“The news of my death has been greatly exaggerated.”
– Mark Twain, paraphrased
The reports coming out today on Nintendo’s reduced hardware sales projections have awakened the same banter that came from the Nintendo 3DS’ slow sales numbers two years back and the already brightly lit conversation that occurred earlier in 2013 when Wii U sales slowed to a halt due to a lack of software. It’s back to the Internet and game journalists alike playing Wall Street Kid and deciding exactly what is going to become of Nintendo in the future, now that the present seems dark.
The problem with “the present seems dark” is the outlook of Nintendo from a Wall Street perspective. Especially a North American one. Nintendo just finished having one of the most successful generations in their history. The Nintendo DS only trails the Playstation 2 as the most successful game delivery system ever (handheld or not) while the Nintendo Wii was a marketing success with over 100 million units sold. Public companies want better results every year. They don’t want merely profit. Right now it’s obvious that the Wii U is going to be a commercial failure compared to the Wii, and if Nintendo doesn’t get crafty it could be a financial failure as well. The 3DS is a bit different. It is already a commercial and financial success, but the sales projections were cut because it isn’t looking like it’s going to be a bigger success than the Nintendo DS. By having to prop up the Wii U, the gains of the 3DS are not enough to allow Nintendo to look rosy here.
The media outside of game journalism in particular has been adamant on demanding Nintendo to look at the smartphone market and assimilate into it. The talk is always the same. “Why can’t I play Mario on my iPhone?” What they are really saying is that the smartphone market is clearly behind when it comes to the console/hardware market and because smartphones are now engrained in American culture, it’s unfair for something everyone has to be inferior in some way. Fact is, regardless of sales or download numbers, smartphone gaming is inferior to console and handheld gaming. That isn’t to say there is no good games. That would be ridiculous. That said, there is nothing that compares to the lineup that can be found on a Nintendo 3DS. Or a Nintendo DS. Or a GameBoy Advance. You have to get to the GameBoy Color and by then it’s really just a matter of technology because you’ll be hard pressed to find titles better than the Oracle of Ages/Oracle of Seasons Legend of Zelda titles. If this was an invalid point, you wouldn’t see CNN and Forbes articles always drilling the point home about the increased sales of smartphone games when talking about Nintendo sales. It’s a threat. “They are coming for you. They are getting better. Well, I think they are getting better. Our interns telling us to write these articles haven’t exactly explained why people are so annoyed with downloadable content.”
I’m sounding a little bitter but the fact is that we’re being faced with very poor Wii U numbers and the conversation again is going to smartphones. Not a single smartphone game is made quite like Super Mario 3D Land and not a single smartphone game has a price tag like a Nintendo 3DS game. For example, take Angry Birds. Rovio said in 2011 that the original Angry Birds allowed them to claim $106.3 million in total revenue. That’s a lot of money. Especially when considering how many of those downloads were only at a dollar each. Now take Super Mario 3D Land for the 3DS. That sold a little over 9 million copies*. At $39.99 a pop. That’s at least $360 million for one game. I doubt that’s what Nintendo made overall when including development and budget costs plus what the stores got out of it, but you can see the difference and why Nintendo has been more than happy to just release a game delivery service than just toss Mario up on an Android store.
And Iwata said as much. In a press conference today, Iwata said:
We are thinking about a new business structure. Given the expansion of smart devices, we are naturally studying how smart devices can be used to grow the game-player business. It’s not as simple as enabling Mario to move on a smartphone.
We cannot continue a business without winning. We must take a sceptical approach whether we can still simply make game players, offer them in the same way as in the past for ¥20,000 or ¥30,000, and sell titles for a couple of thousand yen each.
Nintendo might have something in starting their very own Mobile eShop similar to what Apple and Android provide which allows people to download NES games onto their smartphones. It would be the easiest way to make investors and shareholders happy. Nothing provided would be something you couldn’t get on a 3DS or Wii U. It’s merely about ensuring that if you want to play Super Mario Bros. on your Galaxy/iPhone you can. It’d be a quick fix and allow them to focus back on the handheld/console market. At least until the next generation.
Beyond that is where things get interesting and I think that’s what Nintendo might be thinking about. When you have to create the successor to the 3DS, do you go ahead and just release a cell phone? It wouldn’t be difficult and by having a cell phone that’s built to not only take calls but be a delivery system for the best Nintendo has to offer, it still would allow them to control the hardware side of things. Everyone who isn’t Samsung and Apple would be dying to take Nintendo on with a project like that. It’s what Blackberry needed: immediate competition in the gaming market. If you buy a cell phone just to browse the Internet, use some apps like Facebook and play videogames, are you going to lock yourself in a contract with a phone that plays Temple Run and Angry Birds or the phone that plays Super Mario 3D Land 2? It wouldn’t be like the Sony PSP Xperia, which was rushed and not optimized at all. Nintendo isn’t Sony. It’s Nintendo. And if Nintendo really wanted to get into the smart phone market, they know they can do it on their terms.
That’s where I think Iwata was coming from. It’s not as simple as just tossing Mario on an Android Play store for $1.99. It can be, but it doesn’t have to be. Nor should it. For every bit of doom and gloom, Nintendo has been always about being innovative. With a little innovation and a bit of vision into what the market wants, needs and desires, Nintendo can take the lack of creativity of the press and turn it into exactly what everyone wants.
*VGChartz used because most posted numbers are not listing January 2014 updated aside from VGChartz.