Nintendo’s Biggest Threat

Kim White/Nintendo of America, via Associated Press

At Nintendo’s press conference at the annual Game Developers Conference, President and CEO Satoru Iwata criticized the mobile app market for driving developers into producing lower quality games, putting Nintendo’s sustainability at risk. Ironic though, as the Wii platform was often criticized for the vast pool of lower quality “budget” games often found in bins at game retailers. Iwata does recognize an important point – the mobile market, specifically the smartphone industry, is a huge threat to Nintendo.

Nintendo, especially since the days of the Wii and Nintendo DS has been aggressively pursuing the casual market. It’s paid off in the short run, especially against the pricier consoles from Sony and Microsoft. However, as platforms such as iOS, Android, and Windows Phone 7 are building robust app stores with gaming offerings, the casual gaming audience is losing its need to buy a separate device for their gaming needs. When it comes to that quick five or thirty minute gameplay burst, the 3DS’s offerings aren’t substantially greater than that of an iPhone or iPod Touch.

The issue for Nintendo isn’t that there’s a splintering in the mobile game industry. In fact, Nintendo’s worry is that some of their biggest partners, Capcom, Square Enix, etc., have been developing games for the iOS platform. “Quality” games such as Super Street Fighter IV, Sims 3, Angry Birds (all listed for the 3DS lineup) as well as Secret of Mana, Final Fantasy, GTA: Chinatown Wars, Civilization Revolution, Mega Man 2, Resident Evil, Madden, Sonic, etc. are not only available for iOS, the cost of them put together is less than one 3DS game.

Civilization Revolution DS CivRev iPhone

Civilization Revolution DS vs iPhone

Nintendo’s saving grace has always been its ability to innovate, or in a more negative view, produce a gimmick to help sell units. Still, is 3D enough of a selling point to differentiate a 3DS from an iPhone or iPod Touch? On top of that, several manufacturers including smartphones in Japan are producing 3D phones. With players like Sony and Microsoft in the console market, Nintendo has neither the resources nor R&D to develop or compete with them in the hardcore market. Not only are the former able to produce high end systems (in power, graphic capabilities, etc.), they’re also willing to sell it at a loss to make it in the long term. Now that the mobile industry is closing in on the portable and casual gaming markets, Nintendo may be out of options.

With Nintendo’s vast library of IPs and titles, it may be only a matter of time before Nintendo goes the way of Sega – getting out of the hardware business entirely and releasing their core games (which are still highly respected and top-selling) across various platforms.

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