Game Systems Nintendo DS/DSi/3DS Smartphones Tablets

Portable Consoles Are Not Dead: The True Cost of Smart Device Gaming

I’ve been reading article after article discussing how “Nintendo is doomed” or “portable consoles are dead” because of the meteoric rise in popularity of smartphone devices (Androids, iPhones, tablets, etc).  We continue to hear that “no one will pay $30+ for a game on 3DS|NGC when you can get games for $1 on your phone”.  Some articles even go so far as to say that consumers are being “ripped off” by traditional consoles and are DEMANDING that pricing on these consoles reflect the lower prices on smart devices.

I think it’s time for everyone to take a step back – take a deep breath – and fully explore what we have here.

Let’s take a look at some facts.

Fact 1: Slightly lesser retweeted/reblogged articles have shown that large numbers of apps (nearly 25%) that are downloaded (free and presumably paid) are used once and then ignored or uninstalled.  That is a considerable number.

Fact 2: The days of $1 games are coming to an end (if they aren’t gone already).  A large percentage of games you could reasonably compare to dedicated gaming console games are running $5-$15 now on the various app stores.  Some games are even free on ONE app store, but COST on another store!

Fact 3: Many games require LARGE data downloads – sometimes in excess of 50MB!  These games “strongly recommend” you use Wi-Fi connectivity to download this data – and even when it only has to be done once – chances are likely (based on the short duration that smart phone gamers usually have to play games) that you won’t even play the game during THAT particular sitting – which drastically increases the chances that the game will fall prey to Fact 1 above – and never get played at all.

So much for the revolution.

Now that we have these facts, we can debunk this nonsense about smart device gaming being SO MUCH cheaper than portable game devices.

In order to do this, we have to talk about “value” and how we can perceive it.  I am personally a big fan of “Movie Currency” – that is, using a trip to the theater to gauge entertainment dollar value.  Let me explain.

I’d say just about everyone reading this article has gone to and will continue to go see movies in the theater – even if they are very particular about what they see – the cost of the show (not the concessions folks, just the ticket price) isn’t considered cost prohibitive.  Sure sure, we all complain about the prices going up every year, but for the most part – $9 to see a two hour movie is generally acceptable for most folks.

This makes it a perfect value scale in terms of cost per hour we are willing to pay.

Based on a 2 hour movie and a $9 ticket price – we all appear to be ok spending $4.50 an hour on passive entertainment (that is, entertainment we sit back and watch and not directly get involved in) – provided the movie was at least moderately enjoyable.

So let’s set the bar at $4.50 an hour for entertainment as a reasonable price to pay.

The average story-driven, single player game on home video game consoles these days last anywhere from 10-15 hours (sometimes more – but this is a reasonable number I think).  We will give the game developers the benefit of the doubt and call it 15 hours.  For 15 hours of play at $4.50 an hour, we’re paying $67.50 for that game in “Movie Currency”.  The ‘movie currency’ price goes up the more you play past 15 hours – perhaps a second play through, multiplayer modes, etc.  If you can stretch a game into 25 hours of total play – for instance – that’s 25 x $4.50 or $112.50 “value in movie currency” we get for the purchase price of say $59.99.

Most people would say that’s a fair – even a good – deal.

Typical story-driven portable games run from 4-10 hours of play from start to finish (I’ve played enough to know, folks).  Again, we’ll round up as we did before and call that 10 hours at $4.50 an hour – the movie currency value is $45 for that game.  The more you play, the better “value” you get – get to 15 hours and you’re getting a $67.50 value for the $29.99 retail price.

Again, most people would say – that’s a good deal.

Let’s get back to smart device gaming.  We’ll have to make some assumptions here – but I’m going to be COMPLETELY generous in my guesswork to be as fair as possible.  I’m taking my own personal use time into account as well as those around me I’ve asked.  I didn’t take any Gallop polls here – but I think everyone should find my numbers fair.  Once people see the end result, SURELY my assumptions will come under fire, but whatever.

Those that game on a majority of smart devices (phones – not tablets) do so in very small doses – because it’s “filler gaming” – time killing entertainment you do from the time you get to the theater until the movie starts – or the time you arrive at the doctor’s office before you get seen.  You might call this “twitch gaming” in another vernacular.  This period should average about 10-15 minutes.  We’ll go with 15 minutes to be generous.

Based on the fact that apps (I consider smart device games ‘apps’) are – one quarter of the time – used only once, we will assume that MOST of the time those killing time with a smart phone will bounce between 2-4 various apps (this is definitely my personal number) or gaming during that 15 minute period.  We will say three times.  During that time, we’ll consider that at least ONE of them is a paid app and we’ll call the AVERAGE price of an app as $3 (remember, games are skyrocketing in price so we have to be fair).

Based on those numbers, the average smartphone gamer is paying $3 for 15 minutes of entertainment – or $12 an hour!  Now that assumes that $3 app will never be used a second time – and 1 in 4 are – but we’ll get back to that in a minute.

Based on $59.99 (home console) and $29.99 (portable console) and $3 (smart app) and the times we’ve established, let’s look at the bottom line:

Home Console:  15 hours at $59.99 = ~$4 an hour
Portable Console:  10 hours at $29.99 = ~$3 an hour
Smart Device: 15 minutes at $3 = ~$12 an hour

Even if we were incredibly generous and cut that smart device number in HALF – you’re still talking about twice the cost of smart device gaming over portable console gaming.  For every Angry Birds, there are 200+ stinkers in the app store.

So that’s the ‘per hour’ break down.  Let’s take a look at another number – post play return on investment.

We know Gamestop will screw you blind on used game buy backs – but even with 25% buy back rate, it’s still more than you get with a smart app (which is 0.0% return).  Let’s run that portable console number again.

$29.99 retail cost – sell back for 25% return or about $7.50 – which makes your net cost about $22.50.  10 hours of play would make the going rate of $2.25 per hour for the portable gaming experience.

Taking ALL the numbers into account here – the portable console gaming device comes out MILES ahead as the best value for the entertainment dollar over the smart device.

If you loan that game to a friend (which you cannot do with that smart app, by the way), and THEY get 10 hours of play before you let Gamestop fleece you – that almost doubles the value of the game.

Lastly, people quickly forget about overall cost of ownership on smart devices vs dedicated gaming devices.  Sure, you paid $150 for that smart phone (less than the cost of a DSi XL) but you’re paying $30 x 24 = $720 more for that device in the long run (yes, I know you can resell it later and rcoup – but you get the idea).  The bottom line is – no matter how you slice it – you’re GOING to be paying several times more for your smart phone than a dedicated gaming console and a lot of that has to do with the “sold at a loss or breaking even” business model of gaming companies.

You also should consider the fact that dedicated gaming platforms usually (but not always – thanks to initiatives like Open Feint) offer more value to the end user;  dedicated gaming controls (I’ll take even the DS Phat’s D-Pad and buttons over a touch screen D-Pad any day of the week), unbelievable online experiences (like Xbox Live – paid or not, it’s simply incredible), higher durability (this is important to parents and klutzes) and much lower overall cost of ownership.

What’s the point of all this?

The point is, smart device gaming isn’t the slam dunk financial wizardry the “$1 a game” zealots would have you believe it is.  Even with generous margins of error above, portable gaming and home gaming consoles still continue to offer more value for your dollar and are going to for some time to come.

About Shane Monroe

Shane R. Monroe has been doing technical and social commentary writing for over 20 years. Google+

2 thoughts on “Portable Consoles Are Not Dead: The True Cost of Smart Device Gaming”

  1. If you are paying $3 USD for 15 minutes of gameplay tops, that is bad value. But if you buy smartphone games that don’t suck like Game Dev Story, you can get good value out of them. Game Dev Story was like $5 USD when it first came out. And I played that game for hours on my phone. I would consider that a good value proposition.

    Also the perception of great value changes when you look at home entertainment vs entertainment dollars spent “going out”. Going to dinner and a movie is a social experience. Netflix can be a social experience too. But Netflix is mostly consumed as a solo activity. That’s probably why Netflix is like less than $10/month. And this is why you see people complain about $40 video games but continually pay $20+ at a bar for a beer, burger and fries + tip chatting up with their bros.

    The only people who will generally see $40 portable games as a good value proposition are hardcore gamers.

    $60 AAA home console games can command large sales primarily because they tend to be great multiplayer experiences that they can play with their friends. And offer them an opportunity to compete worldwide with other players. The number of $60 AAA single player experiences is dwindling. The single player games only sell if gamers think the game is edgy or cool like God of War, Grand Theft Auto, Assassin’s Creed, etc (it has a multiplayer mode but people still seem to think it’s crappy story is interesting). Only the hardcore gamer for the most part gives a damn about the $60 single player games that came out.

    I’m not saying that portable console games or home console games need to be longer. Because when you artificially inflate the length, you make the game worse. But studios who see project after project losing lots of money need to start thinking about scaling down their operations and bringing down expenses so that they can price games more cheaply.

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