Apple 2.0

Mac news from outside the reality distortion field

Apple challenges Sony and Nintendo


three-hand-helds1How does Apple plan to sell large quantities of iPods this holiday season in a depressed market already saturated with MP3 players?

By repositioning them as high-end game machines.

That's the message coming through loud and clear from Cupertino, not only in those ubiquitous TV ads proclaiming the iPod touch "the funnest iPod ever," but in a series of public pronouncements from executives usually content to let Apple's products speak for themselves.

Apple marketing guru Greg Joswiak last month called the touch "the future of gameplay" (link). Tech evangelist John Geleynse on Friday proclaimed it a "game console" in the same league as Sony's and Nintendo's (link).

Even CEO Steve Jobs entered the fray, telling the Wall Street Journal last month that the iPhone and the iPod touch "may emerge as really viable devices in the mobile games market this holiday season" (link).

It's an interesting switch in marketing strategy, made just before what should have been — in normal economic times — the biggest selling season for both digital audio players and hand-held game machines. Now it's a scramble on both fronts, and the players are a little desperate. Even, maybe, Apple.

When it first came out, Apple billed the iPod touch as an iPhone without the phone — a portable media player and a mobile Wi-Fi Internet device without the monthly bill from AT&T.  But it also came without AT&T's (T) subsidy, which pushed the touch's average retail price into the mid $300s and kept its quarterly sales — after an initial burst last December — in the 2.0 to 2.3 million range.

With a price cut in September and, equally important, a wave of thousands of games written for the iPhone yet playable on the iPod touch, Apple sensed a new opportunity.

But going up against Nintendo and Sony while maintaining the fat margins to which it has become accustomed required that the company perform a neat trick: it had to flip the usual video console business model on its head.

Nintendo (NTO.F) and Sony (SNE) use the Gillette razor/razor blade strategy: they sell their hardware as cheaply as possible — often at a loss — and make their profit on the games, which typically sell for anywhere from $19.99 to $39.99.

Apple (AAPL) makes nice profits on the hardware and leaves a few crumbs on the table for third party software developers, whose games typically sell for $0.99 to $9.99, if not for $0.00. (See Trouble in the (99-cent) App Store.)

Here's how the three machines — and their top-selling games — stack up:

Best selling games revised

Analysts are split on whether the strategy will work. Kaufman Bros.'s Shaw Wu is bullish; he believes Apple will sell 21 million iPods this quarter — almost as many as it sold last year. The normally bullish Gene Munster at Piper Jaffray is bearish; he doesn't expect Apple to sell more than 18.6 million units, down 16% from 2007. (See iPod holiday sales: Hot or Cold?)

Hand-held gaming is a brutal business and Apple is not the first company to try to break in. The field is littered with the carcasses of portable game systems marketed, priced down and ultimately abandoned. For a gallery of machines past and present see below the fold. (Source: here.)

graveyard-of-hand-held-machines

DAN – check it out. Apple donated $100,000 AGAINST Prop 8 – not for it. Google Apple and Prop 8

Posted By Mike, San Jose CA: December 19, 2008 8:30 PM

Apple has revolutionalized the mobile gaming music and phone industry with the Iphone and Ipod Touch. Who else but Apple? Immitators can try all they want.

I have started my own blog to get out all the latest and greatest on the topic

Come check it out at http://unlockiphone.asia

Posted By Thanksforvisiting: December 17, 2008 12:15 AM

"Apple will hand out 70 % of the retail price and you don’t need to pay any other licenses or physical media or retail supply chain. Significantly, you don’t have the risk of producing too many copies or too little. Digital distribution will make sure you can always meet demand."

I am not sure where you got your information but Apple developers will still be stuck with the hosting cost for their product for an indefinite period. In addition the cost of physically producing copies the game is fully covered by licenser/publisher (Nintendo does charge to publish on there system but it is largely cost of the cartage its self and developers receive full legal backing from Nintendo because of the seal of approval). Having to work through Nintendo is only a challenge for large self publishing developers like EA who enjoy the extra profit and are large enough to handle the risk of the investment. Smaller developers rely on the financing, expertise and legal support a publisher or larger developer can provide for a project from development to release. Since most of the Apple developers are relatively small, I would assume the lack of a publisher really restricts their ability to raise capital for larger projects and mitigating risk to the company once they decide to work on a game. This is another way Apple is leaving these guys in the cold because they make their money from hardware sales (which aren’t driven by games). Apple isn’t charging these guys anything because they aren’t doing anything for them, and in all honesty have no real financial motivation to do so.

Posted By Games? Baltimore Maryland: December 16, 2008 12:36 PM

To all of the people who responded to my comments, run a search in the top right corner where it says 'search fortune' for Philip Elmer-DeWitt and then tell me how many articles he has written that haven't been about Apple in the last year. There might be two or three about Hulu…

ex ped: Dan, it's a blog about Apple. That's my beat.

Posted By Dan, NC: December 16, 2008 8:29 AM

Ok, and here is on more: Apple has a yearly turn-around cycle for their hardware, Nintendo and Sony plan for 4 to 6 years. If the iPod Touch shows some weaknesses in terms of gaming this year Apple has the chance to come out with an improved Touch next year (as far as it doesn't compromise the use as a media player and mobile browser) or even consider a more dedicated "iPod Game" that extends the platform with a directional pad and fire buttons.

Nintendo and Sony have to bet on one hardware design and stick with it for several years until the costs are recouped. The Nintendo DSi will probably be the last new hardware design we will see from Nintendo this decade.

Posted By Tom Ross, Berlin: December 16, 2008 2:32 AM

A lot of good (and bad) arguments have been put forth in this discussion and I want to add one more that I haven't seen so far: The Apple platform has much lower distribution and licensing cost for software compared to Nintendo and Sony.

A typical Nintendo DS game that sells for $40 might have the following costs: $5 for the retailer, $5 for the distributor, $5 for the Nintendo license, $5 for the production of cartrige and packaging. So only $20 or 50 % of the retail price will arrive at the publisher/developer of the game.

Apple will hand out 70 % of the retail price and you don't need to pay any other licenses or physical media or retail supply chain. Significantly, you don't have the risk of producing too many copies or too little. Digital distribution will make sure you can always meet demand.

So a games company could sell the exact same game for $40 on the DS and for $25 or $30 on the iPhone and make the same amount of money per copy.

Posted By Tom Ross, Berlin: December 16, 2008 2:23 AM

Hey DeWitt, get a life! In no way will Apple's ITouch or IPod take over the gaming market. Just another Apple hype column about low-end hardware sold by Apple.

Posted By Mike Gruhlke, Idaho Falls, Idaho: December 15, 2008 4:42 PM

Still waiting for a valid argument from the apple proponents: again the article stated Apple is going after Sony and Nintendo’s market share. Talking about how it appeals to people different from the DS/PSP crowd is not an argument it is a different point entirely. Again this article is about Apple claiming it is going after Nintendo and Sony’s market base. Which as was stated before it is not. No one is questioning that this hardware does a lot…. but inspire developers to take advantage as a media for gaming (at the caliber of what current portable gamers demand) no. Currently a console game has a development team of around 100 persons (size varies as project progresses) for one game for about a year to a year and a half (much longer production times are not uncommon however). A hand held between 35-50 and range to about six months to a year. Because of the marketing challenges on apple products the average app. team size is about three people for a couple of weeks. Obviously not the quality either a DS or PSP user expects. So why so small? Read some of the articles criticizing itunes bias for free-99-cent apps or the open letter from Craig Hockenberry. Basically if you make an apple app you have about a week to re-coop your investment judging by the MSRP on portable video games Nintendo and Sony have about 18 months to turn a profit and can utilize other forms of advertising besides itunes to market their games. Why is this important, well strong sales are pushed by strong games in the video game market, but apple can’t inspire that kind of investment from developers as a result the games needed to drive sales sill never materialize and neither will the sales (form Nintendo and Sony’s market).

Posted By Games? Baltimore Maryland: December 15, 2008 4:24 PM

Gaming on an Touch/iPhone is horrid. Sure the gyro and touch interface is cool, but the performance, depth and stability of the games completely stink. I haven't found a game that holds my attention longer than the average flash diversion. Don't fall for Job's ego induced rainbow of smoke and mirrors.

Posted By Brian, Atlanta GA: December 15, 2008 3:31 PM

iTouch will win the cell phone market for games. To think it will dent Nintendo's handheld market is naive. Get in line behind the others that they've put in their wake for almost 30 years. It's a great electronic device, but don't pretend for a moment it's a gaming device. "But it's more than that!" Exactly. Games are not pushing this. I loved by Snake game on my TI calculator too.

Posted By Tyler, Kansas City, MO: December 15, 2008 2:44 PM

iPhone and iPod Touch has the hardware that surpasses DS and PSP. The issue is Jobs historically has been anti-games (killing the Apple II), and never had the focus, SDKs, nor relaxed-grip to allow little-man third party apps to blossom.

It's going to be truly difficult to bother putting AAA+ game resources into something with such much overhead, and such lean margins.

It would blind-side every other phone maker out there including Google, and Qualcomm licensees, whom are still stuck thinking that these mobile microcomputers are just an application platform extension.

Posted By NuShrike, Los Angeles, CA: December 15, 2008 2:32 PM

Sorry this comment comes so late but in regards to the person who commented that santa was gonna get him the ipod touch instead of the Ds that he asked santa for, I hope you will be there when he comes home crying from school becaue all his friends with DS's are gaming and connecting (yes DS games let you play together by wifi) and he's watching them playing his free or 99 cent games. Remember its about them and not what you want them to have. I have learned my lesson with mp3 players (she got an ipod after all) but gaming is a much different field and Apple cannot just throw around statements and think that's what it will take to make Nintendo or Sony roll over. Also remmeber that in the US they may have a fight but when it comes to the rest of the world (especially Asia) they haven't even made a dent with the iphone.

Posted By pm, Syracuse NY: December 15, 2008 2:30 PM

Meh…

The technophiles and rich kids will get an I-Touch in addition to whatever portable game system(s) they already have.

Apple will not threaten Nintendo and Sony's market share. I dare say that the I-Touch is more closely related to Hasbro's (far inferior) VideoNow toy than a DS or PSP!

Posted By Sean, Detroit: December 15, 2008 2:20 PM

I'm about as far from being an Apple fan-boy as you can get. I had never owned a Mac, iPod, or any other Apple product for that matter until I received an iPod Touch as a gift recently.

The iPod Touch/iPhone is targeting a different subset of gamers than the PSP or DS. If the PSP is for hardcore gamers and the DS is for more casual gamers, the iPod Touch is for ultra-casual gamers. Its user interface completely blows the DS and PSP out of the water, and the fact that you don't have to carry around/worry about losing discs, cartridges, or a stylus is a huge plus IMO. With the PSP and DS (especially the PSP), you often have to wait through long startup/loading screens whenever you boot up a game; with the iPod games start almost instantaneously.

Sure, the games for the iPod are a lot more simple, but some of them are quite fun. I won't argue that they have the depth of most PSP or DS games, but that's why they are going to appeal to a different crowd. They're the sort of games you can pick up, play for 4-5 minutes at a time, and put back down, which is perfect for many situations when I'm on the go. And at $0-$.99 for most games, it's easy to check the app store and download new games frequently when you get bored of the ones you have, and you don't feel burnt when you buy a game that you end up not enjoying that much.

Posted By Mark, Somerville, MA: December 15, 2008 11:28 AM

Hey gaming snobs …The Kids are Alright.

I was at a Xmas festival in Sarasota, FL the other night. I overheard a mother telling a friend she'd just bought a iTouch for her young son. 'all his friends wanted one". This will be the hit of Xmas…

Posted By DeeJay, Sarasota FL: December 15, 2008 11:00 AM

As has been mentioned, Nintendo makes a profit from their hardware. Not nearly as much as Apple, but they still make a profit.

As far as Apple coming in and stealing market share. I don't see it happening. Nintendo owns that market. Sony has failed to make a serious dent, the NGage was a joke, etc. Do I see them selling iPhones/iPod Touches in good numbers, yes. But are people going to buy them specifically for games, no. As such I don't see them ever being considered a "gaming platform".

Posted By James Va: December 15, 2008 9:48 AM

I love how Dan from N.C questions your credibility and then uses terms like; Dude and that was weak. And he cant even spell week correctly i happen to love apple there products have always worked for me.

Posted By Kristina MD: December 15, 2008 7:50 AM

Just bought my daughter a DS a few months ago, and have been amazed not only at the varity of games (literally 100's), but at the quality.

One of the reasons I went with the DS was that most her older cousins already had one and so did many of her friends. Don't know any of then that own a PSP or an iPod touch.

Besides, I'll NEVER allow an apple product in my house due to Apple Corporate support for Prop 8 out here in California and thier past attacks on charities supporting the Boy Scouts.

Posted By DAN, MV CA: December 15, 2008 12:42 AM

The ultimate irony is that Nintendo is winning the console market because it cleverly realized that the bulk of the gamers out there are casual gamers now who are just not as committted as the hardcore. That's NOT to say there's not money in the 60 million hardcore gamers out there but Sony & MS' business nmodel was built on selling 150 million units – a number they won't attain unlike Sony did with the PS2 – different market conditions so ironically, Nintendo which has the grips of the casual AND hardcore handheld market is going to lose this "casual" gaming market to Apple – why? For the very simple reason that I can download a game intomy iPhone – I do not need to carry around a little disc. Nintendo & Sony have no real fears as dedicated gamers will still continue to buy their machines but Nintendo will start losing market share to Apple for casual gamers … and eventually some hardcore gamers but not for a while … just look at the recent Nintendo DS ads with lisa Kudrow cooking … would you pay $130 plus $30 for a cooking tutorial or would you rather have a phone/ipod player with 8-32 GB that allows you to view videos from foodtv online?

Posted By jbelkin, danville, ca: December 14, 2008 10:55 PM

Dude are you serious? Just admit it already that you're sleeping with Steve Jobs. I swear every other weak you write and article about how great Apple is, so basically you have lost all your credibility as an objective journalist.

ex ped: That was weak, Dan. To paraphrase J.J. Hunsecker (or was it Sidney Falco?), you haven't been reading the column.

Posted By Dan, NC: December 14, 2008 9:59 PM

Speaking of games.

The recent offerings from Gameloft and ngmoco for the app store is nothing short of impressive: Hero of Sparta : A God of War-like action game, Brother in Arms which from what i've heard, looks similar to it's NDS counterpart, and Rolando: a lovely platformer for iPhone/iPod touch. And the controls for Hero of Sparta and Brother in Arms, while on touch screen, works rather great too!

With so many casual games(free ones) and some quality games that are listed above, it's not hard to find that the iPhone/iPod touch as a viable gaming platform. And with only 5 months after the introduction of App Store, developers has already come out with impressive games, the future of Apple handhelds sure looks bright indeed.

Peoples that are touting the iPod touch as a gaming gimmick… Do they even PLAY any of the games listed above before? And for the record, I do own all three handheld gaming devices, and recently finished playing Chrono Trigger DS.

Posted By drixz, Melbourne, Victoria: December 14, 2008 7:10 PM

People who have commented here about 99c iPod/iPhone games have obviously played neither Brothers in Arms: Hour of Heroes or Hero of Sparta on it. Or for that matter, Real Soccer. I am sure, though, that Sony and Nintendo executives have, and see a challenge, unlike the ignorant folk spouting here.

Here are links to the aforementioned games

Posted By Sean, SF, CA: December 14, 2008 6:52 PM

Don't forget the DSi coming out next year will only increase Nintendo's already strong stranglehold on the portable market. They invented the market we know today- sorry, Microvision doesn't count, the CURRENT market today is Nitendo's. They started it, they own it. To date over 200 million Game Boys out there, and by March, over 100 million DS systems out there. Over 300 million portable systems sold, I think you know who owns the portable market!

Posted By John, Edwardsville, IL.: December 14, 2008 4:33 PM

I have a feeling that nobody who has commented here takes games seriously. I see a whole bunch of people touting their iPod Touches as being the be-all, end-all when in fact all the gaming you get for the Touch can be described as mediocre at best.

I also can point out an obvious flaw in this article. Why is Nintendo DS's best-selling game Fifa 09? I looked up the data on it and you are completely wrong. Nintendo's best-selling game is Nintendogs with over 20 million copies sold. Fifa hasn't even broken 100,000…so I'm not sure where you got your info from.

If anything, Apple should be afraid of Nintendo. Nintendo makes quality hardware, amazing games and has intentions of wading into the MP3 player market with DSi (a machine that sold 500,000 in Japan in its first week). It has a back-catalogue of over 600 games and over 30 million-sellers. Apple can't even claim one. So have fun Apple, but the gaming market is a tough nut to crack.

ex ped: I defer to readers who clearly know the video game market better than I. Am happy to use Wikipedia's best-seller list as the source for Nintendo and Sony. iTunes is the source for the touch best seller.

Posted By Iowa: December 14, 2008 2:38 PM

Are we even reading the same article? Where are these great games for the Iphone? Stop touting web browsing features and read the title of the article "Apple challenges Sony and Nintendo" probably for their share of the market. For a company that claims that it is going after two gaming giants its not doing a very good job with fundamental market forces or at encouraging developers. Itunes has major problems attracting game developers that are laid out within a link imbedded in the article "Trouble in the (99-cent)App Store". For 99 cents you will not get much of a game. Certainly nothing that could ever pull people away from the titles already released for Sony or Nintendo. Don't miss interpret me people can and will play games on apple products but the people who do, were never in the market for any kind hand held gaming platform. This is again a gimmick to re-brand and sell units during a tough Holladay season; the problem is Apple has done zero leg work to back up its claims as the new gaming platform on the block.

Posted By Games?, Baltimore Maryland: December 14, 2008 2:27 PM

Yeah, I remember my life before I kissed a girl too.

Posted By Anonymous: December 14, 2008 12:28 PM

I'm reading this on my touch, and responding as well. I'd like all the ds users to chime in from their device as well v

You will find the touch to be the big surprise this season. Yes,there will less iPods sold, but the mix will contain a lot more touches this quarter so the revenue will be higher than expected. Given the economy, that is really not too bad.

The public is really starting to figure the leap forward offered by the touch given the ubiquity of wifi. One device, that is always with you, that give you the full Internet, music, video, email and calendar synced perfectly, maps,countless fabulous apps, and of course great games!

Posted By Cranman Waterloo on: December 14, 2008 11:28 AM

It's no Gimmick – The iPod Touch as is the iPhone, is so many things that it's just a matter of preference as to what appeal and aspect one prefers to focus on.

The game aspect is nothing short of amazing for the size and resolution of the thing. It's just a bonus that there's email, full internet, all the customizing apps that one wants and an iPod to boot in this "One Stop Marvel" it is the device of the century- and everyone has 14 days to try it out for free- if you don't like it for any reson, you can return it for a full refund to Apple…. Beat that!

Posted By tom: December 14, 2008 10:47 AM

Gene Munster at Piper Jaffray is bearish at $230 ???!!!!

Are you out of your mind????

He lowered his target by $10 because we're having an economic meltdown, but the rest of his outlook (as evidenced by his target ) is far from bearish turkey.

ex ped: Anybody who follows the stock knows Munster is an Apple optimist. That's why the piece referred to him as the "bullish Gene Munster." It was only in regards to his iPod estimates that we referred to him as "bearish."

BTW, what's "bearish turkey"? It sounds like a designer sandwich meat.

Posted By NY: December 14, 2008 10:41 AM

The PSP has interconnectivity with the PS3, so the PSP will not die. The DS has many mascots like Mario, and Zelda so the DS will not die. Many game developers will not switch from these two well known and established devices to the iPhone. They even said more money is made from the games on DS and PSP while on the iPhone more money is made on the hardware. Game Developers see that and they will not take a loss to make a game for the iPhone. I myself, have a PSP mainly because it is more powerful than any other handheld and the graphic capabilities are untouchable by any other system in the near future.

Posted By Corbin, Melrose MN: December 14, 2008 10:30 AM

This is a gimmick, and I think even the author touched on that point. A gaming device is really merited by the quality of its software. Is a 99 cent game going to make a parent run out and buy a Ipod touch or phone for there child, realistically no. These are the cheap games that was supposed to be the “blue ocean” strategy that never really developed for Nintendo where non-gamers would enter into the market. Fact of the matter is if you like Apple products you’ll buy these products but it won’t be for the games. And since Apple isn’t really trying to feed the demand for portable gaming both Nintendo and Sony’s market share are quite safe.

Posted By Games?, Baltimore Maryland: December 14, 2008 9:57 AM

These comments are filled with so many Apple plants it's not even funny. Or perhaps one really overzealous one. Either way, anyone with actually sense isn't stupid enough to believe the iphone will dethrone the PSP and DS anytime soon. And for that matter, neither PSP or DS games are actually 49.99. Again, anyone who has ever been to a store knows this.

ex ped: I have to been to stores, but was confusing DS and PSP games with Wii games. $39.99 is more like it. Thanks for the note.

Posted By Anonymous: December 14, 2008 8:37 AM

The real battle is over the content of your pocket or purse. How many digital gadgets do you want to carry around all the time? Cellphone, music player, PDA, camera, game console, GPS, web access device, etc. With iPhone, you only need one. With the iPod Touch, you have two, the Touch and your favorite cheap cell phone.

Remember the music player market is approaching saturation. Apple needs to get its existing iPod customers to upgrade. Games are a good reason to do that. Yes, they'll still be a market for high end cameras, GPSs and game consoles, but the iPod/iPhone is what you carry with you all the time. Stuck in a line? Pull out your touch and play. Apple will own the pocket and purse. And their products will keep getting better.

Posted By agr, Cambridge, MA: December 14, 2008 8:33 AM

Good article – I consider the gaming market apple's next obvious play and I think many of the patents recently filed by apple relate to gaming on the itouch/phone. It's happening faster than I thought. Apple is once again including consumer participation in the developing contextuality of the ipod touch, app store model. The ipod and the itunes phenomenon is set be outdone on a grand scale with the itouch/iphone, app store experience. The app store and ipod touch are becoming inseparably linked in the mind of the consumer because of the interactive experience that apple has created. The ability to re contextualize the ipod touch as a gaming console is only possible by involving public and consumers in its develoment. The now interactive and organic environment of the app store is potentially bigger than the Mac Computer.

Posted By Buffeted, Berlin, Germany: December 14, 2008 7:34 AM

Nintendo and PSP are dead men walking.

Apple matches and exceeds as a game machine AND the two have BUPKUS against the many additional functions the Apple handhelds bring.

Just review this Xmas' sales figures and you'll have all the proof you need.

Posted By pk de cville, VA: December 14, 2008 12:10 AM

You can watch Youtube videos and surf the internet and download all the other Apps on the iPod Touch, but with a Nintendo DS or PSP, you can't do any of that. Plus, free games versus $49.99 for a game makes a huge difference! The kid only gets one game every six months, or else he/she can download unlimited games.

Posted By Roger, Irvine, Ca: December 14, 2008 12:10 AM

Yeah, and just how many racing games get old quick tilting back and forth an itouch?

Some ppl forget so quickly the amount of cute little games that came out for Palm and Pocket PC ages ago; this is just more of the same games with no substance, except as of 2008, we now have oooooo, 3D graphics. The only difference here is neither Palm nor Microsoft had to advertise their stuff every football game and every Daily Show and Colbert Report. God Apple's commercials are so annoying. WE KNOW WHAT AN IPOD IS. STOP TREATING US LIKE WE ARE HERMITS AND DON'T KNOW WHAT AN IPHONE IS.

But, if they have games that like put on screen buttons for use, well, that would be different. Of course, there goes screen area.

Posted By Joe, Orlando, FL: December 13, 2008 10:49 PM

to the former comment: 3rd party vendor making a device with buttons in which the ipod touch/phone will plug into..Apple will becoming a Gaming Mammoth soon! I am sure ppl at apple are working on this right now..why wouldn't they..think about it..the graphics are better than DS and PSP..

Posted By Portland, OR: December 13, 2008 8:09 PM

Apple isn't 'repositioning' anything.

You make it sound like they're desperately trying to avoid disaster.

'Positioning', maybe. Big difference.

Posted By GQB, SF CA: December 13, 2008 8:09 PM

What some people don't realize is…the ipod touch is also a phone…using skype and any wifi signal. It also can use any application that the iphone can except make phone calls and use gps. It's a great ebook reader, movie and tv viewer, all around media player as well as game player. Those who haven't used it really don't 'get' why it's so popular…and it's predicted to out-sell all of the other handheld game consoles this season…put together.

Posted By babyfacemagee, ny, ny: December 13, 2008 7:34 PM

Son wrote a letter to Santa asking for a DS. Dad said he had an in with Santa and suggested a touch because in addition to the many games available for the touch, one could also watch movies and podcasts. When further explained that many games for the touch sell for $4.99 and games for the DS can be $49.99, he could get ten games for the price of one, the deal was clinched. One iPod from Santa's workshop coming up.

Posted By Neil Anderson Coalmont BC: December 13, 2008 7:27 PM

@Jeff: "Quick, name a successful gaming device that doesn’t have buttons"

Okay– the iPod touch.

Posted By Don, Buffalo, NY: December 13, 2008 7:13 PM

"When it first came out, Apple billed the iPod touch as an iPhone without the phone — a portable media player and a mobile Wi-Fi Internet device without the monthly bill from AT&T"

No, it didn't. The tech press was saying that, Apple advertised it as "The funnest iPod ever".

It's first commercial was showing games. It's second was about "touching your music".

Not a single ad (print, web, or television) has promoted it as "an iPhone without the phone".

Posted By Neurotic Nomad: December 13, 2008 7:00 PM

Doubt they will sell because of games, though ipods will sell for music primarily and games as just a bonus and if you play games on the ipod the battery dies too quickly and no name brand games, i doubt the games go very far at all, just a bonus feature

Posted By Nick Navis, Auburn, Alabama: December 13, 2008 6:53 PM

As other commentators have noted, Nintendo does not sell the DS at a loss.

I am not sure what that best selling game list came from – Fifa 09 is not the best selling DS game, nor has it ever been. It does have literally dozens of million selling games, however.

The gallery in the article supposedly shows a number of systems that have been "mostly dead" machines. That's like showing a gallery of "mostly dead" music players and showing a Walk-man. Sure, it's not supported now, but in it's time, it was the most popular player of all time. The same can be said for the Game Boy and Game Boy advance line.

Posted By Matt, Gainesville, GA: December 13, 2008 6:45 PM

"For a gallery of (mostly) dead machines, see below the fold."

Quite a few of those machines are doing quite well. All versions of the gameboy advance, the nintendo DS, and the PSP are still alive a kicking. The shouldn't be in that chart.

Posted By Adam Ellis, Ivins, UT: December 13, 2008 6:42 PM

LOL, Ipod handheld game device? What a joke!

Posted By P Diddy,FL: December 13, 2008 6:39 PM

The PSP has buttons. The DS has a touchscreen . . . and buttons. The Touch does not have buttons. Quick, name a successful gaming device that doesn't have buttons.

Posted By Jeff, St. Louis, MO: December 13, 2008 6:31 PM

For the duplicate Game.com picture you should have put the Game.com Pocket Pro handheld.

Posted By Clarence – Indianapolis, IN: December 13, 2008 5:59 PM

Spot on, Philip!

The $500 I'm spending to get my kids' touches this Christmas will be more than offset by the fact I'm never again spending $50/month for Nintendo DS or Sony PSP games. iTunes is serving up hundreds of very cheap or free games, not to mention cartoons, movies and other low-cost content.

You think other parents will notice?

Posted By Rossor, Richmond, VA: December 13, 2008 5:54 PM

" leaves a few crumbs on the table for third party software developers,"

Just a few? Actually, there are developers making a good living and in some cases millions of dollars off these apps. There are other businesses like AppBeacon making money helping people find good apps for the iPhone and iPod touch.

Apple has developed quite an ecosystem around the iPhone and Touch. This is what's going to help propel it above Sony and Nintendo.

Posted By Justin Noel, AppBeacon, Celina, TX: December 13, 2008 5:33 PM

I'm not sure what that monstrosity in the middle of that picture is, but it certainly isn't a Sony PSP as the ALT tags are describing.

ex ped: Yikes! I was led astray. Fixed now, I think.

Posted By Kdawg, Upstate NY: December 13, 2008 5:23 PM

Nintendo is actually very well known for not selling it's products at a loss, unlike Sony and Microsoft.

http://arstechnica.com/news.ars/post/20060915-7752.html is just the first google hit, there are many others where the executives at Nintendo discuss why this is the case.

It's also the reason why the Wii is so different than it's competitors; they had to be creative since they could not compete in sheer horsepower.

ex ped: The record with the Wii is clear; the DS less so. But wording adjusted to reflect what seems to be conventional wisdom

Posted By Josh Sisk, Baltimore, Md: December 13, 2008 5:13 PM

"they sell their hardware at a loss — at least at first — and make their profit on the games"

actually this is incorrect. of current console manufacturers only sony and microsoft sell at a loss. nintendo profits from hardware from the get go.

Posted By echo, seattle, wa: December 13, 2008 5:04 PM

I'm not entirely, sure. But, from my understanding, and some basic research, Nintendo also makes a profit on their hardware from the get-go. Of the three Microsoft, Sony and Nintendo…Nintendo is the one that sells their hardware while gaining a profit from the start. Mainly due to it being in the video game business only. Whereas the others have other sources of revenue.

Posted By Upochapo, State College PA: December 13, 2008 5:01 PM
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Philip Elmer-DeWitt

Philip Elmer-DeWitt
Steve Jobs, goes the old joke at Apple, is surrounded by a reality distortion field; get too close and you believe what he's saying. Apple has made believers out of millions of customers — and made a lot of investors rich — but Philip Elmer-DeWitt believes that an ounce of skepticism never hurts when writing about the company. He should know. He's been covering Apple – and watching Steve Jobs operate — since 1982.
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