Does mobile matter to Nintendo? Mario, the plump plumber who is Nintendo’s best-known character, did finally make his debut on smartphones last October. But there is little connection to the 80 per cent surge in Nintendo’s shares this year.
Instead, it is Nintendo’s tried-and-trusted strategy of favouring its own hardware that has powered the success. The Switch, Nintendo’s latest console, has now sold more than 10m units since it was launched in March, the company said on Tuesday. The pace is at least as good as previous blockbuster consoles such as Sony’s Playstation 4, which has gone on to sell more than 70m units since its launch in 2013.
Yet Nintendo continues to fret and dither about the mobile market. It is now seeking new partnerships with software developers, The Wall Street Journal reported on Tuesday, to try to “strengthen” its line-up of smartphone games.
This latest effort follows the 2015 decision to acquire a 10 per cent stake in DeNA, a video games company, with a plan to launch five smartphone games together. Only three arrived by the March 2017 target; a fourth came last month; none has set the world alight. One question is why, since Nintendo is so good at developing hardware and software in house, that it needs to spend time and resources selecting and working with outside partners.
The more fundamental question: with the Switch selling so well, why does Nintendo bother with mobile? As Nintendo once believed (and probably still does), there is little point eroding margins by selling cheap digital apps (and giving a 30 per cent cut to Apple) when customers are still happy to pay $300 for a console and $60 for a game.
The risk, however, is that Nintendo stays in a boom-and-bust cycle governed by its own variable hardware prowess. The Switch has done well; the previous Wii U flopped. Meanwhile, as smartphones become better as gaming devices and perhaps become the vehicle for virtual reality, it becomes harder for Nintendo’s own gadgets. Getting mobile right remains a necessity in the long run; Nintendo needs to switch it up.
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