Is There Any Demand For a True Gaming Phone?

Nintendo’s profits are in free-fall as Apple’s iPhone and iPod touch increasingly eat into the sales of the portable Nintendo DS. But isn’t it time somebody built a real gaming phone?
Before the fanboys come at me in full force, let me say that I know how great the iPhone is. The large screen and intuitive controls make for a solid gaming experience, and the accelerometer adds a fun, innovative twist. And iPhone users have the luxury of shopping at a retail outlet that offers a mind-blowing 100,000-plus applications, many of which are compelling, enjoyable games.
But a quick look at some recent best-sellers proves that the iPhone is still viewed by most users as a platform for casual games — not immersive, console-type offerings. While Madden and Rock Band are selling well, most of the popular iPhone titles are either digital board games or the kind of simple, pick-up-and-play offerings that are the foundation of mobile-phone gaming. That contrasts drastically with the PSP, where gamers are enjoying highly-reviewed, sophisticated games like Grand Theft Auto: Chinatown Wars and Dissidia: Final Fantasy.
I think Sony Ericsson — which desperately needs a change in strategy — has a huge opportunity to target an untapped market with a PSP phone. Not only does Sony (which owns the joint venture with Ericsson) already have a vast library of content, the move could be a huge boost for Sony Ericsson’s new app store. But there are other players who could find success with a game-centric phone. Nokia flopped a few years ago with its Ngage handset and has failed to execute in the superphone era, but the Finnish manufacturer could breathe new life into both its handset lineup and its mobile Internet service business with a handset designed specifically for gamers. Nintendo could jump in with a phone version of its DS, although executives have denied any such handset is in the works. And Microsoft is considering creating a handheld Xbox device that plausibly could support voice.
A true gaming phone wouldn’t have the broad appeal of the iPhone, of course, and would have to be a bit larger than most phones on the market to provide a more immersive gaming experience. And developing a handset that can compete on price with modern smartphones will certainly prove difficult. But I think there’s a sizable audience of users who’ll spend a couple hundred dollars on a converged device built specifically for console-type games. If someone can build it — and offer it at a reasonable price — the gamers will come.

Question of the week

If you build a true gaming phone, will gamers come?