Opinion: Did tablets and smartphones kill Nintendo?

**claud3** · 05-06-2012

May 5, 2012 By Rob Enderle

Mobile gaming has cut Nintendo deep, and now the company is struggling to compete against tablets and smartphones where it used to compete with Sony and Microsoft. Can it survive?
Nintendo is having a bad year. Revenues are off sharply, and profits are a distant memory. Earlier this month, one of the companies bringing forth a new title cancelled the launc h because there just weren’t enough customers remaining for the Wii. Just this last week Nintendo’s President admitted to making a mistake by chasing casual gamers and abandoning serious gamers. I’ll agree that was a mistake, but I think the real mistake was not seeing how much gaming development was moving to smartphones and iPads. Another mistake was bringing out a console that was behind in technology but profitable, and not cycling quickly. The final mistake was not having a plan B when the Wii fad wore out.
Let’s talk about the Nintendo Train Wreck this week.
Wii vs. PlayStation 3 vs. Microsoft

Both Nintendo and Sony screwed up last cycle. Sony screwed up in an attempt to corner the market on next-generation DVD technology, creating a gaming system that initially cost twice as much to build as the $600 the company initial charged for it. (The market had never been that excited about products that cost over $400.) Sony did bring out a system that was advanced enough to remain technologically viable for over five years, but it took such a big cost hit early on that it nearly sank the company.
Nintendo took the other extreme. It brought out a system that could sell profitably for less than half of what the PS2 was priced at, but it was almost immediately out of date. It couldn’t even support HD programing, and HDTVs were replacing SD in massive numbers. To make the Nintendo strategy work, they needed to update their console more quickly so it remained current and find a way to move the gaming content with them.
Microsoft was neither as far advanced as Sony with the Xbox 360, nor as far behind as Nintendo. It initially passed Sony, then took over when Nintendo stopped being a fad. Now the Xbox 360 leads the market.
Tablets and smartphones

For handheld players, game content has been moving to smartphones and tablets steadily. If you look at the revenue trend through 2011, it is wonder that the game companies have any left. And if you watch where people play the games, particularly with tablets, you see them in the same spaces where they used to play game systems: living rooms and bedrooms. You can only use one of these at a time, and the advantage of a tablet or smartphone is you can both play a game and watch TV at the same time. In a family; the family can still enjoy the TV while the kids are playing a game.

This is why they appear to have chewed through the casual game market first. Folks are not only playing largely casual games on these devices, they are playing them in the same places folks used to use their Wii consoles.
The opportunity for casual gaming consoles and handheld systems has nearly evaporated. Now as these platforms gain more and more performance, they’ll begin to move up market. They are already pulling from budgets that might otherwise have gone to other game systems. In the near-term future, they could fully replace them unless those systems are advanced significantly.
Looking ahead: Are consoles dead?

The Atari (which created this segment) along with Commodore and Sega platforms are long gone. Only Nintendo survived from that initial wave, and currently, they are on death watch. Sony is only in better shape because it has broader business, but the company is hardly what anyone calls health. While Microsoft can likely last forever, even the Xbox is looking a bit old. Given a choice between an iPad and an Xbox, it would appear that most continue to pick an iPad.
However, everything is relative. The right advancements and games could return excitement to this segment, and it certainly has before. I do think the days of being able to keep a console unchanged for over five years are pretty much done. Consoles will likely have to sell closer to cost and be upgraded more often to remain current and interesting, because what they are competing with is updated significantly annually.
Lessons learned

Industries tend to be myopic. While Microsoft, Sony, and Nintendo watched each other, Apple snuck in and stole their revenue, then Google slipstreamed Apple. If they had seen the threat in time, they (and particularly Nintendo) could have resourced a competitive response. Atari, for instance, stopped making consoles and instead started focusing on games alone.
In the end, this is a wakeup call. Play heads-up ball, or someone will take your ball away from you. Nintendo may not ever get its customers back, and if Sony and Microsoft don’t get a clue, they’ll likely follow Nintendo.
Few companies pull out of the kind of funk Nintendo is in, and I don’t see anything from the company that suggests it will be an exception. So yes, tablets and smartphones did kill Nintendo. They may have killed the entire segment. We should know in a couple of years.

Read more: http://www.digitaltrends.com/gaming/...#ixzz1u7BUxMyV

Link: http://www.digitaltrends.com/gaming/...kill-nintendo/

I think Nintendo was dying way before the tablet and mobiles

That is my opinion

**Thorzilla** · 05-06-2012

3DS sales beg to differ. It really makes me wonder where all these article writers get their information from.

**Fon** · 05-06-2012

Originally Posted by Thorzilla

3DS sales beg to differ. It really makes me wonder where all these article writers get their information from.

The entire article reeks of brown. You can tell that this guy has no clue about the gaming industry.

**StaticAge** · 05-06-2012

Only Nintendo survived from that initial wave, and currently, they are on death watch

**Sufi** · 05-07-2012

LOL @ article. Nintendo are fine.

But like I've always said...they can't repeat a Wii...they went the wrong way because now they'll have to come up with something better than that or the dumb non-gamers won't move on to it. Actually even that is being gentle...the non-gamers won't buy it unless it was something else... to them, it's their first and last console and they will play it for the next...until it vanishes into thin air. They just wanted Wii Sports...that's it. They will never move on...most of them anyway.

So now they're behind...because their core probably has moved on or at least shaken their trust in Nintendo.

Like he admits here:"'The Wii was able to reach a large number of new consumers who had never played games before by bringing hands-on experiences with its Wii Sports and Wii Fit. However, we could not adequately create the situation that such new consumers played games frequently or for long, consistent periods. As a result we could not sustain a good level of profit,” said Iwata."

I've always said that it's all about sustainable profits, not just short-term...so thank you President Nintendo for backing me up here.

**NARCsnake** · 05-07-2012

they killd handheld

**mooninites** · 05-07-2012

Wait, when did Nintendo die? Lady tune i checked they were alive and well. Smartphones and tablets are competing amongst themselves.

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**Kasu** · 05-07-2012

I think what might be happening is Nintendo's handhelds are selling well and frequently but the Wii is dying simply because i think everyone and their mother has one. Just think about it, Wii was the cheapest and the most family friendly for everyone, Nintendo's marketing strategy was beast and their sales increased for the most part. Everyone has it and its starting to slow down hard. Consoles can only sell so much.. This is just my opinion though

**MjW** · 05-07-2012

<< I wonder what are his top 5 videogames of all time. lmfao

**Sufi** · 05-07-2012

Originally Posted by Kasu

I think what might be happening is Nintendo's handhelds are selling well and frequently but the Wii is dying simply because i think everyone and their mother has one. Just think about it, Wii was the cheapest and the most family friendly for everyone, Nintendo's marketing strategy was beast and their sales increased for the most part. Everyone has it and its starting to slow down hard. Consoles can only sell so much.. This is just my opinion though

But...the PS2 sold almost twice as much.

Yes, the market is saturated but at the same time, there are issues that the president spoke about.

**RaY_210** · 05-08-2012

Lol. This article is so ridiculous! (At least the part that's shown. I have no intention of giving them another hit) I don't even know where to start, but let's go here:

"Just this last week Nintendo’s President admitted to making a mistake by chasing casual gamers and abandoning serious gamers. I’ll agree that was a mistake, but I think the real mistake was not seeing how much gaming development was moving to smartphones and iPads."

This is just plain stupid. I've got no other way to put it. How is this a "mistake"? With that logic, all three should just quit making consoles.

"Another mistake was bringing out a console that was behind in technology but profitable, and not cycling quickly."

The technology case is arguable, but HD TV's weren't as common then as they are now, and, as far as I know, Nintendo has always been profitable from the start with consoles. The exception, of course, being the 3DS now. Unlike Sony and Microsoft, they don't have other departments to keep them afloat if their games don't sell. And consoles have always typically been 5-6 years, so I don't know why it would be any less this time around.

"The final mistake was not having a plan B when the Wii fad wore out."

Just another stupid statement. I don't even understand this. Wouldn't having the DS/3DS out and selling like crazy constitute a "Plan B"? Or the Wii U? I didn't know console makers had secondary consoles sitting around waiting to see if their primary system sold or not. Lol.

Ok. I'm done ranting. Back to work I go!