Grumpy Gurevitz: Why Dedicated Handhelds Still Matter

Many analysts are claiming the death of the dedicated handheld console way too early. Article after article points out the huge number of smartphone sales and app adoption, and from there leap to the conclusion that this in some way means that there is no future in the dedicated handheld market. I disagree with this position and see that there is room for a strong dedicated handheld offering from the major gaming manufactures. That is not to suggest that I’m blind to the changes taking place in this sector, nor does it mean that I think there will always be a market for dedicated handhelds. I’m open to a world without them eventually, but I would argue it’s way too hard to make that call at present.

So why are ‘experts’ stating that this market is dying? Well clearly there are a ton of smartphones out there, and many are able to play high quality games. However there are five strong reasons why, for the next generation at least, handheld consoles have a role for the serious gamer.

Firstly, if you play games a lot on the move on your phone the batteries cannot cope. This means you’ll find yourself rationing or unable to make phone calls. With their primary purpose being able to make and receive phone calls, it is a major disability when the battery cannot allow such calls to take place. Even emailing a lot can drain the battery on most smartphones, which is why many business people choose to carry a blackberry for email and another phone for calls. Whilst batteries are coming along leaps and bounds, and the CPUs which drive these machines are improving drastically, the extra ‘oomph’ these improvements deliver are fast consumed by the increase in graphical quality and screen fidelity demanded by the consumer, content creator and hardware designer.

Secondly, apart from the Experia Play, all the devices lack credible physical controls. For some forms of games this is not a problem at all, and some have blossomed because of it; but it clearly leaves out a very large number of game genres (especially those adopted by the hardcore) from being experienced in their optimum environment. The hardcore might be a minority term; but it’s a rather large minority who are willing to spend large amounts of money on games and hardware if the content justifies the financial investment (I’ll get onto that in a moment). The hardcore complained about only having one analogue stick on the PSP, so we are hardly excited about having none on the iPhone. Devices that emulate a control stick via the touch screen create a new problem as fast they attempt to solve an existing one. Have you played Street Fighter 4 on the iphone? The controls are not bad, but I can’t for the hell of me see what’s going on as my thumbs are on top of the actual graphics. Now I’m sure some can live with this, but for those that justify this and go out of their way to tell me it’s acceptable, let me pop round to your house when you are watching Avatar in HD and stand in front of your TV wriggling my bottom.

Thirdly, the software ecosystem and dedicated IP offered by the two differing types of devices vary greatly. The smartphone with its app store has allowed a huge amount of content to be generated and sold at amazingly low prices. This is great for the consumer, especially consumers who have never purchased mainstream games before. Additionally, some hardcore gamers also enjoy this content. Apple’s App Store has been good for the genres which were being overlooked on traditional consoles. Additionally, in the case of the latter years of the DS, it has helped make a mockery of the type of software Ubisoft and others were putting out priced at £30 but offering little more than a 79p app. However, this same marketplace is unable to sustain AAA titles, except once in a while. Yes, the iPhone might have its own version of Splinter Cell, but it is a different, cheaper to produce game. Would we have ever seen the iPhone version of Splinter Cell take the lead with regard to design and publishing priority? I can’t imagine such a reality, unless Apple bought Ubisoft and made it an Apple only developer as way of selling more hardware (always a possibility moving forward).

An ecosystem with such low consumer prices cannot offer a return on investment similar to that provided by traditional consoles. Is it easier to make money on the App Store? For sure, in theory, if your app can get noticed. However, is it easy to make hundreds of million of dollars? Not at all.

Additionally, Apple do not yet own or publish internally commissioned content. Perhaps one day they might; after all they have bought music software businesses and other developers as a way of capturing other markets. Yet, at present they do not and hence they lack strong IPs, which can drive the sales of hardware. It could be argued that their best IP is the App store itself along with iOS, but that perhaps is not as strong in the long term as Mario, Uncharted, or LittleBigPlanet. An App store can be replicated, but quality IP cannot be (ask Gameloft).

You see, the handheld is to the videogames industry, what the Cinema is to the film industry. The movie industry needs cinema and to an extent huge HDTVs. The experience of seeing a film on such a large screen with amazing sound is unique and consumers love it. Hence movie studios are able to invest in quality IP that makes the most of the cinema experience and justifies the high price of the tickets demanded of consumers. In turn, the dedicated handheld with its physical controls and larger, or double screen viewing experience is a perfect stage for major games such as Ocarina of Time or Uncharted, which would not see the light of day on a smart phone.

Fourth reason; whilst on paper many of the devices can provide superb graphics, many are often behind the curve in contrast to the dedicated consoles. This is because with the case of the PlayStation hardware it launches well ahead of the curve and it’s only near the end of its life that phone based hardware really catches up. It can be argued that this differential is fast reducing, however, as the smartphone has to always be running phone, messaging and other services; in reality, they can never truly throw their full processing weight behind running a game. This is why even the 3DS graphics look great compared to phones, which are technically more powerful – just compare Resident Evil Mercenaries on the 3DS to the ios version.

Fifth, the price of smart phones, or at least the ones that can really rival dedicated handhelds, are very high. If bought out of contract they can cost close to £500 (iPhone) and the iPad price is £400-£600. The iPad is often mentioned as a handheld and even home based console competitor. Let’s remember a PS3 costs around £250 and does so much more – it’s a daft claim to argue they are in the same space in reality. The PS Vita in comparison is looking at being £280 at launch, with the 3DS already selling new for around £170. The argument goes, that the software for the 3DS and PS devices are much more, but see point three above – it’s not a like-for-like comparison and the hardcore market knows and understands this. That’s why they still buy Call of Duty every Christmas for £40 as well as Angry Birds. The hardcore perceive them as two distinct offerings.

The 3DS has had a dismal launch but if the price stabilises around £150 by Christmas, then with a strong boxed retail line up and with a good range of £2-£8 content on its excellent eShop there is no reason why this won’t be a platform which performs excellently over the next 3-5 years, appealing to old and young alike.

The PS Vita could end up being the tablet for game lovers. It is clear that for many hardcore gamers the iPad is too large, too expensive and lacks physical inputs. If the Vita also has amazing (and flash enabled) browsing, full media capabilities, perhaps even ebooks, then it could end up being perceived as the gamers tablet of choice. It’s not by chance that Sony have moved away from the small screen format of the PSP Go, and decided on a screen large enough for a quality web experience, but more portable and manageable than that of the iPad. It’s also no surprise that the device might offer compatibility with the Android market, offering the best of both worlds from an app perspective.

Will we still be playing on dedicated handhelds in 15 years? Even I don’t want to look that far ahead, but if gamers still want physical controls, AAA content and as long as there between 50-200 million of them worldwide then this will be enough to justify companies existing to provide a solution to that demand with dedicated hardware. For the immediate future though, expect to see 3DS consoles and PS Vitas on birthday and holiday season gift lists for the next 5 years.