Nintendo: Apple's Latest Prey

[InuNacho]

The writing was on the wall

That phrase is used way to much around these forums.

Anyhow yea Nintendo is in deep dog crap. I recently got back from a trip and probably spent close to 6-7 hours in airport terminals waiting for something to happen. Looking around at other people in the terminal me and an 8 year old were the only ones with DSes, everyone else that had a portable device out had a iPod or smartphone variant. This didn't last long since the kid put away his DS after a few minutes and asked his father for his iPhone to play Angry Birds for the next hour.
If the only person around playing on a DS is not part of Nintendo's target audience and everyone around that is in that age group isn't playing on Nintendo products, then something is definitely wrong.

Times have changed, kids want iPods not DSes.

 

[Tiggs]

DOn't really see Nintendo as prey. More like roadkill.

 

[AppleScruff1]

Check out this gaming laptop. Be sure to check the available options.
http://originpc.com/eon17-gaming-laptop-features.asp

 

[roadbloc]

Lol. Nintendo are under no threat from Apple. I find it unbelievable that such a thing has been suggested. You may as well claim that Microsoft or Google are under threat from Apple as well.

 

[*LTD*]

Lol. Nintendo are under no threat from Apple. I find it unbelievable that such a thing has been suggested. You may as well claim that Microsoft or Google are under threat from Apple as well.

Well something must be going on. I guess you could always substitute "Aliens" for iOS and Android in the chart below, if it makes you feel better.

http://blog.flurry.com/bid/60307/Apple-and-Google-Capture-U-S-Video-Game-Market-Share-in-2010

From 2009 to 2010, iOS and Android game sales have spiked significantly, resulting in nearly a doubling of their market share. With both Nintendo DS and Sony PlayStation Portable shrinking in sales, while smart-device game sales simultaneously grew by more than 60%, iOS and Android games now represent more than one third of the portable game category. The net effect is that the U.S. portable gaming category, as we define it, has declined from $2.7 billion in 2009 to roughly $2.4 billion in 2010.

Wedbush Morgan Securities video game analyst, Michael Pachter, points out that the “onslaught of $1 games is going to continue” and that "[Nintendo and Sony] are going to have to share the market with Apple and Android.” Our numbers quantify just how much. Further, as iOS and Android continue to change the paradigm of casual gaming, the battle between Nintendo against platforms such as iOS and Android will intensify. Mario may indeed be standing on a burning platform.

http://www.techradar.com/news/gaming/apple-ios-gaming-boom-hits-nintendo-hard-944079


Apple iOS gaming boom hits Nintendo hard
DS market share continues to be eaten up by iOS gaming

Apple iOS and Google Android smartphones and tablets continue to eat away at Nintendo's long-held dominance in the mobile gaming market, according to the latest market research.

While traditional console gaming remains strong, the latest market research data from Flurry and the NPD Group shows that Apple's iPhone, iPod touch and iPad is taking a serious bite out of Nintendo's market share in the portable gaming market.

3DS and NGP versus iOS

Nintendo recently launched its new 3DS handheld in the UK, with hardened Nintendo fans and aficionados of in-depth gaming on the go certain to continue supporting the Mario factory's portable gaming initiatives for the foreseeable future.

However, that said, Flurry's latest market data claims that Nintendo's market share has dropped a whopping 13 per cent, from 70 per cent in 2009 to 57 per cent in 2010, with iOS and Android smartphone gaming to blame.

Whether the 3DS and the new Sony NGP can reverse this trend over the coming three to five years remains to be seen.

Flurry combines gaming market data from the NPD Group with its own estimates of game category revenues from iOS and Android devices, taken from Flurry Analytics, the company's mobile application analytics service, which "tracks more than 12 billion anonymous, aggregated use sessions per month across more than 80,000 applications."

40 per cent of these app sessions are spent on mobile games.

Prolific installed base gains

"We estimate that iOS and Android game revenue increased from $500 million in 2009 to more than $800 million in 2010," notes the research group."Of this, the significant majority of revenue was generated by iPhone games.

"It's clear that prolific installed base gains by Apple and Android devices, low priced games (including a very robust free-to-play model enabled by in-app purchases) and seamless digital distribution to games on devices so near to consumers 24-hours-a-day, is driving potent industry-disruption.

"Over 2011, we expect to see continued and significant smart-device game growth fuelled by the recent launch of iPad 2, iPhone coming into distribution on Verizon, the expected release of iPhone 5, a relentless expansion of Android devices by leading OEMs across all major U.S. carriers, and Google's enablement of in-app purchase billing, a proven key driver in iOS game revenue."

 

[roadbloc]

Well something must be going on. I guess you could always substitute "Aliens" for iOS and Android in the chart below, if it makes you feel better.

That is all well and good and I'm not denying that that is happening, but I feel we have get off cloud Apple for a second and take a realistic view on the matter.

Kids don't love Nintendo's hardware. Kids don't love Nintendo as a company. Kids love Nintendo's amazing ability to make damn good video games and video game characters. My kid brother loves Mario, can't get enough of it. When I was younger, I was never off my GameBoy Advance, playing Pokemon. Unfortunately, the big sellers in the mobile game industry (Mario, Zelda, Pokemon) are all Nintendo exclusives. And as long as kids continue to love them and they remain Nintendo exclusives, Nintendo are still going to churn over a happy profit.

Realistically, what would you buy your kid? A £70 Nintendo DS with popular games or a iPod Touch for £193 which sort of lacks in popular games. Yeah, sure, it has Angry Birds, Doodle Jump, Cut The Rope... etc. But kids don't want that, they want Mario. Not to mention that touchscreen games are either really simple (angry birds) so have limited entertainment value, or are really complicated to control (infinity blade, rage, doom) resulting in them being too challenging for them. Hell, playing Doom on my GBA is a hell of a lot easer than playing it on my iPhone.

At the price of £70, I'd get my kid a Nintendo DS. At that price it's almost disposable, no massive deal if the little **** breaks it. An iPod Touch at almost £200, it is not disposable, and kids don't tend to be gentle with their toys.

What we are seeing on your graph is the result from the mobile gaming market EXPANDING. Think back to before the iPhone. We had Nintendo's handhelds entertaining kids across the globe. Not really that popular amongst adults. Yeah, we had Sony's PSP, but we all know that that was a total disaster. Now that smartphones with more than a Snake game have come along, the mobile gaming market has expanded. More people are playing mobile games. Mr Executive now might enjoy a good ten minutes of Angry Birds in his lunch break at work, because his phone is capable of it unlike before. But when he gets home, his child will still be enjoying Zelda on his Nintendo DS. And I'm willing to bet a large amount of money that my fictional Mr Executive won't say no to a game of Mario Kart Wii with his family on an evening.

Smartphones have simply expanded the mobile gaming market. They are not taking over it.

 

[0098386]

I'll just say what I usually do when this topic comes up,

I bought an iPod touch last year mostly for the games.
Almost a year and £60 later I've played around 6 hours worth of games, 4 of those went into Angry Birds but I stopped after realising that the flaky physics engine had me attempting the same move over and over and getting different results each time. Randomisation is not good for physics, but I seem to be the only person in the world to be put off by that.

I've already sunk more hours into Ocarina of Time 3DS that I bought a few weeks ago.

They're nice casual games but for something a little deeper and with better built games. I'll stick to my DS+3DS, PSP+Vita.
It's just unfortunate that Apple let anything onto iOS and that they don't have a quality control, unlike Steam. Can you imagine if the bar was a little higher? That would raise ambitions and iOS-only gamers would be playing better games.

 

[Liquorpuki]

From 2009 to 2010, iOS and Android game sales have spiked significantly, resulting in nearly a doubling of their market share. With both Nintendo DS and Sony PlayStation Portable shrinking in sales, while smart-device game sales simultaneously grew by more than 60%, iOS and Android games now represent more than one third of the portable game category. The net effect is that the U.S. portable gaming category, as we define it, has declined from $2.7 billion in 2009 to roughly $2.4 billion in 2010.

Wedbush Morgan Securities video game analyst, Michael Pachter, points out that the “onslaught of $1 games is going to continue” and that "[Nintendo and Sony] are going to have to share the market with Apple and Android.” Our numbers quantify just how much. Further, as iOS and Android continue to change the paradigm of casual gaming, the battle between Nintendo against platforms such as iOS and Android will intensify. Mario may indeed be standing on a burning platform.

Those articles are old, from 09-10 comparing iOS to two >5 year old devices at the end of their product cycle.

Also, if you're gonna quote Pachter, he's the guy who predicted a few years back the iPhone would not catch on as a gaming device because only rich people could afford it. Most recently he predicted the Kinect would only cost $50. Then it retailed for $150 so he predicted nobody would be able to afford it and the Move would outsell the Kinect. Then the Kinect started selling really well so he said the sales numbers were fabricated. While he was getting this all wrong, the Kinect ended up in the Guiness Book of World Records as the fastest selling consumer electronics device. So much for his predictions.

Wait til after Christmas before saying Nintendo is gonna burn. Unlike iOS, the games sell the hardware and all the killer games are on the horizon. StarFox has gotten great reviews (go look at IGN). The two Mario games coming out have gotten people who said they wouldn't buy a 3ds to reconsider.

 

[*LTD*]

Writing's on the wall

http://www.neowin.net/news/nintendo-predicts-first-annual-loss-in-30-years

Nintendo predicts first annual loss in 30 years

Nintendo's latest financial results have come in and the numbers are not just bad, they could be history making for the Japanese game publisher. Bloomberg reports that the company predicts that it will record a net lost of 20 billion yen ($264 million) for its fiscal year. That could be the first such net annual loss for the company in 30 years and the first since the first NES console was released way back in 1983.

The predicted loss means that the company is not only losing ground in the console wars to both Sony and Microsoft but also possibly to smartphone makers. Indeed, analyst Koichi Ogawa, of Daiwa SB Investments Ltd, said today, "Competition in the video-game industry is getting severe, and Nintendo must fight for customers who are using smartphones and tablets."

A perfect example is the launch of the Nintendo 3DS console earlier this year. Despite a lot of hype about the console, which offers glasses-free 3D gaming support, sales have not met expectations, even after an $80 price cut in August that cut the price down to just $169.99 in the US.

So what can Nintendo do to stem the tide? Many people believe that Nintendo needs to enter the smartphone or tablet business and offer a gaming-styled product for those consumers. We actually think that would be a great idea. Wouldn't you want to play the new Super Mario Bros. on a Nintendo-branded smartphone or a new Zelda game on a tablet? We certainly would.

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How about offering the Mario franchise on non-Nintendo platforms - as in, the ones that are actually making money and not tanking. It might be Nintendo's baby, but it's time to face the music.

Mario is sad. Clearly a case of bad parenting.

 

[ct2k7]

An Apple monopoly is evil, but obviously some people dream about that every day.

 

[roadbloc]

Wouldn't you want to play the new Super Mario Bros. on a Nintendo-branded smartphone or a new Zelda game on a tablet? We certainly would.

Since I think tablet gaming is awful and I much prefer the use of buttons, no. But hey, my opinion is anecdotal right?

It's a shame about Nintendo. I'm fairly certain they won't become bankrupt, the company has survived a hell of a long time and if they begin failing at video games and console market they'll adapt to making money from something else. However, their video game future doesn't look certain if *LTD*'s links are correct.

 

[Abyssgh0st]

I could see Nintendo slowing phasing out portables (at least the DS/GameBoy concept as we know it) or at least change/adapt them radically.

If they stuck to being content providers/home console makers, it could be financially better for them.

If they ever get over their arrogance and release Zelda, Mario, Donkey Kong, etc. (even just generic ports would be fine) to iOS/Android, they would make an insane amount of money for hardly any work.

 

[*LTD*]

An Apple monopoly is evil, but obviously some people dream about that every day.

Nah, I don't dream about an Apple monopoly.

What I dream about is an Apple-like competitor who can beat Apple at their very own game. As in, tight vertical integration, software tied closely to hardware, tight control of the User Experience and tireless dedication to same, no matter what the cost.

If we had more than one Apple-like entity operating in the market, technology would advance far greater and in far less time than what we're seeing today.

 

[neiltc13]

According to the earnings release Nintendo has around $7bn in cash and deposits. It isn't going anywhere any time soon.

 

[boss.king]

Nah, I don't dream about an Apple monopoly.

What I dream about is an Apple-like competitor who can beat Apple at their very own game. As in, tight vertical integration, software tied closely to hardware, tight control of the User Experience and tireless dedication to same, no matter what the cost.

If we had more than one Apple-like entity operating in the market, technology would advance far greater and in far less time than what we're seeing today.

And the consumer would be getting thoroughly raped. What's the point of accelerating the process to the point of your gadgets lasting less than a year before needing to be replaced?

 

[Liquorpuki]

Nah, I don't dream about an Apple monopoly.

What I dream about is an Apple-like competitor who can beat Apple at their very own game. As in, tight vertical integration, software tied closely to hardware, tight control of the User Experience and tireless dedication to same, no matter what the cost.

If we had more than one Apple-like entity operating in the market, technology would advance far greater and in far less time than what we're seeing today.

So you want a competitor to adopt a closed ecosystem model like Apple. Yet Nintendo uses a closed ecosystem and you want them to break it by porting to iOS. Makes no sense. Meanwhile RIM also uses a closed ecosystem model and they failed miserably.

And everyone harps about how Apple is good at software. The truth is Apple barely does any software beyond the OS and all of its flagship iOS offerings (iWorks, Garageband, iMovie, etc) are crippled crap apps whose purpose is to help sell the latest revision hardware. Then once everyone has the hardware they barely get updated.

I just finished Isaacson's book (highly recommend it) and one of his observations is that Steve Jobs tends to analyze in binary (AKA something is either "sht" or "the best thing ever"). Too bad Steve Jobs didn't know games. Because if he did, he would've realized most of the games in the app store fall into the "sht" category and that companies like Nintendo make games that fall into the other category. Then maybe he would've spent money on an in-house development studio instead of letting third party companies degrade the gaming section of the app store into pay to play hell. The quality of iOS gaming sucks. Because of that Nintendo is not going anywhere.

 

[*LTD*]

So you want a competitor to adopt a closed ecosystem model like Apple. Yet Nintendo uses a closed ecosystem and you want them to break it by porting to iOS.

I should have said "reasonably competent" competitor, not someone that has failed to re-invent their business and has retreated into pushing gimmicks to make a buck. Sorry, I should have made that clear.

The point of a vertical model is to not half-ass it.

Makes no sense. Meanwhile RIM also uses a closed ecosystem model and they failed miserably.

Denial and stupidity will make a mess of any business model.

And everyone harps about how Apple is good at software. The truth is Apple barely does any software beyond the OS and all of its flagship iOS offerings (iWorks, Garageband, iMovie, etc) are crippled crap apps whose purpose is to help sell the latest revision hardware. Then once everyone has the hardware they barely get updated.

The OS runs the whole show. Apart from that, most Apple software is built for the bulk of Apple's market (the average user), and it all appears to be performing well, mostly because it's based around the same philosophy as OS X.

I just finished Isaacson's book (highly recommend it) and one of his observations is that Steve Jobs tends to analyze in binary (AKA something is either "sht" or "the best thing ever").

It appears to have been a successful strategy. It certainly makes it easy to separate the what from the chaff. When other strategies have brought others the kind of success that Jobs' has brought Apple, then we can judge Jobs' strategy. For now, Apple has basically been holding a decade's-long seminar on how to build and run a successful tech company that guides the industry.

Too bad Steve Jobs didn't know games. Because if he did, he would've realized most of the games in the app store fall into the "sht" category and that companies like Nintendo make games that fall into the other category.

The consumer decides. According to them, iOS games are just fine. In fact, users can't seem to get enough of them. Developers are making quite a bit of money from them (not that they can make nearly as much on any other mobile platform anyway.)

Then maybe he would've spent money on an in-house development studio instead of letting third party companies degrade the gaming section of the app store into pay to play hell. The quality of iOS gaming sucks. Because of that Nintendo is not going anywhere.

Sounds like your real problem is that you're upset that Nintendo has come to this, and is being handed their behinds by what you deem to be an "unworthy" opponent. Don't be upset with me or Apple, or what you perceive to be bad or good iOS games. Be upset with Nintendo. They've had all the time in the world to get with the program and they've wasted it. Probably due to massive hubris.

Nintendo has failed to re-invent their business, and consumers have spoken. It's actually endemic to a lot of the old, established players in the industry these days.

 

[Liquorpuki]

It appears to have been a successful strategy. It certainly makes it easy to separate the what from the chaff. When other strategies have brought others the kind of success that Jobs' has brought Apple, then we can judge Jobs' strategy. For now, Apple has basically been holding a decade's-long seminar on how to build and run a successful tech company that guides the industry.

It's successful because Jobs has applied it to markets he understands. Gaming is not one of them, he didn't aim for it or have a long-term strategy to dominate gaming market, iOS gaming just happened to be a nice side effect of putting out a device at a time when all the gaming companies' flagship handhelds were toward the end of their life cycle.

The consumer decides. According to them, iOS games are just fine. In fact, users can't seem to get enough of them. Developers are making quite a bit of money from them (not that they can make nearly as much on any other mobile platform anyway.)

Yes the consumers will decide when the 3DS actually has AAA games on it that people actually want. Because those are the types of games that you won't find on iOS. For all the talk in the Isaacson book about products as art, I'm surprised people pretend not to know the difference between a $50 Nintendo game that can pass as art with its cinematic presentation/storylines/characters and a 99 cent iOS skinner box.

Sounds like your real problem is that you're upset that Nintendo has come to this, and is being handed their behinds by what you deem to be an "unworthy" opponent. Don't be upset with me or Apple, or what you perceive to be bad or good iOS games. Be upset with Nintendo. They've had all the time in the world to get with the program and they've wasted it. Probably due to massive hubris.

Nintendo has failed to re-invent their business, and consumers have spoken. It's actually endemic to a lot of the old, established players in the industry these days.

I'm not upset at you or Apple. I just can't help myself when it comes to replying to people who don't know what they're talking about (which is why I also usually post in every PRSI thread about green energy). And I'm not trying to diss you because I agree with you roughly 90% of the time but when it comes to the gaming market, you don't know what you're talking about. You're just repeating what all the analysts are saying and the analysts tend to do nothing else but get confused about what market they're referring to and plagiarize each other.

 

[*LTD*]

I'm not upset at you or Apple. I just can't help myself when it comes to replying to people who don't know what they're talking about (which is why I also usually post in every PRSI thread about green energy). And I'm not trying to diss you because I agree with you roughly 90% of the time but when it comes to the gaming market, you don't know what you're talking about. You're just repeating what all the analysts are saying and the analysts tend to do nothing else but get confused about what market they're referring to and plagiarize each other.

What is there to actually understand? Nintendo is screwing the pooch and we all know why. The warning signs were there years ago. Is there something we're all missing? Seems pretty clear what's going on. There's no big mystery about it or deeper analysis required.

 

[Bernard SG]

And the consumer would be getting thoroughly raped. What's the point of accelerating the process to the point of your gadgets lasting less than a year before needing to be replaced?

What the hell are you talking about? If anything, Apple is the company that delivers the most durable devices out there.
I still have a 2nd generation iPod Touch that works perfectly. I even read in this very forum that some people still use their original iPhone from 2007. Of course older devices will be left out from the most advanced software technology or have screen resolution issues but that really concerns but a tiny portion of the app universe.

 

[boss.king]

What the hell are you talking about? If anything, Apple is the company that delivers the most durable devices out there.
I still have a 2nd generation iPod Touch that works perfectly. I even read in this very forum that some people still use their original iPhone from 2007. Of course older devices will be left out from the most advanced software technology or have screen resolution issues but that really concerns but a tiny portion of the app universe.

technology would advance far greater and in far less time than what we're seeing today.

I was referring to this. Look at the 3G. it didn't get iOS4 because it was too old. At a faster rate of improvement it would be the 4S not getting iOS6 because of weak hardware.

 

[Bernard SG]

I was referring to this. Look at the 3G. it didn't get iOS4 because it was too old. At a faster rate of improvement it would be the 4S not getting iOS6 because of weak hardware.

So what's the problem? It's not like you're FORCED to upgrade. It's a strictly individual choice.

 

[boss.king]

So what's the problem? It's not like you're FORCED to upgrade. It's a strictly individual choice.

That's the opposite of my point. It's more incentive to upgrade because your device is only taken care of for a year. Would you buy something as readily knowing that after 1 year it's going to be left out in the cold? Personally I'd prefer my devices to be supported for as long as possible.

 

[Bernard SG]

That's the opposite of my point. It's more incentive to upgrade because your device is only taken care of for a year. Would you buy something as readily knowing that after 1 year it's going to be left out in the cold? Personally I'd prefer my devices to be supported for as long as possible.

Well, you're being obtuse now... Apple devices are the most future-proof out there.

Or do you mean, you'd rather see tech companies sit idle for several years and not update their products so you won't have an impulsive need to upgrade?

 

[boss.king]

Well, you're being obtuse now... Apple devices are the most future-proof out there.

Or do you mean, you'd rather see tech companies sit idle for several years and not update their products so you won't have an impulsive need to upgrade?

Nice outdated chart. And where are the WP7 devices on there? It shows quite a skewed picture. Regardless, I never said I wanted them to slow down, I just don't want it to accelerate to the point that it begins to hurt the consumer (me). If you'll note, I have a 2 year old phone, so I can clearly control my "impulsive need to upgrade", I just want to know that when I upgrade I'll be getting something that will get good support for a 2 years at least.