| HappySqurriel said: Correct me if I'm wrong, but I thought that the sales of digital SLR cameras have exploded in the past 5 years; and photography is one of the most rapid growing hobbies ... Or to put it another way, the smart phone did not eliminate the camera market it just captured the least demanding portion of the market. |
Truth to be told, though, is that the transition to digital made SLR and prosumer-level cameras much more accessible. Thus, there was a market expansion for the upmarket because the difficulty slope to enter the hobby was greatly lowered. But where the market was already more saturated - the point and click, where the camera is not the means for an hobby but an appliance to shoot pictures of family reunions and vacations - the smartphones have been indeed cannibalizing the market of dedicated devices.
The analogy with gaming devices is not perfect, but close enough IMO. Not everybody that owns a gaming device today, either home console, gaming PC rig or handheld, will define him/herself a gamer, nor would say that they have the hobby of gaming. It's just something they do on occasions, in the amount and modalities that have become mainstream norm. Please note that there's no judging on the merit of the issue from me here: someone has all the right to not think of himself as a car hobbist, and still enjoy having a nice car and be able to recognize really good car design choices from really bad ones.
Such users don't read magaziones or web sources for details about games, their design, their sales, their history, for example. That's something that enthusiasts do, from photography to cinema to cars to videogames. Such users would generally still be able to appreciate an exceptionally good movie over a good one, or NSMB over a good platformer of lesser pedigree and polish. The problem that Squidz seem to posing though is that if convergent smartphone/portable computers manage to give easier/quicker/cheaper access to good enough pick up and play entertainment content, then such comparison will never take place, because the needs of the customers have been already satisfied well enough to dampen further research. And that would make the expanded hanheld market where N has taken great inroads an inerently fragile one.
Where can N. go? I can think of
1) defensive battle over what some would call the disruptive values: availability on any device, cheapness, accessibility, net-awareness, variety. They can work on their online infrastructure for years, and they are capable of designing wonderful accessible experiences. But they will hardly be able to match the offer of universality, variety, cheapness that comes with hardware indipendent-ecosystems, a low entrance threshold for developers, wrapped in user-friendly universal digital delivery.
2) go into an entirely different direction and offer something the smartphones can't or won't. Specialized hardware, specialized services. But that sounds like entrenching into an upmarket niche, because those a re not choices that can greatly expand the market - not when the "disrupting values" are "easy to install on every hardware, cheap, accessible to pick up and play".
And I think the 3DS looks like a move along the direction of (2).
That said, I agree with the objection you seem to be raising - that even being likely that N. will become the upmarket niche of handhelds, that doesn't imply that they won't be satisifed with playing that less rapidly growing market. Just like Apple is not the first seller of mobile phones, but has been the first in revenue and will keep for along time the highest profitability against the Android devices tide.
Still, the SLR/point and click markets were already deeply tiered and divided. And while SLRs have made great inroads with the accessibilty granted by digitalization, N. won big money by trying to merge tiers downmarket and offering a "bridge" solution. Retiring into the upper niche might still be economically sound, but seems like the failure of an expansion strategy.
