The influence of Smartphone Apps on Handheld game console market

LAM YAT HANG

    Starting from 1976, with the invention of the first handheld game console, playing video games was not restricted at home or game center anymore. We started to see people playing video games when waiting for buses, queuing for tickets or even attending lectures. Handheld game console allows us to have fun anytime at anywhere.

    More than 40 years have passed, today handheld game console is still very popular among people. It is not difficult to find people holding a PSP or NDS on the street. PSP and NDS, as the two consoles having the most competitiveness in the market of handheld game, starting their competition in 2004. They were both first introduced in 2004 and hit the market at that time. Until now, the PSP has sold for more than 71million units and NDS has sold for more than 147million units. With the release of new versions of the two consoles, their sales are still going. In 2009, the NDS shared 70% and PSP shared 11% of the portable game software revenue in the U.S. It seems that in the market there is no another console can complete with them. However, if you also consider mobile phone as one of the console, they really get a strong competitor.

    Many people may wonder if mobile phone can be considered as one type of consoles. Before appearance of the iOS and the Android system, the games installed in the mobile phones were usually simple games like “Snack” and “Minesweeper”. The mobile phone games usually had lower quality than that on traditional game consoles and didn’t be very popular. Therefore, people didn’t consider mobile phone as one of the handheld game consoles. However, with the appearance and popular of the iOS, Android system and Smartphone in recent years, game developers start to put more money in this market to develop more and better games. The games are not simple any more, some of them even have a big hit in the world like the Angry Bird and Fruit Ninja. These years, we can usually see people playing video games on the street, holding not a NDS or PSP, but a mobile phone. Due to its popularity and success, many people start to consider mobile phone as one of the handheld game consoles.

    Is that mobile phone really intimidating other consoles? Recently a research find that the market share for iOS and Android in the U.S portable games revenue raise from 19% in 2009 to 34% in 2010 and is predicted to further increase in the following years. While the market share of iOS and Android system increase by 15% in a year time, the one of NDS and PSP decreased 13% and 2% respectively. Many researcher believe that appearance of Smartphone and its applications, which called as “Apps”, is one of the factors that make the market share of traditional game consoles decline.

Some news also reported that the Nintendo Corporation, the corporation which invented NDS, has classified the iOS and Android system as their strongest competitor in the market of handheld game.

What makes Smartphone a strong handheld game console? Mobile phone is considered as a must-have item for people living in cities. In 2011, the Smartphone makes up 40% of all mobile phones in the market in the U.S and is expected to increase further in the future. It shows that Smartphone is also becoming more and more popular. Before the appearance of Smartphone, people need to bring an additional device like NDS or PSP with them for playing video games. Many people at that time need to bring their cell phone together with a console when they went out which was a little inconvenient. Many people did not own a cell phone and a game console at the same time. However, Smartphone changes the situation. Smartphone combines mobile phone, game console and even computer together. People bring a Smartphone with them are just like bringing a game console at the same time. With the device on hand, people are more likely to play video games. Although not all people use Smartphone to play video games, but a research find that 29% people will do so. With the amazing sales of Smartphone in the recent years, Smartphone had sold for more than 100million units in the 4th quarter of 2010, it can be said as the console having the most consumers.

Apart from that, Smartphone also provides a more convenient way for their consumers to get video games. The video games in the Smartphone are downloaded in form of applications, which usually called as “Apps”. All Apps are downloaded from the web and no exception for the game Apps. When people want to have game, there is no need for them to go to a shopping centre or waiting for the delivery if they buy it online. All the actions for buying Apps are being instant. The consumer just need to press an icon and their Apps will be downloaded and installed in their Smartphone. From the time that a person has a idea to have a game Apps to the time which he can play the game, the whole process takes no more than 5 minutes. The convenient of the process encourage people to enter the Apps market and have their game Apps. The sales revenue and the game developers will definitely be beneficial to this.

With the increase in the market share for Smartphone in the handheld game console, it is expected that more game developer will enter the market and provide more games for consumers. With more choices, more consumers will also be attracted. This forms a virtuous cycle and the Smartphone market share in the handheld game console is likely to further increase in the following years.

Reference

1. http://blog.nielsen.com/nielsenwire/online_mobile/40-percent-of-u-s-mobile-users-own-smartphones-40-percent-are-android/
2. http://blog.nielsen.com/nielsenwire/online_mobile/mobile-snapshot-smartphones-now-28-of-u-s-cellphone-market/
3. http://thegadgetsite.com/2011/04/nintendo-ds-and-psp-losing-market-share-due-to-android-and-ios/
4. http://www.weiphone.com/iPhone/news/2010-05-15/Statistics_say_iPod_iPhone_hit_DS_PSP_sales_216609.shtml
5. http://news.newhua.com/news/2011/0104/112578.shtml
6. http://blog.sina.com.cn/s/blog_5025e3880100ot99.html
7. http://www.gamasutra.com/view/news/37715/comScore_29_Of_US_Mobile_Phone_Subscribers_Play_Mobile_Games.php
8. http://www.hksilicon.com/kb/articles/34964/iOSAndroid-2015
9. http://www.eurogamer.net/articles/2011-09-14-ps3-worldwide-sales-reach-51-8-million
10. http://www.nintendo.co.jp/ir/library/historical_data/pdf/consolidated_sales_e1106.pdf

High tech, low tech and "no" tech

Comment:

I would like to know clearer distinctions among high, low, and no tech. In which category are the game consoles (e.g., NDS, X-Box, and PS2) classified?

Follow-up:

In my opinion, high tech means the technology has truly ingenious component so that it is very difficult for others to re-invent. Of course, when the technology is being used, others can somehow “reverse” engineer the underlying mechanisms and then possibly copy it. Thus, usually such “high tech” solutions are usually patented to prevent such copy-cats from “stealing” the treasures! Examples of high tech are: micro-chip fabrication, Google search, Skype, NVidia Graphics Processing, etc.

On the other hand, to me, low tech means that the technology is not really that difficult to design and implement. Nevertheless, low tech does not mean unsuccessful product. Usually the reverse is true. I think the reason is that while the underlying technology might not be difficult, the “application” of the technology might be pioneering (i.e., a first mover) so that users are accustomed to using it.

No tech, again in my judgment, is something that does not really involve much technology but just marketing and sales strategies, which are extremely important in a business, if not the most important components.

In summary, I think game consoles are really high tech stuffs because they are really “high performance” hardware built based on really difficult designs. We will talk a bit more about these hardware later on.

Computing using depth-first-search (DFS)

Problem:

In class today, we learn about a computing method for traversing a graph (see Presentation #2, slide #9), called depth-first-search (DFS).

(a) Can you write up a recursive computing procedure for doing so?

(b) Can you analyze its estimated running time?

(c) Can you name some “everyday computing” applications of this method?

Follow-Up:

(a) A possible recursive algorithm is as follows:

DFS(x):

1. Mark x;
2. For every neighbor y of x that is not marked:
3. DFS(y);

(b) As discussed in class, the DFS procedure visits each and every node once, also each and every link once. Thus, the estimated running time should be on the order of N + E , where N and E are the number of nodes and number of links, respectively.

(c) We need to use DFS for many useful daily life applications:

• playing chess: searching for the best move in the game tree;
• playing puzzle: searching for the exit in a maze;
• crawling the Web: the crawler program (e.g., in Google) needs to search the Web graph (i.e., visualizing the Web as a graph of connected documents, where the connections are the hyper-links) in a depth-first way.