Nintendo mentioned this week that they want to dominate the mobile market. That’s both a foolhardily brave goal, and one that could be well within the reach of a company like Nintendo.

What’s New

I’ve already spoken at length about the partnership between Nintendo and DeNA as The Big N enters the mobile space. Since then, DeNA has laid off a significant portion of their workforce in North America. This makes it look like it may be less of a mutually beneficial merging of companies than Nintendo using DeNA for their existing infrastructure. DeNA enjoys getting paid, so they change their structure and direction to accommodate Nintendo, and shrug off the parts that don’t fit the new plan.

It might sound a bit weird to describe Nintendo, the whimsical iconoclasts, as capable of such cynical business dealings, but any business leader worth their salt should be capable of thinking through these kinds of options. It looks like Iwata is no fool, even if he is in charge of a world of whimsy and wonder.

Much like another CEO. Whimsical confectioner, or ruthless businessman who will defame his competitors, and kill or maim children to find a successor? Can’t it be both?

Iwata described some details about the plans for Nintendo’s presence in the mobile space in a recent Financial Results Briefing. While it’s always difficult to tell exactly what is real when an experienced business person is talking, there are a few tasty facts that can be taken from this

Nintendo’s history with Digital Distribution

One of Iwata’s points was specifically about revenue from digital downloads, pointing to 30% growth from 2013 to 2014, and projecting similar growth in 2015.

The interesting thing is the quarterly breakdown in 2015. It shows the first half of 2015 actually slowing down from 2014, and a significant increase in the second half of 2015. This implies a significant faith in the current schedule of digital releases.

I can’t help but find Nintendo’s relationship with digital distribution very strange. If anyone remembers the initial announcements for the Wii Virtual Console, it sounded like it would support all old titles from the NES to the Nintendo 64, all up for sale. Of course, it didn’t turn out that way. We only were able to purchase a few games at first, and a drip feed of new re-releases over time. I, for one, was disappointed. I still think this could have been done better if they had at least put together a good emulator built in to the system and sold the ROMs of the entire NES and SNES library. But I digress.

I’d like to point out that this was way back in 2006, practically the stone ages of digital distribution. Steam had only begun to support third party games in 2005! Xbox Live only just started, and PSN was happening at the same time. Nintendo was not only opening a market like the others but also promising a lot of content that people wanted. No matter the blemishes the Virtual Console had, Nintendo was actually on the bleeding edge of the digital distribution revolution! While there was growth in the system, it wasn’t anything revolutionary. Since then they’ve been clearly overtaken by all of their competitors. I doubt there’s anyone who looks forward to Virtual Console releases in the same way that people watch for PSN Plus free games, the XBLA Indy Summer, Steam Sales, or maybe even Good Old Games or EA’s Origin.

I wanted to point all of that out do highlight that Nintendo, so often the champion of the unorthodox, where Shigeru Miyamoto regularly “upends the tea table” to innovate and improve designs, who were so early to realize that internet would be wireless, have bizarrely stagnated in the face of the most significant business revolution in software possibly since the emergence of software as a business.

How does that kind of creativity drop the ball like this? Stubbornness probably has a lot to do with it.  They dictated the terms of engagement because they could.  “Could”, not “can”.  The market is passing that approach by.

Nintendo’s Change of Heart

Nintendo has always been very interested in controlling their own distribution pipeline in its entirety. They made games that played on their systems. Their IP was inherently tied to their platform, and even today if anyone in the Video Game Industry has strong intellectual property, it’s Nintendo.

Who else in the world has a roster so strong, and so strongly tied to their console line, that they could get away with something as amazing as Smash Bros? NO ONE, THAT’S WHO!!!

Nintendo’s Game Boy line has had a white knuckle death grip around the throat of the portable market since its introduction, and any competitors against it have either been slain, or forced to content themselves with whatever shreds of leftovers the Game Boy line couldn’t wolf down like a mentally unstable steward of Gondor.

Good lord, at least wipe your chin!

Nintendo likes to control its pipeline, and has a portable platform, so any mobile style games should be on that platform! Or, at least that’s how the Nintendo orthodoxy of thought would have maintained. However, now it seems that the desire to control everything is finally yielding to the facts that the market is changing in ways that even Nintendo can’t ignore. The mobile gaming space is not a fad, and it is not going away. Even more significantly, it’s not simply subsisting on the Game Boy line’s table scraps, but taking a lot away from the Game Boy line. Eventually, even Nintendo had to yield to the facts.

What is coming next

Finally, we get back to Iwata’s presentation, and their stated plan to dominate the Mobile space. With IP like Nintendo’s, they will certainly be able to make quite a splash. Their inevitable debut will almost certainly make huge waves, but will they be able to keep it up? I believe they can, and I think it’s a good thing for the market. Like the old saying goes, a rising tide lifts all ships. Nintendo bringing more players to the mobile space, being able to show that there are quality games in the mobile space, will remove some of the stigma that mobile games have with some players.

Nintendo coming in to the mobile space will bring some significant respect along with it. People will be waiting to see just what Nintendo does with this new platform. What will happen if Miyamoto designs a game on this new platform? Will they come up with a new classic? Will we see old familiars? Will they be able to come up with a revolutionary new use for the technology? I, for one, would be interested to see something like a mobile version of Pikmin.

Currently they are planning releasing 5 titles in the next 2 years. This may sound paltry, but in the mobile market, this is probably the correct number. As with any other game development, it takes time. On top of that, you want to learn from one game and use those lessons in the design and implementation of the next one. You want to work with these titles after they are released to improve on them. You want to develop your other tools to make sure they are as stable and reliable as possible. What you don’t want to do is throw a bunch of content out to the market in a foolish attempt to make up lost ground.

Hmm, nah. That idea stinks.

Nintendo would never want to release a product that is beneath their standards. They want all of their games to be well-crafted experiences. While the mobile market is obviously a huge emerging market that promises similarly huge financial rewards for success, it is also a source for increasing awareness of Nintendo’s IP to even more people. There are children now who may never have interest in playing on a console, instead their first video game experiences will be on Mobile devices. Will they even know Mario the way we do?

Iwata spoke about this aspect as well:

“We will deploy our game business on smart devices not because we think that the dedicated game system business will wane, but because doing so will encourage a greater number of people to associate with Nintendo IP, to become familiar with the charms of video games and, eventually, to explore more premium experiences on our dedicated game systems. To realize this, we need to create a bridge between the two platforms.”

What may be further down the line

This is also a promising sign, showing that they are approaching the mobile market not as a new market, or revenue stream alone, but as a part of a comprehensive approach. New players can be introduced to Nintendo IP in the mobile market, and then this would direct these players back to the flagship experiences on the Nintendo consoles. This implies that we won’t see Nintendo creating new IP specifically for mobile.

Even more interesting is the idea of creating a bridge between platforms. I have seen various attempts at cross platform persistence with games. Most fail miserably, but Nintendo actually had one of the better attempts a few years ago with F-Zero AX, the arcade counterpart to F-Zero GX on the GameCube where you could use the same save file across both.

I bet you didn’t even know there was an F-Zero arcade game.

I think Nintendo can find an effective way to “bridge between platforms”. There are strengths that mobile devices have that consoles, or even portables don’t have. Mobile games have a stronger persistence and can become much more interactive. For example:

Imagine a new Pokemon game on Mobile devices. When you’re within a certain range of another player with the same Pokemon game you get a notice and you have the option to duel. This could possibly work on a mobile platform due to the fact that you’ll always have it with you, and on, as opposed to a portable where you’ll turn it off when you aren’t playing. This would make the game world so much more dynamic and lively. The game data could also feed back into a base console game and the two experiences grow off of each other.

Further details in the release talk about a single login system. This leads me to believe that the DeNA partnership was primarily to gain access to their existing infrastructure to run a single login system across multiple games. The functionality described sounds a lot like the existing Mobage system:

“…at a high level the idea is that the consumer can access multiple devices using one common ID.”

Cautions and conclusions

I am not sure about the opinion that the console business won’t wane, but this is a business talk, and it wouldn’t be appropriate to express any lack of confidence in something that has been so central to the companies plans for so long. This part is an example of how you always need to take any business statement with some healthy skepticism. What you need to look for in these is the morsels of information that fit with other things that you know to be true.

Some of what Iwata said in the presentation fits with what I predicted, and with what I know about the mobile market, and with the additional revelation of working with Universal Studios to have Nintendo characters and licenses in their theme parks. I believe these things that are all fitting together to a cohesive whole of Nintendo casting off their own self imposed restrictions and embracing the role of innovator, creative force, perhaps even curator, and still working on their own home turf on console, but working with more external partners to increase their exposure and presence in more ways.

So far it looks like The Big N is taking a good approach to their product schedule, strategic placement, and eve their use of DeNA in these plans. I, for one, am very interested to see if they can bring innovation and greater respect to the mobile game market.

I don’t know if I could call myself excited, because I’m dead inside anyway, but I am very curious to see what happens, and wouldn’t blame someone with a soul for being excited.

Kynetyk is a veteran of the games industry.  Behind the Line is written to help improve understanding of what goes on in the game development process and the business behind it.  From “What’s taking this games so long to release”, to “why are there bugs”, to “Why is this free to play” or anything else,  if there is a topic that you would like to see covered, please write in to kynetyk@enthusiacs.com