Nintendo's alliance with DeNA has arguably been one of the biggest gaming announcements of 2015 so far, and marks a brave new era for the Japanese veteran following countless denials that it would ever move into the smart device arena.
Nintendo president Satoru Iwata has now revealed that smart device gaming will form a very important part of the company's revenue structure - but not at the expense of its core business, which remains dedicated to gaming systems and software.
Speaking at the recent Financial Results Briefing, Iwata outlined the firm's plans for smart device games, and explained that a lot of work has been happening behind the scenes to prepare for this move:
We will start the service for the first game application by the end of this calendar year. Internally at Nintendo, we have executed several organizational and personnel changes in order to properly operate the smart device business, and we will make further changes before the first release.
Iwata also reconfirmed the fact that any Nintendo IP could potentially be used in a smart device game, and pointed out that quality will be a prime concern:
As we confirmed on March 17, all of our IP can be considered for a smart device game. On the other hand, since the game business on smart devices is already severely competitive, even with highly popular IP, the odds of success are quite low if consumers cannot appreciate the quality of a game. Also, if we were simply to port software that already has a track record on a dedicated game system, it would not match the play styles of smart devices, and the appropriate business models are different between the two, so we would not anticipate a great result. If we did not aim to achieve a significant result, it would be meaningless for us to do it at all. Accordingly, we are going to carefully select appropriate IP and titles for our smart device deployment.
He also touched upon the number of titles being released between now and March 2017:
Regarding the number of the titles, you may want to know that we will release approximately five titles by the end of the next fiscal year, which is the end of March 2017. You may think it is a small number, but when we aim to make each title a hit, and because we want to thoroughly operate every one of them for a significant amount of time after their releases, this is not a small number at all and should demonstrate our serious commitment to the smart device business.
Iwata explained that via smart devices Nintendo could reach millions of new customers, making this sector one of the key "pillars" in the company's revenue structure. However, he was quick to add that this doesn't mean the Japanese veteran is losing faith in dedicated consoles:
We will strive to expand this business into global markets at a steady pace so that eventually we will entertain hundreds of millions of people all around the world. We are aiming to make this one of the pillars of Nintendo's revenue structure.
On the other hand, Nintendo continues to have strong passion and believes in the promising prospects for the future of our dedicated video game system business. 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.
Finally, Iwata touched briefly on the integrated membership service that is expected to replace Club Nintendo. Nintendo is working on this with DeNA:
While we will announce the details of this integrated membership service at a later date, I can share with you at a high level the idea is that the consumer can access multiple devices using one common ID.
For us to be able to bridge the gap between smart devices and dedicated game systems, we will offer advantages to consumers who use one ID across multiple devices.So far, the members input their Club Nintendo ID to use the services. With this new service, our members will be able to visit Nintendo's website and log in with one ID, and they will receive various services including the ones based on their past purchases and gameplay records as well as services that will be an improved version of the current loyalty program.
With this new membership, we are planning to deploy services that will make playing Nintendo games with their game pals more fun regardless of which platform they are accessing.
While Iwata doesn't add much that wasn't already known about the DeNA partnership, it's clear that this side of Nintendo's business is likely to be a big one - and hopefully should give the company the forward momentum it needs to grow its core business.
[source nintendo.co.jp]
Comments 38
Honestly, they say their focus is gonna stay on dedicated consoles, but I feel that if their smartphone games are as successful as they anticipate, we're going to see a major shift in the company towards them. Which is a very sad thought, for myself, but an understandable one.
Every time they have said they wanted another pillar it has ended up with there only being 2 pillars left. (I just home console makes the cut - replacing 3DS quality games with stuff on iOS with real controls would be ok for me.).
@Operative Just like every other Japanese company is doing now. Its all about making more and more money. 30 million? Not enough, we want billions.
Thats what you get with investors etc.
Hearing that they're only doing five iOS games over the next two years is a relief. I hate the idea of Nintendo IP on smart devices, and knowing that it'll be done very slowly gives me a bit of hope.
nintendo on smart phones
the end is nigh....
If the NX does turn out to be a hybrid then that could still be the case.Not sure where QOL comes into it though,something has to give.
Surprising thing for me is I first heard about half of this news yesterday on abc's morning news. Even though they talked about the smart device and game release plan, they mostly show the 3ds with people playing Puzzle & Dragons Z/ Super Mario Edition. I was confused thinking they had their news backwards with smartphone games coming to Nintendo system.
It would be cool of at least one of those games have some type of interaction with their home/ handheld counterpart.
They can put as much Pokemon Shuffles on smart devices as they want, won't be interested unless there is a actual decent game on there.
I'm glad they're reassuring the doubters that they are going to hyper focus on QUALITY games. Not just pump out lazy mobile clones of crap that already exists.
I wonder if it will really go as smooth as they are imagining. Also how much will they dabble into those freemium games that are all the rage?
I just have this sinking feeling that if the next console isn't a rip roaring success, Nintendo will be exclusively on phones and I will not like that.
@Operative If they are dominating in the handheld market and if they seriously make profit out of their products, do you really think they would stupidly shift to the smartphones if they made more profit out of the phones?
@artwark of course, how is that even a question? If they make even more money from mobile games, it's logical to shift more resources towards them.
Should have done this years ago and I applaud Nintendo for doing this now. It will help create a bigger market for Nintendo. Doesn't hurt the console one bit. If anything, it's more advertisement for Wii U etc.
I think it's funny Nintendo seems to be planning a big revenue stream from app games.
I've been all for Nintnedo on smart devices since long before they announced it, but never as a revenue source, just as a marketing device for the 2 and 3 yr old children who play on their parents smartphones on line at the grocery store - let them see a Kirby endless jumper or Mario endless runner. I'm sure anything Nintendo does will get literally billions of downloads, but how much money they earn remains to be seen. Could be billions like King and Gung Ho, or it could be less. "Key revenue pillar" is putting the cart before the horse.
This is honestly not much different from merchandicing. Clothes, bags, plushies, McDonald's toys, amiibos. It's a licensing deal that will help them put butter on the bread (I know the Japanese don't eat much bread,) but it won't be what defines them as an entertainment company.
@rjejr
If they want to make money on the apps, they have to plan it from the outset. The potential is certainly there to make it a pillar of revenue, IMO. I mean, if you are talking billions of downloads, ads alone could make serious money for Nintendo, but I don't think that's the plan.
I'm starting to think NX will be less and less of an important thing when all is said and done.
@aaronsullivan - I feel like they will make money, but I'm an "under promise, over deliver" kind of guy. They shouldn't be making comments like these two so close together:
First, the liklihood of bad news -
"since the game business on smart devices is already severely competitive, even with highly popular IP, the odds of success are quite low if consumers cannot appreciate the quality of a game."
followed by the "fingers crossed" good news -
"We are aiming to make this one of the pillars of Nintendo's revenue structure."
I'd rather they focused on the side of caution, saying something to the effect of - "We only have 5 games set for mobile over the next 24 months, during that time we'll asses the profitability of the endeavor and then determine how to continue in the smart device gaming space."
Go in eyes wide open, not w expectations so high. High expectations are rarely met, don't make comments like this one:
"thoroughly operate every one of them for a significant amount of time after their releases, this is not a small number at all and should demonstrate our serious commitment to the smart device business."
Caution, w/ potential. And if they over promise too much they can kiss NX good-bye before they even officially unveil it.
@rjejr
While I hear what you are saying, I think you and I are reading: "We are aiming" differently.
To me, it's exactly the kind of statement without promises you are asking for. A useful message of intent. To say you are aiming to hit the bullseye does not suggest you are making a promise that you will.
Always keep in mind that these things are translated, too.
@aaronsullivan - Translated.
Yeah, when I first read this sentence my first thought was - Iwata needs to hire a different translater:
"I can share with you at a high level the idea is that the consumer can access multiple devices using one common ID."
Still hurts my head.
Nintendo could maybe be the first developer to actually make a mobile game worth playing, not only when waiting for the train or sitting on toilet
Ofcourse. Nintendo is all about that monayy
@NiBar There are some that's actually worth playing: Temple Run 2, Dead Trigger 2, Asphalt 8, MARVEL Contest of Champions, Rayman Fiesta Run, Bullet Time, Mighty Switch Force: Hose it Down, Real Racing 3, Snake '97, ..
That sounds like an awful lot more than the "just impressive ads" that so many fans adamantly claimed.
This sounds like some big, full-blown games and products.
@Yorumi
In some circles, it's been stated that the mobile bubble has already burst. Once a haven for indie creativity, mobile games have gone big business and overly corporate. Fewer than 50% of all mobile games are profitable. The vast majority of that revenue stream is through a tiny number of games and apps.
I will help with revenue if Nintendo makes a Smart Device also! $$$ Nintendo Phone 128gb or higher! To go with your apps.
I hope their complete mobile apps are about the size of their 3ds demos.
As long as they don't abandon their consoles, then I'll be okay.
Despite Iwata's translation problems I believe English outside of England is the new world Esperanto. Considering
that I speak English it is American English with a Californian dialect.
Ill be the cynical one and say: "That wont be happening"
A small revenue boost ? Sure, people are curious.
But as a revenue pillar for the company ? Thats pretty naive, seeing how many other big name devs already tried that approach and pretty much failed with it.
Sony gave up their mobile plans because pretty much no one took notice of it. And the people who did, already belonged to their core audience. So nothing to gain there.
I give it the benefit of the doubt here and hope that it turns out good for everyone. But something inside me anticipates it alienating the core fanbase while it doesnt draw a new audience, resulting in a red numbers.
I doubt it's going to be a pillar of revenue. Maybe they'll spin some of the cash they earn from mobile development to make more powerful consoles, but I doubt that's going to happen.
@Operative But then how can they do things besides just using the touch screen? You know Nintendo's history upto this point right? They always make innovative technology. Do you see Smartphones being innovative?
@artwark
Edit: oops, sorry, I replied to the same comment twice
Personally, I hope I'm wrong and they stay focused on dedicated consoles, regardless of their smartphone success. But I'm still wary that we'll be seeing a major shift in the Nintendo we know and love if they do succeed with their apps
@Yorumi
Is there any place you read this from?
Aside from internal restructuring to take care of the business side of these productions, and appointing a head producer, I have not seen any statement that Nintendo are actually responsible for the game development.
There's a great possibility that NX will run Android to support their mobile games. It's an all-in-one console.
@Yorumi
That sounds like a good visual marker--when people simply aren't talking about it. On the industry side, it means releases see a drastic drop in numbers and companies moving elsewhere... or going under.
So... nothing new to report. Got it.
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