Despite claims to the contrary, it would seem that Apple is indeed making a dent in the handheld gaming market with the release of the iPad. Fortune magazine is reporting that the iPad has been eating away at the market share of multiple electronics markets such as netbooks, desktop PCs and even its smaller cousin, the iTouch. What is even more unexpected, though, is Apple’s rising handheld gaming market share through the App store in the iPhone, iTouch and more importantly, the iPad.
The study comes from Morgan Stanley’s Katy Huberty, and though she focuses on the recent Hewlett Packard acquisition of Palm, there is discussion of the iPad's effect on the rest of the handheld gadget market. Gaming handhelds were a likely candidate for cannibalization.
Nintendo recently reported a net income decline for the first time in 6 years, and it seems that they are expecting to continue to take a hit, notably in the handheld market. This comes at a time where the iPad and its game applications are starting to rise up and get noticed. In a separate Fortune article, Adam Sussman, VP of EA Mobile, gaming reflected upon the benefits of the iPad. “It’s really a new product category that is suited for lifestyle entertainment, but it also opens a host of new possibilities for game experiences, which currently has three games in the Top 10. It enables us to create new game experiences that are really different and very exciting.” With the imminent Game Center app that will mimic a social networking aspect akin to Xbox Live, Apple is poising itself to take a big chunk of the handheld market.
The iPad is well on the way to defining the social and recreational gaming market, and it is fast becoming the preferred method for new gamers to ease into the market; and that is taking a chunk directly out of a market that had been dominated by Nintendo. With over a million iPad sales, and over 3.5 million apps specifically for the iPad [thanks Pocket Gamer], there is no sign that any slowdown is going to occur. Support from big name developers such as EA, Ubisoft, Capcom and a myriad of others lends credit to the system turning into a legitimate gaming concern.
Wedbush Morgan Securities' Michael Pachter agrees with the Morgan Stanley findings. "The introduction of the 3DS some time this fiscal year may serve to hold off substitution of iPod Touch for DS, but we think that ultimately, Apple will gain share in the handheld market," he said.
Perhaps Reggie should be a little worried?
