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Wednesday, April 1, 2015

Nintendo's lost power



Nintendo has been trying to reestablish itself as something aside from a niche gaming market.  It has survived largely on nostalgia.  But from this generation on Nintendo's legacy is fading.  We have already reported and predicted this state and made the only logical solution. A step away from hardware and a focus on game development.

Nintendo is way behind the curve on hardware, and it has yet to announce or attempt to update its system that was behind at the start.  But now it is selling out its most popular franchise to have a live action series on Netflix.(S)  


Segas(SGAMY) last 5 years have been trending in a more positive direction than Nintendos(NTDOY).  Sega has been kept afloat by its merger with a casino game machine business.  And Sega has recently made an announcement that they will not develop for consoles anymore.(S)  

Considering entire companies survive on mobile alone, this could be a positive move.  The problem is they are holding on to franchises that are killing them.  Comment if you would like to read more about Sega. But this is a Nintendo article.


Nintendo is quickly losing its market share to tablet and cellphone games that are most of the time free, rely on small in app purchases and are very convenient for parents to acquire for Nintendo's target market.  But Nintendo is dead set on remaining a first-party developer.  


Nintendo is keeping its stock bloated by constantly selling more and more DS variants and combining these into a family and inflating their numbers.  But there are drawbacks to having a console.  Sales, according to the President of Nintendo, have been directly impacted by US port strikes.(S)
Also, much press was put into the glasses free 3D portion of the 3DS, but it also messed with children's vision.  The possible implications gave way to a 2DS which was cheaper and sold well adding to overall sales.  The latest sales figure we could find showed all DS sales totaling about 45 million units with ~2% increase from the previous year, most likely from the 2DS.  On the other hand, Android alone shows a history of doubling tablet sales that were at 37 million in 2012, and phones are activated on an average of 1.5 Million a day.  And Nintendo doesn't have to worry about shipping cartridges or consoles.  Meanwhile, you can't buy a legitimate copy of a Nintendo game on the billion or so Android devices out there.   


Do you think Nintendo survives? 

**Note article written prior to Nintendo's 3rd party announcement. 


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