Nintendo loses to smartphones and tablets
Reuters reports that this business year will be the first ever for Nintendo to end up with an operating loss. The Japanese video game giant failed to meet the initial sales goals for their home console Nintendo Wii, handheld DS and 3DS consoles.
The head of Nintendo Co. Satoru Iwata blames the losses on a strong yen and economic recession in Europe: since 80% of the company’s profits come from export, these financial matters can greatly affect the revenue. However, there may be other reasons. As the popularity of smartphones and tablets is growing, more and more people turn away from home gaming consoles with full-feature games to fun and simple apps on their cell-phones.
Just look at the list of most popular Android games on Google Play: Angry Birds, Wordfeud, Draw Something… They are all very easy, and unlike ‘traditional’ large-scale games for consoles and PC, they hardly require any skills or time to set up a character, get used to the controls, discover your goals, etc. Just download and play - and stop at any moment. This ‘small game standard’ together with the technology behind smartphones and tablets allowed expanding the target market for games from computer geeks to virtually anyone who has a suitable device and a little free time.
From personal experience I can tell you that on a home console like Nintendo Wii you would normally spend at least half an hour playing a game (because you had already spent 10 minutes looking for the remotes and the game itself, inviting a couple of people to join you, changing batteries and so on). On your phone you can play for 5 minutes waiting for the bus to show up, and stop if a call comes in.
Nintendo is missing out on an opportunity to make money on their popular characters like Mario and Pikachu: none of their games are present on the app market, at least officially. A few months ago bloggers wrote about a fake pokemon app called Pokemon Yellow, which managed to get to the top of paid rankings despite the fact that its producers didn’t have any rights to use Nintendo’s character, and the app itself didn’t even work. The funny thing is that people bought it anyway, so the demand is definitely there!
But of course, if (when?) Nintendo launches apps with Mario and his friends, they will create competition for their handheld devices DS and 3DS (so far it’s the only way to play Nintendo games on a portable device). The question, however, is whether these devices have any future at all, or they will eventually disappear as smartphones and tablets become more advanced…
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