Is your handheld a handheld or an iPhone?

[W1nTry]

I've not owned a handheld since the original Gameboy, with its spinach colours and 4 AA batteries, but I do have a smart phone (the non iOS kind). The following article raises an eyebrow more than once, if you're into handhelds many you should take a read.

Apple iOS chipping away at DS, PSP for handheld gaming crown
By Chris Foresman | Last updated about 2 hours ago

A new market research report shows that mobile phones—"particularly the iPhone"—make up a large and growing percentage of the handheld gaming market, while use of dedicated gaming devices like Nintendo's DS and Sony's PSP is slowly waning. With Apple's iPod touch outselling those other devices, plus the millions of iPhone and iPad sales, Apple's iOS is poised to become the number one mobile platform for games in the near future.

According to a new report by research firm Interpret, mobile phones are now responsible for about 44 percent of handheld gaming, up 53 percent of the last year. Use of a DS or PSP is down 13 percent over the same time period.

"The proliferation of highly multifunctional smartphones and messaging phones is a very real threat to the dominance by the DS and PSP of the handheld gaming market," Courtney Johnson, manager of research and analysis for Interpret, said in a statement. "Devices which satisfy a variety of entertainment and utility needs are fast outstripping single-function devices as consumer favorites."

That point is underscored by the fact that nearly a quarter of those that use a mobile phone exclusively for gaming have a DS or PSP but never use it.

Even among mobile phone platforms, however, the iPhone has attracted the most developer attention. id's John Carmack has been a proponent of Apple's iOS platform for gaming since 2008, noting that the iPhone 3G was "more powerful than a Nintendo DS and PSP combined." In a recent interview with Ars, he noted that id has ditched development on feature phones for iOS exclusively because the development process is so much more "pleasant."

"There's a vocal fraction of the consumer crowd on the iDevices that really wants the devices to be the successor to the PSP or DS—they want it to be a gaming machine," Carmack said. "You're somewhat hampered by the touch interface—there's a lot of places where tactile controls really are better—but you can definitely do a lot."

Wedbush Morgan Securities analyst Michael Pachter has also been bullish on iOS, particularly with respect to the iPod touch. For more than a year, he has argued that the iPod touch simply offers a better value proposition than a PSP or DS. While hardware pricing is somewhat similar, top-notch games cost in the range of $5-10 for iOS, while similar games run $20-30 for dedicated mobile gaming devices.

"Why would you pay $20 for Tetris when you can get it for $6.99 or $3.99 on iPod Touch?" he said late last year.

The analyst hasn't changed his tune, especially now that iPod touches are starting to outsell Nintendo and Sony hardware. "We're starting to see DS hardware sales crack," he noted on a recent episode of Pach Attack. "I think the ubiquity of the iPod Touch is cutting into the handheld market, I think the PSP was dead on arrival and I think the PSP2 is going to be dead on arrival."

Sony has made attempts to position the PSP Go as an alternative to iOS with little success. And the company is now—perhaps a little late in the game—exploring a mobile phone capable of playing PSP games. Nintendo, on the other hand, is integrating more hardware in its next-gen Nintendo 3DS, including gyroscope and motion sensors, cameras, and a 3D display; it will also be capable of playing 3D movies.

That new hardware might give a bit of a life line to the handheld market, but not for long. 'ltimately, I think handhelds are in trouble," Pachter said. "After the 3DS has had its little rush I think the handhelds will continue to decline."