Nintendo is doing just fine and doesn't need to make games for mobile, thank you very much
It seems like every few weeks someone is writing a new article about how Nintendo is doing horribly and how they need to start releasing their games on iOS because that's where the future is.
These critics will always present this as a foregone conclusion, as an inevitable that Nintendo is stupid for not embracing sooner. They'll point at the lagging sales of the Wii U, or the fact that the Wii U and the 3DS are not performing as well as their predecessors.
Let's get this out of the way first: the Wii was lightning in a bottle. It hit in the right place, at the right time, and it's not going to happen again. The Wii was sold at a good price, and it was novel for its time, so everyone wanted one. Now, both Xbox and PlayStation are competing in the same motion control space so consumers have choices in that arena now, and besides, many critics are also bemoaning how this could be the "last generation of game consoles."
The Xbox One and the PlayStation 4 aren't even out yet. Sure, Wii U sales might be lagging (though they are experiencing a bump in software and hardware sales: www.theverge.com/2013/10/30/5045152/nintendo-earni..., www.forbes.com/sites/erikkain/2013/10/21/wii-u-sal...), but until the competition is out we won't know for sure if this a failing on Nintendo's part or the market in general.
However, no one's really suggesting that Nintendo needs to make games for the other systems, or for PCs. What they're suggesting is that Nintendo start developing games for a market that has experienced significant growth in the past few years: mobile. Last year, smartphone penetration broke 50% of the cellphone market, and as of June 2013 it was 61%. www.nielsen.com/us/en/newswire/2013/mobile-majorit...
Fortunes have been built on the mobile gaming market and games like Angry Birds or Candy Crush Saga. Development is cheaper too, but that also comes with a lower price point for the games as well. Regardless, when it seems like everyone and their grandmother has a smartphone, it looks like a untapped market that any sensible developer should be trying to get into.
But Nintendo isn't. And that doesn't make it impractical. Any mobile gaming projects they undertake would be competing with their handhelds, and right now the 3DS has been selling pretty, pretty good. Lifetime shipments worldwide are at almost 35 million after two years of release, compared to... 35 million shipments of DS units two years after its release. So if the DS was some astronomical success that the 3DS has to live up to otherwise it's a failure, then the 3DS is doing just fine. And with the recent release of the 2DS and the new Pokémon games, it'll continue to be fine, if not better. (It's worth noting that Pokémon Diamond and Pearl weren't released outside of Japan until 2007... three years after the DS came out and around the time sales started to pick up. Pokémon X and Y are out worldwide now, after the 3DS has been around a little over two years.)
Even if the 3DS weren't doing as well as the DS, there are still other factors to consider: the DS benefited from an increased interest in gaming and the big push from Nintendo to turn non-gamers into gamers, and there wasn't that much competition from smartphones and Facebook gaming yet. My mother owned a DS, but now she plays all her games on a smartphone. I don't let that bother me. All this means is that we're likely to go back to pre-DS, Game Boy-like levels of portable handheld gaming. Smaller, but still profitable.
Nintendo is doing just fine, and they don't need to switch up its business model... yet. But why not future-proof? Or why not expand their business into mobile, if they can do it in such a way that doesn't cannibalize their current handheld market, like designing games specifically for mobile while still keeping some games exclusive to their handhelds (which isn't what a lot of critics are suggesting, but I'll posit this anyway)?
Well, for that answer you have to look into Nintendo's history a bit. First off, there's the issue of tradition. As has been oft-stated, Nintendo started out in 1889 as a company that made hanafuda playing cards. It's experimented with other types of business over its history, but for most of the past 120+ years Nintendo has been a gaming company, the last ~40 as a video game company that makes hardware and software. With that kind of pedigree, it can be hard for a company to change gears -- look at Sony, whose operating profit mostly comes from their financial division, leading many to say that it should abandon the electronics sector. But it won't, because electronics is what Sony is known for: gdgt.com/discuss/should-sony-stop-making-electroni...
Granted, if Nintendo started making games for mobile it'd still be making games, which isn't a huge momentous change. But it does mean giving up on their commitment to hardware. And that leads us to the other reason it doesn't make the switch:
Many of its major business decisions, for good or bad, have been driven by a need to maintain control.
In 1983, Nintendo was in negotiations with Atari to distribute the Famicom/NES in the United States. At the time, Donkey Kong was licensed to Atari for home computers, Coleco for home consoles. However, at the 1983 CES, Coleco was showing off the ability of their Adam computer to play ColecoVision cartridges... using Donkey Kong. Understandably, Atari was pissed. The deal later fell apart, and while this incident might not be the primary reason it never went through, you can certainly bet it factored into Nintendo's thinking to market the NES itself here in the United States, rather than leave it to companies that may not respect licensing agreements. en.wikipedia.org/wiki/Coleco_Adam
One of the "causes" usually cited for the big video game crash that year was that the market was flooded with bad games. Atari did not exercise strict control over what could be developed for the VCS and its other systems, letting anyone develop games, for good or (usually) bad. This meant that poor product overwhelmed good product, drove down prices (making it unprofitable to develop games), and generally burned out consumers. To prevent this from happening to its own systems, Nintendo instituted the "Seal of Quality."
They tightly controlled production of games for the NES by means of a lockout chip. If a cartridge didn't have the chip, it didn't work in the NES. Of course, Nintendo held the patent on this chip so it was the only one who could manufacture cartridges, so all developers had to go through Nintendo to get their games approved for production. Nintendo restricted companies to five games a year (this is why a lot of companies ended up creating subsidiaries, like Konami-owned Ultra games, or Acclaim's ownership of LJN, so they could get around the restriction). And every game had to pass Nintendo's own rigorous standards for quality -- Nintendo play testers played every game and scored it, only games that scored a 90(!) or above would be approved for release. And games couldn't be released on competing systems for two years. These measures certainly were draconian, and Nintendo saw enough days in court over them, and there was even a chip shortage that halted manufacture of new cartridges for a while. But regardless of these drawbacks, the system worked. Consumers flocked to the NES, and developers had to play by its rules if they wanted a piece of the pie, which also had the effect of starving out the competition.
Moving forward they were a little less successful, though. There was a plan for Nintendo and Sony to team up to build a CD-based system, the SNES-CD. But Sony wanted control of the format itself, which was a no-go for Nintendo, who ended up negotiating with Philips instead, and Sony went off and built its own standalone CD system instead... the PlayStation.
As for that deal with Philips... Nintendo let it make a few Zelda and Mario games for the CD-i, and this is what we ended up with:
Eventually Nintendo came out with the Nintendo 64 to compete with the PlayStation and Saturn, but it used cartridges instead of discs, losing developers like Squaresoft in the process. The executives may say they wanted to build games that didn't rely on load screens, but let's face it: discs are easier to pirate. The GameCube only further substantiated the drive to protect Nintendo's IP and deter privacy by switching to optical discs but using a proprietary 80mm disc. And of course, neither the GameCube, Wii, or Wii U play DVD or Blu-ray discs. Nintendo might say it's because it wants its products to remain dedicated game machines, but it also saves the company money because it doesn't have to pay licensing fees to the DVD Forum or Sony (for Blu-ray).
If Nintendo doesn't want to pay licensing fees so people can watch movies on their Nintendo systems, why would it want to pay 30% of its sale price on games to Apple?
By manufacturing its own hardware to go with its software, Nintendo doesn't have to worry about licensing or any other fees, all profit is its to take. The company can also design whatever hardware features it wants, and build games around it... or design games and build the hardware to match. This means the company is also more likely to innovate, like with the 3DS's StreetPass system: kotaku.com/quietly-nintendo-perfected-a-whole-new-...
Apple might offer a huge market for Nintendo to tap into, but as game designers having their own hardware offers them so much more to play with. Just look at the crazy amount of features built in to the Wii U GamePad, for example: D-pad, buttons, touchscreen, accelerometer, infrared, camera... it's crazy, and few developers have taken advantage of the options, except for Nintendo, because it designed the frickin' thing. Apple only just added native controller support into iOS.
Nintendo won't make the switch to iOS because it means ceding control to a company that doesn't make gaming its #1 priority. And that's important to the people there -- Nintendo is a culture. And they will go to great lengths to preserve that culture; for example, where most companies flush with cash would go on a spending and acquisition spree, Nintendo doesn't. Adding new departments, new people, buying up other companies -- all of these could disrupt the delicate balance it has going, strip the company of what Nintendo president Satoru Iwata calls "Nintendo-ness." And by removing Nintendo's games from their "natural" environment, they too, stand a risk of losing their "Nintendo-ness."
I hope you all are right, I hope Nintendo can find the right combination and keep itself afloat. Because if it doesn't we'll get those classic titles on iOS down the road, only they won't be handled as loving ports by the creators, but as quick cash grabs by whomever paid the rock bottom price for Nintendo's intellectual property during liquidation.
"While Nintendo plans to use smartphones to promote its games, it has no intentions of releasing its games onto mobile platforms, senior research analyst David Gibson reported Nintendo as saying during its results meeting.
The meeting follows the company's financial results for the six months ending September 2013, where the company posted a ¥23.2 billion ($187 million) operating loss."
What Nintendo should probably do is just go ahead and release all the NES games that are available in the 3DS Virtual Console, but limit them to touch screen virtual controls only. Then, have a feature in the game that allows you to generate a one-time code you can use in the 3DS store to get the game over there for free.
That way, for the people who just want to open Super Mario Bros., smash a Goomba, grab a mushroom, and listen to the music, happiness is theirs. But, as soon as they start wanting to actually play through it, the 2DS is going to start looking really tempting, especially at only a little more money than the over-priced bluetooth controller they were considering.
In fact, they could even throw a screen up when you quit the game that shows the 2DS and it's MSRP, along with a reminder that you can redeem a code from this game to get the same game on your 2/3DS for free.
So, I will agree that Nintendo does not need a presence in iOS, but it could actually make a decent marketing tool for the consoles if they play it right. And if anyone in Nintendo marketing is reading this, hire me and we will take those portable sales up a notch! ;)
That, and Nintendo's games are a whole lot more in depth and, for the most part, craft stories. iOS games are, for the most part, time-sucks that you play when you're bored. So yeah, Nintendo is indeed just fine staying where they are. I don't see them going the route of Sega any time soon.
All of a sudden, last Christmas, I decided a 3DS looked like fun, and I had to have one. I was lucky enough to receive it as a gift, along with The Legend of Zelda: Ocarina of Time, which I never played on it's original console. Since then, I have collected a mass of over 30 retail games, and many more eShop games (at least it is for me, I've never owned this many games). I love my 3DS, I take it with me everywhere I go for the Streetpasses, have decided to go to gaming conventions, almost exclusively for the Streetpasses (so sue me), and I am interested in playing almost all new releases that come out for it. I've also purchased a Playstation Vita, a Wii U, and preordered a PS4. I remember a few times during the Xbox 360/PS3 early days, debating if I should get one and which. I never did. I couldn't make up my mind for so long, that they announced new consoles, lucky for me because my decision became much clearer. My point has almost arrived.
What this very long personal gaming (hi)story comes down to is, besides that I'm obviously not a game completionist, I love Nintendo consoles, and I don't play games on my mobile devices anymore. So why should Nintendo make games for mobile? They shouldn't. They don't need to. I never had a problem paying a few bucks for mobile games, and obviously I don't have a problem paying for retail games, I will pay for quality products, but I don't find mobile devices to be my preferred gaming platform, never have and probably never will. It was an accident that they became gaming devices, and thus aren't made for gaming. They are made for doing other things, while gaming consoles are made for gaming.
There are so many ways to play games these days what with Steam, mobile devices, a myriad of consoles, portable consoles, so on and so on. But there's only one way to play a Nintendo game, and I think that's fine. You either buy their consoles or you don't. It's the same with Apple iOS and OSX, you either buy their products or you don't. But you're not going to get the same experience elsewhere. If there's a game you want to play that's out on every device under the sun, ultimately the publisher/creator/studio isn't getting all the money on table. So when Nintendo makes the console and the game, they're getting the most of the money on the table. They're also controlling the experience.
We seem to forget that Nintendo is inherently a Japanese company, and even though we have Nintendo of America/Europe/UK and so on, arguably their core audience and priorities lie with Japan. If they don't think it will go over well with their main audience, they probably won't do it, and that's why they probably won't ever make mobile games. If you think about the difference between someone throwing 99 cents at a mobile version of Mario that probably isn't as good as it's console counterpart, versus someone who decides they have to have a 3DS or Wii U to play the new Mario or Zelda, they are making more profit than they would off the mobile game. And sure, there are many more people willing to pay that 99 cents, versus plunking down $200+ for the whole Nintendo package, but Nintendo wants you to have the whole package, the whole Nintendo experience, and not just another crappy 99 cent mobile game you pick up once and then never play again.
You can even plug an Xbox 360 or PS3 controller into your PC. So why are consumers en masse continuing to buy gaming consoles? Because they provide a special, dedicated experience for games.
And that's exactly why the 3DS continues to sell so well.
Remember how the Wii is still the best-selling console from this last generation? Guess what just stole that title in Japan, in under half the time? The Nintendo 3DS. And it's been the #1 selling console here in the States for weeks.
Pick up a 3DS and see how StreetPass makes you want to carry the device in your bag all day. Your smartphone can't do that. Its battery life barely gets you through the day, and that hasn't improved in years. Go play a game of Super Mario 3D Land, Fire Emblem, or Animal Crossing. There are some great smartphone games out there, but nothing with the breadth and scale of the titles you'll find on portable consoles.
I think Apple's App Store has also shot itself in the foot in terms of pricing and the consumer mindset. People ridicule a $3 Twitter app for iPhone and say it's overpriced because it isn't free or 99 cents. If game studios invest a lot of time and money to produce titles for iOS and charge $40 for them, app shoppers will scoff.
Even more, touchscreen gaming itself limits the control methods that mobile game devs can work with. I don't think people want to plug a joystick accessory into their iPhones. I barely want to put a feather-weight case on my smartphone, so I'm not going to carry around a chunky gamepad accessory.
Everyone I know buys an iPhone over an Android phone, or a Mac over a Windows machine, because of the amazing software available for those platforms. And that's why people will continue to buy Nintendo consoles, myself included.
Nintendo is sitting on a massive stockpile of cash and their portable console business is still printing money. That's not much encouragement for them to make iOS games.
The other thing that is often overlooked, like you said, is control. Regardless of how far mobile gaming has come it has not caught up to the experience that Nintendo delivers. To assume you'd be able to replicate a similar experience of Super Mario Galaxy 1 or 2 on a iPad or iPhone is just bollocks.
Ninja edit: I'd like to also point out that Nintendo is still not at the level that Sega was before bowing out. While the Wii U is doing poorly Nintendo is still propped up by the strength of the 3DS line. When Sega was failing they were making bleeding edge hardware (which is something critics say Nintendo doesn't do) before it was ready and never had the portable game space to help them like Nintendo does.
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