1. Handheld consoles
Why someone at Nvidia (NVDA) thought it would be a great idea to release not only a handheld console, but one dedicated to personal computer games is beyond us. The chipmaker already announced its Project Shield device that looks like a Microsoft Xbox 360 controller with a screen and streams PC games through services such as Steam, but there's still little indication of why.
The handheld market and mobile gaming in general is dominated by the casual gamer. These people typically aren't the kind to sit in front of their dual monitors with a case of Mountain Dew and lead raiding parties until sunrise. More importantly, they're not the type of folks who support frivolous little trifles such as handheld consoles in the least.
Nintendo's DS and 3DS portables built an empire on the thumbs of casual gamers who also embraced the company's Wii home console. That said, the 3DS is the best-selling handheld in America and is still getting its lunch handed to it by smartphones and mobile apps. Just a few months after its launch in 2011, Nintendo had to knock down its price from $250 to $170 just to get people to choose it and its $40 game over a $199 iPhone and its $1 (or free) apps.
Though Nintendo has sold more than 25 million 3DS consoles worldwide since 2011, Apple (AAPL) sold 26.9 million iPhones last quarter alone. As a result, Flurry Analytics estimates that Nintendo's share of the handheld gaming market decreased from 70% in 2009 to just 36% in 2011 as smartphones' share ballooned to 58% from 19% during the same period.Think hard-core gamers are the answer to those mobile woes? Ask Sony, which debuted $250 and $280 versions of its PlayStation Vita handheld last year with those gamers in mind, only to watch its global sales come in at less than a quarter of those posted by the 3DS and scarcely inch by those of the original DS. In the U.S., it's the second-least-popular console ahed of only its 8-year-old PlayStation Portable, which made a nasty habit of outselling the Vita during February and December of last year in Japan. Handhelds are fairly one-dimensional, they're expensive and, even for Nintendo, they're costly to produce and aren't subsidized through subscription services like smartphones. Expect Nvidia's Project Shield to be the last such offering for a good, long time ... or ever.
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