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Nintendo's future shouldn't be focused on Smartphones
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Nintendo's future shouldn't be focused on Smartphones
by Chip Sineni on 01/20/14 09:02:00 pm   Featured Blogs

The following blog post, unless otherwise noted, was written by a member of Gamasutra’s community.
The thoughts and opinions expressed are those of the writer and not Gamasutra or its parent company.

 

With all the analysts and stockholders claiming Nintendo's recent losses being caused by smartphone and tablet markets, it is important to realize what a mobile market to Nintendo really means.  

Take one look at the top grossing sales in the mobile market. The Mobile market is dominated by Free-to-Play.  Analysts and stockholders  should be asking if Nintendo has the core competencies to compete in this market. Does Nintendo demonstrate they understand Free-To-Play? Do their products show they have an expertise in understanding setting up a compulsion loop based gaming, on players almost giving up, but instead throwing in another dollar? If not, then this is not an instant solution to their problems.

While some of  Nintendo's IPs are similar to F2P games in the market - Pokemon to Dragonvale, Animal Crossing to FarmVille, Dr Mario to Candy Crush, Nintendo is about having a super polished experience where they teach players skills and have them grow those skills to overcoming greater challenges. The F2P mechanics that dominate mobile would be re-training the whole company's DNA, and remove much of the magic that allows them to generate profits.

Their main Flagship titles like Mario or Zelda have no top grossing equivalent in the AppStore; in fact there are very few true 'action' games that chart on top grossing mobile charts at all, and even fewer with a balance towards premium monetization.

Without remodeling their whole company's towards Free To Play style games, these are things Nintendo could do to expand their business:

  • Retro Games on App Store: This seems obvious and probably the one stockholders are most asking for, but the problem here is that is won’t be a signifact revenue stream. The $10 -$5 dollars they would want to charge per title (what they are charging now) would mean these are among the most expensive titles on the market, and parents and kids are used to downloading something free. Yes it would generate revenue, but similar offering by competitors like Sonic the Hedgehog, despite doing well, have not charted high on top grossing for any duration to make this a play that will "save Nintendo"- it is just another supplemental revenue stream.
     
  • Controller for App Store: One way the above idea could generate more profit is to make an exclusive controller for mobile games, that you need to use to play Nintendo games. Something like their WiiU classic controller and make it the only one that will work with their mobile games. Smart design so it can work with all phones or tablets. This way, they are more selling a new 'pseudo console' that uses your mobile device. Playing Nintendo games on mobile could be a more premium experience.  
     
  • Make a real version of Pokemon Skylanders: It is crazy to think Skylanders and Disney Infinity stole  Pokemon's 'Collect Them All' tagline to real toys and Nintendo themselves haven't done the same. Yes 'Pokemon Rumble' is a (half hearted) attempt at this, but Nintendo needs to do real investment and marketing to make this a viable product. Right now with so many Pokemon products (both games and toys), there is no version real enough to take off, and they are all seperate efforts.  There are no real separate Skylanders toys to collect. Skylanders IP generated $1.5 billion in revenue (not counting this holiday season) . 
     
  • Retro games on PC and consoles: This would make more money than a similar effort on mobile for two reasons. The first being this market is used to spending more money than mobile- $10 dollars on PC or console is a good deal. The second reason being this is where much of the Nintendo market graduated to. Imagine how well a 'Mario Classics' collection would do on Steam?
     
  • Put latest  greatest games on PC and console:  How many customers would pick up the next big Zelda if it was on PC or console? To justify the development costs of blockbuster game, their best bet is to get it into as many consumers hands as possible. Again this audience is not scared of paying $50 for a great game, and this audience is a fan of Nintendo quality products. It is missassumption Nintendo software is just for kids, but a correct assumption is their hardware is not as popular for adults who already own other gaming devices. 
     
  • Exclusive Deal with PC or Console Platform: This idea isn’t new, but Nintendo could align with Sony, or Microsoft or Steam. While Valve might seems like the least likley fit, because they aren’t as rigid of a platform, they might be a better fit for Nintendo to find terms more agreeable to them. Valve wants more people playing in living rooms, and a broader reach, and give reasons for the Linux side of their business; Nintendo needs to sell their products to a lot of customers. Nintendo could even make a custom Steambox that plays PC games and Nintendo products, or Nintendo could just be exclusive to Steam (in addition ot their own platforms) and Valve gives them a better % of profits to keep just to drive people to their platform. With 65 million Steam users, there should be some mutually lucrative deal that could be made, or something similar with Microsoft or Sony. Nintendo in Microsoft or Sony's corner would make the decsion of what next-gen console to buy an easy one. 

Again mobile should be a part of the success story for Nintendo's future, but the other parts will be the ones that yield greater results.  Analysts should stop directing Nintendo to emulate mobile companies like Supercell or King, and should instead be looking at emulating success of companies like Activision that are catering to core gamers, and selling physical goods of their products. 


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Comments


Robert Green
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I think a custom controller + a subscription service for retro games could be a good idea. You wouldn't necessarily have to lock out other controllers either, since most people don't have one at this point, and wouldn't probably prefer the Nintendo one if it was decent quality. They'd still get the subscription fee either way.

For some reason I never considered Nintendo games on PC before. I know I'd buy Super Mario 3D World if it came out on PC, but then if Nintendo first party games were available elsewhere, that'd remove the only remaining reason to buy a Wii U. Sony and MS often don't consider the PC to be competition to consoles, but it's hard to know what Nintendo's stance is.

SD Marlow
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For the short-term, they could create a PS Vita TV style device with classic SNES controller with a Nintendo-skinned version of android, and pre-install the games most people are playing thru an emulator on the OUYA. Longer-term, they could provide tools for people to mod older titles, have an open exchange and some kind of SDK for a curated, family-friendly storefront (maybe with a special focus on edu-tainment games).

Chip Sineni
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>>For some reason I never considered Nintendo games on PC before. <<

Ha yeah me neither, until I just put down some options. In the past, piracy seemed like a big issues, but Steam has made such a great customer experience (sales, ease of use, works on multiple systems) that it is a better service for most consumers than illegal downloads (no viruses, etc)

Probably a more realistic option for Nintendo PC would be to make their own Steam / Origin- basically put Virtual Console on PC. In many ways it it doesn't really compete with WiiU business(probably a different market) and doesn't conceed anything to another platform's rules.

Robert Green
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Something else interesting - it's generally acknowledged that there isn't a huge selection of great games for the Wii U, and that without great third party support, there probably won't be.
But Nintendo has another platform that does have a lot of great games. One with two screens (one of them a resistive touchscreen), an accelerometer, analog sticks, four face buttons and shoulder buttons.
All of which is to say that if they could somehow get 3DS games running on the Wii U, I'm sure they'd sell a few Link Between World's, Pokemon X/Y's and Fire Emblem's, especially if they could get cloud saves working between the two.

Tanner Mickelson
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I think Nintendo has enough money from the Wii saved up in their reserves to make it through this generation just fine with the 3DS, and to continue trying to push the Wii U with big first party titles like a Metroid, Star Fox, Mario Galaxy/Sunshine, Zelda U, etc. Hyrule Warriors and Smash Bros are going to help in the short run. They might not be wildly successful, but they'll manage.

In the long run though, after the PS4 and Xbox One generation, Nintendo can't pull the same move and come out with a console that runs at slightly above PS4 capabilities while Sony and Microsoft push the hardware bar higher again. The hardware might not matter to Nintendo because of the way their games are, but it seems to be one of the reasons 3rd parties aren't very interested.

Maybe I'm completely off here, but I think the best option would be for Nintendo to partner with Sony to produce a handheld/console. Think about it: Sony failed hard with the Vita, and Nintendo failed hard with the Wii U. If Nintendo and Sony were to partner and build a handheld that snapped into a docking station plugged into the TV then we'd get the best of both worlds. Sony and PSN could handle the online services, and Nintendo would still retain some measure of control over the hardware.

Thomas Happ
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This is unlikely, but, maybe Nintendo has a bit of that indie developer mentality, and just does what it likes, not what would be most profitable? Or tries to find a way to get the most profit out of what it likes doing, rather than trying to change what it does?

Jeferson Soler
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@ Thomas Happ - No and yes to what you said! Think of Nintendo as a professional writer or a professional artist! A professional writer (especially a professional comic book writer) will always do stories that entertain himself/herself first and not worry about others think, especially the minority of people. If the writer went by the suggestions from the small portion of people, then his/her work would never sell to most people (including to the small portion of people that gave those ideas in the first place). The Blue Ocean strategy is proof that Nintendo was being like a professional writer, and now, it is time for Nintendo to get back on track by improving the marketing and by closing all cultural gaps.

warren blyth
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I was pretty captivated by your idea of Nintendo making THE controller for mobile games. It just sounds sexy.
But i can't figure how they'd make it last (once you buy it, you'd just buy games. it'd be hard to justify an upgrade, unless it wildly changed the controls). Nor can i figure they'd deal with the inevitable knockoffs. (nobody seems to talk about controller patents, but didn't nintendo's patent on the D-pad only recently expire? i thought it was pretty well established that third party controllers have always sucked, because they were forced to badly mimic the most direct solutions - and always chose to go with cheaper/less-precise approaches).
(...is there a definitive article on this somewhere?)

* now i'm captivated by a tangential idea - Nintendo could release a cell phone like controller for the WiiU, which partners with your existing cellphone. a gamepad mini. They could encourage games that put their cell-phone-esque controller in one hand, and your real cellphone in the other (thinking the wii's initial two handed controlelr split. with the nunchuck). or they could sell it as the bottom half of a DS, where you plug your phone in as the top screen.

I just dig the idea of partnering up with your cellphone, instead of fighting to replace it.

Just sounds a lot more reasonable than asking Nintendo to focus purely on putting out software for other people's hardware.

Also sounds more exciting than Nintendo making yet another baby version of popular tech -(without the feature parity). I'd say the wiiU gamepad is a baby version of a tablet with single touch. And DS was a baby version of the laptop, with weird limited mp3 and photo abilities.

Aaron McClay
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I completely agree that Nintendo's games and philosophy would be a terrible fit for the F2P Mobile market. This is the same kind of thinking that had people urging Apple to allow clones and make the Mac OS for PC's in the 90's. If Apple had done either of those things it was have ceased to exist.

One avenue that's still open is the whole 'cloud gaming' market. If Nintendo created a "Nintendo Network" or some kind of licensed chip to be included in TV's, they would have their own closed ecosystem in which all of their properties were still exclusive (kind of like an HBO for gaming). If it was a smooth enough user experience, they might be able to get a foothold in the living room, and if cloud gaming technology has matured enough by that time, the 'hardware superiority' issue would be moot.

Paolo Gambardella
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"While some of Nintendo's IPs are similar to F2P games in the market"

kidding? It's exactly the opposite. Give to Caesar what is Caesar's, please.

Pedro Fonseca
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Was discussing pretty much this the other day with a colleague

Basically we boiled the discussion to how much more would the WiiU potentially sell if instead of that expensive controller, what we got was a peripheral so people attach it to their iPads (which is the most popular tablet, not to mention the one where there would be less need for multiple adapters) due to a partnership between Apple and Nintendo.

Not to mention how awesome it would be to have such peripheral with Nintendo-quality design and input response so you can not only play Nintendo games on the go (and legally, no emulator nonsense!) and potentially have its SDK adapted to other games so the mobile market can really become a "true console".

That said, there is the huge caveat that such a thing would be quite the competitor to the 3DS and, even on the basis that the 3DS is more like a smartphone than a tablet, if there was such a deal between Apple/Samsung/Microsoft and Nintendo, chances are the formers would want their smartphone in place of the 3DS...

Adam Merkel
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I know Nintendo makes its devices region-locked, but one idea is to launch an International Market in their eShop. There would be caveats like no English translations available or content not rated by a ratings commission, but opening up this path for small international indies would bring in different innovations and maybe the attention these developers need.

Jeferson Soler
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@ Adam Merkel - That's an excellent idea, in my opinion! That could further help resolve the cultural gap issues. In addition to that, Nintendo could open an international portal to games that may never be released outside of certain countries (especially outside of Japan) with the help of the eShop. In case of Japan, some titles from Japan would appeal to only so many people anyway, so by using the cost-effective approach of digital download, Nintendo could make 1st-party, 2nd-party and 3rd-party games that are exclusive to Japan available to foreigners that like to play Japanese games through the eShop's international portal. This may arguably be a better alternative to any other action that would resolve the region-lock issue, including Nintendo making legalized region-lock removal apps for certain games.

G Irish
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Nintendo doesn't have to go F2P on smartphones, nor should they port old games to smartphones. A game designed for a D-pad is simply not going to play well on a phone.

If Nintendo wants to take advantage of the smartphone market, they should make touch-based games for smartphones. If Nintendo made a Mario game for mobile they could charge $10-20 and people would snap it up. Of course, the argument against that is that it would cannibalize 3DS sales, but that's sort of the wrong question. The question to me is: would Nintendo iOS/Android games sales + 3DS game sales be greater than just 3DS game sales? There may be some cannibalization but ultimately I think they'd make more money. Because there is a large segment out there who is simply never going to buy a 3DS.

The other thing about cannibalization is that Nintendo would only need to put out 1-2 games out a year on smartphones to pull in quite a bit of revenue. I would think $30-50 million in revenue would easily be in reach if not more. 1 or 2 games a year on smartphones is not going to kill the 3DS. However, diverting first party resources away from native Nintendo platforms would be the major downside of going to smartphones. Right now they need all of the first party production they can get.

All that said, I would say that there is a lot Nintendo could do to save the WiiU. Improve their online services, maybe offer a subscription service for their entire back catalog, massively upgrade their developer tools, open up their wallet and fund some 3rd party exclusive games, and even reduce their licensing fees. I don't think the WiiU is a totally lost cause at this point.

Bob Johnson
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IF they can customize STeam OS for use on their next console then perhaps they could get instant 3rd party support that way.

But can they do this for $300? No.


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