itself as a more versatile alternative to the Nintendo DS or Sony's PSP. This has of course been discussed for a while. The sales figures of the iPod Touch now seem to back these early (and initially largely theoretical) thoughts. 

Nintendo has been keenly aware of this even before the recently published app download numbers were out. In the words of the CEO of Nintendo US (from the above WSJ article):

"Whether you chose to play on your DS or listen to music on your iPod, we're already in the same competitive space for time."

And whilst one could argue about the pound-for-pound comparison of pure touchscreen vs devices with gamepads for certain types of games, the huge upside Apple has created is the hassle-free and easy distribution model for games: a DS developer needs to buy the cartridges (and pay for them up-front), find retailers, and then sell. This means huge cash outlay and very significant commercial risk over and above the development cost, making for a much less risky business model. And as to the input: some of the accelerometer-powered racing games are significantly better to control than with any game pad.

The DS is and arguably will be for a while a formidable gaming platform (as the father of a 10-year-old girl I can certainly vouch for that) but the sheer number of games available on the AppStore is likely to create a space longer term that may well tilt the balance in favour of the latter: you've got a) the arguably best music player in the market, b) higher WiFi usability (the DS doesn't really allow you to surf the web), c) e-mail, maps, and all those nice little (and often useless) apps, d) much, much more choice of games at lower cost (anywhere from $0.99 to $9.99 as opposed to $30 for, say, Cooking Mama 2) and - to top it all of - e) the coolness factor of the sleek Apple form factor. Tough competitor, that.

For mobile games developers and new iPhone game entrants this constitutes and exciting development as it opens the revenue potential further up, and all that at a comparatively efficient and high-margin market place.