There's three mobile gaming platforms out there, the DS, PSP and cellphones.
The PSP is probably the best example of death. Most of the games on the PSP aren't that good and the PSP seems to be a system where developers dump their unused and unfinished ideas in an attempt to churn a profit.
The DS has a much stronger hold on the market, setting more of a middle ground. There's good titles but the DS really has Nintendo only keeping it alive with their own games like Mario or Pokemon, as long as those exist, Nintendo will always have a foothold in the mobile gaming market.
Then there's cellphone gaming, which seems to be where really mobile gaming innovation is taking place and would be the example of rebirth. Look at Angry Birds, such a simple game that's been done several times before, but it's exploded, there's Angry Birds plushies and even dog toys modeled after the birds. Cut-the-Rope is another title that's taken off and there's Omnom toys now.
So what's the difference between all these games? Well the PSP and DS titles are what would be considered a real game, there's a beginning and an end and a story to go with it. The cellphone games are very basic and are more of a time waster with no actual accomplishment other than getting a high score.
I have a friend who bought a 3DS on launch day and he'll go out an buy games for it, I think maybe 4 of them. Now we both have iPhones as well. He refuses to pay $1 for an iPhone game but would rather spend $40 on a 3DS game that he might not even like.
So here's a challenge, if you have a PSP or 3DS go buy 1 game for that system, then buy as many games as you can on your iPhone that are equal to the amount that you paid for the PSP/3DS game and see which one you have more fun with.
Also Game Stop is taking in iOS devices for trade ins, that's gotta tell you that cellphone gaming is just as competitive, if not more, than portable gaming.
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