Interesting Handheld Figures

[VR46]

(based on sales in Japan from Jun 05 to May 06 I believe)

Full report can be found at Gamespot, couple of highlights

Each year, the Computer Entertainment Supplier's Association releases a report of the past fiscal year on the state of the Japanese console gaming industry. The association's numbers indicate that the Japanese game industry hit bottom with a pretty dismal 2004, but bounced back in 2005, according to the Japanese-language Weekly Famitsu.

In 2005, combined hardware and software sales rose 13.9 percent from 2004's 436.1 billion to 496.5 billion yen ($4.3 billion). Software sales accounted for 314.1 billion ($2.70 billion), while hardware took in 182.4 billion ($1.57 billion)--a jump of 51.9 percent, largely due to the sales of two handheld systems. In 2005, Japanese gamers scooped up 4.25 million Nintendo DS and DS Lite units and 2.61 million Sony PlayStation Portables.

Over the past two years, handhelds have grown to control a 63.2 percent share of the Japanese game market. The inverse of the handheld revolution has been a corresponding decline in the Japanese home-console share. It decreased from 68.3 percent in 2003 to 36.8 percent in 2005--a loss of 159.8 billion yen ($1.37 billion) in sales.

So since the DS & PSP launched, the handheld market has doubled in size revenue wise, amazing since the GBA was such a success also - however, (higher than GBA) DS & PSP prices are responsible for a certain amount of the rise.

The association found that the most expensive system to develop for is Sony's PlayStation 2, at 139 million yen ($1.2 million) a game. That's more than double the cost of a typical title on Sony's PSP handheld, at 63 million yen ($541,000) a game. On the other end of the spectrum, developing a Nintendo DS game costs a relatively modest 39.8 million yen ($342,000).

No fanboy posts please

[sj33]

Not too suprising really, they've really lapped up the DS in Japan.
Not something I really understand myself... I mean don't get me wrong, I love my DSLite to bits, but after playing NSMB quite a lot over this week, it struck me that as much as I like the game, I'd enjoy it so much more sitting in front of the telly on a traditonal console.

Of course, it's the more casual games that seem to be hitting the right notes with people over there... Nintendogs, Brain Training, Animal Crossing and whatnot. Not really for me, but you could argue it shows people tire of the existing trends and are looking for something new, bringing in new people who found no appeal in traditional gaming. Where does that leave us lot, I suppose...

Still, bodes well for the Wii too, and that would be a good thing, if only to bring some diversity into a market which has basically had 3 main competitors with little to differenciate (sp?) between them.

[Mr Ono]

The handheld market has "doubled" because many of us bought a DS and then had to get a DS Lite not long after.

(or in my case, 2 DS Lites after )

[sj33]

The handheld market has "doubled" because many of us bought a DS and then had to get a DS Lite not long after.

(or in my case, 2 DS Lites after )

Nintendo are very good at that really, I bought a Lite... true my original DS was broke, but I don't think I'd have any guilt if I did buy a Lite anyway. Dispite being the same product that plays the same games, they've managed to make buying a console again as justifyable as buying a new TV.

It was the same w/ the various different GBA models.

[Dogg Thang]

I think there are many reasons for this. Kids have always loved handhelds but I think there are a number of older gamers (like me) who just don't have the time to play tv consoles as much as we did but, with a handheld, can grab some game time as soon as it becomes available. Maybe not a massive percentage of people as I notice many, if not most, still play handhelds at home but convenience is still a factor.

But I also think Sony entering the market made a massive difference. Not just in terms of what they offered, but in prompting Nintendo to step up their game.

Handhelds have been so far behind their home counterparts, but it wasn't always like that. Nintendo dominated the market with the genius that was the Gameboy. If you'll remember back then, we had the Game Gear and Lynx follow. They both didn't survive but neither handheld was actually all that far behind the current home consoles. But the Gameboy won out, due to the fact that its games were better but, maybe more importantly, it was actually portable.

However, Nintendo dominating the handheld market allowed it to stagnate. They saw off competition from the NGP and Wonderswan. Slight upgrade to the GBC was all we had in something like 10 or 12 years while home consoles, in a competitive marketplace, were advancing rapidly. So, even when the GBA was a significant upgrade from the GBC, it was still way behind home consoles. It was accepted by that stage that that was simply the way of handhelds but, like I said, it had not always been so.

Then Sony announced the PSP. In their usual spirit of exaggeration, we were told we'd have PS2 quality GT on a handheld. A handheld that could match home consoles. Whether or not they could deliver that, whether or not they could dent Nintendo's complete domination, Nintendo had to be seen to be stepping up their game. So enter the DS. Some of us saw it as a reactionary mess. Others saw it as the second coming. Regardless of which camp we started in, it delivered. No doubt about it.

Was Nintendo's domination in handhelds really ever in question? I don't know. I said it back when the PSP was announced that I thought the GBA could still be a huge seller if Nintendo had kept supporting it and the Micro is the first 'slip straight into your pocket' handheld. That, to me, is worth a lot. But nevertheless, the introduction of the PSP gave handheld gaming a kick in the arse and created growth where there really hadn't been any in years.

So rather than have one handheld that is at least 10 years behind the home consoles, we're now in a situation where we have a handheld that can deliver just about any genre a home console can and another that can deliver genres in a way that no other console can and both handhelds, in spite of what many like to think, have an exceptionally impressive line-up of games. Is it any wonder handhelds are doing well?

[prinnysquad]

That's a very good post Dogg Thang. I think the effect of these new handhelds on untapped markets is difficult to overemphasise. The PSP was the first of a kind, great graphics light years ahead of the traditional handheld fare; this undoubtedly attracted gamers who enjoy games featuring next gen visuals, and were previously put off handhelds due to cutesy, sprite-based graphics.

The DS seems to have seeped into the consciousness of people who couldn't give a toss about visuals, the people who enjoy puzzles, self-improvement, social interaction and (sometimes) retro. People who enjoy games with a simple interface and goals that they don't feel overwhelmed by. My partner wouldn't have looked twice at the sprawling vistas of Oblivion and shakes her head in bewilderment at the stress and frustration that Hitman causes me, but she loves to Brain Train every day, enjoys Bust-a-Moving, checks up on her Labrador puppy, racks up Zoo Keeper scores far superior to mine, and would, I suspect, love Animal Crossing (well, she likes the GC version). People have responded to these two vastly different options - different to each other and different to the past - which can only be good for gaming.

[MattyD]

Something a lot of people don't consider is the difference in perception and experience involved in playing handhelds. At risk of sounding trite, a handheld is something you hold in your hand, rather than something that aims to suck you into a fantasy world completely with surround sound and rumble effects and all the rest. This, I believe, is partly why it's more socially acceptable to play handhelds, especially in Japan where the work ethic is very strong - it's somehow less indulgent and more honest. Many people express this as simply having that 'pick up and play factor' but that is what I think creates that effect.

This is partly why the Game Boy has always been so successful, but with the current handhelds now able to provide almost the same standard of graphics as the home consoles, they're a more attractive prospect to people who once turned their noses up at them as inferior and trivial.

Another reason has to be the shift in emphasis by the industry. Ridiculous development costs have caused developers to re-examine what makes games fun, and a lot of them are discovering that again with DS games in particular. The games are more fun so they sell better, and they're cheaper to develop so they generate more profit for the developer and become more attractive to the consumer. The industry obviously wants to promote this model so it markets better and more aggressively, so that's where all the new customers are coming from.

Personally I'm very pleased with the rising success of handhelds. It bodes well for the future and it's reinvigorating videogames.