Nintendo NX may capitalize on "largely ignored" kids market - DFC

In the latest note from DFC Intelligence, the research firm ponders the future of Nintendo and the console market. DFC sees the under-12 market as the "lost console generation" that could ultimately be a significant opportunity for the right company. Naturally, Nintendo has always been kid-friendly, and with the right approach its upcoming Nintendo NX platform could capitalize on a market that's been vastly underserved.

"One of the ironies of the latest generation of console systems is how children under the age of 12 have been largely ignored. The Nintendo Wii U is the only dedicated system remotely targeted at kids and it has been a failure. Twenty years ago many casual outside observers viewed children as the ONLY market for video games. The fact that console systems can thrive without targeting a younger audience speaks volumes to how the industry has grown. However, it also highlights a major missed opportunity," DFC says.

"Arguably Sony and Microsoft don't need younger gamers and can simply rely on the trickle down effect where kids come on board several years into the lifecycle. Really it is hard to point to major specific new generation games targeted for kids outside of Lego titles and toys to life products. Furthermore, these products play fine on older console generations and do not really justify an investment in expensive new hardware.

"Of course, the company that has had the greatest success with targeting children is Nintendo. Nintendo is currently in a holding status until they can launch a new console system but the company has a real opportunity to reinvent the groundwork in the game space by introducing an easy to use system that targets the entire family."

DFC believes that current consoles from Microsoft and Sony have become overly complex to operate, especially for children. If Nintendo or some other company can make console gaming easy again, it could be a real win for the under-12 market.

"The original beauty of the console business was a kid could push a button and in seconds be playing games. In the current generation, that appeal has been lost and the immediacy of being able to play games is now found on Apple devices, the Nintendo DS and even PC games. Of course, it is not only kids that want to get in and out of games as fast as possible. Apple, Supercell, King Entertainment and other major growth stories are all about giving consumers quick access to games," DFC continues.

"The current hole in the market for accessible high-end games that are NOT on Apple devices could be a real opportunity for Nintendo. Nintendo really helped pioneer the easy in and out accessibility that is a major appeal of Apple devices. Of course, saying there is an opportunity and doing something about it are two different things. The market is ready for an easy to use system that targets the family. The question is will Nintendo be able to capitalize on what is clearly a major vacuum in the game space.

"Someone is going to come along and take advantage of the opportunity to make games simple again... Many observers are rightly skeptical of Nintendo's chances. DFC also believes Nintendo is a dark horse... Poor recent execution has not been encouraging but the opportunity to turn things around is clearly there."