Nintendo Enters Mobile Gaming: Too Little, Too Late?
What Does Nintendo’s Newest Move Really Mean?
Back in March, Nintendo announced its entrance into the mobile market, in partnership with Japanese developer DeNA Co. To discuss what this means for mobile game developers and players, Apptentive CEO and co-founder Robi Ganguly sat down with Ryan Morel of GameHouse and Ian Sefferman of MobileDevHQ by TUNE to get their thoughts on the matter.
The announcement comes a little over a year after Nintendo chief Satoru Iwata rejected any notion of moving Nintendo games to non-Nintendo platforms. Still true to this statement, Nintendo’s newest move is rumored to be less of a commitment to creating great new games more of an opportunity to extend the gaming experience, without cannibalizing the gaming giant’s beloved titles.
All of this, of course, begs the question: Is it too little, too late?
Robi, Ryan, and Ian explore this question by sharing their thoughts on the risks and opportunities posed by Nintendo’s announcement in our latest App Marketing Conversations video – touching on everything from Super Mario to childhood nostalgia to Kim Kardashian.
Check out what they had to say in the video below:
Like what you see? Please subscribe to our YouTube channel for more great App Marketing Conversations.
App Marketing Conversations Transcript
Robi: Good morning. Welcome to another App Marketing Conversations. As always I’m joined by Ian Sefferman of MobileDevHQ by Tune and Ryan Morel of Gamehouse, and I’m Robi Ganguly from Apptentive. So a few weeks ago, we had a stunning, amazing, world shaking announcement from a highly relevant gaming company that all of you have heard of, Nintendo, And they are finally going to get into the Mobile Games business, but they’re not doing it themselves. They’re not actually making the games themselves. They’re licensing their IP to DeNA. And so, many of you watching this might not actually know who DeNA is. We were talking about this a little bit. Ryan, you have a good history of the company. Talk to us about who DeNA is.
Ryan: Well so, thank you for saying that, I’m not sure that’s entirely true. So DeNA has historically been a really successful Asian publisher mostly in Japan, focused around card trading games, right? That’s where they made their name and then in the U.S., they had acquired Ngmoco which if you remember from the original iPhones in 2008, 2009. Ngmoco was one of the biggest publishers they had gained. Rolando was there, one of their big games and so DeNA bought them, I think, in 2010 or 2011.
Ian: It was a couple hundred million dollar deal I think, right?
Ryan: It was. Ngmoco, I believe, was actually one of the first companies funded by Sequoia’s iFund, if you remember that. They had the iFund and the S Fund and I think his name was Neil Young, but I’m not entirely sure. So since then, the acquisition of DeNA, at least, in the U.S. as far as I can tell, has had Rage of Bahamut which has been a fairly successful title, but not much beyond that. So just segway into my opinion here is I think it’s an interesting choice for Nintendo to choose DeNA. I think probably they’re the right choice for Asia, but it remains to be seen whether that’s the right choice for the rest of the world given DeNA’s track record in the U.S. for selling.
Robi: What do you think about this idea to license their IP as opposed to actually getting them to practice and making mobile games themselves?
Ian: So I’m a little bit surprised that they didn’t want to do that. It feels like they have the chops if they wanted to, they could have. Maybe it’s a low risk way for them to feel out the market, right? I don’t know how the deal is structured, how locked in they are to DeNA over the long-term. But maybe over the next few years, they license out the IP, they don’t have to risk a whole lot. And if they win, they win and it’s great, and if they lose they didn’t risk too much. And if they win, maybe they say, “Hey, we could win more by not licensing this out.” A few years from now, they come back and start doing it in-house. So maybe it’s not so crazy.
Robi: Right. Right. It seems to me this is the … Unfortunately, so I love Nintendo. Grew up with Nintendo games. It’s hard for me to watch the company actually slide into irrelevancy over the past several years. This seems like classic corporate, dip your toe into the water strategy.
Robi: Oh yeah, “We don’t want to cannibalize our core business.” When they talked about the announcement, it was very much like, “This isn’t to create mobile games, it’s to unlock new mobile experiences that you use the characters you know from Nintendo.” Which just feels like not enough, it feels like too little, too late.
Robi: And it feels, in some ways and there have been some Q&As; from the leadership of Nintendo talking about this. In some ways, the way they’re positioning it is very much like, “Yeah, we’ll see how this goes. Clearly our core market of Japan is moving into mobile more meaningfully.” But if you look at it outside of Japan, people aren’t developing for the Nintendo consoles. That’s a huge problem. Nintendo has historically been the best publisher of games on their own platforms, but they’ve not been the only ones. And it almost looks like they’re the only ones, so this feels like too little, too late. I think the flip side of it that’s interesting is that this gives DeNA a lot of leverage if they go gangbusters.
Robi: If they sell a lot and start to mean a lot for Nintendo, what does that mean strategically? Are we going to see them combine three years down the line if this works?
Robi: What do you think? If that played out that way, would it be a good outcome?
Ryan: Probably for DeNA. Yeah, I mean I want to talk a little bit about your first point. I mean, I think the thing, at least, my opinion is that Nintendo is in real danger of losing out on an entire generation of gamers, right?
Robi: That’s right.
Ryan: That’s the thing I think they should be most concerned about. It’s like, oh yeah people are still buying 3DS. That’s probably true, but they’re not buying them for their kid as their first gaming machine, right? Putting it in the hands of a third party, is I think especially dangerous given how controlling Nintendo has been about their content and their use of characters in the past, right? They’ve always wanted to have uber control and now they don’t have it, right? And I just think that’s really dangerous in light of the way they stand in the market. I mean, I hope for both their sake and DeNA’s sake, they come out with not only great content but the people respond to it, they buy it and everyone makes a lot of money. I think as you said, everyone in our age group, probably 15 years on either side has very fond memories and probably still plays some Nintendo games.
Robi: Right. In many ways, they’re the original casual gaming company, right?
Robi: They started out as a card company over a century ago.
Robi: So it would be a shame if they couldn’t figure out what casual gaming looks like today, but they’re at risk, definitely at risk.
Robi: So if you’re in the games market, is this meaningful? Are you watching this at all? How are you paying attention and what are you learning from this over the next six to 12 months?
Ian: I mean, it will be interesting to see how it plays out. I think today, you’re watching and learning.
Ian: Maybe you’re somebody with an interesting IP that you can license out and you want to learn if that’s going to be good or bad. But I think ultimately you’re not too concerned, right? I don’t think that this is an 800 pound gorilla entering your space that you have to start fearing right now.
Ryan: I think the scary thing for publishers is potentially brands thinking that they have more power in games than they maybe do, right? We’ve seen Kim Kardashian all of a sudden do really well and you can end up in this rat race of trying to license brands and that can get expensive. And that was the ultimate downfall of the original mobile gaming space, right?
Robi: That makes sense. Mario is very powerful.
Ryan: Mario is very powerful.
Robi: Probably more powerful than Kim Kardashian.
Ryan: Yeah and my point there was that people are crazy. They’ll believe that their brand is much more valuable than it is.
Robi: Oh yeah.
Ryan: Mario did a million dollars.
Robi: I think you’re absolutely right and people are going to fall into that trap. “Well, here’s some random character you can really, really connect with.” He’s as cool as Mario, but it’s not the same, not the same.
Robi: Don’t have statues built in his honor all around the world.
Robi: All right. So let’s wrap that up. Be sure to check out the other videos. We talked about the Apple Watch and what’s the other topic we covered the other morning?
Robi: Meerkat. We talked about Meerkat, live video ironically. Check those out. Share them, like it on Facebook, thanks.