Apple Declares War on Nintendo, Sony Over Video Games

Apple might have shined its spotlight Wednesday on Apple TV and the new iPods, but at the same time, it had a clear message for the video game industry: We’re coming for you—and it’s going to be an ugly fight.

Apple Store
Flickr: hairygrumpy
Apple Store

Over the course of the past three years, Apple has stumbled into a powerful position in the gaming world. The iPhone, iPod Touch and iPad were never designed as gaming platforms, but the app explosion that followed opened up the world of mobile gaming —and now the Cupertino-based company seems ready to capitalize on that.

Jobs, on Wednesday, referred to the iPod Touch as “the number one portable game player in the world,” adding that the device “outsells Nintendo and Sony’s portable game players combined.”

There’s some creative math there, of course. While the Nintendo DS has been the company’s focus for years, millions of consumers still use their Game Boy Advances and other legacy systems. But that doesn’t blunt a more solid number: To date, 1.5 billion game and entertainment titles have been downloaded to the iPod touch alone.

And the acceleration pace of that number is likely to speed up, since the new iPod Touch includes most of the features of the iPhone 4, including a significantly improved screen.

Apple currently lacks the franchises that have helped make Nintendoand Sony devices popular with consumers, like “Mario,” “Zelda” and “God of War”. But it holds a distinct pricing advantage—apps generally run for $1 to $5—with $15 being the high-end (versus an average of $30 and $40 for new Nintendo DS or Sony PSP games, respectively.)

But as the popularity of iDevice titles has grown, so has the franchise power of those games. “Angry Birds,” from developer Rovio, has become a certified hit, with over 6.5 million iPhone and iPod Touch downloads since its debut in December 2009. (The free trial version has been downloaded 11 million times, while an iPad version of the game has sold 200,000 copies.)

The app is a constant presence in the Top Selling Apps chart—and is about to hit several new platforms, including the DS, PSP, PlayStation 3 and Android devices. “Angry Birds” has grown so big, in fact, that it has attracted the attention of non-gaming entertainment companies, with a possible TV show, movie and toys in the works.

Meanwhile, some of gaming’s biggest developers are showing growing interest in Apple’s devices. In August, John Carmack, co-inventor of the “Doom” and “Quake” franchises, demonstrated an iPhone version of id Software’s upcoming title “Rage” that he said will release this year. (The console version’s not due until next September.)

Eric Piermont | AFP | Getty Images

And Epic Games, makers of the “Gears of War” and “Unreal” franchises, showed off a title code-named “Project Sword” Wednesday. Both games are approaching graphically parity with today’s console titles.

The move by these developers to publish games on Apple devices is certainly not an abandonment of current systems, which generate significantly higher revenues, but it does indicate that time and energy that formerly would have been spent crafting a new title for an existing system is now being dedicated to Apple products. And as the installed base for those products increases, and customer comfort with higher price points begins to set in, they could become a viable income source.

Apple, meanwhile, seems to be studying what works on console systems as it seeks to improve the gaming experience on its products. Next week’s rollout of iOS 4.1—the operating system for all iDevices—will include a feature called Game Center, which will make it easier to play multiplayer games. Players can assemble a friend’s list and challenge them to games, or use it as a matchmaker to find players with similar skill levels.

Game Center will also have the usual features, like Leaderboards and achievements – pages that seem to mimic the online functionality of the PS3 and Microsoft's Xbox 360.

Steve Jobs & Co. may still be a long, long way from winning the gaming wars—or even joining the top three, especially in terms of revenue—but Apple has quickly moved from being a non-player to a force to be reckoned with.