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Roundtable: Is Nintendo's mobile move a smart play?

The GamesIndustry team discusses the strategy and implications of the landmark deal with DeNA

For the past couple years or more speculation has run rampant about what Nintendo needs to do to firm up its business as millions of players flock to mobile devices. People would often say, "Why doesn't Nintendo just start releasing Mario and other games for smartphones?" And for its part, Nintendo would usually counter by saying that it's essentially never going to water down its flagship IPs with mobile releases, that its games inherently are made to work best with the hardware the company produces.

While Nintendo has been leading the handheld gaming space, mobile games just isn't in its DNA; ironically DeNA is now changing all of that. The Japanese mobile firm's alliance with Nintendo came as a big surprise to everyone today. Nintendo's sudden reversal means that in the not too far future, core franchises like Mario, Zelda, Donkey Kong, Pikmin or any others could be on a smartphone anywhere in the world. But is this truly the right direction for Nintendo? Will leveraging the massive global smartphone and tablets marketplace outweigh any concerns about cherished games like Mario being watered down? Or should we trust in DeNA to do right by Nintendo's titles? The GamesIndustry.biz staff discusses the implications of Nintendo's mobile move in this roundtable.

Matthew Handrahan

As someone who grew up free from Nintendo consoles, I've often marvelled at the incredible power its brand has over the most sober and sharp of intellects. The rose-tint of those iconic characters and long-running franchises is enough to weaken the objectivity of even the most cynical journalist, but I am not among their number. As a child raised on the Amiga and the PC, announcements like the one today carry not even the smallest hint of nostalgia, and with that in mind I can only view it is a positive step, though not just for Nintendo and DeNA.

"Nintendo IP and Nintendo characters have the sort of hard-won value that could truly alter the way premium prices are perceived by the mobile audience"

Matthew Handrahan

Whatever else can be said about the mobile market, to my mind it has a significant problem with the perception of value, both among the people who idly tap away at the most popular titles on the way to work, and among the developers who have to make tough decisions about the time and resources they can possibly recoup in terms of revenue. This I know for sure: many of the smaller developers for whom mobile presented the best opportunity yet at independence and creative freedom are waiting for the pendulum to swing away from free-to-play to a position where a larger slice of that vast audience might actually be willing to pay upfront for a game. The small group of companies making virtually all of the money in that market aren't likely to challenge their own status quo, but Nintendo's entry into the space could change that.

Will Nintendo opt for premium? There's a solid argument in both directions, but I genuinely hope that it does. Nintendo IP and Nintendo characters have the sort of hard-won value that could truly alter the way premium prices are perceived by the mobile audience.

James Brightman

Considering the smartphone world we live in, the 3DS has been performing exceptionally well, but even so the whispers kept coming, hinting at the day that we might see Mario and company go mobile. Well, that day is here and it's happened sooner than I'd thought. During Nintendo's shareholder meetings, investors and analysts repeatedly asked CEO Satoru Iwata when Nintendo would take advantage of the mobile scene; some even called for Iwata's head. I get the sense that Nintendo tried to resist the gravitational pull of mobile for as long as it could but that ultimately, despite every fiber of its being shouting no, it was forced to give in. If the company's Wii U had been a better performer and its bottom line were in much better shape today, this decision likely would have been forestalled.

Like a child refusing to take its bitter medicine but realizing that it was necessary for its health later on, I'm hopeful that this move will ultimately pay off for Nintendo. The company knows that its expertise isn't on mobile, so it's wisely teamed with one of the leaders in Japan in DeNA. Whether DeNA knows how to make a "proper" Mario experience is up for debate, but Nintendo wouldn't have made the deal if it didn't trust DeNA to handle its properties with care.

"Much like Disney and Mickey Mouse have persevered, remaining relevant across multiple generations, Nintendo has that chance now - a chance to keep Mario and other characters in the mainstream cultural consciousness, potentially for decades to come"

James Brightman

The bottom line is that Nintendo just vastly expanded its addressable audience to millions upon millions of smartphone and tablet users worldwide. How many 3DS players do you actually see on planes, trains and buses? As popular as 3DS is, most of the time people have a smartphone in their hands and they are playing games like Candy Crush, Game of War, Crossy Road or Monument Valley. Most of the editors of this website grew up with the NES but just how significant is Mario today to a kid who's been handed a smartphone at the age of five? Much like Disney and Mickey Mouse have persevered, remaining relevant across multiple generations, Nintendo has that chance now - a chance to keep Mario and other characters in the mainstream cultural consciousness, potentially for decades to come.

Brendan Sinclair

The big question I have about this deal is what kind of oversight Nintendo will have on the mobile projects developed using its IP. In the past, Nintendo has struck a few deals where it had little to no oversight over the final product and the results were disastrous. The Super Mario Bros. box office flop and the CD-I Zelda and Mario titles come to mind. However, when Nintendo retains a bit more control over the process, third-parties have done just fine with the company's IP (as evidenced by Capcom's Zelda Game Boy games and Sega's F-Zero GX and Sonic and Mario Olympic titles).

The problem here is that Nintendo sought a partner for its entry into mobile because it doesn't have the expertise of confidence in that area to do the job itself. Naturally, DeNA will produce something that Nintendo wouldn't have made on its own. And when it does that, will Nintendo clamp down and insist on changes, or will it yield to the mobile firm's expertise and let Mario, Link, or its other icons branch out into unfamiliar territory? Will Nintendo let DeNA make free-to-play games despite its public protestations of price erosion in the industry? How will the mobile world's "minimum viable product" approach mesh with Nintendo's insistence on delaying games as long as it takes to get it right? Can Nintendo let go just enough to make this partnership a success, but not so much that they lose the unique qualities that produced such a world-class stable of franchises in the first place?

Dan Pearson

A conversation took place in the office this morning between a stalwart Nintendo fan and his colleague - a man who doesn't shy away from a bit of healthy ribbing whenever Nintendo looks to have done something unusual. (In fact, we've all taken to making siren-like 'Wii-U, Wii-U' noises to signal the arrival of the Nintendo Defence Force, but he's usually the ringleader.) The Nintendo fan arrived as his colleague was already at his desk, gathering the day's news. With great relish, he imparted the details of the DeNA mobile announcement with all the gravity of a declaration of war. The fan responded with the classic five stages of grief: denial, anger, bargaining, depression and, finally, acceptance. At first, he simply refused to accept it, assuming it was a wind-up, which he promptly became infuriated by. Then came a long period of insisting it would just be companion apps, like the Pokedeck. Some moments of quiet sadness followed before he was able to discuss it properly.

"If you're the last kid left on the diving board, you've got to make a splash. So it is for Nintendo - having prevaricated about the prestige of its unparalleled IP for so long, there's nothing left to do but jump with both feet"

Dan Pearson

As much as the scene was played for laughs, it's a range of emotional responses which is likely to be repeated by many a Nintendo stalwart when they hear about the deal.

It's understandable. Nintendo has flat out denied that this would happen several times, as recently as January. "Mr. Iwata has also stated that Nintendo's intention is not to make Nintendo software available on smart devices," fans were told - a certainty which many took as a staunch defence against any accusations of being "too casual". The refusal to loan out its catalogue to other platform holders has always been a point of pride for Nintendo, and that attitude has been shared by fans. If you want to play Mario, you have to do it on a Nintendo platform, instantly giving them a massive advantage in any argument over who has the best exclusives. If our resident fanboy is any yardstick, there are going to be considerable feelings of betrayal.

The thing is, the whole process of five stages took all of twenty minutes. By the end of it, he was just as excited as the rest of us at the prospect of Nintendo's magic being more widely available - and it's that last stage of acceptance which Nintendo has to focus on. Trying to appease the earlier responses, by easing audiences in with companion apps, demos or minigames, will just prove the doubters right - this isn't something that can be half-assed. To convince those who aren't already Nintendo fans (because let's be honest, even the most shocked of existing Nintendites will always give them the benefit of the doubt) DeNA has to make big, brilliant games which embrace the IP on a scale which rivals that of their original homes. If you're the last kid left on the diving board, you've got to make a splash. So it is for Nintendo - having prevaricated about the prestige of its unparalleled IP for so long, there's nothing left to do but jump with both feet. I'm looking forward to it.

Steve Peterson

Nintendo has finally acknowledged that those pesky smartphones and tablets aren't going to go away. While this should have been done years ago, a deal with DeNA makes great sense. Nintendo gets the benefit of DeNA's mobile development skills and expertise, and DeNA gets to use the most popular game characters in existence. This should help create more awareness of Nintendo characters among kids (who are moving heavily into smartphones and tablets), and potentially bring them to buy into Nintendo devices and "premium" game experiences on Nintendo hardware.

It's interesting to note that during this announcement Nintendo also announced a new hardware platform, NX, though with no details about it. This affirms that the company still plans to make proprietary hardware. Thus the demise of the Wii U is signaled, and perhaps we'll get more info at E3. The question then becomes what can Nintendo bring to proprietary hardware that won't be found on smartphones and tablets that are produced in numbers that are orders of magnitude larger than Nintendo could possibly hope for? Competing on price and tech specs is not a viable option for Nintendo; they will need to find innovation that matters to gamers in order to make their own hardware a top seller.

Perhaps even more important in the long run is how Nintendo connects these mobile games with its other games. Will they be entirely separate, or will there be some connections between online identities, characters, virtual items purchased? Nintendo has been well behind the networks of Microsoft and Sony; perhaps DeNA's expertise in social networks for gamers can be put to good use. This deal has terrific potential, but only if Nintendo really uses it to its full advantage on all levels. If this is just a check box to satisfy investors (and Nintendo's stock is already up over 14 percent on the news), then in the long run it won't make much difference. Let's hope Nintendo really puts in the effort to this partnership to make it truly special.

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Latest comments (20)

Daniel Hughes PhD Researcher, Bangor University4 years ago
Firstly I'll point out that what Iwata said last January was largely misreported. Iwata denied an incorrect report in the Nikkei, but then confirmed that Nintendo were investigating how best to use smart-devices and what kind of apps to develop on them. Then, last April, Iwata confirmed that a team of developers at Nintendo would begin to experiment with software for smart-devices. The turn-around began over 12 months ago. As James suggested, were Nintendo in a better position, they would likely not have done this. Personally I think it's one of the smarter decisions Nintendo have made in recent years.

I'd also point out that it's being reported on other sites, including Eurogamer, that Nintendo will retain control over actual development of the software on smart-devices. There will be joint development of apps, not a simple outsourcing to DeNA. It's also tempting to make the NES analogy; Nintendo are entering a market dominated by large amounts of low-quality software, and it looks like their key differentiator is going to be that they offer quality rather than quantity.

EDIT: Also, no, while clearly a commercial failure, the demise of Wii U is not yet signalled and there won't be more on NX at E3. Iwata clearly confirmed that NX will only be discussed in more detail in 2016. I expect the announcement of NX came precisely because there would be widespread misunderstanding and that many people would assume Nintendo were going mobile only.

Edited 1 times. Last edit by Daniel Hughes on 17th March 2015 4:00pm

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Anthony Chan4 years ago
From end user point of view, I just pray that Nintendo retains decsion making in terms of how to monetize this - i.e. NOT F2P. DeNA is great publisher, however their monetization of their games is quite horid and explotative of gamers. I don't mind smart F2P, but DeNA (along with some other big names) cross several lines of ethics - i.e. Defender of Texel.

What will be intersting to see is how Nintendo comes into this market without alienating its 3DS hardware - divert potential buyers away from 3DS due to game availability on smartphone.

Anyways, I would be happy for an official Nintendo release of all the pokemon on to smartphone!!! with multiplayer options included!
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André Bernhardt Free Bird, IndieAdvisor4 years ago
Looks like the stock market appreciated the move: http://finance.yahoo.com/echarts?s=NTDOY+Interactive
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Show all comments (20)
Steve Peterson Marketing Consultant 4 years ago
Nintendo will certainly continue to sell the Wii U as long as it can, but the simple fact of confirming a new hardware platform is in the works is a signal that the Wii U is coming to an end sooner rather than later. Such an official confirmation means that third-party support, already thin, will get even thinner or vanish entirely. And it's not going to help sales in any way. Why say anything? Because Nintendo felt it was important to confirm they still will be doing hardware, and not going all-mobile.

And I do expect to hear more about NX at E3, though it may not be official statements from Nintendo.
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Greg Wilcox Creator, Destroy All Fanboys! 4 years ago
Given that some of DeNA's games feature Pokemon-style gameplay mixed with digital card collection, it'll be pretty much them doing what they do, but now with Nintendo characters and hopefully, a LOT less in the way of pay for content timer shenanigans.

We'll see, but I'm hoping Nintendo does at least try to reign in what some parents will despise in the form of too much money being yanked out of their wallets by some of these addictive mobile games they get for their kids. Particularly those parents who shelled out for a few 3DS systems and games thinking those would make do as one time purchases that didn't have paid DLC.

Eh, we'll see...
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Jeff Kleist Writer, Marketing, Licensing 4 years ago
Well, basically Nintendo today validated everything I and others have been saying, and the WiiU successor scuttlebutt ibe nee. Talking about for awhile

Once again, they didn't care until they're seen erosion in Japan in the handheld arena, now they're running scared. So now they make a deal that is obviously as much internally political as externally necessary. The heavy emphasis on NIntendo Next, which as I've been saying is some kind of kindle Fire style walled garden designed to Chromecast to your TV still being a dedicated game machine. And those internal forces are going to keep fighting for the status quo. It's over, it's just a matter of how much they want to waste going down. You'll know the surrender has happened when they move virtual console over to whatever mother app they're working on
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Istvan Fabian Principal Engineer, Sony Computer Entertainment Europe4 years ago
That should be a different idiom...
Running scared -> Take the ball and run with it.
...but yes, both contain the word "run" ;)
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Jim Webb Executive Editor/Community Director, E-mpire Ltd. Co.4 years ago
Jeff, this has been in the works since 2010. So 5 years in the making. Nintendo was still doing well in 2010 and the 3DS was only revealed that year. Don't act like this is some last minute decision based on the most recent quarterly results for Japan.

Mobile deals in the works since 2010.
Combined R&D facility planned since 2008.
$100 million acquisition of unknown tech firm last year.
QoL concepts introduced as far back as 2006.

Hardly knee jerk. Seems like they've been planning something like this for far longer than since last quarter.
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Nicholas Pantazis Senior Editor, VGChartz Ltd4 years ago
You all seem confused about who's making these mobile games. Iwata stated that it's Nintendo developing them, not DeNA. DeNA is providing infrastructure, knowledge, server space, and distribution. From Eurogamer:

"Speaking in a press conference this morning, Nintendo boss Satoru Iwata confirmed Nintendo would take charge of the actual game development - the front-end, gameplay and UI that players actually see.

DeNA, meanwhile, will be working on supporting Nintendo by providing back-end services and server knowledge."
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Greg Wilcox Creator, Destroy All Fanboys! 4 years ago
Ah, well... that makes more sense. Now, someone needs to tell the screaming people off the industry sites, as things are getting hot and hotter in the inter-space, lol...
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Joe Nuyen Mail Carrier & Industry Shareholder 4 years ago
There is no reason Nintendo can't enjoy all sides of the gaming business. Jim is right, they've shown tremendous vision. Better to be late to the party with a plan than miss the boat entirely.
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Jeff Kleist Writer, Marketing, Licensing 4 years ago
@Jim

I'm sure there have been meetings, and I'm sure there are people inside NintEndo who have been pushing this. This deal has not been in the works for five years. It's like eliminating Andre the giant from the royal rumble, it takes five guys to put it over that rope, several of which is the serious threat to their only business making moeny: handhelds.

Japanese companies like NINTENDO turn like a cruise ship with one prop and one rudder on opposite sides. Very slowly, and with incredible effort. This isn't a carefully thought out move, it's one only being done because the people at the top are finally scared because the barbarians are at the door, and they can see way more people on the train with mobile than gamebiys, so it's actually in front of their face
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Adam Campbell Game Manager, Azoomee4 years ago
Once again, they didn't care until they're seen erosion in Japan in the handheld arena, now they're running scared.
Nintendo are probably more forward thinking than people give them credit for.
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Antoine Baker Artist/Designer/QA Tester 4 years ago
@Adam Campell

I agree. Nintendo has been leading a trail to this move. Everyone has been distracted by the sinking ship that is the Wii U, which really seems like a blessing in disguise for them. I think while everyone is going on about the Wii U, Nintendo has secretly been thinking and analyzing their strategy. No one really gives them credit for being innovative or forward thinking. After all, they have set trends that even the big boys today are trying to cash in on.
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Chris Payne Managing Director & Founder, Quantum Soup Studios4 years ago
Pikmin on iPad. I rest my case.
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Adam Campbell Game Manager, Azoomee4 years ago
Pikmin on iPad. I rest my case.
Good idea.
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Jeff Kleist Writer, Marketing, Licensing 4 years ago
@Adam

I've been working with Japanese companies for fifteen years, and as their own now-former executives said, no, they haven't. While some middle management may have been doing that, the rigid system, hierarchy, and groupthink thst is traditional Japanese corporate culture has made sure that nothing active has been done with it until relatively recently. Everything Nintendo does is a generation behind, and the fact they've just discovered 2010 isn't really a suprise, it's par for the course.
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Greg Wilcox Creator, Destroy All Fanboys! 4 years ago
Well, Pikmin, Fire Emblem, the return of Advance Wars and heck, even some sort of Mario Party or other tsuguroku on mobile would be fantastic. I really hope Nintendo explores every angle here, as they can come into mobile strong from the start and have no duds that make the more ardent anti-mobile Nintendo fan want to buy a tablet if they don't yet own one. Or, hell, wish those games would also come to the Wii U, which HAS a "tablet" to play games on that's not used as well as it needs to be...
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Adam Campbell Game Manager, Azoomee4 years ago
I've been working with Japanese companies for fifteen years, and as their own now-former executives said, no, they haven't.
Maybe so, but it appears to be the case that they're making a move into mobile at just the right time. Given that they've been investigating this move for at least 5 years, a long time in technology, it suggests to me they haven't made a knee jerk reaction to a percieved decline in 3DS or portables today.
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Andy Samson QA Supervisor, Digital Media Exchange4 years ago
Nintendo's "NX" could mean two things, a handheld or a home system. 2016 is an ideal time for Nintendo to be revealing their next gen handheld, but this time is also a good year for them to be decisive or jump the gun while it's still feasible for them to turn the tides and reemerge; grow up and be a "real man's home based gaming console".

My predictions: This new console will have a similar architecture to the PS4 but will be slightly more powerful and feature an upgradeable/expandable RAM (proprietary). Also, announcing a new system doesn't necessarily mean that they'll be abandoning the Wii U. Based on what Nintendo has hinted over a year ago is that development for their NeXt gen system will be scalable so I wouldn't be surprised if "Nintendo NX" games will also be playable on the Wii U but scaled down to run on the hardware. It is possible that the same game will work on both systems or come with a free DL code of the Wii U version. The NX will run the definitive parfait cherry on top version while the Wii U will have the vanilla edition.This can be a standard thing for 1st and 2nd party games. The Wii U will continue to have games until the end of its 5th or 6th year in the market and it will be using "NX" games as long as it can.
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