Having lost to Sony’s PlayStation 2 in the previous generation of consoles, its two key contributions to this age, the Nintendo DS and the Nintendo Wii, have, in terms of units sold, become the clear champions of the handheld and console gaming worlds respectively, with the former even beginning to approach the stellar 154.4 million units sold by Sony’s PS2. In terms of games themselves, the current generation owes a huge debt to Nintendo with their prolific franchises such as the Mario and Zelda series, two of the best-selling franchises of all time. Pokémon too, though a somewhat passé institution, is seen by many as an important part of their childhood.
With this in mind, it is difficult to imagine that this may be the beginning of the end of this mighty company. However, in this fiscal year, ending in March, Nintendo suffered its first annual loss since it released its first console in 1977.
There are several factors that director Saturo Iwata blames for this downturn: the Yen is particularly strong, hindering exports by making the units effectively more expensive for countries to import Japanese goods. The 3DS is also to blame, and it is easy to see why – despite high sales in Japan, “the momentum of the Nintendo 3DS overseas has not reached [its] anticipated level, unlike the domestic [Japanese] market,” according to Iwata himself. Even a drastic price cut, paired with an emotional letter of apology to hardcore fans who bought the 3DS in its youth, failed to revive the sales of the device.
Then at 2011’s E3 gaming expo, Nintendo unveiled their new console, the Wii U. Despite, or perhaps because of its interesting design it suffered a rather lukewarm reception, especially with investors as the share price dropped to its lowest point since 2006 (though the Wii initially had the same effect). This was worsened by a downgrade of Nintendo’s rating by UBS Securities from ‘buy’ to ‘neutral’. The console, which features controllers with HD touchscreens, seems to have been misunderstood by many as simply a Wii peripheral as opposed to a completely new system.
However, there are whispers of a new theory as to why Nintendo might be going through tougher times, in that their precious casual gamer demographic may be turning away from Nintendo and towards platforms like iOS and Android.
It’s easy to see why – taking iOS as an example, there are several key advantages that an iPhone or iPad has over the Wii or the 3DS in fighting for casual gamers. Price comes at the fore – with iPhones already in the hands of millions of potential gamers, playing simple games often comes free or at 70p, whereas the 3DS costs £130, a high price to pay, especially for people who may not be particularly into gaming. Portability is also a key factor, and is something that iOS devices have in spades. Finally, user-friendly software distribution is vital to attracting and keeping gamers of all kinds, and there’s just no beating the app store.
One of the greatest technology companies of all time may on its way out. So do your bit – buy a 3DS, indulge in some officially licensed merchandise, or even just dig up the old gameboy and get back into Pokémon this weekend.