Oh No He Didn't! ...Pachter Calls Mobile Games A Fad

Joystiq ran a piece last night covering the July Industry Update from Wedbush Morgan rockstar interactive entertainment analyst Michael Pachter in which he has a section entitled "Mobile Phone Games Are A Fad." His point is that the market for mobile games will grow over the next few years, but will eventually decline as better portable gaming devices enter the market. Here are some other interesting tidbits from the report:

• The mobile games business WW is currently around $2bil (sounds right to me, I've always thought those $5mil folks were smoking crack)...and will max out at between $4bil & $6bil in the next few years
• iTunes App Store has generated ~$400mil in revenue from mobile games in its 1st year of operation (this is based on 20% of downloads being games...which I think is an underestimate)
• Pachter thinks EA's mobile initiatives are "misplaced" & he goes on to discuss how the top mobile games producers are "barely profitable" (I think he's being generous here)

Without having read the full report (which I probably can't afford), I must say I disagree. I think mobile games will continue to be a substantial part of the mobile content mix and will attain more popular acceptance (substantially beyond today's 5% of addressable users) as devices and platforms evolve. As usual teens & tweens will drive the trend. Already we're seeing smarter mobile devices (iPhones, BlackBerrys, G1s, etc.) get into the hands of that demo..and I'm certain, as the capabilities & user experiences of those products continue to improve and their game offerings get better and cheaper, that kids will leave their DSis and PSPs in a dusty corner of the bedroom floor more and more frequently. This non-rockstar analyst predicts sustained growth.