The entire internet has weighed in with what it believes is the answer to Nintendo's financial woes: Go mobile, immediately. But the entire internet is wrong.
Nintendo's announcement that it's facing a third straight year of losses prompted pundits to say the company must swallow its pride and put Super Mario on smartphones. I've argued against this in the past, to little avail. The opinion that Nintendo should "go mobile" has become such conventional wisdom that it has moved beyond gaming columns and investor reports to the straightest of straight news stories.
"Resisting Mobile Hurts Nintendo's Bottom Line," read a New York Times headline over the weekend. "Nintendo Refuses To Make The Radical Change That Could Boost Sales," Reuters declared. This is begging the question, beginning from the presumption that obviously Nintendo should put its games on iOS and going from there.
The conventional wisdom is wrong. It is not an inevitability that Nintendo must put its games on rival hardware or die. It may even be a bad move.
Having been at least convinced that it would be too risky for Nintendo to jettison its hardware business entirely, many analysts and commentators are now staking out what they imagine to be a more moderate and sensible position: Nintendo should put some of its games on others' platforms. This, too, is a logical fallacy, namely argumentum ad temperantiam: the idea if one is faced with two opposing arguments, the correct position must be somewhere in the middle. But suggesting that Nintendo "dip its toe" into mobile app stores is like suggesting that a couple pondering parenthood consider getting just a little bit pregnant.
Before Nintendo would ever put any content onto the App Store, it would first have to be ready to compete in that environment and sell its games on a platform where race-to-the-bottom pricing and aggressive freemium money-making mechanics are the norm. It must be willing to learn how to design its products in a way that would make them competitive on that platform. This is not so easily done. And that's a fundamental problem with the conventional wisdom: It is based on the premise that a strong enough brand can make the App Store a glorified ATM: Old games go in, piles of money come out.
If I was working my ass off making mobile games, I'd take the "Nintendo should put Mario on iOS and make tons of money" idea as an insult. Not only does it slight the hard work being put into great mobile games, it's an outdated strategy. Clunky ports of old games might have had early success, but you have to scroll deeply into the Top Grossing Apps list these days to find an old game. The only ones I saw were various versions of Grand Theft Auto, but they aren't quick and cheap ports – they have high-definition graphic updates and customized touch controls.
The idea that Nintendo should just dump its old games on iOS for free money is Underpants Gnomes logic. Speaking of which, that's an issue, too: Super Mario Bros. 3 is an amazing game, but would it be as much fun on a touch screen with virtual buttons? No, it would not. And before you argue, but you can hook up a Bluetooth gamepad to your phone, think about how that changes the situation. If Nintendo is designing mobile games for the tiny number of people who go to the trouble of using an external controller with their mobile device, it's no longer going after the millions upon millions of casual consumers that presumably are the entire reason it would go mobile in the first place.
The idea that Nintendo should "just dump its old games on iOS for free money" is Underpants Gnomes logic. It takes time, effort, talent and care to create successful mobile games. It's not free money, it's a significant diversion of resources from Nintendo's platforms.
Moreover, while "mobile" may be an effective shorthand for describing Nintendo's current problems, the company's hardware is not the fundamental problem. It's not as if the tablet is an incredibly attractive gaming form factor that is manifestly superior to 3DS or Wii U. "Nintendo should go mobile" is a profoundly unimaginative statement. Videogames, man-machine interfaces, are evolving rapidly in countless ways. With all of the many, varied things Nintendo could attempt in order to change how we play games, why would we want to railroad it into slavishly following the current trend?
Nintendo doesn't need to go where its customers went; it needs to get them back or find new ones. Not having games on iPhone is not Nintendo's problem. This is Nintendo's problem: For the last few years, it has been attempting to use ~$250 game platforms on which you must pay $40-60 to play a game to compete with ~$250 game platforms that give you infinite games for free. Nintendo cannot win this fight. When consumers look at a 3DS and a Kindle and decide they want to play games on the Kindle, it's not because of the hardware, but because that hardware is a magic portal to a world full of free entertainment. For Nintendo to stay relevant, it must develop a strategy that can legitimately compete with that reality.
I don't know what such a strategy might be. The possibilities are endless. But if Nintendo were to decide that everything it has resisted so far – cheap game prices, an open platform one which everyone can create games, swimming in the same pool as "garage developers," free-to-play mechanics – are in fact desirable, the most likely outcome would not be Nintendo entering a competitor's app store, but Nintendo creating its own app store.
Although software sales have been sluggish, there are 40 million Nintendo 3DS units out there. Why not change the eShop already on these units from a walled garden where only Nintendo and a few selected partners can play and open it up to everyone? Instead of dripping one or two games per week onto its classic game download service Virtual Console, why not launch a full-on push to get as many games from its catalog and the catalogs of every other classic console onto the service – and use variable pricing to sell premium games (think Super Mario World) for $8 and more obscure ones for a buck?
You should want Nintendo to run its own platform.Heck, why not make the thousands of games for the original Nintendo DS available on the eShop? Licenses would have to be re-negotiated for many third-party titles, sure, but that would be as close to free money as you can get because 3DS already runs DS software natively. Nintendo itself has a huge back catalog of DS games that it owns the rights to, free and clear. It should begin selling these games to its own customers before it starts selling anything to Apple's and Google's customers.
Moreover, if you like Nintendo's games as they are, you should want Nintendo to run its own platform. I wonder if any of the Underpants Gnomes understand why, exactly, Nintendo's games are so unique. Nintendo has the freedom to create games unlike anything else in the world precisely because it has always controlled the entire gameplay experience from hardware to software. It doesn't have to rely on the success or failure of another company to continue to deliver its products, which is not the case with other software makers. The idea that Nintendo could simply shift its games to another platform and we would continue enjoying the same content is magical thinking.
But if Nintendo wants to keep its own platform, it does need to tackle the cost problem. Its first plan was to attempt to shame game publishers into backing its vision of the future by suggesting that Apple's business structure represented a dire threat to the long-term health of the videogame industry. Once that didn't work, Nintendo made some long overdue but still conservative tweaks to its own digital games store while doubling down on the content and appeal of its own software. No one would suggest that 2013 was anything less than a slam dunk for the Nintendo 3DS in terms of the sheer quality of games; Nintendo was able to push its teams to churn out hits like Animal Crossing, Pokemon and Legend of Zelda. If customers were resistant to the idea of paying $40 for a new game, Nintendo would make games that were so damn good they'd have no choice but to pay up.
Nintendo is excellent at staving off the forces of gravity, which can have the result of delaying the inevitable. The kicker quote of that New York Times piece is from Greg Richardson, former head of EA Partners, who opines that before Nintendo can "disrupt itself," it needs to "fail against [its] own playbook fundamentally." Buzzword-heavy but correct: If the old ways still deliver some results, it's harder to throw them out. Nintendo is Sisyphus pushing the rock up the hill, but in this case it is exceptionally good at pushing the rock. It can push the rock like nobody's business, really, really far up the hill. Almost to the top.
Nintendo has a reputation of being "too conservative," which is true in some ways but not others. The Nintendo 64 machine is the archetypal example. While the entire rest of the industry moved to cheaper, safer CD-ROM technology, Nintendo stuck with the expensive ROM cartridges that it knew and loved. This was a huge mistake, causing practically every game publisher to shift its business to Sony's PlayStation – and yet Nintendo, through producing its own best-in-class software, actually turned a profit every single year of the N64's life. The same thing is currently happening with 3DS (not even the game franchises have changed) minus the profit.
But on the other hand, Nintendo 64 revolutionized 3-D videogames by introducing the analog stick, force feedback and other innovations, not to mention the way Super Mario 64 and Zelda: Ocarina of Time practically wrote the book on how to make 3-D videogames. Nintendo can be a phenomenally deep stick in the mud about some things, but also willing to go all in on crazy new ideas. Sony and Microsoft, in their entire histories in the game hardware business, have never done anything half as crazy as Wii.
Just as eventually Nintendo was forced to put its games on discs, so too will it eventually come around to the reality that it is possible to run a more open and agile digital games store without ruining the entire videogame industry in the process. If that doesn't work to fix Wii U and 3DS, then Nintendo will likely at least release another generation of hardware and see if that can do it.
And if that doesn't work, well, then maybe Nintendo will get out of hardware. Nothing lasts forever. But it's likely that there will be many, many steps between now and then. Nintendo will have to give up something that it holds dear, if it wants to go on. But it doesn't have to give up entirely.
