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Nintendo Refuses Apple's Life Preserver

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The shrewd and prescient Nintendo of the mid-'00s is no more.

Despite blowing away the competition by targeting non-gamers with the Wii and recapturing its mobile console gold medal with the Nintendo DS, the current state of the company is in peril.

Shovelware, a lack of innovation, and unstoppable disinterest has crippled the Wii -- giving way to the more powerful Xbox 360 and PlayStation 3. Rumors are swirling that it's hastily botching the design of the forthcoming Wii U. And even with a price drop for the Nintendo 3DS, analysts expect the company to miss sales targets for 2011.

As Nintendo continues its downward spiral, investors are pleading with the company to branch out to where business continues to boom: smartphone gaming.

For $0.99, users are finding just as much enjoyment out of an Android or iOS game as they would for a game running $39.99. Downloading and installing a game from the iTunes Store or Android Market is quicker and easier than visiting Best Buy or Game Stop for a cartridge. And as an added bonus, since smartphones are a requisite accessory anyway, there's no need to free up another pocket.

While Nintendo may turn a blind eye to the state of the mobile gaming industry, designers are taking notice and migrating to smartphone development.

Those with skin in the Nintendo game are begging the company to develop for iOS. Last month, Stats Investment Management Co. fund manager Masamitsu Ohki stated the obvious and said, "Smartphones are the new battlefield for the gaming industry." Adding, "Nintendo should try to either buy its way into this platform or develop something totally new."

But Nintendo president and CEO Satoru Iwata won't have any of it. Echoing his sentiments from August, he's still refusing Apple's life preserver.

"This is absolutely not under consideration," Iwata said in a recent interview with Japanese news outlet Nikkei. "If we did this, Nintendo would cease to be Nintendo. Having a hardware development team in-house is a major strength. It's the duty of management to make use of those strengths. It's probably the correct decision in the sense that the moment we started to release games on smartphones we'd make profits. However, I believe my responsibility is not to short term profits, but to Nintendo's mid and long term competitive strength."


Not only does he acknowledge the profit in smartphone gaming, his pride forces him to continue down the road with signs reading "DEAD END."

Whether he can right the company in time remains to be seen, but by defending his company's dismal trajectory, Iwata has arguably become the Jeff Zucker of the video game industry.

And if it does hit that dead end, Nintendo will become the Sega of the video game industry.

(See also: The iPhone Ain't Cool, Says HTC Exec and The Biggest Droid Bionic Glitch That Every Review Missed)

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POSITION:  No positions in stocks mentioned.