Consistent readers of video game industry news know just how frustrating a year it’s been for Nintendo Corporation. After glacially slow initial sales of its much-hyped 3DS console, the company’s stock prices and reputation have taken a pounding. In the wake of its Tokyo Game Show press conference, the company has developed another possible headache: its own CEO.
In an interview with Nikkei released today, Nintendo Corporation CEO Satoru Iwata declared unequivocally that his company will not develop software for smartphones and other mobile platforms. The interview puts to bed months of speculation on whether Nintendo would reverse its previous stance on joining the flourishing mobile market.
Standing firm on his earlier stance on the issue, Iwata made the following statement in response to whether his company would begin developing games for smartphones:
“If we did this, Nintendo would cease to be Nintendo. Having a hardware development team in-house is a major strength. It’s the duty of management to make use of those strengths. It’s probably the correct decision in the sense that the moment we started to release games on smartphones we’d make profits. However, I believe my responsibility is not to short term profits, but to Nintendo’s mid and long term competitive strength.”
The announcement will earn Iwata few friends among investment authorities and Nintendo stockholders, who recently called for the company to expand into the smartphone gaming market. In the same interview with Nikkei, the CEO also mentions that the recent Nintendo 3DS price cut will be the last of its kind, and that he is certain that the upcoming Christmas season will stimulate sales enough to dispel any worries about Nintendo’s profit margin.
Despite his reassurances, Iwata’s statements come on the tail of several public relations blows for Nintendo. These include a drop in stock prices following lukewarm reception to their Tokyo Game Show showing and rumors that the upcoming Wii U’s much-touted tablet controllers won’t work as claimed. Even recent positive news regarding an uptick in Nintendo 3DS sales has had little effect on the dour mood surrounding the company.
One can certainly see the logic in Iwata’s decision—if smartphone gaming’s swiftly expanding popularity does turn out to be a bubble, Nintendo Corporation does not need to invest in a market that will shrink or disappear entirely within the near-future. However, analysts have pointed out that the tepid reaction to the Nintendo 3DS may owe considerably to cheap, easily obtained games available on phones and tablets. By the time the industry sorts out whether phone gaming is a fad, Nintendo may well have missed out on an entire generation’s worth of new fans.
The notion that smartphone investment will only produce ephemeral, short-term profits is somewhat baffling. Though the market for cheap mobile gaming has exploded only in the last couple of years, the sudden mass adoption of smartphones as gaming devices does not necessarily indicate a short-lived fad. Nintendo’s skittishness may be born of getting burned in this regard before (see: the Virtual Boy), but the wholesale dismissal of mobile gaming as a sustainable business is overcautious at best.
It will certainly be interesting to see how investors—those very same folks who called for Nintendo’s involvement in mobile gaming in the first place—react to Iwata’s declaration. In the coming weeks, will we see an even further sell-off of Nintendo stock? Or will Iwata’s vehemence that his company stick to its guns reassure investors that Nintendo is confident in its own future? As Kent Brockman might say, only time will tell.
Does Satoru Iwata’s announcement bring tears of rage to your eyes? Are you confident Nintendo can persevere without the mobile market? Are you just happy that the 3DS finally fell in price? Make your own pronouncements in the comments!