What goes around comes around: during the GameCube era, gamers argued about Nintendo's downfall and questioned whether the company would abandon its hardware to become a third-party developer for Sony and Microsoft. Longtime Nintendo rival Sega had decided to do exactly that after the Dreamcast's death, which was fuel for the argument. But then Nintendo found insane success with the Wii and DS, putting the matter to rest for half a decade. And now the discussion is back--after launching the 3DS with a weak library, banking on a none-too-popular visual effect, and tacking on a second analog stick with an optional accessory, Nintendo's future is cloudy once again.
The iPhone has changed handheld gaming in ways Nintendo wasn't prepared for, but President Satoru Iwata has emphatically stated that Nintendo has no plans to ditch its hardware and start releasing games for iOS. Gamers won't be surprised, but is this an instance of Nintendo sticking to its guns or refusing to adapt?
Nintendo has recently gone to great lengths to talk about the value of games and the danger the 99 cent price point poses to the industry. But can the company continue to profit with a handheld if the market has moved on to smartphone games? Even with the 3DS struggling, things aren't all bad--at $170, Nintendo still makes something like a $70 profit on every 3DS sold. What would a switchover to iOS gain for the company? In making that change, Nintendo would likely lose what makes it a unique company, as Satoru Iwata explains:
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.
It would sell more games more quickly, at least initially--but iPhone development isn't really in line with the long production cycles Nintendo lavishes on its major franchises. But in a way the company is refusing to adapt. It doesn't need to adapt by abandoning its hardware and switching to developing $5 games for Apple, but it sure could learn a thing or two about building an online store and tapping into the potential of digital delivery.
Nintendo's sitting on a reserve of $10 billion in cash--the 3DS' troubled first year means very little in the short term. And Nintendo's looking for long-term success with the 3DS and the Wii U--it just needs to study what the iPhone does well to better serve the smaller fanbase still interested in dedicated gaming handhelds.
Image via flickr user John.Karakatsanis