Seth Fischer, who is one of Asia’s best-known hedge fund managers, has written to Nintendo to demand that the company begins developing and selling games on Apple’s iOS and Google’s Android. Candy Crush Saga developer King managed to generate $1.9 billion in revenues in 2013, or $5 million a day. Fischer says that Nintendo arguably has the largest library of casual games so they would be well suited to smartphone and tablet based gaming.
“Nintendo needs to embrace this thematic change in consumer demand, behaviour and expectations to stay relevant,”
“It is readily apparent that the standard elasticity of demand principle no longer applies in the consumer entertainment market when access requires the purchase of a physical product.”
“As the holder of what is arguably the largest library of casual games, Nintendo is well placed to make an immediate entry into mobile”
Thanks, Nintendo Commander Quadraxis
Nintendo president Satoru Iwata has told The Wall Street Journal that the company has no intention of making its key titles available on tablets and smartphones over fears it will damage the brand and also impact on Nintendo 3DS sales.
“The spread of smart devices does not spell the end of game consoles. It’s not that simple,” President Satoru Iwata said at a news conference Friday. The key is to figure out a way to use smartphones to make people aware of Nintendo’s games, and encourage them to try out the console version of the games, Mr. Iwata said.
“It doesn’t mean that we should put Mario on smartphones,” he said.
In the meantime, it is worth noting that Nintendo is beefing up its research and development budget, and that Mr. Iwata promises to surprise game players in the future. While there are plenty of unknowns, Nintendo isn’t saying game over to consoles just yet.
Nintendo of America president Reggie Fils-Aime has stated that the company is experimenting with smartphones and tablets, but this is really being done to market their content for their consoles and handhelds. However, Reggie says that Nintendo firmly believes that Nintendo games are best played and best enjoyed on their devices, and so the full game play will only be on Nintendo devices.
“It’s a topic that comes up all the time. It’s a debate that’s constantly had. We recognise that there are a lot of smartphones and tablets out there, and so what we’re doing is we’re being very smart in how we use these devices as marketing tools for our content.”
“We’re also doing a lot of experimentation of what I would call the little experiences you can have on your smartphone and tablet that will drive you back to your Nintendo hardware. It’s largely going to be much more marketing activity-oriented, but we’ve done little things where there’s some element of gameplay – a movement, a shaking, something like that.”
We already know that investors are demanding Nintendo to jump onboard the smartphone and tablet bandwagon, but Reggie says that the company is currently thinking about how to leverage popular mobile platforms for marketing purposes. Reggie explained that Nintendo is mainly considering how they can give tablet and smartphone users little experiences which then drive them back to the Nintendo 3DS or Wii U.
“We’re constantly thinking about how to leverage mobile as a marketing vehicle. How do I give little tastes of content, little experiences that then drive the consumer back to my hardware environment?”
“That’s why we’re so focused on having content exclusive to our platform,” he said. “When the consumer wants to play Mario, Zelda, and Pokemon, they have to purchase our hardware to do so. And that preserves our overall financial model.”
Statistics provided by the NPD group show that children these days are ditching Nintendo handheld products in favour of those designed by Apple. The NPD’s survey of more than 4,200 kids ages 2 to 17 found that 26% play games on iPhones, up from 11% in 2011. By comparison, 25% of kids surveyed play games on Nintendo’s DS devices, down from 37% two years ago. The survey also found that 21% of kids play games on Apple’s iPad, up from 5% in 2011, and 19% play games on the iPod Touch, up from 18%. Some 23% play games on Android smartphones, a device category not measured two years ago. The Nintendo 3DS is only being used by 9% of young people, after being on the market roughly 30 months.
“Kids are engaged with mobile devices as less expensive tablets and an increasing amount of hand-me-down phones create greater accessibility to these platforms than before.”
-NPD analyst Liam Callahan said in a statement.
Nintendo appears to be of the firm opinion that bringing its established franchises to both smartphones and tablets would ultimately decrease the overall value of the brand. Nintendo says that it is confident that sales performance of the Wii U and Nintendo 3DS are steadily improving. The company also believes that you can not get the true feel of Mario or a similar title on your smartphone and tablet device.
“Performance is temporarily getting better, you can’t get a true feel for Mario on smartphone or tablet, and this would also lead to a decrease in brand value over the long term.”
Games industry veteran Ian Livingstone has told attendees at Bristol Games Hub that he believes that Nintendo risks losing an entire generation unless they decide to bring their franchises to other platforms. It’s already well documented that consumers are spending more on smartphone and tablet games than on traditional handheld games. Livingstone thinks it’s time for Nintendo to embrace this and bring their games to the mobile space.
“Nintendo should have their IP on every platform. Otherwise a whole generation of young people will miss out on their games.”
24/7 Wall St., a Delaware corporation that runs a financial news and opinion operation with content delivered over the internet, declares that Sony’s latest handheld game console, the PlayStation Vita, which released globally this year, is one of the worst product flops of 2012.
The company says, that while its initial sales were promising, the overall sales of the PlayStation Vita are poor, compared to the Nintendo 3DS, smartphones and tablets.
Also on 24/7 Wall St.’s list of the worst product flops of 2012 is another Sony device – the Sony Tablet P.
Released first in Japan in December 2011 and then globally in February 2012, initial sales of the PlayStation Vita were encouraging. By the end of February, the company announced it had sold approximately 1.2 million units, followed by an additional 2 million units of software for the handheld game console. Yet sales quickly declined. From its release date to June 30, just 2.2 million PlayStation Vita units were sold, far less than the 3.6 million units Nintendo 3DS sold in just its first month. Recently, Sony has clumped sales of the Vita and its predecessor, the PSP, together to avoid highlighting embarrassing sales figures. Frequent complaints about the Vita were that the $300 price tag was too expensive and that its game lineup was both weak and small, especially given the availability of cheaper gaming through smartphones and tablets.
Vice president of mobile development for Activision, Greg Canessa says that both Nintendo and Sony can’t ignore the looming rise of smartphones and tablets. Canessa argues that while you can’t get console quality experiences on either of those devices, you can get great games. These games cost a fraction of those found on Nintendo 3DS and PlayStation Vita.
“There’s no doubt that that space faces challenges. They are more directly competitive with what’s going on in the tablet and mobile space and there’s a lot more overlap there, to be honest.
“It is a challenging market, and challenging in a number of ways. From a gameplay immersiveness standpoint, from price point and business model standpoint, I mean it’s $40 for some of those games and you can get great experiences – not necessarily comparable experience, but great nonetheless – for seven dollars on a tablet.”
“Our relationships with Sony and Nintendo are important and we continue to support them by creating games on both [Vita and 3DS] platforms. Beyond that the market’s going to speak ultimately as to the viability of those products.”
Out of a total of 715 games that were at this year’s Tokyo Game Show, 507 were for smartphones and tablets. In comparison, there were a mere 41 for Nintendo platforms – 34 for Nintendo 3DS, five for Wii and two for Wii U, which will launch in Japan on December 8th.
Games At Tokyo Game Show 2012:
- Smartphones & Tablets: 507
- PlayStation 3: 57
- Nintendo 3DS: 34
- PC: 32
- PSP: 30
- PlayStation Vita: 24
- Xbox 360: 24
- Wii: 5
- Wii U: 2