Is the Handheld Video Games Market Shrinking? Or Just Changing?

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You’ve probably heard someone, somewhere, claim smartphones are encroaching on handheld gaming’s turf. It’s what you’re seeing anywhere you go, after all: in planes, trains and automobiles, or maybe at family get-togethers, watching siblings and cousins, or nieces and nephews. Let’s call it “the anecdotal truth.”

Just don’t tell Nintendo president Satoru Iwata, who’s bullish as ever about Nintendo’s prospects in the palmtop console biz.

(MORE: Hands On with the Wii U, Nintendo’s Next-Generation Game Console)

In a sit-down with Kotaku, the ever-elegant Iwata, who seems incapable of effusing so much as a molecule of negativity about the competition, acknowledges the arrival and growth of smartphone gaming, but says it’s just not the threat to handheld gaming some have made it out to be.

“I think a lot of this discussion is based on the premise that the handheld gaming device market is shrinking or vanishing and I don’t think that is true,” said Iwata.

History’s on his side. Nintendo remains the predominant handheld tastemaker. I can’t remember a time when the company wasn’t heading the pack. The Game Boy and Game Boy Color together sold nearly 119 million units (their only serious competitor, the Sega Game Gear — I owned one just to play Sonic the Hedgehog — sold a paltry 11 million). The Game Boy Advance, no slouch itself, racked up just shy of 82 million units sold, more than either the Xbox 360 or PlayStation 3 can claim worldwide today. The Nintendo DS, including the DS Lite, DSi and DS XL, has sold an incredible 152 million units to date, making it the bestselling games console in history, surpassing even Sony’s set-top legend, the PlayStation 2 (also: 80 million more than Sony’s PlayStation Portable).

And Nintendo’s 3DS? Currently topping 19 million units sold, according to Nintendo’s most recent public sales figures (though June 2012), which puts the glasses-free 3D handheld just behind the DS’s sales at the same point in its lifecycle. What’s more, says Iwata, the DS had two holiday periods under its belt at this point, where the 3DS only has one.

But what of the more important question: Are people actually playing these things?

It’s one thing to buy a product, another to use it. You know what I’m talking about. You probably have a gift card to some store sitting in your purse or wallet. Possibly you own a bread maker. Maybe you’ve dabbled with Bowflex, or a Shake Weight, or an Ab Master. And if you’re a bibliophile (in spirit, anyway), how’s that copy of Stephen Hawking’s A Brief History of Time doing?

Hawking’s pithy history of the space-time continuum as we knew it circa 1988 — massively popular by any standard, selling more than 10 million copies (as of 2007) — was also supposedly the least-read (or finished) bestseller yet written.

Or take the Wii. It’s closing on 100 million units sold worldwide (a couple million shy of the original PlayStation), but when Nielsen took a six-month look at active video game usage in 2009, it noted Nintendo’s console was the least played — even Nintendo’s own much older GameCube ranked higher. And in 2010, another Nielsen study that used metered console tracking to measure total console use (gaming, video streaming, etc.) found that players 13 or older spent just 1.7 hours (males) and 1.1 hours (females) a week with the Wii. Contrast with the Xbox 360 (6.1 hours for males, 2.6 hours for females) and PlayStation 3 (5.2 hours for males, 2.1 hours for females).

Product sales can tell us a lot. Or they can tell us next to nothing.

Iwata knows that, and he also knows that the real story’s software sales, where the 3DS is doing more than fine: At E3 2012, Nintendo noted the 3DS had in fact moved more software than the DS at the same point in its lifecycle.

(MORE: Nintendo’s Provocative Pre-E3 Wii U Reveal: A Tweaked Controller and New Social Network)

But I suspect smartphone wonks will give no ground here. “Look at iPhone sales, look at Android sales,” they’ll argue. “Look at Angry Birds. Look at Fruit Ninja. Look at Infinity Blade. Look at Doodle Jump and Cut the Rope and Bejeweled.” To which you might respond: “Yes, look at those games, still owning the top 25, same as last month, and last year, and really since the whole smartphone party got started.” For all the ballyhoo about smartphone gaming, it looks an awful lot today like it did last, and the year before that.

What you won’t find much of, if at all: First-person games. Or third-person games. Or real-time strategy games. Or anything, all respect to games like Plague Inc. and Plants vs. Zombies, of significant depth. Take Civilization Revolution for iOS, a downscaled version of Civilization Revolution for consoles — in turn a seriously downscaled version of Civilization IV. Or Dead Space (also for iOS), which looks gorgeous…save for the fact that most of the touchscreen’s necessarily obscured by your thumbs.

And that’s where Iwata makes his best argument: Smartphone gaming is really about killing time, he says, whereas handhelds like the 3DS are about having a “rich experience.”

Previously we had to think, ok, ‘How are we competing with Sony?, How are we competing with Microsoft?, How do we compete with all the other software titles and all the other publishers out there?’ That environment has changed. And the games available for smartphones, I’m not saying that none of these are interesting, rich or fun experiences, because I know that there are some. And one way we can ensure that there’s a market for handheld gaming devices is by continuing to bring out entertaining and engaging software that will provide users experiences that they cannot get on these other devices.

I think this much is certain: Smartphones will never be handheld gaming devices with multiple flip-out screens or triple cameras, and especially not dedicated face buttons, analog thumbsticks (raised or flush), left/right shoulder buttons, front and rear touchpads and whatever other features future game handhelds add to augment our play experience.

The two reasons smartphone gaming exists at all, frankly, is that one, it’s complementary to the pocket-sized mobile phone paradigm (but always secondary to the device’s primary function as a communications hub), and two, most of the games cost next to nothing, or in plenty of cases, literally nothing. Not to disparage smartphone gaming, but you can sum that up in four words: “There anyway, and cheap.”

It’s always possible, and I don’t have the numbers to prove this one way or another, that the sort of gamer looking for a “rich” handheld experience, say Zelda Ocarina of Time 3D and Kid Icarus Uprising on the 3DS or Metal Gear Solid HD and LittleBigPlanet on the Vita — games impossible on any smartphone — could be crowded out by economics, the way wargames and adventure games and flight sims all but disappeared when 3D gaming arrived, took the industry hostage and turned everything into Call of Duty.

But I don’t think so. I think there’ll always be a significant demographic that wants a “rich,” totable game experience, one that doesn’t trade a more precise or creative interface for the sake of one-size-fits-all smartphone conformity. I have an iPhone. I game on my iPhone. I dig stuff like Tiny Wings and Amazing Alex and Plague Inc. I have nothing against iOS or Android. I genuinely appreciate what those devices add to my personal gaming ecosystem.

But count me with Iwata when he says: “I don’t think we’re going to see the desire to have, again, rich and deep sort of gaming experiences… we’re not going to see that vanish. That’s not going to go away.”

MORE: Why the Wii U Isn’t the Dinosaur Some Are Making It Out to Be

Andrew Chen
Andrew Chen

I appreciate the point of view conveyed in the article.

Gaming on smart phones has exploded primarily because at first it competed against non-consumption. Just how Nintendo found and filled a void in the market of potential gamers with Wii and DS and its relevant software, these modern mobile games had essentially no one to compete with because a phone is a device people tend to always carry around with them...putting an easy to use download platform at their fingertips additionally greased those wheels.

As you noted, the use cases for someone playing a dedicated handheld game and a mobile game are still often different. There remain experiences I cannot have on an iPhone due to input constraints.

That said, if Nintendo's primary moat around its handheld business comes down to a dpad and buttons...thats just not a very secure place to be. Involved game experiences can be had on mobiles even now, but it will depend on the type of game you are looking for (puzzle games, adventure games, strategy games and even RPGs can play extremely well on a quality touchscreen). Meanwhile, if a company with the distribution clout of Apple realllly wanted to get serious about taking share in that market, developing and bringing to market some sort of elegant control solution is certainly within their means.

Thankfully for Nintendo, their real moat lies in their franchises and ability to create unique and desirable user experiences. I hope they will have all their magic on display for the 3DS and the upcoming Wii U because both platforms will need every bit of it against a mobile game value proposition that is iterating far more rapidly and inching ever upwards.

Sam Trutna
Sam Trutna

I'd be tickled to death if I could get in depth, story driven games for my phone. The old FF games seem like they'd transition really well to a touch screen interface, or really any game that handles similarly (Pokemon jumps to mind). I'll make due with my DS for now though.


Iwata is completely correct. 

Russell Carroll
Russell Carroll

I'm an aging gamer (nearing 40) and for me that is why I love my 3DS.

I'm used to experiences that have depth. As much as I find Jetpack Joyride diverting, I haven't put 2 hours into it between my half-dozen times of playing it and haven't played it for months (which makes it more played for me than most mobile games).

For comparison's sake, my 3DS XL has been out 2x in the last 24 hours and my old 3DS never went a week without playing. (however, I know here that I'm abnormal as I also have put 10 hours into my Wii in the last month playing Rune Factory and Xenoblade)

My biggest fear in gaming, honestly, is the deeper experience going away. While there are some 'deeper' experiences on mobile phones, for the most part phone gaming is more akin to flash gaming. Simple and simplicity are keys to accessing the masses. While there is some depth in more niche games, the controls often take away from those experiences. 

Playing Mario 3D Land this last week on the 3DS, I was struck again by just how much I can do. Mario is freedom. You can move in so many ways to get to where you are going and the levels encourage you to take your own path, explore, and dare yourself to 'get up there.'

When you take away the controller and try to do that with a touch screen, I find limitations and frustrations. I'm not free anymore, I'm constrained.

I hope Iwata is right and that we keep seeing great deep experiences on dedicated game platforms. I worry though as I see a lack of support from 3rd parties on the 3DS that Nintendo itself may be the last company really trying to make the type of experience I love. Hopefully they never stop and sales are strong enough to interest a few more guests to the party.

Certainly it is good to see other people seeing the same thing and wanting something more.

However, as teenage literature rules the top-selling book lists and dumb action movies are the top box office driver, I think a future where shallow games with little more than a simple game mechanic rule the gaming world seems like a highly probable end game.


As a 3DS owner since day one and a smartphone owner since 2009, I think Mr. Iwata is dead-on: most smartphone games are just time-killers.  Fun time-killers, but not the experience that a gamer craves.  Most 3DS games (including digital downloads) give me the experience I'm looking for when I play a game.


Excellent article. What a rare thing to read on the subject of handheld gaming; a nuanced approach to understanding what gamers actually want. Most of the time, as you said at the beginning of the article, it's "smartphones are overtaking the handheld gaming market". My wife has a billion games on her Android and she's not a gamer. But she's spent WAY more time in 'Animal Crossing' and 'Harvest Moon' on the Wii. Smartphone games are for waiting rooms. Console games are for immersion into other worlds... there's a big difference. 

Manuel Avellan
Manuel Avellan

My kids  (2 under 10)  have at their disposal a Nintendo 3DS XL, an Ipad, a Xoom and a Wii, Iphone 4 amount of time actually playing a game Vs surfing the internet, surfing games, Goes like this:

3DS, Ipad, Iphone, Xoom.

Me Xoom, Ipad, Iphone.

Matt Peckham
Matt Peckham

That's a great point Manuel. I'd love to see a detailed demographic breakdown that included pre-teen gamers, which is where a lot of DS and, one assumes, 3DS sales are going.

James Martin Mueller
James Martin Mueller

I have to say, this is one of the best written articles I've seen about this topic.  I've been feeling along these lines for a long time, and frustrated by the amount of negativity in the media, which at times seems stemmed more from those with financial interest (investors/analysts) or those who haven't been watching long term (new gamers).  You've taken a very good high road view, and have also matched a lot of Iwata's own style, of not being negative nor denying to good of others work.


Cartridges are archaic.  Nobody wants to tote around a gaming system with a million plastic squares that could get lost or stolen on the subway.  If the DS would just allow you to at least install any cartridge-based game into some internal memory, then that would be good.   With the iPad or iPod, not only can I have a lot of games already on board, I can also download the ones I don't have from the cloud (good luck if you accidentally leave a DS game at home that you had intended to finish on your flight..)

Also, you forget the iPad.   That where there are many rich experiences (Horn is a great example as well as The Walking Dead) to be had...and those rich experience games do not cost $29.99 a pop....the most I've paid for an iPad game is $6.99.


Just like Kouso said, there is a whole store full of small games and apps on the 3ds and even the DSi. These games are either free or range between 2-5 dollars and sometimes also (but rarely) up until 10.

The 3DS now also has the ability to buy games you normally have on cartridges, to buy them online and save them to your SD-card. It's really easy and they provide much more depth than an iPhone-game.


Hello sir, 3ds has an eshop where you can download a lot of things. There are 3D games, nes, gameboy color and game gear games, there are apps too. All are stored in your sd card (except the dsiware, which are stored in the console memory). Pushmo, sakura samurai and Dillon's Rollin western are awesome games that cost less than 10 dollars (6.99 for Pushmo and sakura samurai and 9.99 for Dillon). These and a lot more games available on the eshop offer a lot of content and hours of entertainment.  Please check them out, you might have a lot of fun.