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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Angry Birds games have amassed 1.7 billion downloads, making them hugely successful — they hold the first and fifth spots in Apple’s top five best-selling iOS games of all time. Most titles are pay (although there are free versions and occasional free promotions), yet Rovio’s profit for 2012 amounted to $72 million, nearly half of which was merchandise sales.

In other words, even if Mario and company were to make the transition to smartphones — potentially cannibalizing Nintendo’s existing portable business — the potential payoff isn’t necessarily a pot of gold.

Nintendo certainly doesn’t think its future lies in Mario running across the display of an iPhone or Nexus. In a 2011 interview, Nintendo’s president said “That is absolutely not under consideration.” When asked earlier this month by CVG, he again brushed off the possibility of app store sales:

“If I was to take responsibility for the company for just the next one or two years, and if I was not concerned about the long-term future of Nintendo at all, it might make sense for us to provide our important franchises for other platforms, and then we might be able to gain some short-term profit. However, I’m really responsible for the long-term future of Nintendo as well, so I would never think about providing our precious resources for other platforms at all.”

Price cutting has helped to spur 3DS sales (the Nintendo handheld has been the top-selling video game console in the U.S. for the past three months) up 14% year over year, and as Adam Benjamin points out, the company’s stock has responded even though Wii U sales remain disappointing.

Rather than cave in to pressure to release its games for mobile, Nintendo has just announced its latest strategy to fight back on its own terms, a new portable gaming device aimed at those smartphone and tablet owners.

The new 2DS offers the same dual-screen play mechanics as its 3DS (minus the 3D capability), is compatible with 3DS games, but comes in a small tablet form factor and at $129, shaves $40 off the price of the cheapest 3DS.

A few years ago, Wired’s Chris Kohler said “We’re never going to see Super Mario Bros. on the iPhone, no matter how much Nintendo’s investors may clamor for it,” and I suspect he’s right.

As of this writing, Brad Moon did not hold a position in any of the aforementioned securities.


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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