Apple’s iPhone and iPod touch have officially arrived on the games front. These two devices saw their combined share of gaming revenue quadruple between 2008 and 2009, according to industry research firm Flurry.

Apple took a slice of the pie from every major player. In the portable gaming market, between 2008 and 2009:

  • Sony’s PSP market share fell from 20% of the market to 11% Nintendo’s DS share fell from 75% to 70% Apple’s iPhone OS (which powers both the iPhone and the iPod touch devices) share nearly quadrupled from 5% in 2008 to 19% in 2009

In the overall video game software market, portables are taking an increasingly large share of revenue from consoles. In 2009, portable games accounted for nearly 30% of all gaming revenue. If that seems surprising, Apple took 5% in 2009, up from 1% in 2008. Note that Flurry excluded PC market revenue (currently 5%) and online gaming revenue from its figures.

From a larger perspective, the video game software industry had extremely volatile performance last year. Revenue shrank from approximately $11 billion in 2008 to $9.9 billion in 2009, according to NPD Group. In the US, console software sales fell 7% and portable software sales fell 8%.

Apple’s entrance into the gaming industry is striking. In 18 months it has grabbed a 5% share of a nearly $10 billion industry – $500 million in 2009. Apple also controls the distribution channel through its App Store, so at least 30% of that $500 million goes right into Apple’s already deep pockets. Despite a shrinking market and strained economy, Apple has positioned itself as a true player in the gaming industry.

In 2010, two other events are likely to shake things up. First, the iPad is set for release next month. When Apple presented the iPad in January, both EA and Gameloft made appearances on stage. Second, data shows that more than one third of iPhone OS game developers are from the traditional gaming industry. That means more simultaneous releases and broad third-party support from publishers.

Apple created and put into motion a plan to capture the video game market, and the numbers confirm that it’s working. But 2010 is also a year of big hardware and software releases – what (if anything) do you think could unseat Apple’s increasing dominance in portable gaming software this year?

Source: Electronista, Flurry , NPD