by Tuong Nguyen – Principal Analyst Consumer Technologies & Markets
Like other people attending CES, the hype around Nintendo’s return to the show after a 16 year absence led me to believe there would be a relevant gaming presence at the show. Nintendo didn’t have a booth on the floor, but instead opted for a number of private showings of the anticipated 3DS. Other notable hardware gaming vendors such as Microsoft and Sony dedicated the expected amount of show floor to gaming. The gaming pavilion was mostly a number of smaller, me-too vendors, but there was some innovation to be seen.
Maybe Nintendo is waiting for a more appropriate forum like E3 to talk about gaming, or maybe an event closer to the 3DS launch date. Whatever the case, the gaming market is at a turning point. The industry faced its toughest year, yet. 2010 hardware sales are estimated to be down at least 22% over 2009. Gartner expects 2011 to be flat to down. Moreover, we don’t expect to year over year growth in the next 5 years.
In the past year, we’ve seen the rise of numerous smart phone operating systems, growth of applications stores to cater to these platforms, and a surge in sales and interest in smart phone devices (almost 1 in 5 phones sold in 2010 were smart phones). Moreover, the introduction of tablet devices (which I’m sure my esteemed colleagues have also blogged about) has further fueled this market. An increasing number of consumers are gravitating towards these devices and gaming on them. The mass market is turning to gaming on these devices because of increased awareness and the install base is also growing (more and more people have game-capable devices, and smartphones). Furthermore, these devices are also gaining interest with the more hardcore, dedicated gamers due to improved hardware, added features and functionality of these devices – making them more suitable for richer, better gaming experiences – nvidia’s demo with LG’s Optomus 2X certainly showed this.
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