A new report on the digital media industry from a firm named Interpret says that mobile phone gaming is rising at an incredible rate, even while traditional handheld gaming (such as games on handheld consoles like Nintendo's DS or Sony's PSP) is falling off. 43.8 percent of the gaming market plays games on phones like the iPhone according to the report, a sizable total that represents a jump of more than double the total last year. During the same period, DS and PSP gaming has dropped by 13 percent, and 27.2 percent of users say they own a DS or PSP, but only play games on their phones.
From an anecdotal standpoint, I fall into that last group. I have a DS and have really enjoyed some games on it, but 99 percent of my gaming lately has been on my iPhone. It's mostly because that's the device I have available, and the games are often just as good from a technical standpoint. That's generally the conclusion of Interpret's report; devices that have more than one function (like phones and especially the iPhone) are being used instead of devices specifically designed for a single function like gaming.
That said, I don't think the handheld gaming market is dead at all. I think that both Nintendo and Sony have tricks up their sleeves that will attract a specific gamer audience back to their devices and away from the iPhone for certain experiences. But there's no question that mobile phones have captured the attention of the casual gaming audience, and those are people that traditional gaming seems unlikely to ever really woo with more targeted hardware.