Flurry: Smartphone game revenues eclipse Nintendo DS, Sony PSP

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Games developed for Apple's (NASDAQ:AAPL) iOS and Google's (NASDAQ:GOOG) Android smartphone operating systems now account for 58 percent of all portable gaming revenues in the U.S., surpassing the Sony PSP and Nintendo DS platforms, according to new data published by mobile app analytics firm Flurry.

Portable game revenues across both the smartphone and handheld platforms will reach $3.3 billion in 2011, Flurry estimates--the segment generated revenues of $2.5 billion in 2010 and $2.7 billion in 2009. Two years ago, iOS and Android titles combined accounted for just 19 percent of the U.S. portable game market, with the Nintendo DS at 70 percent and Sony PSP at 11 percent; in 2010, iOS and Android grew to a combined 34 percent, with Nintendo DS slipping to 57 percent and Sony PSP falling to 9 percent. Twelve months later, Nintendo DS now yields just 36 percent of portable game revenues, while Sony PSP has declined to 6 percent.

Flurry credits surging iOS and Android device sales along with the rise of the freemium pricing model for the recent acceleration in smartphone gaming revenues. This summer, the company reported that freemium games (titles that are free to download but offer premium in-app transactions like virtual currency and virtual goods) now generate 65 percent of total gaming revenues in Apple's App Store, up from 39 percent earlier this year. Parallel with the explosion of interest in mobile gaming, Nintendo DS and Sony PSP revenues have plummeted from $2.2 billion in 2009 to $1.4 billion in 2011.

"Within the portable category, an abundance of digitally distributed free and $0.99 games, available on hardware that is both comparably priced and more powerful than traditional portable game devices, better appeals to many consumers," writes Flurry vice president of marketing Peter Farago on the firm's blog. "As a result, the days of paying $25, or more, for a [Nintendo DS or Sony PSP] cartridge at a retail store may soon end."

For more:
- read this Flurry Blog entry

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