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.
The Wiimote still had one attached to it, but signaled its impending doom. The PlayStation Move motion controller did away with it all together, while the Xbox Kinect saw no reason to make a player hold something at all. The Wii U's GamePad put more emphasis on its touchscreen, motion control and analog sticks than the pad. With technology such as Intel's ( INTC) Wireless Display making it theoretically possible to turn your smartphone into a console controller, the beloved D-pad could become as much of a retro gaming fossil as Atari and arcade joysticks. If Microsoft has its way, you can count on it. Its Xbox Smartglass app already allows users to navigate through the Xbox's dashboard without a game controller, access information about shows streaming through its entertainment service or check out maps and stats on games such as Forza Horizon or Halo 4 from their tablets and smartphones. Users can turn their smartphone into a controller for Home Run Stars or a playlist manager for Dance Central 3. It's not a fully portable controller yet, but it gives smart devices far more functions than up, up, down, down, left, right, left, right, B, A, Start. 3. Physical games
As we mentioned earlier, downloaded game sales are soaring while physical game sales are way off. That means discs and game cards are dying, but it doesn't mean that every digital game sold is some app that costs less than $5. While Project Shield may have a tough road ahead as a handheld, its basic function of giving users a way to play full, engrossing games from cloud-based services such as Valve's Steam without using a full-fledged PC or a clunky console stuffed with an unnecessary optic drive. The folks at Engadget were on the lookout for "Steam Box" systems (once rumored to be in the works from Valve itself) that would capitalize on Steam's Linux version to bring great downloaded games into living rooms at low cost. Nvidia didn't provide a price for Project Shield, but it's likely the first in a line of devices with similar function. Keeping the hardware to a minimum will cut costs in a way the big console makers can't, while processors such as the Tegra 4 provide much-needed gamer brawn without a whole lot of bulk. Nvidia just gave console makers a road map for ditching discs altogether. If Sony's purchase of game streaming service Gaikai last summer was any indication, the big boys just might follow it. -- Written by Jason Notte in Portland, Ore. >To contact the writer of this article, click here: Jason Notte. >To follow the writer on Twitter, go to http://twitter.com/notteham. >To submit a news tip, send an email to: email@example.com.