Tuesday, May 03, 2016

Nintendo Looks to Future with NX and Mobile

It's been a wild couple of months for things over at Nintendo. The gaming icons have revealed the death of one console, the birth of another, and big news for several of its largest IPs. What remains to be seen is what effects these developments will have for the future of the company. There had been more than a few rumors that a major announcement concerning Nintendo's latest console was forthcoming and the company did not disappoint. The Nintendo NX has been given a release date of March 2017, which is much sooner than many had expected. With profits down 61%, Nintendo needed to do something to right the sinking ship and they needed to do it fast. And beyond the new console, the company has been pushing its mobile gaming projects.

The Wii U failed to perform as expected and came nowhere near to the success of the original Wii. As of this writing, the Wii U has shipped a scant 12.8 million units compared to more than 100 million Wii consoles. To compare the performance of the Wii U to the other consoles of the current generation, the PlayStation 4 has shipped nearly 40 million units with the Xbox One having moved about half of that with about 20 million. It should also be noted that the Wii U hit the market almost a full year before either of the competitor consoles. Sales-wise, it has been a failure by all accounts. Given the lackluster sales and the need to move on to new projects, there are reports that Nintendo will cease production of the Wii U by March 2018.

Nintendo president Tatsumi Kimishima has expressed his confidence that the NX will be much more successful while also looking toward the mobile and smart device market to help make up the difference. One blog reports that during the company's recent financial results briefing, Kimishima described Nintendo's goal to make "the smart device business a pillar of profit" for the future. Nintendo has already started to dip its toes into the mobile market with the introduction of Miitomo, a social gaming platform, along with an additional four games planned by March 2017. The mobile market is big business, with market revenue reaching $34.9 billion in 2015, so it comes as no surprise that Nintendo is trying to get a piece of the multi-billion dollar pie.

Nintendo aren't the only ones looking toward the mobile market for a much-needed additional revenue stream. Other legendary companies such as Marvel have been taking advantage of the marketplace with their own offerings. The comic book titan has not only developed popular games such as Marvel Heroes 2016 and Contest of Champions but has also been licensing its iconic cast of characters to this platform in an effort to reach even more fans. Marvel has lent out the likenesses of heroes such as Iron-Man, Spider-Man, Daredevil, and more to a range of casual titles based on classic games like slots and roulette. If Nintendo were to take a similar approach to Mario and Luigi or even third-tier IPs such as Pikmin—why not throw Mario and his cronies on a slot reel?—it could be a substantial source of revenue for the company. And right now, Nintendo needs all the help it can get. 

There's still plenty of time for Nintendo to turn things around and we're confident that company will be able to do just that. With a new entry around the corner for the Zelda franchise and plenty of news left to be revealed for the NX, we'll be hearing a lot from Nintendo during the next year. We also fully expect them to recover in the way they always have, with innovative technology and above all, great games.

1 comment:

CrimsonB said...

I too think that increasing users' interaction with Nintendo IP through mobile is going to be a fruitful investment for them, even more so when they aim for that business to be self-profitable.
Nintendo might take a back seat for a few months, but I do believe that they will use that valuable time to realize their visions and their well thought-out plans, which I suspect they have after following the investors' briefing carefully.
Finally to me all signs seem to point to Nintendo having a transformation, from being a Gaming company, to something even broader, which I'd call an Entertainment company, which includes gaming but expands even beyond that with results such as the collaboration with Universal regarding their future theme parks.
Anyways, time will tell.