The iPhone 3GS sports a better processor than its predecessor, the 3G, which makes the new handset an even more muscular platform for mobile gaming. However, most iPhone users still have an older 3G or first-gen model, and the cost of developing an advanced game necessitates a large customer base. How long will developers wait to build graphics-heavy, 3GS-exclusive games?
Consider the juice inside a hot new portable gaming device: It has a speedy processor, a powerful graphics chip, plenty of memory and wireless capabilities for instant downloads. You can play the latest blood-soaked first-person shooters like "Resident Evil," dizzying platformers like "Assassin's Creed" and some killer racing games that don't even require punching combinations of buttons and triggers; just lean the device this way or that, thanks to a built-in accelerometer, and you're careening down boulevards at top speeds in a shiny red Ferrari.
If you want, you can also make a phone call on it.
The iPhone 3GS is the best argument yet for those who say smartphones will eventually replace notebook computers as full-service portable communications/entertainment devices, and the ability to play is becoming a big part of its consumer appeal. "Games are certainly one of the most popular applications categories in the App Store," Yankee Group analyst Carl Howe said. "Clearly there is a lot of gaming interest."
However, is there enough of that interest to make gaming the major impetus for iPhone sales ? That interest isn't just among consumers who will use their iPhones to kill time on their flight home by playing "Hero of Sparta;" developers for those games dream of taking advantage of the 3GS' tech specs by loading up new offerings with rich graphics and animation; but can they afford to develop those games for the new, beefed-up iPhone if there aren't yet enough of them in consumer's hands?
"It's hard to predict if a game that costs twice as much to develop is going to sell enough copies to recoup the development investment, which is why install base is often factored into a game's green-light decision," game developer Corey Dangel said. "Lessons leaned on the PC side indicate that unless you're selling a game engine, like 'Doom,' 'Unreal' or 'Half-Life,' you want to keep your minimum specifications very approachable. Developers have learned that living on the bleeding edge, while sexy, is not all that lucrative."
In an effort to recoup those costs, will the games be more expensive than current App Store offerings, leading to a potentially confusing split in store pricing? If the iPhone 3GS becomes such a playground for game developers, could it eventually make you think twice about picking up a Sony (NYSE: SNE) PSP or Nintendo DS Lite -- especially since the iPhone comes with that amusing and occasionally annoying phone-call feature?
Which Came First: The Chicken (iPhone) or the Egg (Game)?
Dangel, a 15-year veteran of gaming development, knows only too well the work, time and risk involved. He spent the last two years of his life working on "The Agency," a much-anticipated PC/PlayStation 3 secret agent game coming soon from Sony Online Entertainment. Recently, however, he and two other Seattle-based Sony developers left that company to start their own firm, Detonator Games, which will focus on titles for social media and mobile devices.
He's aware of what the 3GS offers developers: "a fully programmable graphics pipeline and support for pixel and vertex shaders," Dangel told MacNewsWorld. "It's now possible to create any number of advanced post-process effects, not unlike what we're used to seeing on high-end consoles. In less technical terms, the 3GS is more advanced that an Xbox but not quite as advanced as a 360. You can fit a lot of game in the 256MB of unified RAM. So from a graphic feature standpoint, the phone is a very robust platform."
Which leads developers into a classic Catch-22 situation: They don't want to spend the money it takes to create those graphics-intensive games because there aren't enough 3GSs on the market yet, and game-crazy consumers may not be ready to buy a 3GS unless there are enough games to take advantage of its specs. "It takes more time to program, it takes more time to generate all the specialized texture maps, it takes longer to debug because there are more moving parts," Dangel said. "Really taking advantage of the potential is going to drive up production costs, and then we end up in that chicken-and-egg cycle again."
Dangel praises Apple (Nasdaq: AAPL) for creating an elegant, user-friendly product. Yet the limited screen size, game control capabilities that don't measure up to a Sony PSP, and the basic difference between casual and hard-core players will keep games from being a main driver for iPhone sales -- while also keeping their prices affordable.
"The casual gamer, be they business, commuter or student, may not care as much about the enhanced fidelity. And my suspicion is that it's the casual gamer who is most represented in the 40 million iPhone owners," Dangel said. "As the power of the platform increases, there will inevitably be games that match the visual fidelity of handheld devices. If those games support deeper, longer play and have higher production values, they will cost more to create and will command a higher price point. But it's going to be challenging for the (US)$29 game to look like a good value when there are a thousand reasonably decent games under $9, many under $5.
"Savvy game developers may want to look at other ways to monetize their offering instead of just raising the purchase price," he added.
Better Games Sparking a Two-Tiered App Store?
The digital compass and better camera in the iPhone 3GS are responsible for the latest buzzworthy trend in applications: augmented or enhanced reality. Computer-generated information is superimposed over a real-time image, as best demonstrated in a YouTube video from the makers of the Your New Eye app -- a view of a London street seen through an iPhone camera shows boxes floating on the screen, detailing locations for all Underground stations in the neighborhood. The Monocle feature in the Yelp app offers much the same service; shake the phone three times, and pop-up boxes appear over locations of reviewed restaurants.
Now imagine you're James Bond, and your iPhone helps you rendezvous with a gorgeous female double-agent somewhere on the streets of Cold War-era Prague. You pick up clues and elude the bad guys -- a.k.a. your friends who join you via multi-player. The gaming -- and revenue -- possibilities are endless.
"In terms of pricing, there will definitely be elite games launched," VDC Research analyst Josh Martin told MacNewsWorld. "But the App Store has so much competition -- imagine going into Best Buy (NYSE: BBY) and seeing 50,000 pieces of software, it would be mind-boggling -- that to justify a price higher than $9.99 you would have to release something really unique and special, and even then it would be the exception to the rule. Combine that with Top 10 rankings being so important to discovery, and very expensive games won't get on the Top 10, reducing their market size, and forcing them to lower price -- good old supply and demand."
The iPod Touch, Martin said, will get the lion's share of attention from game developers. He thinks it may be too early for larger developers to spend the money to build games utilizing the 3GS' power. "But some will certainly start doing it soon and in another year or so, it will be much more common -- again, just in time for another feature upgrade and more splintering."
Yankee Group's Howe believes asking games to drive iPhone sales may be expecting too much from customers. "When you buy an iPhone, you're not just buying a piece of hardware, you're also signing up for about $2,000 in payments over the next two years, so you're making a big investment for a gaming platform," Howe told MacNewsWorld. "People are now buying the package, and they like the fact that it plays games."
The new Snow Leopard OS X upgrade for Mac shares a code base with the iPhone, Howe said, and that could open up even more possibilities for games that travel from your iMac or MacBook to your 3GS. A shift to multicore processing could also boost performance while saving battery life in a smartphone. Still, he doubts Apple would let all that result in runaway game prices or a bifurcated App Store.
"I think Apple's going to try to keep it a fairly uniform platform. Since they exercise a lot of control over their ecosystem, they kind of have the power to do that, so I don't see a lot of fragmentation. (But) the idea that you'd be able to play a full 3-D flight simulator on a phone would have been absurd five years ago. The fact that it not only runs but runs quite well is testament to how powerful these platforms are," Howe saidConsider the juice inside a hot new portable gaming device: It has a speedy processor, a powerful graphics chip, plenty of memory and wireless capabilities for instant downloads. You can play the latest blood-soaked first-person shooters like "Resident Evil," dizzying platformers like "Assassin's Creed" and some killer racing games that don't even require punching combinations of buttons and triggers; just lean the device this way or that, thanks to a built-in accelerometer, and you're careening down boulevards at top speeds in a shiny red Ferrari.
If you want, you can also make a phone call on it.
The iPhone 3GS is the best argument yet for those who say smartphones will eventually replace notebook computers as full-service portable communications/entertainment devices, and the ability to play is becoming a big part of its consumer appeal. "Games are certainly one of the most popular applications categories in the App Store," Yankee Group analyst Carl Howe said. "Clearly there is a lot of gaming interest."
However, is there enough of that interest to make gaming the major impetus for iPhone sales ? That interest isn't just among consumers who will use their iPhones to kill time on their flight home by playing "Hero of Sparta;" developers for those games dream of taking advantage of the 3GS' tech specs by loading up new offerings with rich graphics and animation; but can they afford to develop those games for the new, beefed-up iPhone if there aren't yet enough of them in consumer's hands?
"It's hard to predict if a game that costs twice as much to develop is going to sell enough copies to recoup the development investment, which is why install base is often factored into a game's green-light decision," game developer Corey Dangel said. "Lessons leaned on the PC side indicate that unless you're selling a game engine, like 'Doom,' 'Unreal' or 'Half-Life,' you want to keep your minimum specifications very approachable. Developers have learned that living on the bleeding edge, while sexy, is not all that lucrative."
In an effort to recoup those costs, will the games be more expensive than current App Store offerings, leading to a potentially confusing split in store pricing? If the iPhone 3GS becomes such a playground for game developers, could it eventually make you think twice about picking up a Sony (NYSE: SNE) PSP or Nintendo DS Lite -- especially since the iPhone comes with that amusing and occasionally annoying phone-call feature?
Which Came First: The Chicken (iPhone) or the Egg (Game)?
Dangel, a 15-year veteran of gaming development, knows only too well the work, time and risk involved. He spent the last two years of his life working on "The Agency," a much-anticipated PC/PlayStation 3 secret agent game coming soon from Sony Online Entertainment. Recently, however, he and two other Seattle-based Sony developers left that company to start their own firm, Detonator Games, which will focus on titles for social media and mobile devices.
He's aware of what the 3GS offers developers: "a fully programmable graphics pipeline and support for pixel and vertex shaders," Dangel told MacNewsWorld. "It's now possible to create any number of advanced post-process effects, not unlike what we're used to seeing on high-end consoles. In less technical terms, the 3GS is more advanced that an Xbox but not quite as advanced as a 360. You can fit a lot of game in the 256MB of unified RAM. So from a graphic feature standpoint, the phone is a very robust platform."
Which leads developers into a classic Catch-22 situation: They don't want to spend the money it takes to create those graphics-intensive games because there aren't enough 3GSs on the market yet, and game-crazy consumers may not be ready to buy a 3GS unless there are enough games to take advantage of its specs. "It takes more time to program, it takes more time to generate all the specialized texture maps, it takes longer to debug because there are more moving parts," Dangel said. "Really taking advantage of the potential is going to drive up production costs, and then we end up in that chicken-and-egg cycle again."
Dangel praises Apple (Nasdaq: AAPL) for creating an elegant, user-friendly product. Yet the limited screen size, game control capabilities that don't measure up to a Sony PSP, and the basic difference between casual and hard-core players will keep games from being a main driver for iPhone sales -- while also keeping their prices affordable.
"The casual gamer, be they business, commuter or student, may not care as much about the enhanced fidelity. And my suspicion is that it's the casual gamer who is most represented in the 40 million iPhone owners," Dangel said. "As the power of the platform increases, there will inevitably be games that match the visual fidelity of handheld devices. If those games support deeper, longer play and have higher production values, they will cost more to create and will command a higher price point. But it's going to be challenging for the (US)$29 game to look like a good value when there are a thousand reasonably decent games under $9, many under $5.
"Savvy game developers may want to look at other ways to monetize their offering instead of just raising the purchase price," he added.
Better Games Sparking a Two-Tiered App Store?
The digital compass and better camera in the iPhone 3GS are responsible for the latest buzzworthy trend in applications: augmented or enhanced reality. Computer-generated information is superimposed over a real-time image, as best demonstrated in a YouTube video from the makers of the Your New Eye app -- a view of a London street seen through an iPhone camera shows boxes floating on the screen, detailing locations for all Underground stations in the neighborhood. The Monocle feature in the Yelp app offers much the same service; shake the phone three times, and pop-up boxes appear over locations of reviewed restaurants.
Now imagine you're James Bond, and your iPhone helps you rendezvous with a gorgeous female double-agent somewhere on the streets of Cold War-era Prague. You pick up clues and elude the bad guys -- a.k.a. your friends who join you via multi-player. The gaming -- and revenue -- possibilities are endless.
"In terms of pricing, there will definitely be elite games launched," VDC Research analyst Josh Martin told MacNewsWorld. "But the App Store has so much competition -- imagine going into Best Buy (NYSE: BBY) and seeing 50,000 pieces of software, it would be mind-boggling -- that to justify a price higher than $9.99 you would have to release something really unique and special, and even then it would be the exception to the rule. Combine that with Top 10 rankings being so important to discovery, and very expensive games won't get on the Top 10, reducing their market size, and forcing them to lower price -- good old supply and demand."
The iPod Touch, Martin said, will get the lion's share of attention from game developers. He thinks it may be too early for larger developers to spend the money to build games utilizing the 3GS' power. "But some will certainly start doing it soon and in another year or so, it will be much more common -- again, just in time for another feature upgrade and more splintering."
Yankee Group's Howe believes asking games to drive iPhone sales may be expecting too much from customers. "When you buy an iPhone, you're not just buying a piece of hardware, you're also signing up for about $2,000 in payments over the next two years, so you're making a big investment for a gaming platform," Howe told MacNewsWorld. "People are now buying the package, and they like the fact that it plays games."
The new Snow Leopard OS X upgrade for Mac shares a code base with the iPhone, Howe said, and that could open up even more possibilities for games that travel from your iMac or MacBook to your 3GS. A shift to multicore processing could also boost performance while saving battery life in a smartphone. Still, he doubts Apple would let all that result in runaway game prices or a bifurcated App Store.
"I think Apple's going to try to keep it a fairly uniform platform. Since they exercise a lot of control over their ecosystem, they kind of have the power to do that, so I don't see a lot of fragmentation. (But) the idea that you'd be able to play a full 3-D flight simulator on a phone would have been absurd five years ago. The fact that it not only runs but runs quite well is testament to how powerful these platforms are," Howe said
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