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How smartphones mean 'game over' for consoles, portable game systems


If there's one Wall Street analyst who consistently makes sense when it comes to computing and mobility, it's Asymco's Horace Dediu. On a regular basis, Dediu charts the sales and shipping information released by consumer electronics companies like Apple and is able to spot trends that spell either good fortunes or a bleak future for the firms in question. Today's target was the gaming console companies, with Dediu's analysis showing how mobile devices -- specifically smartphones and tablets -- spell doom for sales of gaming consoles.

Didiu's numbers take a look at data from just two of the big three -- Nintendo and Sony -- as Microsoft does not provide sales information for Xbox. That confetti-like chart at the top of this post shows the bad news for Nintendo. Not only are sales of the latest console (Wii U) tanking, but the two portable gaming units -- 3DS and 3DS XL -- are also showing a precipitous dive towards irrelevance.

Add in Sony's numbers (above) and the picture is the same -- for consoles and portable gaming devices, the peak year in sales was in 2008, five years ago. What's the difference? The huge influx of smartphones and tablets, all very capable gaming devices on their own.

Dediu sums it up perfectly in his final paragraph:

The implications are that Nintendo, Sony and Microsoft are beyond the point of no return in this industry. Gaming, as a business, cannot be sustained as a platform independent of a general purpose computer. Like other "applications" that used to have systems built around them conforming to their needs, the dedicated-purpose solutions came to be absorbed into the general-purpose platforms. And the modern general purpose computer is the smartphone.

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