How the iPhone reset the gaming industry

Less than a year after launch, the App Store is already closing in on the 1 billion application download mark. Apple is celebrating the milestone by introducing a download counter on its website--as I'm writing this column on Monday evening, the total number of iPhone and iPod touch application downloads to date is well over the 949 million mark, and almost certainly will top 950 million by the time the issue arrives in your inbox Tuesday morning. Keep in mind the App Store reached the 500 million download mark not even three months ago--assuming it hits 1 billion in the few days, that means iPhone and iPod touch users are now downloading roughly 175 million applications per month.

In conjunction with the download counter, Apple also released lists of the top 20 all-time most downloaded premium and free App Store titles. (For a slideshow, click here.) As you might have guessed, the premium countdown is particularly heavy on games, including Bejeweled 2, Crash Bandicoot Nitro Kart 3D, Enigmo, Moto Chaser and Cro-Mag Rally. The App Store's impact on the $40 billion gaming industry is the subject of a recent feature in the Los Angeles Times, which reports that publishers are carefully analyzing the thousands of iPhone games already available to determine what works and how those lessons can be applied to more traditional game platforms.

So far, the iPhone is having its most dramatic impact on game pricing--while iPhone titles cost $9.99 or less, most releases for consoles and PCs sell for $30 to $60, and even games for Nintendo's handheld DS platform cost between $20 and $35. No surprise that Nintendo will introduce downloadable games for its new DSi handheld priced as cheap as $2, although the gaming giant contends that its pricing strategy was developed independently from the App Store: "Are we intrigued by the iPhone? Yes. But our approach is fundamentally different," Nintendo's North American president Reggie Fils-Aime tells the LA Times, presumably with a straight face. "We want to give our customers high-quality, innovative and captivating entertainment. A storefront with 10,000 pieces of content doesn't do that." A billion downloads in and counting, the App Store masses might beg to differ. -Jason

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