IHS: Smartphones To Hurt Handheld Game Players

By Joseph Palenchar -- TWICE, 2/17/2011

Englewood, Colo. - The opportunity for dedicated handheld gaming devices such as Sony's planned NGP (next-generation portable) is shrinking because of the rise of game-playing smartphones and other handheld devices, IHS Screen Digest concludes.

On smartphones, games are plentiful and cheap, and "this combination will deliver a hammer blow to specialist devices like the NGP," said senior analyst Piers Harding-Rolls. "The overlap between the average future NGP user -- males aged 14 to 35 with high disposable income -- as well as the high-end smartphone user is substantial." As a result, HIS said it "believes that the opportunity for NGP is narrowing, especially in Western markets."

The market opportunity for specialty gaming devices "is shrinking rather than growing," and "short- and medium-term market conditions are less supportive of the release of a high-end handheld console," IHS continued. By the end of the fourth year after its release, IHS expects the NGP's total installed base to hot 22.8 million units, less than the 30.7 million installed base achieved by Sony PSP handheld during the same length of time.

 Smartphones, he said, "are now aggressively intercepting a wide range of consumers further up what is described as the consumption chain," which is increasingly dominated by mainstream devices that are used for a wide range of everyday activities and that also happen to serve games content." When consumers are on the move, he said, "this represents a convergence of activities into single devices, a trend that will result in usage away from specialist devices by the mainstream consumer and onto smartphones."