The mobile games industry is booming and recent research reveals that games for smartphones and tablets are making four times as much revenue as the combined turnover for Sony and Nintendo’s handheld devices. The question is whether the continued growth of mobile games will soon cause major headaches for the console market.

Smartphones and tablets have become the most popular and accessible platform for gaming since the industry began, and the iPhone 5s is the most powerful gaming device Apple has yet created. Does the advent of the app mean “game over” for the likes of the 3DS and the PS Vita?


A Million Dollar Industry

In its last financial quarter, Entertainment Arts (EA) made $9.2m from game franchises on Nintendo devices, $12.3m from Sony handhelds, and a staggering $113m from mobile revenue. The figures speak for themselves, and with games of the quality and caliber of Infinity Blade III being released, the app market is getting stronger every day.

Yet the mobile gaming market is not entirely dominated by big players such as EA. Independent developers also have the opportunity to compete with the heavy hitters if they strike gold on Apple and Google’s app stores. For example, in the first quarter of 2013, Supercell’s two iOS games, Hay Day and Clash of Clans, made a combined revenue of $179m for what were in effect very simple and organic games.

The Dawn of a New Era

For a relatively new market, mobile gaming is hugely successful. Its profitability and accessibility are drawing more and more creative people to experiment with the platform. Yet mobile gaming is not without its critics. The “free-to-play” games, which dominate a huge sector of the market, have been slammed as less about the game play and more of a cynical exercise in monetization, which damages the industry as a whole.

Although there are many truly amazing budget-priced games, any startup development studio wishing to get rich quick should be aware that on the mobile platform, fewer than 1% of games generate enough money to make their development worthwhile. Also, nearly half of app developers make no money at all. Nevertheless, those who do are proving a real threat to the handheld console market.

The Consoles Strike Back

To counter the threat of mobile gaming, Sony has plans to invite more indie studios to the PlayStation platform and has introduced a lighter version of the Vita handheld. Nintendo has also recently launched a cheaper version of the 3DS. It’s called the 2DS and is a flat, open-faced gadget, as opposed to the clamshell form of the 3DS. Although Nintendo is still sticking to its long-term policy of releasing games only for its own devices, Sony has partnered with Coca-Cola to launch an iOS and Android app called PlayStation All-Stars Island.

Because Apple itself doesn’t invest a cent in gaming, Sony and Nintendo still have the upper hand when it comes to attracting quality developers and exercising some quality control. After all, only gamers will purchase a handheld console, but other consumers will buy a tablet or smartphone for a multitude of uses.

Clearly, mobile games are here to stay. Although they are currently not capable of offering gamers groundbreaking titles such as Grand Theft Auto V, that could all change. The time could soon be upon us when the mobile industry presents a legitimate challenge to the console in your living room.