Hard economic times aren’t any fun, but probably just as necessary as the boom times. It’s survival of the fittest, and not unlike a lion running down the slowest (sickly) gazelle that thins out the herd, some companies will falter. But nearly everyone must now make adjustments and changes if they are to survive.

Steve Sechrist
Senior Analyst and Editor

Take the latest sell through numbers in Sony’s game division as a case in point. The UK Guardian recently reported the "…the [Sony] games division’s sales fell by a third to $4.36B, while operating profits fell by 97% to $4.42M. The whole company didn’t do much better, Sony’s revenues fell by 25%, and profits by 95% to $115.6M." And the US AP wire recently reported a revised [Sony Corporation] net loss figure of $1.67B for the full fiscal year through March - its first loss in 14 years.

For its part Sony is blaming the bad economy and high value of the Yen. "From the second half of September last year, there has been a sudden deterioration in the economy, and with the effects of foreign exchange it has had severe consequences on our business," Chief Financial Officer Nobuyuki Oneda said. But that argument just doesn’t fly. It’s not the weather (economy) that allows the lion to chase down the gazelle; companies flourish in good and bad economic climates.

And what lion is chasing down Sony? Well, here’s how David Chartier over at Arstechia.com put it: "A new study has revealed that smartphone gaming is exploding and the iPhone is at ground zero." He continues, "the iPhone has ushered in a new age of personal connectivity and productivity, and according to a new study, it’s turning out to own the smartphone gaming space as well."

Here’s how Mark Donovan, senior analyst, comScore put it. "Over the past year, we have seen mobile gaming expand into a broadening demographic, with strongest growth among teens, who previously eschewed their mobile device in favor of handheld gaming devices, and those 35 and older." The reason, according to Donovan, "As the mobile phone has evolved into a better platform for both playing and merchandising games, the games being offered have also been improved, drawing in a broader user base."

Apparently, Sony Gaming, a company with long standing success in the category, failed to see (or saw but failed to act on) the tectonic shift happening at the primary user level. As a result, Smartphone gaming has grabbed market share from Sony’s traditional devices.

Apple dominates, with six of the top 10 phones used for mobile gaming including the top three spots (8GB iPhone 3G, 8GB iPhone, and the 16GB iPhone 3G). The original 16GB iPhone came in at number seven of the top ten Smartphones used for mobile gaming. Others included the BlackBerry Curve 8330, BlackBerry Curve 8310, the "smartphone-like" Samsung Instinct M800, and LG VX10000 Voyager.

Over the past year, comScore said there was a 291% growth in Smartphone Mobile game downloads (2007 to 2008) from almost 2.4M smartphone users-and another 5.6M non-smartphone a game downloads. This is a total growth of 17% in the category.

Whether or not Sony saw this coming is a bit irrelevant at this point. They need to react (and maybe they have plans in the works). Let’s see what they do. -Steve Sechrist

See Mobile Display Report February issue for an expanded version of this article.

Correction: in the January 26th edition of Display Daily, there were some technical errors about how the Dolby 3D encoding is used. It does NOT require an external box, as was stated. The updated and corrected article is now on the web site (http://displaydaily.com/2009/01/26/the-time-is-right-for-a-3d-content-delivery-standard/)

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