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GI.Biz: Smart device pivot could cost Nintendo at home

T

Tripon

Member
In the wake of Nintendo's full-year financials earlier this week, we may not know very much more about its upcoming console, the NX, but one thing was hinted at very strongly; after years of trying to pretend that the smart devices revolution wasn't happening, the company is now pivoting to a stance that puts such devices at the heart of everything it does. New CEO Tatsumi Kimishima, who took on the role last September, isn't turning Nintendo into a smartphone game company, as some analysts have - shortsightedly - demanded, but their calls haven't fallen on deaf ears either; the company's vision of the future now sees mobile games not as being its only business, but as being a pillar of the company which supports, and is supported by, all its other businesses.
Click to expand...

To put this in blunt terms; if, as seems apparent, the NX is designed to fit within a smartphone-centric strategy, then the NX is going to have serious trouble gaining traction in the kids' market - at least in Japan. Reading about Nintendo online or watching the noise made by its vocal fans, it's easy to forget that Nintendo's most consistent and loyal consumers aren't westerners in their twenties and thirties with deep wallets and deeper wells of childhood nostalgia; they're Japanese children and families. Though this market is in slow decline (demographics alone have seen to that), it's Japanese kids whose enduring affection for Nintendo's properties, generation after generation, have kept the company's consoles afloat in its home market - especially its handheld consoles, which owe much of their evergreen success to schoolyard hits Pokemon and, more recently, Yokai Watch. Much of Nintendo's value in this market comes not just from being loved by kids, but from being trusted by parents; the firm's Japanese marketing, both for 3DS and for Wii U, is a masterclass in the tricky balancing act of simultaneously making products look appealing to children, and safe to parents.
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Thus, if there's one social factor that's truly played in Nintendo's favour in recent years, it's the resistance of Japanese parents to giving their children smartphones. Smart devices are increasingly common among even fairly young children in other markets, but in Japan, it's very rare for children to carry one - many schools actually ban them entirely. Special phones for children are a pretty big market; they often carry a GPS device that can be remotely tracked by a parent, and have an extremely limited set of functionality, with no capacity to install apps. Teenagers often have a smartphone, but children of primary school age carry a "dumb", child-focused phone - and of course, lacking a phone that can play games, they also carry a Nintendo handheld console. Without detracting for one second from the quality of games like Pokemon or Yokai Watch, it's this aspect of Japanese child-raising society, more than anything else, that has allowed those franchises to thrive in this market while kids elsewhere got hooked on smartphone games.
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http://www.gamesindustry.biz/articles/2016-04-29-smart-device-pivot-could-cost-nintendo-at-home
 
J

JimJamJones

Member
as seems apparent, the NX is designed to fit within a smartphone-centric strategy
Click to expand...

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W

Weebos

Banned
Yeah, not sure I agree with the assumption that the NX will be smart phone focused.

It could be, but I think so far most indications point away from that.
 
M

MuchoMalo

Banned
Another business company/analyst think that smartphones are Nintendo's future and a 100% guaranteed multi-billion dollar per year success because it's trendy. More at 11.

Edit: Oh my god, I should have finished reading first. It's even more stupid than I thought,
 
Toadthemushroom

Toadthemushroom

Member
Nintendo *is* moving towards supporting a smart device strategy, in the short term it expects smart devices to generate lost revenue from missing the holiday season with other titles, in the longer term Iwata outlined smart devices as bridging the gap between customers and their dedicated gaming platform.

Which is why Miitomo's goal is to get people on Nintendo Accounts and engaging with My Nintendo, it's why Animal Crossing is going to be a companion app with the real game.

While there are plenty of unknowns (we don't know how important playing or engaging with Nintendo's own smart device software will be relative to NX) it's fairly clear Nintendo is utilising smart devices to strengthen its business.

Also remember that Nintendo's partner in all of this - DeNA - is not doing this for free. Last year the DeNA west CEO said they expected Nintendo's smart device games to bring in $23m/month. Miitomo was earning an estimated $1m/month two weeks ago, and there will be 5 smartphone games launching by March 2017.

I'm a bit worried that Nintendo will start chasing whales in that respect, even though Iwata claimed otherwise (he said in order to maintain long term relationships with customers they will not only monetise to whales). DeNA may put the pressure on as far as that goes...

Edit: Forgot to say that the word "pivot" here is a bit hyperbolic, but the NX delay and de-emphasis of the Wii U has made Nintendo appear more dependent on smartphone revenue in the short term, so I can see where it came from.

As for the people bashing Fahey - he is someone who understands Nintendo, I've found.
 
S

Scrawnton

Member
Well they kind of are focusing on smart phones. Their big fall games this year are Pokemon Sun/Moon and two cell phone games.
 
M

mitchlol

Member
Do you think it's possible that if Nintendo released a game that got like candy crush or clash of clans big that they would pivot into an entirely mobile company? Say the release a MFI controller and just start releasing on iOS and chase that money?

Sure it's possible right?
 
Toadthemushroom

Toadthemushroom

Member
ElectricBlanketFire said:
Kind of is not changing their entire philosophy as the article suggests.
Click to expand...

I don't think the article suggests that, it just suggests that their business, and products, will be augmented by their smart device offerings and, by extension, their loyalty system and data analytics. Which does seem to be the case based on where things are headed, and what a few people within Nintendo have commented on regarding the cloud etc. (hopefully I'm not making that up!)
 
E

ElectricBlanketFire

Member
Toadthemushroom said:
I don't think the article suggests that, it just suggests that their business, and products, will be augmented by their smart device offerings and, by extension, their loyalty system and data analytics. Which does seem to be the case based on where things are headed, and what a few people within Nintendo have commented on regarding the cloud etc. (hopefully I'm not making that up!)
Click to expand...
It literally says they're putting smart devices at the heart of everything they do.
 
T

TheJoRu

Member
If you want to know what Nintendo's core business is then I suggest you read Kimishima's own words:

Kimishima said:
For our dedicated video game platform business, Nintendo is currently developing a gaming platform codenamed “NX” with a brand-new concept and our unique software-led hardware-software integrated business will continue to constitute the core business for Nintendo. For the purpose of maximizing the population that interact with Nintendo IP, we will also enter into the smart device gaming business and aim to generate revenue and profit from it as well as to create synergy with the dedicated video game platform business.
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https://www.nintendo.co.jp/ir/en/management/message.html

The smartphone business is a part of their strategy, but dedicated gaming platforms, such as NX, remains their core business. Thus their smartphone strategy should reasonably be seen as complementing the dedicated gaming platform strategy, and being designed thereafter. Not the other way around.
 
M

McDougles

Member
TheJoRu said:
The smartphone business is a part of their strategy, but dedicated gaming platforms, such as NX, remains their core business. Thus their smartphone strategy should reasonably be seen as complimenting the dedicated gaming platform strategy, and being designed thereafter. Not the other way around.
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Now I can't help but envision the Nintendo strategy being using our Miitomo accounts to praise upcoming and current video games by giving them compliments.

Smartphones complimenting dedicated gaming hardware.
 
T

TheJoRu

Member
McDougles said:
Now I can't help but envision the Nintendo strategy being using our Miitomo accounts to praise upcoming and current video games by giving them compliments.

Smartphones complimenting dedicated gaming hardware.
Click to expand...

Small little error there on my part. I think you got the gist of it. :p
 
Toadthemushroom

Toadthemushroom

Member
ElectricBlanketFire said:
It literally says they're putting smart devices at the heart of everything they do.
Click to expand...

Oh, okay!

That's pretty much why I wrote that the word "pivot" is a bit hyperbolic. It's more that they are shifting more focus to mobile, particularly in the short term.

The end result has always been to augment dedicated platforms with mobile and the loyalty system, which is even acknowledged in the piece, so I'm not sure why that language was used anyway.
 
K

Kyry

Member
Didn't some article yesterday quote that while the NX wouldnt be a phone, it would be a "smart" device?
 
J

Jay Seven

Banned
ElectricBlanketFire said:
Make a reasonable case that moving forward, Nintendo will base every decision they make regarding the NX around smart devices.
Click to expand...
The NX's gimmick might integrate smartphones/devices. And the article didn't say that every decision will focus on smart devices, just that it's at the center of their strategy. But don't let facts get in the way of your rant.
 
E

ElectricBlanketFire

Member
Jay Seven said:
The NX's gimmick might integrate smartphones/devices. And the article didn't say that every decision will focus on smart devices, just that it's at the center of their strategy. But don't let facts get in the way of your rant.
Click to expand...

That's the same thing.

And four short sentences is not a rant.
 
M

massoluk

Banned
They are going to lose any way with or without family safe image, at least this will minimize the damage. And I highly doubt they will let the squeaky clean reputation slip from their dedicated hardware environment.
 
Pokemaniac

Pokemaniac

Member
the company is now pivoting to a stance that puts such devices at the heart of everything it does.
Click to expand...

Did we read the same investor briefings? Because that's definitely not the impression I got from them.
 
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