Could Smartphones Kill The Portable Gaming Star?

Pardon the rhetorical headline. But it appears that portable, handheld gaming devices like the Nintendo DS and Sony PlayStation Portable may one day be added to the lost list of things that the smartphone is making obsolete.

In a post today, Flurry, which runs a cross-promotion network for mobile apps and offers analytics to developers, estimates that U.S. iOS and Android game revenue jumped to more than $800 million in 2010 from $500 million the previous year. That suggests that mobile gaming revenue has surpassed PC gaming for the first time. On top of that, iOS and Android represented slightly over one-third of all U.S. portable game software revenue last year, up from 19 percent in 2009. Nintendo DS’s share has slipped to 57 percent from 70, while Sony PlayStation Portable’s has slid to 9 percent from 11.

“As iOS and Android continue to change the paradigm of casual gaming, the battle between Nintendo against platforms such as iOS and Android will intensify,” wrote Peter Farago, Flurry’s vice president of marketing.

“Mario may indeed be standing on a burning platform,” he added, referring to Nokia chief executive Stephen Elop’s famous memo arguing that the company needed to change its strategy away from building its own smartphone OS. At the Game Developers’ Conference this year, Nintendo president Satoru Iwata gave a strange, out-of-touch speech, arguing that the industry’s shifting focus to mobile and social gaming was going to be damaging in the long-run. Flurry’s figures suggest that Nintendo may have to change strategy and be open to bringing its beloved franchises to other platforms.

Overall, U.S. gaming revenue remained relatively stagnant at $10.7 billion from $10.4 billion. Console revenue was up slightly, from $7.4 billion in 2009 to $7.8 billion last year.