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Strong iOS game sales could spell doom for the PS Vita and Wii U

October 31st, 2013 at 4:30 PM
iOS Gaming Console Analysis

The most recent Fiksu data indicates that the iOS app market is still chugging along nicely in America. The launch of the new iPhones triggered the usual fluctuations in September that we get just before new iPhone launches: First a decline in download volumes in the week before the launch, then a 25% spike in downloads as new phone owners go on an app binge.

But year on year, September showed 40% iOS app download volume growth, a very similar number to August (46%) and July (33%). This continuing strength in app consumption even as iPhone sales volume growth in the U.S. market tapers off is probably bad news for game console vendors. Americans are now spending two hours a day on entertainment on their mobile phones and tablets, up significantly from the mere minutes Americans spent enjoying entertainment on their mobile devices during the last big wave of new home consoles in 2005 and 2006.

Sony’s PS Vita has basically foundered in the U.S. market and while the Nintendo 3DS is still selling strongly, the imminent arrival of new Xbox and PlayStation consoles will likely create a console glut that will kill off a machine or two. Of course, Nintendo’s Wii U and Sony’s PS Vita are the two most likely candidates to suffer grievously as consumers contemplate the smorgasbord of gaming consoles to buy during the Christmas shopping season.

Complicating the situation is the bleak consumer mood in America. In the run-up to the Christmas of 2012, the Gallup Economic Confidence Index swung between -12 and -20. Right now, the index stands at -31. There are signs of softening spending in fast food and fashion industries. What will happen in the consumer electronics space, where a cluster of appealing new tablets will compete with game consoles for household dollars?

Will the $230 Amazon Kindle seem like a better deal than a $400 or a $500 tabletop console? Or will the glitzy new Xbox and PlayStation launches suck some oxygen out of the high-end tablet market? This could be the most unpredictable Christmas sales season in years.

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