Friday, January 29, 2010

Are iPhone and iPad gaming platforms?

Now that the iPad is out of the bag, will the 'big Apple' become the new capital of gaming? Or will the device turn out to be an 'iFad' in this field? With the iPhone’s phenomenal success and its app store also featuring plenty of gaming content, some gaming analysts have seen Apple as a new and important player in videogaming. Are they? I will discuss the iPad in general first and then move on to it and the iPhone as gaming platforms.


The iPad 3G

Like many other analysts, I was expecting Apple to show something as original as the Microsoft Courier prototype. The way it is, we got just a big iPod Touch. Apple CEO Steve Jobs’ assertion that 75 million people already know how to use one must be followed by the fact that very few of them are likely to buy an iPad for the very same reason. Why own both?

The Microsoft Courier prototype

Of course, the iPad will have some cool features. It will run everything from photo albums to the browser very fast and smooth, though this is not surprising with such a closed and restrictive system, as we shall see. It has an extremely impressive battery life, which is one of the most important features to have with mobile devices (the single most important reason why the original GameBoy destroyed its competition). But, again, this feature comes at some dear costs, to be examined below. And you have a number of dedicated applications by third parties, like five book publishers, and content channels by some newspapers.

Yet Information Week and other news outlets were quick to point out a number of important features missing from the iPad. To briefly summarize, the browser does not have flash – mostly for security reasons and to save on battery life – and you also have no choice of browser, since every program must be downloaded through Apple’s platform. MacOS applications will not work on the device because it runs the iPhone’s operating system. Already, Jobs’ promise of ”the best web experience you've ever had” appears questionable.

The iPad running iBooks

The device surprisingly features no USB ports and no SD card slots (you need proprietary adapters) and it also has no HDMI output. It has no camera (where two were expected) and offers no multitasking. Only one application can run at a time. Apple’s carrier of choice is still AT&T, whose 3G network in the US is said to be shaky, I hear. Finally, it seems, the iPad will not feature real GPS. The 3G versions will use some kind of triangulation, I suppose.

The iPad has no USB ports and no SD card slot

I am writing this on an HTC Shift, which boasts pretty much the same specs as the iPad but natively runs Windows Vista (as well as Windows Mobile) and Windows 7 is running perfectly on it. Battery life does not compare to the iPad, but then you get a full OS and the ability to multitask. You also get a camera, flash support and free choice of carrier. And you can install any program you like. The list goes on.

The HTC Shift

As does the list of iPad’s shortcomings. I myself particularly regret that the device lacks an OLED, which had been rumoured to be included. And I find the standard resolution of 1024 by 768 pixels rather humble given the screen’s size. I also miss a physical keyboard integrated into the device. ”It's a dream to type on,” Steve Jobs said yesterday. But typing must be an awkward experience, because if you want to rest it in your lap, it faces straight up. You need to rest your feet on something to tilt it up in an ergonomically correct fashion. If you put it down on a table, it gets worse. The back is rounded, so it will constantly rock when you touch it. The stand accessory may come in handy here – although the limited height of the stand will surely make the iPad wobble when you are using the touchscreen. This is a mobile device and should be useful anywhere.


As far as mobility is concerned, I do not understand Apple even producing models without 3G. The main reason must be to be able to announce a $499 entry point. The non-3G product line is a total scam, in my opinion. This device needs to be able to go online, as Market Watch agrees:

At first glance, the beginning $499 price for a 16GB model that was announced by Jobs seemed a surprise compared to forecasts calling for something closer to $1,000. But the $499 does not include a 3G wireless connection, so that device would be only useful primarily at home or office networks.

The price with 3G wireless is $629 -- which compares with $259 for the Amazon Kindle, which is a single-use e-reader but can purchase and download books virtually anywhere.

I think it is highly questionable whether the iPad will find a noteworthy market. But what about games?


Four years ago, I looked at an Apple patent that sounded very promising for games. It promised ”a wild new video game application for Apple’s accelerometer technology”:

It provides specific gaming examples of user as a driver and pilot and even provides a glimpse of how the accelerometer will be used in First Person Shooter games.

A user holding the tablet can turn around and see the view looking backwards from a position in a two or three dimensional image or object database as if the user walks into a virtual reality game space.

Apple patent "Methods and apparatuses for operating a portable device based on an accelerometer" (2006)

Why did we see no such games yesterday then? The ones demoed looked solid, but they were nothing spectacular. Apparently, ´Need for Speed Shift´ was even merely upscaled to run on the iPad. Will the big publishers hop onto this bandwagon, though, and throw their weight behind this device? Do they even support the iPhone in any serious fashion? Electronic Arts executive Peter Moore told The Guardian just before Apple revealed the iPad:

If it's got a great screen, some buttons, you can turn it on and it connects to the Internet, it's got the ability to be a games machine.

The iPad running iTunes

I wonder whether the remark about it featuring buttons was a swipe at the iPhone. I myself see one of the biggest hardware shortcomings of the iPhone as a gaming device in it lacking buttons and a stylus. You need a stylus to actually make use of every pixel on that screen (fingers are naturally broader than a pointy object, effectively reducing the playing field). And you need some physical buttons (or a touchscreen with haptic feedback) to give the player some feedback, a feeling that he is actually touching something. The iPhone has neither and I believe Moore was keen to point that out. His second condition for it becoming a games machine – the ability to connect to the internet – is only true of half the models. Entry models have no means to go online but Wi-Fi.

The iPhone running iTunes

The iPhone / iPod Touch combo has attracted some big names, true. But it still is no attractive platform for them and, most likely, never will be. Look at the Wii and its main problems with third party development. Cheap shovelware seems to sell too well (see ´Carnival Games´) for most publishers to give the hardware a real shot and invest some serious resources. With the iPhone, this problem is ever so much bigger. You have the umpteenth clone of ´Jewel Quest´ selling like crazy. And why not, it’s usually only 79 cent. But where are the big names in the iTunes charts? There are some, but almost all of those games are free or light versions of what are already very light versions of a big console franchise. You cannot charge more than $9,99 for a game and you already have a problem convincing the user base to buy a game for $4,99. They are conditioned for prices around one Dollar and with a plethora of offerings in this category – quality aside – they are not going to notice a proper game that has been meticulously crafted by a professional team, but comes at a premium price.

The iPhone running ´Scrabble´

In fact, such a large amount of shovelware is a marketing nightmare. Imagine going to your local GameStop and finding the store extended to the size of an airplane hangar. There are more than 7.000 games available. But do they compare with what we consider proper games? Apparently, the iPhone is in competition with the DS and PSP consoles, some people would have you believe. But you simply cannot compare the games. A blockbuster game for either of the gaming platforms costs hundreds of thousands of dollars, if not millions. You cannot afford to sell it at anything but a double digit price, even if half a million people will buy it. So you churn out mini-games and slap a big franchise name on it. And you hope to sell more than some creative programmer who single-handedly programmed an iPhone version of ´Where’s Waldo?´.


At the time of writing, the US top ten list of games contains only two entries by videogame publishers: ´Rock Band Free´ and ´Call of Duty: World at War: Zombies Lite´. Both are free. The UK charts only contain the latter and in both territories the free ´Call of Duty´ game is beaten by ´FallDown!´, developed by a lone Swedish guy.

Screenshot of ´FallDown!´ for the iPhone

As far as paid apps are concerned, ´Grand Theft Auto: Chinatown Wars´ is the only game by a big publisher in any top ten list. In both the UK and the US, Rockstar Games’ entry for $9,99 (on DS and PSP the game costs a minimum of $20 and $30, respectively, after already being reduced) is beaten by ´Doodle Jump´ for 99 cents, developed by a guy and his brother.

Screenshot of ´Doodle Jump´ for the iPhone

Don’t get me wrong. iPhone and iPod Touch have brought fame and fortune to some very creative indie developers out there. The platform creates a level playing field between amateurs and big publishers. But for precisely the same reason, big publishers shy away from it. Obviously, big publishers do not want a level playing field and, if you like deep, meaningful and immersive games, they don’t deserve to be dragged into one. Ironically, for all the control Apple exercises over games (no game is allowed to utilize the camera, by the way, for some unknown reason), they allow shovelware and the thirtieth Tetris clone to flood their market. They announce the amount of games available for the platform like it is a good thing. It is not. 7.000 games are way too many for any kind of manageable filtering to tell the good from the bad, the clone from the original. The PlayStation2 – the best-selling home console to date – has managed a software library of 1.900 titles by 2009 and it already suffered from great amounts of shovelware.


I don’t see developers making efforts to include the iPad in their projects. If you already have a user base of 75 million people who own iPhone or iPod Touch (according to the Apple presentation), why go out of your way to include a special iPad mode when their userbase is obviously starting at zero. Gamasutra agrees, calling the iPad ”as big a crap shoot for developers as the iPhone is.”

It's obvious that, at least at launch, most developers are going to worry about making iPad-native versions of existing apps. Sure, "most" iPhone apps are compatible with the device out of the box, but while they're totally playable, they don't benefit much from being blown up to two times their native resolution. The benefit here is that the Apple fanatics who buy this thing at launch will already have access to their existing software libraries on their new device, which may reassure some purchase decisions.

But the retrofit mania will happen mostly because it won't make sense for many developers, particularly cash-strapped indies, to pour resources into iPad-native games when its future is less obviously bright than the iPhone's was. And indies won't be the only ones doing this. After demoing a version of iPhone Need for Speed Shift, quickly retrofitted for iPad, EA's Travis Boatman said, "We're going to be able to bring all of our other EA games from the App Store to this device in no time."

iPad running ´Need for Speed Shift´

Much more so than at the original App Store launch, it's going to be exceedingly difficult to stand out from day one -- unless you can come up with a tremendously original idea, execute on it well, and market it aggressively.

If you do come up with that great new idea, "we're going to put it front and center" on the App Store, promises Apple's SVP of iPhone software, Scott Forstall. That's a promise you can rely on. Apple routinely features strong software on the App Store and, more importantly, makes the choices itself, based on quality, without ad buys coming into the picture. But the slots are so limited and the process so opaque that you can't rely on it happening to you.

There is also another problem. Will developers curtail their market twice by, firstly, choosing to develop for the iPad only (ignoring many millions iPhone users and potential customers) and then curtail their user base even further by concentrating on only the 3G models? Hardly believable. An optional mode for iPad and another for iPad 3G could be an alternative but a costly one. Why invest in such special modes if you know the bulk of your returns is going to come from the iPhone userbase anyway? This way, the phenomenaly success of the iPhone will, ironically, hold back the iPad and prevent it from getting off the ground.

Xbox360 Arcade

Similarly, the Xbox360 still suffers from the models not including a hard drive. Developers are still required by Microsoft to make their games compatible with systems that only use a memory card. It splits the userbase in two, forces the manufacturer to impose silly rules on third parties and confuses developers.


In conclusion, I believe the iPad sales figures will be anywhere between abysmal and modest. For this reason alone, it will not get off the ground. It will lack dedicated apps for a variety of reasons. And as a platform for the big game publishers, it will never become truly attractive – which can also be said about the iPhone.

EDITI just discovered a small but embarrassing blunder in Gameloft's presentation which may show the limitations of the hardware. At 37:30 minutes into the keynote, the first attempt of throwing a grenade by sliding two fingers up the screen fails and moves the camera instead. Sure it is just a demo and was put together in a few weeks. But they chose to show it, so they must have been satisfied with the controls. If Gameloft cannot play their own title properly, how should I get to grips with the controls?

EDIT Wall Street analyst Brian Marshall of BroadPoint AmTech has calculated the manufacturing costs of each iPad model - a so-called ´bill of materials (BOM) analysis´, speaking to Computerworld.

The 16GB WiFi-only iPad components total $290.50, including manufacturing and warranty service costs. Its price tag is $499, making Apple's profit margin 42.9%. The 16GB iPad with WiFi and 3G costs Apple $306.50 and is sold for $629 at a profit margin of 52%.

So including 3G costs Apple a mere $16 extra, which seems to suggest that a non-3G entry model for $499 really is just a dummy, to be able to advertise a lower entry price, similarly to Microsoft's strategy with the Xbox360 core model, i.e. the Arcade.

The 32GB 3G model costs Apple $332 and is sold for $729, pushing the margin to 55.1%, the highest of any models, according to the estimate. Such margins sound very high, but are standard for the company, the analyst notes.

High profit margins are standard for Apple, which earlier in the week boasted that its corporate margin for 2009's final quarter was 40.1%. Some products, in fact, have estimated margins even higher than Marshall's iPad numbers: The consensus for the iPhone 3GS is above 60%, for example.

EDIT For those of you who understand German, I have translated most of this article with some marginal updates on the 3sat Neues blog.

Wednesday, January 13, 2010

Ubisoft, Capcom and Sega to shift focus away from Wii

With Ubisoft, Capcom and Sega, three major publishers are announcing a shift of focus away from the Wii console. Most recently, Ubisoft announced that their casual titles on DS and Wii failed to generate the expected revenue and, as a result, the company would favour developing core games for Xbox360 and PS3.

Despite relatively robust sales for Wii casual games, and particularly the success of Just Dance, sales in the casual segment are expected to be down for the full year by around €160 million, representing a drop of around 50%.

Further market concentration towards AAA high-quality games. Ubisoft has demonstrated its ability to react to this trend through the success of Assassin’s Creed 2, which has achieved sell-through sales topping 6 million. However, not all of the Company’s games have reaped the full benefits of the measures implemented, with James Cameron’s Avatar™: The game and several non-casual Wii titles reporting lower-than-expected sales. (...)

We intend to continue to refocus our development resources on our major franchises and on the Xbox360 and PS3, the two consoles which are expected to see sales growth in games for gamers in 2010. Ubisoft has already demonstrated its capacity for success in the high-end games market thanks to Assassin’s Creed 2, with sales 40% higher than for the first title. The 2010-11 line-up – which is stronger in franchises for Xbox360 and PS3 – reflects our refocusing efforts and should enable us to both win market share and enhance our profitability.

Previously, Sega announced that they will "probably not" consider any more mature titles on Wii while Capcom more broadly notes that "the future is the PlayStation 3 and Xbox 360." The commercial failure of games such as ´Dead Space: Extraction´ or ´MadWorld´ is quoted as a catalyst for the move.

This story corroborates my previous comments that the Wii has failed as a vehicle for mature games, at least as far as third parties are concerned. ´Monster Hunter Tri´ and ´Red Steel 2´ may be the only third party Wii titles for some time, it seems.

Sources: Ubisoft, Nintendo Everything, MTV
Thanks to: Joystiq, Joystiq