For the past two or three years now, there’s been a storm cloud hanging over Sony’s and Nintendo’s heads. Games sales for Android and iOS have been steadily gaining steam, with revenue slowly creeping up on the once indisputable giants of the handheld gaming industry. According to a new report out of Flurry Analytics, 2011 is the year that smartphones have finally taken the crown.

In 2009, Nintendo and Sony had little to worry about as far as game revenue was concerned. Nintendo held 70% of the market alone. Sony was at 11%, while Android and iOS were at 19%. But combined, Nintendo and Sony sat comfortably with 81% of the market. By 2010, those numbers were shifting. Sony was still hovering around 9%, but Nintendo had gone down to 57%. Meanwhile, Android and iOS were already up to 34% in just a years time. Now, in 2011, Nintendo has taken Android’s and iOS’ spot at just 36%, with Sony still holding 6%. Android and iOS revenue makes up a total 58% of the pie. And that number is going to continue to rise.

Of course things may change once the holiday season passes, and revenue is not the same as profit, but this is a telling sign of things to come. Nintendo has already taken a stand against smartphone gaming, while Sony has done just the opposite. The Xperia Play is only the beginning of Sony’s shift in mobile strategy, a move that could turn out very successful for the company. Nintendo is going to come out with a Ninten-phone sometime soon, but it may be time to start reevaluating their handheld sales model.

How about it? Would you buy a Nintendo branded phone just for the games? Or do you think they should start releasing Mario and Zelda games for currently available smartphones? Should Nintendo even be worried?

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