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The trend lines are ugly: while portable console game sales decreased as the industry moved from Q1 2013 to Q2 2013, iOS and Google Play game app sales continued robust sequential growth. The mobile app market is so hot that it is delivering double-digit quarter on quarter sales growth even as the console sales shrink.
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In November, the new home consoles from Sony and Microsoft are going to vie seriously for consumer Christmas spending. The portable console market is facing a squeeze between the lavish marketing spending for impressive new tabletop consoles and the continuing growth ofgame app sales on smartphones and tablets.
The portable console game market is stuck on permanent nostalgia the current big hits like Animal Crossing and Luigis Mansion are retreads of hits that debuted years ago. In contrast, the mobile game app market is evolving vibrantly; new genres and sub-genres keep popping up as consumer tastes change and the overall demand slowly shifts from casual to mid-core games. This shift presents a major challenge for portable console gaming, as new tablet hits like Clash of Clans and Candy Crush Saga are starting to approach the complexity of Nintendos portable hits.
It is increasingly clear that the portable consoles are a sunset industry. Both Nintendo and Sony are basically making a final stand, trying toslow down declines ofproduct lines that have already peaked. The best talent in the gaming industry has already migrated to the app industry, where a major game can generate $50-100 million a month for a year or two.
Findinga new billion-dollar blockbuster in the portable console market is a fools errand.
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