In recent years, I’ve noticed a fascinating trend in the hardware space, as have many others. That trend is the proliferation of handheld gaming devices that use emulation to play PC or older console games. This category I dub “handheld emulators” has become a veritable mini industry all on its own, when 20 years ago, almost none of these devices existed at all.
In this blog post, I aim to deep dive into this remarkable industry, try to understand some of the major players, and why the handheld emulator industry has seen so much success in recent years.
The beginning of mainstream handheld gaming
Let’s begin with the dawn of mainstream handheld gaming: The release of the Nintendo Gameboy in 1989. The release of this console marked a monumental turning point in the history of gaming, showcasing the viability of on-the-go gaming, a category which beforehand was considered niche, but since the release of the Gameboy has maintained its status as one of the most popular ways to play games. In fact, on-the-go gaming evolved into mobile console gaming, and has now shifted into mobile phone gaming. Mobile phone gaming is now the #1 category of gaming by player base and revenue, showcasing the ubiquitous market desire to play games in a mobile, convenient way. However, this transition from portable console gaming to mobile phone gaming only occurred after the smartphone was invented. Between the release of the Gameboy in 1989, and the release of the iPhone in 2007, portable console gaming remained king. We saw a golden age of portable console gaming between the release of the original Gameboy and the introduction of the smartphone, with some of the most popular and beloved portable consoles of all time, including the Gameboy advance, Nintendo DS, and the PlayStation Portable.
On-the-go gaming’s transition from portable console to mobile phone gaming
Mobile phone gaming was a burgeoning industry even before the proliferation of smart phones, but still didn’t have nearly the impact as the portable console industry. However, after the proliferation of smart phones in the years after the iPhone unveiling, the tides began to turn, and mobile phone gaming began to surpass portable console gaming in revenue.
Nintendo and Sony, the only 2 major relevant players in the portable gaming console market in the early 2010s, continued to create new, innovative portable gaming consoles, which still saw some success, yet not as much as they did in the golden age just a few years prior. In the early 2010s, despite exceptional hardware, Sony quickly lost faith in their successor to the PlayStation Portable, the newly minted PS Vita, and dropped support much faster than many enthusiasts had hoped. Nintendo’s 3DS launched with a rough start, with poor reception and some controversy, but they managed to quickly make improvements and turn the tide to make the device once again a beloved addition to portable consoles.
However, as the years dragged on, Nintendo and Sony both began to lose faith in the viability of a dedicated portable gaming console, seeing the trends of proliferation of mobile gaming. Nintendo pivoted their strategy to the Switch, their dual-portable and TV connected gaming console in 2017, and haven’t looked back since.
This essentially marked the death of dedicated portable gaming consoles by major game console makers with the final release of the final dedicated portable gaming console by a major player, the New Nintendo 2DS XL in 2017. Since then, major game console companies like Nintendo have solidified their focus on the dual-portable and TV connected Switch, and Sony has shifted their focus onto their tried and true stationary PlayStation lineup.
That is far from the end of the story, because although Nintendo and Sony assumed there was not a market for dedicated handheld gaming, a passionate and disgruntled group of consumers disagreed.
The birth of handheld emulators
Back in 2001, a fascinating South Korean company called Game Park created an influential handheld gaming device called the GP32. What set the GP32 apart was it’s open source nature, a stark contrast to the existing market at the time. Although the GP32 was intended by their creators to be an entire unique gaming ecosystem, launching with 5 exclusive games, where the GP32 ended up excelling is in its ability to emulate games from other systems such as NES, Sega Genesis and Gameboy games due to its open source nature.
This set an important precedent, influencing many later handheld emulators, showcasing the market and power of open source devices capable of emulating games from many platforms. As a successor, in 2009 Game Park released the GP2X Wiz, which ran Linux allowing it to function not just as a gaming but a multimedia device as well. This device featured several innovations we take for granted in handheld emulators today, such as a relatively fast (533mhz and overclockable) processor, AMOLED display, pocketable form factor, and cheap release price at only $180. The open source Retro gaming community poured tons of talent and work into developing emulators just for this device, to even play relatively recent (for the time) systems such as the PS1.
A new paradigm unleashed: the dawn of Android emulation
In 2015, GamePad Digital released a new device called the GPD XD that took inspiration from the recently released Nintendo 3DS. It featured a clamshell design, similar form factor, and small joysticks, but importantly, ran on an Android operating system. This goes to show the progression in hardware and software technology since the release of the iPhone 8 years prior, showcasing the rapid progression and democratizing of the ability to make portable devices reminiscent of smart phones. However, this device had fairly primitive software and issues with high quality emulation. Later in 2016, GamePad Digital released the GPD Win, a spiritual successor running Windows instead of Android, showcasing the diversifying capabilities of handheld emulators to run various operating systems.
The beginning of the handheld emulator Cambrian Explosion
The Steam Deck’s release in 2022 represented a monumental shift. Although there were the beginnings of some major handheld emulator companies beginning to get their footing in previous years, such as the unique Evercade release in 2020, the Aya Neo crowdfunding campaign, Funkey crowdfunding campaign, and the Anbernic RG350 release in 2021, the release of the Steam Deck dwarfs everything else in terms of how it shifted the industry.
Valve, the parent company of Steam is one of the most important and successful gaming companies of all time. With the release of the Steam Deck, it marked not only the first time their company ventured into making a console, but the first time any major Western gaming company ventured into the space of making handheld emulators. Before this point, handheld emulators had primarily only been designed and produced by Asian companies, with the original GP32 being South Korean and the GPD XD being Chinese. However, the Steam Deck marked a significant validation of the Western market for handheld emulators, and its wild success of about 3 million units sold proved the demand. Assuming an average sale price of about $450, that makes it so the Steam Deck alone may have generated around $1.35 billion in sales thusfar.
The race to get in on the action
With the technological advancements born from the lowering price and increased accessibility of mobile device manufacturing, software emulation improvements, the discontinuation of portable consoles by major gaming companies, and the significant market validation pioneered by the Steam Deck, many companies are beginning to capitalize on the huge amounts of demand for this industry.
The companies that have come to the forefront of this industry have begun to spread out and fill every niche they can find. The majority of these companies create multiple different devices with different specs, shapes and sizes, providing options for a variety of player needs. There are several major categories I’ve identified, where some devices fit into multiple categories.
Categories of handheld emulators
- Established – Made by large, established companies
- Pocketable – Designed to be small enough to fit in a pants pocket
- DIY – Involves Do It Yourself assembly
- FPGA hardware – Uses FPGA-based hardware emulation to more accurately play older games
- Physical cartridge readers – utilizes special hardware to be able to read existing game cartridges, rather than relying solely on digital media
- Controller attachments – Instead of being a full device, is designed as an add on to an existing device with a screen, such as a phone, to turn it into an emulation device
- Android – Uses Android as the operating system
- Linux – Uses Linux as the operating system
- Windows – Uses Windows as the operating system
Major competing companies in the handheld emulator industry
- Valve – Linux, Established
- ASUS – Windows, Established
- Razer – Android, Established
- Lenovo – Windows, Established
- MSI – Windows, Established
- Retroid – Pocketable, Android
- Anbernic – Pocketable, Linux
- Analogue – FPGA, Pocketable, Physical cartridges
- FunnyPlaying – FPGA, DIY, Pocketable, Physical cartridges
- Ayaneo – Linux
- PowKiddy – Linux
- Miyoo – Linux, Pocketable
- AYN – Android, Windows, Pocketable
- GPD – Android, Windows
- GKD – Linux, Pocketable
- Evercade – Linux, Physical cartridges
- Funkey – Linux, Pocketable
- KT – Linux, Pocketable
- Pimax – Android
- Backbone – Android, Controller
- Gamesir – Android, Controller
- Null2 – Linux, DIY
It’s tough to estimate just how popular this industry is in total, as there’s incomplete data on the number of units sold. In 2023, Miyoo gave an unofficial estimate of 180,000 of their Miyoo mini emulators sold. Based on pure speculation, if we were to say similarly popular companies ASUS, Razer, Lenovo, MSI, Retroid, Anbernic, Analogue, Ayaneo, PowKiddy, AYN and GPD each have similar sales figures across their entire product lines, we could estimate that perhaps there have been an additional 1.8 million devices sold in this category, in addition to the 3 million steam decks from Valve. It would potentially be a reasonable estimate to say there may be around 4.8 million handheld emulators sold so far.
This makes the handheld emulator market start to seem like it’s shaping up to be pretty comparable to the dedicated portable gaming consoles of the past from Nintendo and Sony.
At the heart of all of this, emulators and Retro gaming are practically interchangeable. Even if the games being played are more recent console games and PC games, at the heart of emulation is the classic, simple, Retro idea of simple methods of accessing games, with them being played locally on your device, rather than the cloud, and monetization being very straightforward. In the case of emulation, that price is usually the most straightforward pricing model, of being completely free, as opposed to the complex and externally controlled monetization systems on some modern PC and mobile games.
This is all to say, the demand for the ability to play Retro games and to play more modern games in Retro ways is incredibly high right now as evidenced by the proliferation of the handheld emulator industry. This trend only seems to be growing.
If I was an investor in gaming, I would be paying close attention to this space, and looking for ways to get in on this obviously in-demand market.
If you are an investor looking for an early stage startup founder who has a vision to capitalize on this incredible market, you know where to find me.
-Jonah Eskin
P.S. You know an industry is getting big when you go to your local Walgreens and see it on the store shelves
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