Nintendo's new strategy to revive Mario
After years of downplaying and denigrating the mobile market, Nintendo (Tokyo Stock Exchange: 7974.T-JP) may be doubling down on it.
Just months after the company announced a partnership with Japanese mobile giant DeNA to create games for Google's (NASDAQ: GOOGL) Android and Apple's (NASDAQ: AAPL) iOS devices, Nintendo may base its next home console around the Android operating system, according to Japan's financial news organization Nikkei.
Nintendo did not reply to requests for comment.
Nintendo, to date, hasn't said much about its next system-currently codenamed NX-other than to acknowledge it's in the works. The company plans to divulge more details next year. If Monday's report is accurate, though, it could point to a new philosophy at the company.
Four years ago, Nintendo President Satoru Iwata famously vilified the mobile industry at a keynote address during the Game Developers Conference in San Francisco.
"Smart phones and social network platforms are not at all like our (industry)," he said at the time. "These verticals have no motivation to maintain the high value of video games. For them, content is something that is created by someone else. Quantity is what makes the money for them. Quantity is how they profit. The quality of video game software does not matter to them. ... The fact is, what we produce has value and we should protect that value."
The partnership with DeNA was the beginning of a turnaround, but an Android-based console could be the next step. Iwata, when tipping his hand about NX during the announcement of the DeNA partnership, said the system was a "brand-new concept."
Several times, Nintendo has proven its ability to think outside the box when it comes to hardware. The company calls this its "blue ocean" strategy - which boils down to avoiding a feeding frenzy for a small customer base (aka a "red ocean") when there's a much larger, untapped one available (the "blue ocean"). Both the Wii, with its unorthodox controls, and the dual-screen Nintendo DS have been successful implementations of this strategy.
So hearing that the NX platform is a new concept immediately sparked all sorts of speculation in the gaming world. And the possible addition of Android has a lot of people wondering if the system will be a hybrid home console and portable game platform.
"One thing that a lot of American investors have been wanting is to take Mario to mobile devices," says Eric Handler, senior equity analysts at MKM Partners. "So if they do introduce Android to a new Nintendo console, maybe that will give them what they want."
Regardless of the form the system takes, though, an Android-based system could help Nintendo lure more third-party developers. Nintendo has struggled to do that with with the Wii U, as that system has fallen to a distant third in the current home console generation, behind Sony's (Tokyo Stock Exchange: 6758.T-JP) PlayStation 4 and Microsoft's (NASDAQ: MSFT) Xbox One.
Since its 2012 launch, the Wii U has sold just 9.2 million units. The PlayStation 4, which was launched in 2013, has sold more than 20 million units life to date.
While this apparent further embracing of mobile might be viewed as a surrender of sorts to some people, in fact it may be more of an acknowledgement the gaming industry has changed.
By putting its own spin on that industry, and possibly finding a creative way to blend it into the company's next system, Iwata and company may be positioning Nintendo to move beyond some of its more recent stumbles.
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