According to Apples latest annual report, 20.7 million phones were sold during 2009, representing an increase of 78% compared to 2008, and generating a total revenue of $6.8 billion dollars. Net sales of other products and services increased to $696 million dollars predominantly, according to their report, because of an increase to net sales of third party digital content and applications…
Now sadly the report does not give a breakdown on categories of sales, so it would be impossible to guess how much revenue was generated by specific companies. However, what is evident from this information and seeing the App store daily, is that large game developers are quickly cottoning onto the fact that much like STEAM, the App store and the iPhone (specifically the 3GS) has the ability through its downloadable content and hardware to make serious money, with little financial outlay.
Grand Theft Auto: China Town Wars is the perfect example of what the iPhone is capable of. Rockstar Games have managed to port the entire game, without sacrificing any graphical quality, while still maintaining silky smooth frame rates. In addition, they have also managed to implement the famed radio stations of GTA, linked to the players iTunes. The distinct lack of a physical control method has been replaced with onscreen touch replacements to great effect. This demonstration of ingenuity from RockStar (similarly developed for other iPhone games) solidly demonstrates the 
potential the iPhone has as a gaming platform.
With the significant increase in speed that the 3GS has offered, developers are naturally aligning themselves to another platform where revenue can be achieved. Despite relatively poor sales on the PSP in comparison to the DS counterpart (undeservedly so I might add) the iPhone version of GTA:CW has remained top of the App stores sale charts since its release. At only £5.99, it’s a fraction of the price when you consider the identical DS and PSP versions start at £25.00-£30.00
What stuns me the most however, is the hardware capability that the iPhone demonstrates. I won’t bore you comparing the devices; you can find their specifications here and here and here. But what is evident is the landmark I would consider Rockstar have achieved in bring GTA:CW to the iPhone. With sound, reams of dialogue, cut scenes and 3D graphics of the highest quality, I was honestly astounded when I played it for the first time. You can’t help but think to yourself “But it’s a bloody phone…a phone!!”
The NGage’s foresight at merging videogames with mobile phones was met with much scepticism at the time of its launch, and I will freely admit I was at the time part of that scepticism, often voicing the opinion that the two should remain mutually exclusive. However, Apple have bridged the gap with such finesse that it seems to have happened without a mass marketing barrage. Of course, a large percentage of iPhone owners will never touch games on the device, mainly due to the broad spectrum of individuals who own the handsets. But, what is appealing to developers is that even if 5% of the 40 million iPhone owners purchase their game, encouraged by the cheap price tag, then it becomes a significant revenue stream.
Doodle Jump, one of the most famous and ludicrously addictive iPhone games by an indie developer is estimated to be well on its way to achieving two million downloads. At 0.59p you are looking at a potential total gross of $2million dollars.
The accessibility and low cost that the App store offers gives indie developers, and the heavy weights equal opportunity to flex their creative muscles, where word of mouth over marketing budgets is king. With no distribution costs for printing manuals, discs or game cases and a development kit for the iPhone costing as little as £100, it truly does become an attractive prospect for independent studios and individuals. A platform to truly show off their wears.
The question I want answering now is how long will it be until Microsoft, Sony or Nintendo develop a console which is exclusively download content only, where they have all their games released onto their equivalent of the App store at a fraction of the price. Surely it is an inevitability; we are already half way there.
What amazes me is the context. Not long ago not everybody had a cell phone. Not long ago cell phones were somewhat brick-like. Before that there were “Car Phones,” remember those? Not long ago cell phone use was around $0.69/minute. Not long ago no one would have considered, even for a second, abandoning their land line and living only with cell, it was too unreliable. Fast forward a bit and you’ve got me and millions of others who haven’t had land lines for years.
And then you have the iPhone, the screen of which is unbelievable in comparison to the digital displays of old. Forget what it’s capable of, did any of us imagine a device like this in 2000?
Apple has proved twice now that digital distribution is a reliable business model if well implemented. And the company’s got style, something its competitors lack. Between Steam, the App Store, and iTunes, we’re really seeing a big change. Great stuff, Lewis!
Isn’t the PSP Go download only?
It is Pete, yes. However it also sold catastrophically, most likely because Sony simply didn’t have the download infrastrucutre to support it.
God, I had that original brick. Then a series of flip phones with antennas that would break off. Then the candy bar phones, more flip phones, the Razer, and now a cheapo free Nokia something. My work has always dictated that I have a mobile but these days I hate spending $$$$ on them.
That said I’ve been going back and forth between a jailbroke iphone or a Nexus One with no contract. I’m thinking if I want to invest in a mini-computer/smartphone I just want to OWN the sucker. I love/hate Apple, always have and the geek in me wants a Google phone though I was in a meeting tonight and 5 of 6 people had Macbooks and iphones. I had the beat to shit Nokia and a paper notebook.
I sincerely doubt I will be gaming on a smart phone. Achy fingers and fading eyes sort of keep me in front of a PC with ever bigger monitors.
The PSP Go is a perfect example of how Sony just don’t “get” the success of the App Store. The PSP Mini’s range is Sony’s bodged response to affordable, bite size mobile gaming, but their pricing policy is so wide of the mark. £3.99 for Tetris? No thanks. £0.59 has become the new de-facto price point for that form of gaming on the App Store, rising to around £3.99 for more ambitious games that in all fairness play similar to “full” £20+ PSP games.
From a hardware perspective the PSP Go is a great piece of kit, but is a disaster in terms of timing and implementation. There’s almost no incentive for existing owners to upgrade, seeing as their existing UMD games instantly become useless on the Go, and with Sony’s rather hit and miss (mostly miss) pricing policy for both Mini’s and full games there’s not a right lot of incentive for newcomers either. Factor in an almost £100 price premium on the hardware itself and of course no options for the used games market.. the Go is a stop gap solution between the PSP and the much rumored PSP 2 that nobody really asked for, and clearly very few people need or want.
The industry at large has made it perfectly clear that digital distribution is the avenue they wish to go down, but there are alot of lessons Microsoft, Sony and Nintendo need to learn both from the success of the iPhone and the failure of the PSP Go if they wish to take it seriously.
Good article, Lewis.
@ Gust- I havn’t yet had aching fingers on the iPhone. Probably because of the distinct lack of a physical control method. I remember playing Metroid Prime on the DS and having to regularly pull apart my fingers after they warped into a freakish stylus grip.
@ Mat, £3.99 for Tetris on the PSP? Ouch! Games like that are usually free on the iPhone! How on earth they can charge £20 for a game is beyond me, you don’t even get a box, manual or CD!!
Yep, playing Mario Kart on the DS gave me shooting cramps in my hands. I had to give it up, the DS that is. Good to hear the iPhone doesn’t do that. I’m still on the fence about buying one and now I’m waiting for the refresh…always something to wait for.
I’ve never got cramp from any particular DS game but I can say that Metroid would ruin me from what I played. And that thumbstrap? Tch.
The problem I had, and particularly with Mario Kart DS, was the corners of the DS digging into my palms leaving really red, sore marks. That’s horrific design as far as I’m concerned.
I really dislike the design of the DS. Was that thumb strap a legitimate product?
The iPhones interface replacement as a touch input is absolutely incredible. The analogue “stick” on the iPhone is much greater than the PSPs! You must all try it:)
I’m not sure about that, Lewis. The PSP analogue nub has it’s problems, but it at least does a job and gives you some tactile feedback. I think the main problem with the PSP’s analogue nub is that there’s only one of them..
The quality of the iPhone control system is entirely dependent on the game and the developers ability to work around the controls. Having played countless games since the App Store launched over a year ago, I can assure you that Chinatown Wars is the exception rather than the rule (although naturally, on screen controls ARE improving across the board.. generally)
I never really felt the PSP’s analogue stick was very effective. It always felt like it was stretching too far, was far too light-weight, and its flatness to the PSP made it more of a moveable disc than an analogue stick. However I would agree that it is still usable and works well on games such as Fifa.
On a side note- I’ve only managed to play games on the iPhone which uses the same analogue control method as GTA:CW, so I have probably landed lucky. I think it would be wise for developers to continue developing this same control method, but with added tactile feedback to the player; once you press the analogue stick on screen, the phone vibrating would be a welcome addition.