Nintendo Still Won’t Make a Cash Grab for Mobile Games

Looks like Mario is staying on Nintendo's handheld systems

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Should Nintendo (NTDOY) be making games for Apple’s (AAPL) iOS and Google’s (GOOG) Android mobile platforms?

The question has been asked repeatedly over the past several years as the veteran game maker struggles. Its Wii U video game console has been less than a stellar performer while casual gaming on smartphones and tablets eat into the portable console market Nintendo has owned since the late 1980s.

Making things worse are ominous rumblings of set-top boxes from Amazon (AMZN), Google and Apple that would let consumers play those inexpensive mobile games on their TVs as well. All of these developments have added some urgency to the argument that if Nintendo were to release games for the competing app stores, the move would be a cash windfall for the company.

A lot more people own smartphones and tablets than own Nintendo portable game consoles like the 3DS. When someone has already forked out the cash for a smartphone, tablet or an iPod Touch, it can be tough to convince them that they should also spend $170 or more on a dedicated portable game console.

The sell gets even tougher when the potential customer sees that Nintendo’s game library consists of a few hundred titles (including compatible titles developed for earlier systems) that go for $30 or $40 a pop. Apple’s App Store, by comparison, offers hundreds of thousands of games, including titles from top game publishers like Electronic Arts (EA), many of them free to play, and the rest costing no more than a few dollars.

There are a massive number of mobile devices out there, and owners have a habit of buying lots of those 99-cent and $1.99 games. As a result, game sales through Apple and Google are four times those reported for handheld game consoles. That handheld market isn’t just Nintendo, but also shared with rival Sony (SNE) and its PS Vita portable console.

Actually, Sony presents an interesting case study in attempting to capitalize on your iconic video game characters through an iOS/Android release. In partnership with Coca-Cola (KO), it released All Star Island, a free platform game that features the character “Drake” from its best-selling Uncharted series of games for the PS3 and Vita. Other iconic Sony game characters like Ratchet and Clank can also be unlocked.

It’s too early to tell if this strategy has affected console versions of games with these characters (I suspect not), but the Coke tie-ins (players collect Coke Zero drops and Coke product logos) aren’t likely to win over any fans. Still, Sony is at least testing the water.

In the face of predictions that classic Nintendo games released for mobile platforms could be a $400 million yearly revenue boost for the company, let’s not forget the cautionary example of Rovio, the game developer behind the smash hit Angry Birds franchise.


Article printed from InvestorPlace Media, http://investorplace.com/2013/08/nintendo-still-wont-make-a-cash-grab-for-mobile-games/.

©2014 InvestorPlace Media, LLC

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