iPhone stealing game market share from Sony, Nintendo

New report finds Apple sold 19 percent of all portable game software in the U.S. in 2009, up sharply from 5 percent in 2008.

Those who thought Apple's iPhone and iPod Touch would not live up to the promise of being a great mobile gaming platform are in for a big surprise.

Apple sold 19 percent of all portable game software in the U.S. in 2009, up sharply from 5 percent in 2008, according to a new report released by Flurry Analytics on Monday.

It's clear that Apple is taking share from Sony's PlayStation Portable, and to a smaller level, the Nintendo DS. According to Flurry's report, Sony fell from 20 percent in 2008 to 11 percent in 2009, and Nintendo fell from 75 percent in 2008 to 70 percent in 2009.

Flurry Analytics

The success of the iPhone and iPod Touch isn't the end of the story. With the iPad being released to the public in less than two weeks, things could get even worse for the traditional gaming companies.

"Apple has already established broad third-party game publisher support," wrote Flurry analyst Peter Farago. "With the iPad featuring a larger screen and more processing power, games on the tablet take a step closer to PC and console gaming. Unless the other major video game platform providers (i.e., Sony, Nintendo and Microsoft) respond accordingly, Apple could continue to roll up video game market share."

Using data from market research firm NPD, Flurry calculated that iPhone game revenue was $500 million in 2009 compared with $115 million in 2008.

"With these figures, our main finding is that iPhone (and iPod touch) is a gaming platform to be reckoned with," Farago wrote. "Controlling 5 percent revenue of a $10 billion industry in just a year and a half is significant."

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