Nintendo “Studying” How to Expand Business Model to Smartphones
Satoru Iwata, President of Nintendo, said the company is considering a new business model after they reported a surprising $25 billion-yen ($240 million) annual loss because of a lower-than-expected demand for the Wii U.
The company is considering entering into the smart device market after reports of a third consecutive annual loss, decreasing the global sales forecast for it Wii U console from 9 million units to 2.8 million. Nintendo has also scaled back its expectations for the 3DS from 18 million to 13.5 million.
“We are thinking about a new business structure,” Iwata said at a press conference yesterday in Osaka, Japan. “Given the expansion of smart devices, we are naturally studying how smart devices can be used to grow the game-player business. It’s not as simple as enabling Mario to move on a smartphone.”
The Wii U, a family focused console, is losing its appeal as casual gamers move to iOS and Android while hardcore gamers have moved to the faster and better performing Sony PS4 or the Microsoft Xbox One.
Nintendo has faced tremendous competition in recent years, from other console makers and even mobile game developers. The Wii U is a family focused console is losing its appeal as casual gamers move to iOS and Android while hardcore gamers have moved to the faster and better performing PS4, created by Sony, or the Xbox One, created by Microsoft.
With the growth of mobile gaming on iOS and Android, Nintendo’s handheld consoles are also suffering. The selection of apps and games on mobile platforms overwhelms the selection on handheld consoles, like the Nintendo 3DS. Investors have called for Nintendo to develop titles for iOS and other platforms since 2011.
The company could be planning to make its own smartphone or just move their existing collection of games to smart devices but if and when Nintendo actually enters the smart device market is still unknown.