Nintendo Has "Great Games" But Is Facing A "Structural Problem", According To Industry Analysts
Posted by Damien McFerran
"The first step to recovery is to acknowledge the problem"
Today's somewhat dismal financial results have given Nintendo fans plenty of food for thought, as well as providing the company's critics with all the ammunition they need.
Mitsushige Akino, chief fund manager at Ichiyoshi Asset Management Co. in Tokyo, feels that Nintendo needs to radically change its approach to cope in a market which has "moved on":
The video-game market has moved into smartphones and tablets. Nintendo needs to expand from their current hardware business model. It’s a structural problem.
Industry analyst Michael Pachter — we're sure you remember him — has positive things to say about Nintendo's software, but also believes that the company needs to change:
Nintendo software is still great and will continue to be. However, if software remains proprietary, sales are limited when they sell fewer hardware units. The first step to recovery is to acknowledge the problem. I have not seen anything from Mr Iwata that acknowledges that there is a problem.
Nintendo's Shigeru Miyamoto has previously been quite adamant that moving away from hardware is not something the company is willing to do, which is an understandable stance. The massive profits generated by the success of the Wii and DS are proof that when the approach works, it can be incredibly rewarding. One hardware failure does not mean that the same strategy cannot work again in the future, and by focusing solely on software, Nintendo would give up the chance of that happening again.
However, in the short-term at least, it's easy to argue that Nintendo is potentially missing out on bumper profits by not putting its games on other systems — although whether or not a touch-screen Mario on iOS would be a success is something that remains up for debate.
This is, as ever, a particularly tricky argument — what are your feelings, given the figures released today? Can Iwata keep Nintendo in the hardware realm, or do you think he will be feeling renewed pressure to embrace rival systems? Sound off by leaving a comment below.