The very first outing of new president Kimishima Tatsumi in front of Nintendo's investors ended on a note that would be very familiar to veterans of such events from Iwata's tenure; the announcement of a delay. "Please understand." After a generally upbeat presentation, the announcement that its first smartphone game (and first fruit of its collaboration with DeNA) will be delayed to March 2016, rather than launching at the end of this year, sent Nintendo's share price tumbling by over 10% almost instantly.
Kimishima's explanation for the delay ought, at least, to reassure those who feared that his tenure would see any retreat from Nintendo's core values. The company wants to get the game right. It wants to move it away from the overcrowded bustle of the holiday season, when it will be promoting several other titles on Wii U and 3DS, and into the relative calm of the first quarter, when it'll have time to explain and promote the new game properly. Both of these things make perfect sense. If the first game from Nintendo and DeNA sucks it'll be a hammer blow to the new strategy, and launching a free-to-play mobile game around Christmas is, to a large extent, a hangover from console game thinking. It offers limited advantage and forces you to vie for attention much more aggressively than would be needed at a quiet time of year. Nintendo's choice is the right one.
"The stock market doesn't care. Investors in Nintendo want one thing, and one thing only; they want mobile games"
The stock market doesn't care. Investors in Nintendo want one thing, and one thing only; they want mobile games. They're broadly not impressed by the financial turnaround executed by Iwata and Kimishima over the past two years, which has brought the company back into healthy profitability (yesterday, it announced a strong profit in the first half of its financial year, for the first time in four years). They see companies like GungHo, Mixi and Colopl turning over billions of Yen from single mobile titles and believe this to be the future, and fret that unless Nintendo copies those firms as soon as possible, it will become obsolete.
They're right about much of that assessment, but wrong about one crucial thing; what GungHo, Mixi, Colopl (and many others besides) are doing isn't the future, it's the present. It's not the next big thing, it's already a thing. For a company like Nintendo to ignore mobile would be fatal; for a company like Nintendo to blindly run towards the present mobile model would be equally fatal, because by the time it reached that point the goalposts would have moved again. Have you ever watched small children play football when they're too young to understand that they need to predict where the ball will be next, and instead all charge directly at where the ball is now? It's not entirely unfair to visualise stock markets as being a little like that in their grasp of strategy. Much will be made of the share price drop in the wake of Kimishima's announcement; it actually means little, especially to a firm whose management team, founding family and closely related institutional investors hold such a large proportion of stock. The only meaningful thing is whether his approach actually works.
The now-delayed first game we're going to see is something called "Miitomo." The name is a fairly clever pun in Japanese, being a mixture of "Mii" and "tomo" (meaning friend) which also contains "miito" (meet) and sounds like "ii to omou" ("it's good"). Nintendo's language pun writers burned the midnight oil on that one. The game itself revolves around the Mii avatars that Nintendo has used since the launch of the Wii and appears to mix elements of 3DS hit Tomodachi Collection with some aspects of Animal Crossing and the 3DS' Streetpass functionality. It's free to download, but you can buy cosmetic items to dress up and equip your Mii, which will run around interacting with other people's Miis, chatting to your friends and so on. It might work (Tomodachi Collection wasn't a million miles off and it was absolutely huge), it might not, but crucially it's very different from the successful titles in the mobile market today. Nintendo's trying to create or discover a new segment, not panicking and running after the current market leaders.
"What GungHo, Mixi, Colopl are doing isn't the future, it's the present. It's not the next big thing, it's already a thing"
The use of Miis in the company's first mobile title, incidentally, upsets the betting pool that's been going on among gamers and industry types alike about which of the firm's IPs will be first out on smartphone. I'd figured Animal Crossing or Advance Wars, for the record (and I maintain that Animal Crossing will be among the five titles to be released by March 2017 under the DeNA deal); everyone seemed pretty certain Mario wouldn't roll out first; nobody, that I know of, thought Miis would be the first IP out the door. That's perhaps because we tend not to think of Miis as a Nintendo IP; yet in retrospect, it's easy to see why Nintendo chose as it did. Miis absolutely are an IP, and perhaps the most powerful IP the company established in the Wii era. They were the stars of Wii Sports and Wii Fit; the accessible, friendly face of a console for everyone. They're incredibly recognisable and well-liked by exactly the non-core audience that Nintendo wants to bring on board with its smartphone offerings. There will, incidentally, be smartphone offerings for the core players down the line, it seems. Kimishima mentioned that along with free-to-download titles like Miitomo, the company is also working on paid mobile titles. My guess is that these are games from the firm's back catalogue (there would be holy war if Nintendo classics were retrofitted for F2P), but it's possible that the company wants to test the waters with paid-for titles as well.
Miitomo will launch in March 2016 alongside another application, My Nintendo, which is the smartphone portal for the new, fully-featured network service that backs up all of its future efforts. Nintendo Account (catchy name, though I guess Sony Entertainment Network doesn't exactly set the heart aflutter either) was talked about in broad strokes at previous events; it's a service that links together your consoles, your PC and your smart devices, allowing games to swap data through the cloud (so yes, the firm is very clearly working towards having smartphone games that act as an extension of console games) and social interaction between friends across all devices. The company is also working on improving the download experience. It's doing far, far better than before at driving sales of download games (though I wonder how much of its impressive download sales number in 2015 so far is down to retail shortages of key titles like Splatoon pushing people online) and intends to allow you to buy games directly through your phone or PC, and have them downloaded automatically to your Wii U, 3DS or (eventually) NX. Welcome to five years ago on other platforms, sure, but it's a good feature nonetheless. More interestingly, the firm's late lamented Nintendo Stars point system will be directly incorporated into Nintendo Account in future. And it intends to extend the service's functionality to the real world, with interactions possible in retail stores, cinemas and in theme parks; an oblique reference, perhaps, to the company's theme park joint venture with Universal Studios, which was otherwise not mentioned today.
"Miis absolutely are an IP, and perhaps the most powerful IP the company established in the Wii era"
In spite of the stock market reaction - and the big headline being "Nintendo delays mobile entry" - today's conference seemed pretty positive overall. The firm is being cautious about mobile, and with good reason; it doesn't want to rush to copy existing market leaders, and instead wants to find a way to make smartphones work with, not against, its console hardware and games. Some will lament that as holding on to the past and continue to demand that the firm abandon hardware for developing software on smart devices. I maintain that these people fail to understand Nintendo on both a business and a creative level, and underestimate the extent to which even Nintendo's "failures" in hardware are more bankable than the vast majority of mobile game companies. Look around the edges of today's big news to see just how unusual Nintendo's business is. Here we have a company that's unquestionably fallen on hard times in its home hardware business (and faces tough challenges in handhelds, too), yet sold over 30 million games on its platforms in the six months ended September 30th. It turned out a pair of multi-million sellers on the Wii U (one of them an entirely original IP) during the quiet months of the year. Most impressively, it's shipped over 21 million amiibo toys, 7 million of which shipped this summer alone, and is currently having to apologise to customers for not being able to make enough of the recently launched amiibo cards for Animal Crossing to satisfy demand. (Incidentally, if Nintendo and DeNA's engineers can figure out a way to make amiibo NFC talk reliably to the NFC chipsets on iPhones and Android devices, I suspect they'll have to build a whole new Scrooge McDuck style swimming pool to store the resulting money.)
With a business like that behind it, and the potential of a return to greater console success with the NX, Nintendo has every right to be cautious about how it approaches mobile. It wants mobile to be a new pillar of its business, but that's no good if in building it other pillars are demolished. It needs its mobile business to bolster and support its console business, not detract from it. It needs mobile games to spread recognition and engagement with its long-nurtured, hugely valuable IPs, not to cheapen or discredit them. Crucially, it needs Nintendo mobile games to be unique and recognisable; to avoid being lost in a sea of mobile titles in which publisher name recognition counts for little and less. If achieving that goal requires a few more months to get right, and demands a careful approach rather than rolling out big-hitting IP straight out the door, then those are the right choices to make.
Kimishima's performance today was as we might have expected; solid, steady, no big surprises and no big departures from Nintendo's existing strategy. He's a safe pair of hands, to be sure, but the muted nature of today's announcements merely pushes back the inevitable to the first quarter of 2016. Eventually, Nintendo has to reveal its more long-term mobile plans, not to mention more details of the NX console. Today was just a mock exam; Kimishima's real test will come when he stands in front of investors and truly draws back the curtain on his vision of Nintendo's future.