Apple bites away at video game share

Just a couple years ago, mobile phone games hardly made a blip on the radar, but the amount of the video game pie that the iPhone is getting has increased five-fold in the span of just one year.

It’s getting to the point where Nintendo, Sony, and Microsoft need to be looking seriously at the iPhone and iPod Touch.

Apple’s devices singlehandedly gobbled up 5% of all vidoe game revenue in 2009. That’s up from just 1% in 2008. In fact, the iPhone is now toppling the PSP in game sales.

Market research firm Flurry released a new set of data that shows just how much one single phone can cut into a gigantic industry.

“Controlling 5% revenue of a $10 billion industry in just a year and a half is significant. From a market share perspective, console games lost ground to portable platforms and iPhone,” said Flurry’s VP of marketing Peter Farango.

In 2009, console video games accounted for 71% of all game revenue. “Portable” games, which is mainly the DS and PSP and excludes the iPhone, took 24%, and the iPhone accounted for the remaining 5%. That’s an increase for both the iPhone and handheld game segments, while it’s an 8 percentage point decline in console sales over 2008.

When specifically broken down into portable games, iPhone game software accounted for 19% of all revenue in 2009. That eclipses Sony’s PSP, which only nabbed 11%. That says as much about how far in the decline Sony’s system is as it does just how much steam Apple is gaining in the video game world.

No one talks about the two markets together…yet. In the future, it is very likely that iPhone game announcements will be made alongside PS3 and DS announcements. And as Flurry notes, the iPad will only add further catalyst to Apple’s gaming success.

“With companies like Electronic Arts and Gameloft joining Apple on stage during its January unveiling of the iPad, the tablet device will enjoy elite game publisher support on day one,” Farango said.