Ronnie05's Blog

Nintendo DS and Sony PSP loosing relevance and life on Portable Gaming!

Posted in Gaming by Manas Ganguly on November 9, 2011

Digital content distribution has disrupted several notable industries. In that context, no industry has been more impacted by digital distribution than the video games. Leading the disruption are iOS and Android devices, whose free and inexpensive games, distributed across a massive installed base of powerful and networked tablet and mobile phone form factors, have already disrupted billions of dollars of game revenue.

Portable gaming, has been dominated by Nintendo and Sony for over two decades. In this model, at retail, consumers pay around $200 for the gaming device and up to $40 for popular game cartridges. Because of the similar form factor, overlap in consumer base (especially younger players on iPod touch) and the casual nature of game content, iOS and Android devices have redefined the category. With the inclusion of smartphone revenue into the category, shifts taking place in market share become clearer.

The most striking trend is that iOS and Android games have tripled their market share from roughly 20% in 2009 to nearly 60% in just two years. Simultaneously, Nintendo, the once dominant player, has been crushed down to owning about one-third of market in 2011, from having controlled more than two-thirds in 2009. Combined, iOS and Android game revenue delivered $500 million, $800 million and $1.9 billion over 2009, 2010 and 2011, respectively.

Within the portable category, an abundance of digitally distributed free and $0.99 games, available on hardware that is both comparably priced and more powerful than traditional portable game devices, better appeals to many consumers. As a result, the days of paying $25, or more, for a cartridge at a retail store may soon end. Further, the installed base of iOS and Android devices has not only reached critical mass, but also continues to grow at unprecedented rates. In their latest public statements regarding installed base, Apple and Google reported a total of 250 million iOS devices and 190 million Android devices activated, respectively.

Due in part to its demise in the portable game category, Nintendo is facing its first fiscal year loss since the company began reporting profits in 1981. Combined with slumping Wii sales, Nintendo is indeed struggling. Equally concerning for Nintendo is that the battle for video game dominance is entering the living room, with entries by both Apple and Google into the TV category. Ostensibly, this new class of hardware will create a new platform upon which the digital distribution model of apps will be overlaid. Now, in addition to tablet form-factor competition, the console game industry, which currently pits Microsoft, Sony and Nintendo against each other, will additionally face competition from Apple and Google TV initiatives. Beyond 2011, if Nintendo continues to face financial hardship, it may be forced to consider difficult choices such as divesting its hardware business and distributing its content, for the first time, across non-proprietary platforms.

In February this year, Nokia’s CEO Stephen Elop mentioned about the burning platform in a internal memo to Nokia employees. Nintendo has a very similar problem at hand. A burning platform and hard decisions for its future – Innovate or Die!

Facebook’s mobile ambitions could pose a threat to Microsoft, Google and … possibly Apple

Posted in Industry updates by Manas Ganguly on November 9, 2011

A stat that caught my eye was that every 8th minute on the internet is spent of Facebook. Increasingly, Facebook is becoming the connective tissue between users, websites and apps, and the social circles.
Facebook is increasingly becoming the sort-of web equivalent of an operating system, including its own application platform. This whole web OS thing seemed like it was going to be Google’s role, but right now, Facebook seems to be making bigger strides.

To take it a notch higher, Facebook intends on becoming more of a mobile platform, and not just an app or service. Towards this Facebook has acquired the HTML5 “app delivery network” Strobe. To have maximum value, Facebook needs companies building on top of it in mobile the way they do on the desktop web.

In doing this now, Facebook can have the effect of running both Google and Micrsoft obsolete.The more that Facebook and the Mobile web consume the user’s time, attention, and effort for communication and entertainment, the less will be the need to be using a device that runs Windows, which is the old way of organizing apps and web resources. In other words, Facebook is actively making Windows irrelevant.

Google with its Android platform is the next stop for Facebook. Whether it acquires WebOS as its medium for challenging Android or build its own platform on the Android, Facebook has the capacity of taking weaning users away from Android. And Facebook has decent enough traction amongst device makers, app makers and others in the eco-ssystem to give Android a run for its money.

This also takes Facebook a step further from challenging Apple at its turf. Presently, Apple makes money from selling hardware — iPhones, iPads, Macs, and iPads. All those apps — including Facebook, the most popular iPhone app of all — are there to grease the wheels and sell more hardware. Facebook is currently not in the business of hardware but all this then takes it to a position, where the next step could be making own hardware and voila! we have a direct Apple competitor.

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