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Console Makers Respond to the Rise of Mobile

The launch of the fifth installment to the Grand Theft Auto videogame series was met with an insane level of demand.

Sales reached $1 billion in just three days. And according to Cowen & Company analyst, Doug Creutz, sales have likely reached 15 million units worldwide in just a week.

Creutz also believes that the game could go on to sell upwards of 25 million units by the end of the year.

The record numbers indicate that demand for console games is still running strong.

However, as more consumers scoop up mobile devices, it’s creating severe competition in the sector.

You see, over the past five years, the percentage of U.S. households using wireless devices for gaming jumped almost 40 percentage points – far outpacing console games.

Indeed, as throngs of people lined up outside videogame retailers last week, Apple (AAPL) stores also saw record-long lines waiting for the launch of the iPhone 5s and 5c.

What’s more, mobile gaming developer GungHo’s market cap blew past Nintendo’s earlier this year. And its mega-hit, Puzzles and Dragons, boasts almost 20 million downloads in Japan.

Needless to say, this underscores the increased competition mobile devices pose for traditional consoles.

So how are console makers responding to the challenge? Well, according to Sony’s (SNE) Japan Marketing Manager, Mayako Fukunaga, it’s important to adapt to the new market climate and give consumers what they want.

“There are a lot of devices out there. Some people want to use the PlayStation, or maybe also their smartphone for games,” says Fukunaga. “If you can’t meet the customers’ needs, you are limiting their choices. We want to support people who are serious about enjoying their games or any kind of visual content, no matter where they are.”

Both Sony and Microsoft (MSFT) are also meeting the demand head on.

Microsoft has come up with the Xbox SmartGlass ­– an app that allows gamers to connect their Xboxes to smartphones and PCs to blur the lines between consoles and mobile gaming. And Sony is supporting the development of indie mobile games like Octodad, designed by a group of students at a university in Chicago.