By Tom Terranova

Not all of us have the latest handheld gaming devices, but most of us have mobile phones. And although we don't hear much about it, mobiles phones and devices actually comprise the world's largest videogaming market. In the past, most mobile games have paled in comparison to their handheld counterparts. But as mobile phones have become increasingly powerful, their technical capabilities have begun to rival (or exceed) those of handheld gaming devices like the Nintendo DS and Playstation PSP. Whenever manufacturers have tried to market a phone as a game platform, it has failed miserably. Witness Nokia’s original N-gage. Shrewdly, N-Gage has now decided to try again with it’s N-Gage Mobile Gaming Network.
One of the strikes against mobile gaming has long been the fact that there were hundreds of different phone models with different capabilities. Writing a game to work on all of them reduced a game’s quality to the lowest common denominator, and writing for each individually started to eat into profits. Apple may have cracked this nut, however, thanks to their monopoly on Apple hardware. If you design one game version to run on the iPod Nano/Classic/5th Gen line of iPods, you immediately have 50 million potential customers. If you write for the iPod Touch/iPhone, you have an audience of 10 million customers — and growing. By putting standardized iPods and iPhones into so many hands, Apple may finally be poised to exploit the full revenue potential of the U.S. mobile gaming market — even stealing some business away from the locked-out handheld market controlled by Nintendo and Sony for so many years.
Even though mobile phones have yet to be universally hailed as viable gaming platforms, it certainly hasn't stopped people from using them to play games. In fact, worldwide mobile gaming revenues are expected to exceed $4.5 billion this year — with mobile game sales exceeding those of the Nintendo DS and Sony PSP combined. And whereas the Nintendo DS and PSP have collectively sold about 100 million devices, there are now over 3.3 billion cell phone users. Snake was one of the first mobile games to reach the masses back in 1998, when Nokia began pre-installing it on selected phones. Since then, over 1 billion people have played Snake and its spin-offs.
These large numbers are largely due to emerging markets. Now that lower manufacturing and component costs have made mobile phones accessible to almost everyone, mobile devices are quickly becoming ubiquitous. Today in 2008, you're almost as likely to find a cell phone or a blackberry in the pocket of a peasant from remote China or under the thoab of a bedouin in Jordan as you are to find one plastered to the ear of a yappy Manhattan socialite. Because many of the emerging markets (especially in Asia) have a lower PC penetration rate compared to the United States, mobile phones often serve as a low-cost gateway into gaming for those who can’t afford the more expensive, dedicated gaming devices. In the United States, where PC penetration is high, the mobile gaming market has yet to reach its true potential. But new devices such as Apple's iPod and iPhone/iPod Touch are beginning to blur the lines between mobile and handheld gaming. As designers create new kinds of mobile entertainment and leverage the inherent advantages of mobile devices (such as GPS and network connectivity) to set them apart, we may soon see more consumers buying iPods and iPhones specifically for gaming.
Apple's new Application store (part of the iTunes store) — and the new iPhone with its excellent graphics capabilities, large dual-orientation screen, touch sensitivity, and tilt sensor — have together helped to position Apple as potential disruptor in the stagnant North American mobile gaming market.
Whereas Nintendo and Sony are still in the early stages of digital content delivery to their handheld devices, Apple already has the tested, well-established iTunes store serving up hundreds of mobile applications directly to iPod and iPhone users. The only major gaming company with a digital distribution system to rival Apple’s is Microsoft with its online marketplace for Xbox and Xbox 360. Despite the success of its online service, Microsoft doesn’t have a significant mobile gaming platform with which to leverage itself into the mobile gaming market.
Another issue in Apple’s favor is value. Games for computers and home gaming consoles generally sell for $50, while handheld titles retail for around $30. Nintendo Wii or Xbox downloads can range from $5 to $30, but with an increasing number of greedy publishers leaning towards the higher end of the spectrum or manipulating customers with extra downloadable content (which is often present on game discs, but hidden and locked up in order to milk more money from consumers.) In contrast, the games on offer in the iTunes store start at $2.99, with a majority selling for $4.99 and many offered for free. As of July, there were already over 500 applications available — and 150 were free.
The iPod Classic and Nano started with a handful of downloadable games in 2006, slowly growing the library since then. With the recent launch of the iPhone 3G and the 2.0 iPhone OS firmware update for all iPhones and the iPod Touch, dozens of the videogame industry's most successful and prolific software developers from other markets have signed on to begin releasing new mobile games. Games for the iPhone/iPod Touch are generally incompatible with titles written for the older iPods. But rather than dismaying developers, the new devices have actually excited them and spurred them on to create even more titles for both Apple platforms.
A year from now, someone in search of a handheld role-playing game from Square-Enix will be able to buy a game disc or cartridge for $30. But they will probably also have the option of instantly downloading and playing a mobile-exclusive version of that game designed for the iPhone — for just $15. Besides being longer, bigger, and better-looking than it’s handheld equivalent (thanks to the iPhone’s superior processing power, memory, and display), the iPhone game could also feature networked play, tilt-sensitivity, force-feedback vibration, voice-chat, and GPS-based gameplay — and many of these features aren't available on the Nintendo DS or Sony PSP. Given this kind of a value spread — plus the additional functionality of an iPhone or iPod — what device would you pick for portable gaming?
As Apple's application store accumulates a large library of must-have titles and mobile exclusives, more people may begin to choose Apple rather than Nintendo or Sony for their handheld/mobile gaming, creating a slight dip in sales for the handheld gaming industry and a giant windfall for Apple and its software partners.
With over 100 million active iTunes users, Apple is in a unique position to promote its mobile apps directly to its customers. If you’d like to read more about any of these games, you don’t even need a URL. Just launch iTunes and click on “Apps” to browse hundreds of different titles.
 

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