By JP Mangalindan
May 3, 2010

Insiders explain why the future expansion of videogames with widespread appeal rests with Apple’s already popular tablet

Since the first Game Boy hit our shores in 1989, gamers have used single-purpose devices for gaming on the go, a model most developers followed until 2007, when the iPhone took ”walking-around” gaming mainstream. The smartphone’s touch-screen interface, hardware, and widespread adoption  means that both casual gamers and hardcore gamers could get their fix from one multipurpose device.

For all the iPhone’s trailblazing, it’s the iPad’s supercharged hardware that has the industry buzzing to get in on the action. Of the 2,300-plus iPad applications currently available on Apple’s App Store, at least 830 are games. Flurry Analytics recently estimated that 44 percent of all apps in development are games. And the iPad’s 500,000-plus user base should swell even more once the 3G version arrives in stores later this week.

For developers, the iPad marks a new product category, a powerful yet portable, multipurpose device that will mean different things to different users. According to Scott Steinberg, CEO of video game consulting firm Tech Savvy, the iPad is a natural fit for gaming.

“It’s a Trojan horse that gets gaming into the lives of those who wouldn’t necessarily consider themselves gamers,” Steinberg says. “But at the same time, what we have is a highly-connected, multi-functional, highly-social, highly-variable, and affordable gaming platform that serves a multitude of functions, better speaks to people’s lifestyles, and offers in many ways a much more rewarding gaming experience than what you’d get from a traditional $30, $40 cartridge or disc that demands a certain degree of commitment and investment from the player.”

According to the Entertainment Software Association, 68 percent of American households play console or computer games, the average age of gamers being 35. After that, nearly half of them stop playing on dedicated gaming devices. So while the iPad remains uncharted territory for big developers, the opportunity to capitalize on a device that stealthily brings gaming to a non-gaming audience and also brings ex-gamers back into the fold is just too tempting for them to ignore.

None of the developers Fortune spoke with would disclose sales figures, but Andrew Stein, Director of Mobile Business Development at PopCap Games said the iPad game Plants vs. Zombies HD has sold at least two to three times projected sales. Developers clearly feel that getting in early will pay off down the road.

The first truly personal gaming platform

“The iPad is the first device that’s both immersive and personal,” says Rob Murray, CEO of Firemint, whose company recently had two games in the Top 10. “There’s never been anything like it before, and we think it will introduce brand new audiences to video games.”

“It’s really a new product category that is suited for lifestyle entertainment, but it also opens a host of new possibilities for game experiences,” said Adam Sussman, VP of EA Mobile Gaming, which currently has three games in the Top 10. “It enables us to create new game experiences that are really different and very exciting.”

One early example, EA’s Scrabble for iPad, innovates in small ways. In “party play” mode, the iPad becomes a Scrabble board, and the player’s iPod or iPhone becomes the tile rack. Gamers flick tiles from their iPod or iPhone onto the iPad “board.”

PlayFirst’s Diner Dash: Grilling Green, wasn’t just a port of the popular series. The developers had to rethink game play entirely: The iPad can process 11 simultaneous touch points as opposed to the iPhone, currently capped at 2, and the PC and Mac, which have one.

“We realized that shifting from a game designed around a single moment of input or single click to effectively having the game be able to respond to multiple touches was pretty radical,” said Chris Williams, of PlayFirst. “It was almost like we had to reengineer for multi-threading, to deal with all those instances if someone is touching here and here and here, and drags this way and does a gesture like that. That’s a big shift of how you think of your game design rather than just saying oh, well we’ll just make the game bigger.“

iPhone OS offers gamers a direct connect: to developers and each other

With the App Store, the iPad also upends the retail model, eliminating middlemen like Gamestop or Best Buy. For many of the developers we spoke with, that’s a big relief. No need to pay for manufacturing costs. No more fighting for physical space on finite retail shelves. The App Store makes sales a direct one-to-one conversation between creators and consumers.

When it launches later this year as part of the iPhone OS 4.0 update, the Game Center app will also introduce a new social networking element to the mix. Similar in concept to Xbox Live and the Playstation network, Apple’s online hub which will offer social networking, scoreboards, achievements, and multiplayer matchmaking. Gamers will be able to seamlessly connect, befriend others, discover new games, and be social, no matter where they are, especially once 3G iPad usage becomes commonplace, which Steinberg estimates could happen in as soon as two years.

“When [3G] hits critical mass, the iPad will be another big nail in the coffin of what you’d consider traditional gaming because at 1.5 lbs, you’re not tethered to a single place,” says Steinberg. “I can just pick it up and go. I can’t do that with my Xbox 360. If I do, I’ll get a hernia.”

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