Apple Is Nintendo's "Enemy of the Future"

Pickens writes "The San Francisco Chronicle reports that video game industry revenue fell by 26 percent in April, adding more concerns about the health of the industry in the worst year-over-year decline since July 2009. But the big news is that the decline in portable sales makes up 61 percent of the overall monthly decline, suggesting that the Nintendo DS platform is losing steam but also reflecting the growing clout of the iPhone platform as the iPhone and iPod Touch continue to draw in more casual gamers, the iPad offers a bigger screen experience, and Apple announces the 'Game Center' — a social gaming hub with console-like online gaming features. Nintendo CEO Satoru Iwata is understood to have told his senior executives recently to regard the battle with Sony as a victory already won and to treat Apple, and its iPhone and iPad devices, as the 'enemy of the future.' 'If Nintendo's future mobile platforms are to be any kind of success, the company will have to figure out how to take on the ease of use afforded by the App Store,' writes Nicholas Deleon. A large part of Nintendo's faith in reviving its efforts hinge on the 3DS, which may ship in the fall, the first truly major handheld introduction for Nintendo since the original DS in 2004. He adds, 'Maybe Nintendo should just release a phone?'"

Comments

can't see the forest for the trees...

[Em Emalb]

I disagree with the premise of the article.

I believe the lack of video game sales is due to the crappy economy overall, not because of things like the iPhone/iPod/iPad.

I could be wrong, but I feel their view is too shallow.

Re:can't see the forest for the trees...

[Red Flayer]

Emphasis mine:

The economy has continued to worsen in the previous two years and unemployment continues to rise.

Depends on how you calculate it. Unemployment is only continuing to rise because we've been using numbers that underestimate the unemployed; as we correct for that (rather, it corrects itself as more people are trying to enter the workforce), the unemployment number can be going up even though we have more people gainfully employed.

I wish we could use employment figures instead of unemployment figures, it'd be a lot more clear. Currently unemployment figures are based on something like this, with B being the "unemployment" figures:

A) Fully Employed
B) Unemployed, but looking for work
C) Unemployed, but not looking
D) Underemployed

The current situation is that people are moving from C to B, and so the "unemployment" figure is going up, even though A (fully employed people) is also going up.

If you really want to look at video game spending as a function of general economic health, you should compare the video game market to consumer spending. Consumer spending has risen for seven months straight -- yet video game sales haven't mirrored this rise in spending. So it's likely that the cause of decreased sales is dependent on more factors than just the general state of the economy.

No no no no

[Monkeedude1212]

Well maybe Nintendo could release a phone. I'm not against that. I guess. I don't know how I feel about that.

But what I'm really noing to is WHY the sales are dropping. Its not because of the iPhone.

It's because the DS is almost 6 years old. Nov 2004 was its release. Anyone who has wanted a DS, already has one. Nintendo foolishly tried to enhance the sales with the DS Lite and DSi. How shocked am I to find that nintendo fans who purchased a DS, don't feel the need to buy a DS lite, or a DSi. So how much money went into those two projects, and really what benefit did they expect to see? Did they expect a resurgence of sales? They merely expanded the market of the DS by small margins. And so only those who didn't wants a DS for various reasons would be so inclined to buy a DS lite or DSi, hoping those reasons would be resolved.

I'll stick my neck out and make this claim: If Nintendo decided to launch a new handheld - and it was different than the DS or Gameboy, it would sell well. Problem is that Nintendo has started to fall apart on their innovative ideas. The Wii has also been out for 4 years now, and the only innovation they've added to it has been the Wii Fit board 2 years ago, and the DS gets rehashes.

So, when Apple releases a new phone, and it sells, Nintendo isn't losing because its a threat in any sense, its more or less that Nintendo's sales have already plateau'd and started to have fallen, and Apple sales just happen to be on the rise.

Correlation != causation.

Again?!

[RyanFenton]

This story is eerily similar to the previous "Oh NO! Nintendo sales are down!" article about the Wii. Nintendo is the dominant player of the market, and sales are down, BECAUSE ALMOST EVERYONE POSSIBLE ALREADY HAS A DS.

Market saturation, mixed with the usual mid-year games lull, and the anticipated rollout of a new platform combine to lower sales numbers. Does that mean competitors are taking over the market? No, no it doesn't.

I'm not crazy about "does this mean that...?" style of journalism. Speculation is fine - but it isn't news. Yet, this style of "journalism" seems to be rising as other forms of journalism are going out of business. It's fine for arguments, but annoying when there's too much of it, too often.

Ryan Fenton