The 3DS vs PSP2 (NGP) battle: Who will win the console wars ?

[Grimes]

HappySqurriel said:

Honestly, I don't ever see $10 applications being particularly popular on these handsets; and (unless China, India and Africa buy into these phones rapidly) it will take decades for sales on individual games at these prices to match the revenue of handheld gaming systems.

I know a handful of people working at "shovelware" developers who release games for portable devices and the PC; and (right now) most projects that are exclusive to smart phones are being heavily subsidized in order to create a market, even with how low budget these games are (often a fraction of the development costs of a Nintendo DS game). From what I have been told, most of their games that sell for $0.99 or $1.99 on iTunes are also being sold for $10 to $20 on popcapgames.com or steam; and the number of units sold are similar on both. They have no ability to increase their price because every game they're selling soon has a dozen clones that are free or selling for $0.99 on the iPhone.

You might see the occassional large publisher push a big budget iPhone game at $20, but I'm expecting every last one of those games will disappoint their publisher for the next 5 years (at least).

For many consumers, the games will be good enough. Last generation, the games were bad or non-existant, so it was an obvious choice for the average person what they would buy if they wanted to play a few games in their spare time. This upcoming generation, the games on these new class of devices will be good enough that for many consumers, they simply won't buy a dedicated gaming device.

What this could translate into is slow, stagnant or negative growth for the 3ds/NGS compared to the DS/PSP. Because many consumers on the edges will not buy the systems. Sure you'll have the core, but that is somewhat niche. The core doesn't translate to growth, and without growth I'm not convinced that there will be good profits.