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Pachter: iPhone Gaming Not Commercially Sound

By Kris Graft

 Wedbush Morgan analyst Michael Pachter is impressed with the iPhone's capabilities as a gaming device, but questions its commercial viability as a gaming platform. Big name publishers including Electronic Arts and Sega have promised to bring some impressive-looking titles to the iPhone in the form of Spore and Super Monkey Ball, respectively. They're not alone, either, as Namco Bandai, Gameloft, THQ and others have committed to the device.

But while developers have been singing the praises of the iPhone as a blank canvas for game design, but Pachter doesn't see the device as a commercially viable platform for developers.

He said that the "impressive" device has “virtually unlimited potential," but added, "I don't see it as a viable gaming platform, due to the cost of owning one. The iPhone costs $400 plus an AT&T wireless subscription for voice and data, I’m guessing this is $80 a month, so the addressable market doesn't really fit the core gamer demographic.

“To the extent that hip, rich people are an interesting gaming audience, iPhone games will work. My guess is that this group is only interested in the most rudimentary games, and that the market will be small.”

Nevertheless, game developers are even more ecstatic about the device, following the unveiling of the iPhone SDK earlier this month.

"This is a phone that offers plenty of power to work with, no compatibility concerns, and uniform input functionality. That represents an evolution in the mobile gaming space," said Sega's Super Monkey Ball producer Ethan Einhorn in an interview.

Further comments from iPhone developers, along with a wishlist of 10 titles we'd like to see on iPhone can be found right here.

He's right.

However people are stupid and smart companies looking to capitalize in the short run will make money.  As soon as the programs are up for download on iTunes, there will be a mass exodus of idiots with iPhones snapping up anything that looks nifty and fun.   Those who have products ready by then will see success, those who don't will likely not see as much success later on.

well, neither is cellphones but that doesn't stop a lot of people from playing and buying games on there.

kingofwale said: well, neither is cellphones but that doesn't stop a lot of people from playing and buying games on there.

did u not read his reasoning?  everyone has cell phones, including the gamer demographic

he's saying the gamer demographic has a very low % of iphone ownership, so there is a small market of people who will buy complex games for the phone

 

>he's saying the gamer demographic has a very low % of iphone ownership, so there is a small market of people who will buy complex games for the phone

What he DOESN'T realize is that IPhone's demographics is with young 18-42 yr range who loves tech and gadgets. If they come out with something awesome, (like Spore), those people will definitely at least try it.

I would know, I have an 8GB IPhone.

@Kingofwale LOL

yeah, i have an iPhone as well--i love it to death. And yes, i've been wanting games for it for the longest! And kingofwale is right, most ppl i know who have an iPhone are really young

i think i hear cashiers ringing in the distance...
:P

the plural of anecdote isn't data

maybe pachter has data to backup the claim that gamers don't own iphones...or maybe he's talking out of his ass again

either way, kingofwale's first post is incorrect....everyone has cell phone and most cell phone games are not complex...pachter is talking about complex games selling on cell phones, not bejeweled and tetris

>maybe pachter has data to backup the claim that gamers don't own iphones...or maybe he's talking out of his ass again

Yeah, because we all know how Patcher always backs up his predictions/data. Right?
;)

Honestly in many ways, I think Patcher and JL is the same person

Other than what you guys already mentioned, I think he's missing a couple basic points:

1. The iPhone is $400 right now. Most likely, they'll try to bring about lower cost versions of the iPhone soon.

2. The iPhone is currently the best portable media device. Adding games to it makes it possible to have everything: movies, music, games, directions, etc. and most importantly a phone. Even with Skype, the PSP cannot compete with that except as a low cost, less cool alternative.

I'm not saying he's wrong, I just think he should have at least commented on those areas.

He got it completely wrong. He said that the iPhone has lots of technical potential but limited market potential for gaming. Actually it's more the other way round.

The market potential is there, as Apple's Touch platform will branch out into different devices that offer something to a wide variety of consumers, just like the iPod today. In a few years there will Touch devices that are the same price as the PSP2 or DS2.

The problem with the iPhone and iPod Touch today is that their input capabalities are more limited than the swift Wii and DS comparisons would suggest, something we have discussed before. That may or may not change with the 2nd generation coming in time for the 2008 holiday season.

Overall, Pachter is a grinning, salivating imbecile.