Mobile analytics firm Flurry revealed on Wednesday that free and inexpensive games from iOS and Android devices have taken control of the portable gaming market. Together, Google and Apple's platforms controlled 58 percent of revenue in 2011, a significant change from 2009 when the Nintendo DS commanded 70 percent of the portable industry's revenue.
"We see, for the first time, that smartphone revenue in the U.S. has leap-frogged portable game revenue," said Peter Farago, vice president of marketing with Flurry. "The disruption has been downright brutal."
The data comes soon after Nintendo reported its first loss in profits since 1982. A sharp decline in game and console sales led the Japanese game maker to lose $925 million over the six-month period ending in September.
Flurry estimates that total U.S. portable game revenue in 2011 will be $3.3 billion, up from a total of $2.7 billion in 2009. But while iOS and Android accounted for just 19 percent of the market in 2009, their share of revenue has more than tripled in the last two years.
Nintendo, meanwhile, has seen its market dominance shrink to just an estimated 36 percent of the U.S. portable gaming market in 2011, while Sony's PlayStation Portable platform is expected to represent 6 percent domestically.
"The days of paying $25, or more, for a cartridge at a retail store may soon end," Farago said. "Further, the installed base of iOS and Android devices has not only reached critical mass, but also continues to grow at unprecedented rates."
Flurry's data is based on a combination of publicly available data from the NPD Group along with its own data collected from mobile devices. Flurry Analytics tracks more than 20 billion use sessions per month across more than 125,000 applications on 330 million unique devices per month. Nearly 40 percent of the application usage sessions it tracks are from games.
The success of smartphones as gaming devices has prompted investors to encourage Nintendo to bring its popular game franchises, like Mario and Zelda, to competing platforms like the iPhone and iPad. However, Nintendo executives have refused to port their software to third-party devices and are sticking with their own hardware for first-party games.
Apple's iOS devices may even begin to encroach on traditional living room consoles as well, thanks to the new wireless AirPlay functionality built into iOS 5. With an Apple TV hooked up to a high-definition television set, an A5-powered iPhone 4S or iPad 2 can wirelessly stream content and allow users to play games on the big screen, as Firemint has done with its Real Racing franchise.