Analysts are tipping that Apple, the company that destroyed Sony’s Walkman business, is set to grab up to 30% of the gaming market.
In a note to investors BernsteinResearch analyst, Toni Sacconaghi, wrote that by 2012 handheld gaming could generate $1 billion in annual sales and add roughly 30 cents a share to Apple’s earnings. This he says will hurt Sony, Nintendo and Microsoft.
Sacconaghi claims that of the 665 million to 760 million games downloaded by App store users over the past year, only about 12% of them have been paid games, Sacconaghi wrote. The average price for those paid games is US$2.51. 30% cut means it generated gaming revenues of between $60 million and $70 million over the past year.
According to Forbes Magazine, Sacconaghi sees those figures growing fast, assuming what he described as “modest” improvements that include Apple increasing the average selling price of App store games to $6 a game and an average of three games purchased every a year. Currently, only 1.6 to 1.8 games are sold for every iPhone or iPod touch.
While such improvements would be good for Apple, it could upend the economics of the gaming business, lowering the barriers to entry for new developers and radically changing the revenues that companies can hope to reach. Sacconaghi estimates the iPhone and iPod Touch installed base will amount to one-third of the total handheld gaming installed base by 2012. “The upshot for traditional gaming console vendors and applications developers is likely to be negative,” Sacconaghi wrote.