The Next-Gen Portable Wars

Tomorrow, Satoru Iwata, President of Nintendo, will be giving the keynote address here at GDC. While the headline indicates that his address will focus on the past 25 years in the gaming industry, he's also expected to dedicate a significant portion of his time to the Nintendo 3DS, which launched last week in Japan and will be launching near the end of March in the United States. Shortly after Iwata's address, Sony will hold a session to share more details about the NGP, their code-name for the next generation PlayStation Portable platform. The NGP lacks the stereoscopic screen that the 3DS boasts, but is a vastly more powerful portable unit based on the new A9 ARM chipset and a powerful array of features that effectively puts it on par with Sony's home console, the PlayStation 3.

Yet both of these sessions will almost certainly be lost on the general public, because of the uninvited guest that also decided to set up shop near the Moscone Center on Wednesday. The Yerba Buena Center for the Performing Arts has been transformed, as so often in the past, into a stage for a new Apple media event, widely expected to focus on the second generation of the iPad.

iPad 2 is not expected to have a "Retina" quality display, which would require a jump in screen resolution from 1024x768 to an unheard-of (in a 10" form factor) 2048x1536. It is to be driven by a more powerful processor, based on the same A9 chipset found in Sony's NGP and will double the amount of on-board RAM to 512MB. iPad 2 will likely have a better on-board speaker, a sleeker and lighter case design and battery life at least on par with its predecessor. And while Apple may shy away from assertions that they are actively competing in the portable gaming market, setting up a media event for a new portable platform across the street mere hours after Nintendo and Sony hold events to discuss their new portables says otherwise.

Nintendo and Sony have both seen the threat posed by Apple and are attempting to respond to it with their latest portables. Nintendo turned to the same philosophy that served them so well with the Wii by centering their new portable around a stereoscopic screen, something that forces developers to create exclusive content (or at least highly adapted content) for the 3DS and provides a unique selling point not offered by any current competitor. They also stuck with the dual-screen design that set the original DS apart in order to ensure backwards compatibility and to allow for the benefits of a touchscreen display, something very difficult to accomplish with just a stereoscopic screen currently.

The 3DS also features a number of multifunction capabilities; a web browser will be launching in May, and users meanwhile can purchase games from the Virtual Console, take notes in a simple note application, chat with friends and other simple features. These can even be accomplished by simply suspending a game session, rather than quitting out of it entirely, allowing users to reenter their game after completing a task. Battery life for the platform is, however, disappointing, often registering as low as three or four hours depending on

Nintendo priced the 3DS at $249, even though many had expected it to come in at $299 or higher. This is no mistake; Apple's entry model iPod Touch also retails for $249 and is the most direct competitor the company offers to today's portable gaming platforms.

Sony also took a similar path to their home console strategy when creating the NGP. Sony set out to build the most powerful portable, bar none, and built in a dizzying array of complementary features. The system includes touch functionality on both the front and back, every wireless antenna this side of CB radio and a chipset that allows developers to truly recreate console experiences in a portable environment. However, Sony has yet to discuss pricing or battery life, which is a bad sign. Jokes that the NGP won't be priced at $599 like the PS3 was initially have not helped to reassure gamers that it will be an affordable proposition.

This leave Apple in an enviable position. Despite the efforts from Sony and Nintendo to make their new portables even more multifunction friendly, there's no doubt that they are to their core gaming machines. The iPod Touch and other iOS devices, on the other hand, elude such categorization. Today's iOS devices are media players, web browsers, SMS communicators and home to a staggering array of apps encompassing every software category imaginable. This includes gaming. iOS users have proven particularly receptive to quick and casual gaming experiences, be it Flight Control, Angry Birds, We Rule, one of Smule's music games or others.

The fact is, to many consumers, and especially to the parents of children that play games, the iPod Touch represents a better value than traditional portable gaming platforms. It allows them to effectively kill several birds with one stone, letting kids tap into their music and video libraries while also enjoying games. iPod Touch is also smaller and has better battery life than its gaming-dedicated competitors. The same holds true on the iPhone for older customers, who can bear the burden of monthly service plans. The iPad holds an odd position as a gaming device. It can be a multiplayer-oriented experience more akin to a home console or a very large personal gaming device. For older customers, though, this can be alright; they're used to lugging much heavier devices or portfolios around for their work or studies and can now accomplish those on iPad before enjoying it as a gaming platform as an added bonus.

iPhone and iPod Touch are more likely than the 3DS or NGP to win in another critical, but often overlooked, element of real-world play: the Pocket Wars. People simply have a limited amount of space in their pockets. Normal folks have to make room for a wallet, their keys, perhaps some change and a pen, a pair of earphones, etc. Carrying a 3DS or a NGP is a difficult proposition in a pocket and, at best, certainly requires a pocket all to itself. This requires that users carry their cell phone, if they have one, in another pocket, and pockets are in short supply. This simple, practical concern may serve to detract many customers who have to make a decision between one platform or several. After all, if they don't have room to carry around their gaming system, then their ability to enjoy that system is constrained to when they carry an additional bag or when they are at home, and good be enjoying a true console experience.

From a graphical point of view, Infinity Blade has shown that modern iOS devices can hold their own. Powered by the Unreal Engine, Infinity Blade shows that an immersive 3D environment can be created on iOS devices, and allows iOS devices to hold their own when compared to at least the current PSP.

From a distribution perspective, the App Store model has some downside in that users are limited to the onboard storage of their device rather than being able to carry an unlimited number of separate game cards with them. However, the instantly-available nature of any App Store content is clearly more convenient (and more prone to impulse buying) than the traditional model of a game-in-a-box, requiring a trip to the store.

Perhaps the most critical element, though, comes back to pricing. While the 3DS and the iPod Touch are identically priced (with the NGP likely being priced at least a little above that range), the difference between game prices is cavernous. 3DS games are slated to be priced at $35-$45 each, and NGP games will likely fall in a similar range. Compare this to Angry Birds, which is offered at full price for $4.99, and often on sale for as little as 99¢. The fact that a gamer can purchase Angry Birds and six other similar games for the same price as one 3DS game cannot be overlooked.

This sort of devaluation is a tremendous issue for Nintendo and Sony to overcome. Nintendo's Virtual Console and Sony's "Mini" game entries are meant to compete with this, offering many titles for a more reasonable $5-$15. But even the most tremendous gaming experiences available on the App Store fall into this range. Grand Theft Auto: Chinatown Wars, for example, sold for $30-$40 on the Nintendo DS and PSP, but for only $10 on the App Store upon its introduction.

The reality is that Nintendo and Sony will likely have a difficult time when trying to compete with Apple for the casual and mainstream gaming audience. We suspect that both new portables will more likely fall into the sales model of the original PSP, catering toward a more dedicated gamer audience willing to pay a premium and invest the time and attention necessary for a gaming-specific platform. It's not that the market for gaming-specific portables has vanished in the face of Apple's competitive offerings. Rather, we simply believe that attracting mainstream customers will be increasingly difficult as Apple and others offer devices capable of gaming as a feature, rather than as a focus, while offering a quality of experience almost as good as that found on dedicated devices at a higher price.

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