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Posted at 04:14 PM ET, 04/15/2011

Apple, Google eat into the handheld gaming market

Satoru Iwata, president of Nintendo, showcases the 3DS portable video game system in San Francisco on March 2. (By Kim White/Associated Press)
Are smartphones killing the handheld gaming industry? The big three — Sony, Microsoft and Nintendo — may have to add two more to the list.

A report from the analytics firm Flurry, based on publicly available market news, has found that Apple and Google have 34 percent of the portable gaming market.

According to the report, game revenue in the U.S. is fairly flat, but portables have been attacked from both ends by mobile and consoles.

At the Game Developers Conference last month, Nintendo President Satoru Iwata said that smartphone games were hurting the industry with low-quality, low-cost games. Of course, Nintendo has the most to lose here, as its main competitors have mobile options for their games.

Microsoft told gaming blog Kotaku that the Windows Phone 7 is its mobile gaming platform. And Sony is launching the Xperia Play, the phone that also has PlayStation controls.

Nevertheless, Nintendo told CNN this month that it isn’t interested in making a phone right now. “We don't see that as an opportunity,” Nintendo of America President Reggie Fils-Aime told CNN. “Phones are utilities. Phones are not by definition entertainment devices.”

Flurry’s report pours a bit of cold water on that statement, particularly as notable game companies such as Square Enix start to design high-quality games just for phones.

Have you let your DS or PSP gather dust while playing Angry Birds? Or is your handheld still your go-to portable gaming gadget?

Related stories:

Xperia Play launches in Europe, Hong Kong and Taiwan

Angry Birds to hit Windows Phone 7 on May 25

Report: Wii HD coming in June

By  |  04:14 PM ET, 04/15/2011

Tags:  Gaming, Mobile

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