Who hasn’t heard of Android lately? Chances are you have at least heard of Verizon’s DROID (running Google’s Android 2.0 OS) since its massive ad campaign started a little more than a month ago. DROID does a whole bunch of stuff that the iPhone may struggle with doing, but there is one thing in our industry that DROID just doesn’t do well at all: act as a viable and profitable gaming platform—at least not yet.

Android is an appealing gaming platform for developers. It offers open-development whereas iPhone has a proprietary, closed system. The app approval process for Android Market is a walk in the park compared to the iTunes App Store, and Android Market’s registration fee costs $25 against Apple’s $99 SDK requirement. So why aren’t developers jumping on the Android bandwagon by the boatloads? Simply put: consumers aren’t paying for apps on their Android handsets like they are on their iPhones.

Econ 101 will tell you that money lies with the market and at the moment, there is not much of a gaming market for Android. Developers have openly discussed the dismal revenues being generated by Android when compared with iPhone’s shining profits for the same apps. Gameloft recently stated that they sell 400 times more apps for the iPhone than they do for Android. Gameloft even went on to announce that they were cutting back investment for the Android platform (yet a few days later rescinded the statement and reaffirmed support). Why the sudden move to reinvest in Android? Possibly because market trends suggest that Android devices could be a serious contender in the near future.

AdMob recently released statistics showing that 75% of U.S. web traffic browsed on smartphones were from either an iPhone or Android device. Of that 75%, Android is holding on to 20% of the web traffic and shows signs of gaining a bigger market share. Android devices are now being distributed by multiple handset manufacturers and available on most wireless service providers, whereas Apple is the sole manufacturer of phones with the iPhone OS and has an exclusivity deal with AT&T for the moment, therefore limiting its rate of growth. With these factors in mind, it will only be a matter of time before the number of Android users starts to catch up to the number of iPhone users in the U.S., therefore building a substantial base market for Android Market.

With the Android install base set to massively grow, here’s the big question: when are all the sweet Android games coming out? The audience will be there, Android Market is equipped to handle app purchases with ease, what’s the hold up? Unfortunately, the biggest obstacle to Android becoming a worthy adversary in the mobile gaming arena is the operating system itself.

Android can only run apps from its onboard memory. On DROID, that’s 512MB. On every other Android device, it’s only 256MB. The Android OS also runs off this same onboard memory, leaving even less space for apps. Furthermore, SD cards can’t be used to store apps on Android either. iPhone can utilize most of its hard drive for storing apps, currently ranging from 8GB-32GB of capacity. Sega’s Super Monkey Ball was one of the first apps launched for the iPhone last year, weighing in at 36MB, and if you could play it on Android, that would already take up a good size chunk of the app space available to you. Fast forward to today’s apps where graphic intensive games like 2XL’s ATV Offroad are 100MB+ and you can already see the problem with porting these bestsellers to Android. Sure there are much smaller apps available but the capacity, or lack of, in Android devices is what ultimately hinders it from being a major player in the gaming space. Even at only 10MB per app, just a mere handful could be purchased and kept on any Android device. How can a featherweight compete against a heavyweight?

Android has a lot of potential for the mobile game arena. If Google addresses some of the OS technicalities, Android could pack on some serious pounds and add gaming to the list of things DROID does.