Nintendo Gadget is Game Over for the iPad

by Jeff Reeves | March 2, 2010 3:09 am

Apple (AAPL[1]) just closed the doors on another annual shareholder meeting, and as usual there were plenty of colorful questions. But the one that was by far the most interesting was “Has Apple considered partnering with Nintendo (NTDOY[2])?”

Such an alliance is intriguing, and no doubt would help the new iPad gain credibility as a gaming console—one of many proposed uses for the gadget along with surfing the web, reading ebooks, etc. NTDOY would also provide endless fodder for Apple’s app store.

But the fact is that Nintendo doesn’t need Apple. In fact, the video game icon appears to be making a move right now to ensure the iPad will never gain traction as a portable gaming console.

Specifically, Nintendo is super-sizing its wildly successful Nintendo DS portable gaming console—rebranding it the DSi XL The console currently has two 3.25” screens (one touch-responsive and the other just an LCD display) but a new upgrade will almost double the display area. This will make the device even more appealing to aging gamers who stick to Nintendo’s more “refined” games like sodoku, crosswords or puzzlers like Brain Age.

There’s more: The wi-fi enabled DSi XL will include an e-reader. Though initial offerings are pretty slim, including a $20 package called “100 Classic Books,” Nintendo is firing a shot across Apple’s bow. Though neither Apple’s iPad or Nintendo’ DS should offer serious competition to Amazon.com (AMZN[5]) and its Kindle e-reader, both companies know a move to get into the market could pay off down the road if e-books become widely adopted. This shows Nintendo isn’t willing to be boxed in, and is willing to give AMZN and AAPL a run for their money.

Nintendo’s several incarnations of the DS console have already proven to be the gold standard in portable gaming. The console has sold more than 125 million units since it’s launch in 2004, which is on par with the total sales of Microsoft’s (MSFT[6]) xBox 360, Sony’s (SNE[7]) portable PSP console and the TV-based PlayStation 3 console combined!

Additionally, NTDOY has an online marketplace for games that rivals Apple’s app store. It’s Wii Ware and Virtual Console software for the Wii offer hundreds of downloadable titles and have resulted in over 10 million game sales worldwide. A similar store exists for the DS, with about 1,0f00 titles.

Clearly Apple would benefit from an alliance with Nintendo, but it appears that the Japanese video game icon doesn’t need AAPL to rake in the profits. And if the DSi XL is as successful as the other incarnations of the portable console, it could sink the iPad’s gaming potential permanently.

Apple COO Tim Cook recently told an audience at Goldman Sachs’ tech conference that the Mac maker’s future was as a mobile device company—and that may be true. But unfortunately, Apple may have to concede portable gaming to Nintendo and focus on other uses for the iPad.

Tell us what you think here.[8]

Endnotes:
  1. AAPL: http://studio-5.financialcontent.com/investplace/quote?Symbol=AAPL
  2. NTDOY: http://studio-5.financialcontent.com/investplace/quote?Symbol=NTDOY
  3. Activision ATVI Deal with ‘Halo’ Studio Bungie Could Send Stock Soaring: http://investorplace.com/experts/jeff_reeves/activision-atvi-bungie-halo-video-game-stock-erts-ttwo-msft-sne-ntdoy.html
  4. Sony Could Launch Online Video Game Sales for PlayStation (SNE, MSFT, NTDOY, ATVI, ERTS, TTWO): http://investorplace.com/experts/jeff_reeves/sony-online-video-game-service-sne-stock-microsoft-msft-xbox-live-nintendo-activision-atvi-erts-ttwo-nflx.html
  5. AMZN: http://studio-5.financialcontent.com/investplace/quote?Symbol=AMZN
  6. MSFT: http://studio-5.financialcontent.com/investplace/quote?Symbol=MSFT
  7. SNE: http://studio-5.financialcontent.com/investplace/quote?Symbol=SNE
  8. Tell us what you think here.: mailto:editor@investorplace.com

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