Gene Therapy: Making Sense of Nintendo’s Deal with DeNA

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Surely by now you’ve heard the news: Nintendo is finally entering the mobile landscape. On March 17th, Nintendo announced its partnership with Japanese mobile provider DeNA (pronounced “DNA”) to co-develop games featuring Nintendo IP on smart devices. As part of this agreement, Nintendo invested $181 million in DeNA for a 10% share in the company (and DeNA invested the same amount in Nintendo for approximately 1% of Nintendo’s shares). With that amount of money changing hands, one thing’s for certain: Nintendo isn’t simply dipping its toes in mobile waters. Rather, it’s diving headfirst into an ocean of iPhones and Android devices. As Satoru Iwata put it, “Now that smart devices have grown to become the window for so many people to personally connect with society, it would be a waste not to use these devices.”

In an
interview with Time Magazine, Iwata confirmed that Nintendo will handle most of the development of smart device games. Given Nintendo’s long history developing touchscreen games, they’re certainly qualified in that regard. However, Iwata noted that Nintendo will leverage DeNA’s expertise and experience for the more “service-oriented” aspects of mobile development. Additionally DeNA will help co-develop Club Nintendo’s successor program – a new membership service that encompasses smart devices, PCs, and Nintendo hardware. Per Iwata, this new service will “create a connection between Nintendo and each individual consumer regardless of the device the consumer uses.”

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Taking over your life, one virtual fitness step at a time

Thankfully, Iwata ensured that Nintendo won’t simply port its console titles to smart devices, noting, “There are significant differences in the controls, strengths, and weaknesses between the controllers for dedicated game systems and the touchscreens of smart devices.” If there’s anything I’ve learned from playing Sonic CD on my iPhone, it’s that virtual d-pads and buttons aren’t nearly responsive enough to handle the precision required for a Mario platformer. Fortunately, it seems Iwata understands the potential damage of mismatching gameplay and hardware. He further explained, “…if we cannot provide our consumers with the best possible play experiences, it would just ruin the value of Nintendo’s IP.”

For those concerned that Nintendo’s mobile strategy signals the end of their console-making days, fear not; Iwata also announced that Nintendo is working on a new dedicated gaming hardware, codenamed “NX.” Iwata referred to NX as “a platform with a brand-new concept,” so another trend-bucking system seems like a safe bet at this point (
free-form LCDs, anyone?). Sadly, we’ll have to wait until next year for more NX news.

What does this all mean for Nintendo? Only time will tell, but the decision to enter the mobile space makes sense financially. An additional revenue stream never hurts, and mobile games can help alleviate some of the burden caused by sluggish Wii U and stagnant 3DS sales as Nintendo rides out its current hardware cycles. Although the mobile marketplace is highly saturated and competitive, Nintendo has both the brand recognition and talented development personnel to sidestep the more common barriers to entry that smaller developers must overcome. Given their wealth of recognizable IP, Nintendo is in a good position to develop multiple popular titles rather than a single hit game.

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When in doubt, just call it “a Nintendo”

If not ports of console titles, however, what games will Nintendo release on smart devices? Perhaps we’ll see something similar to the company’s recent free-to-play experiments on the 3DS, such as Pokémon Shuffle, whose match-three gameplay is both well suited and well established on mobile platforms. Regardless, Iwata indicated that all Nintendo IP and pricing models would be up for consideration on smart devices. He did note, however, that Nintendo would be careful not to devalue its digital content or damage its brand image, particularly among parents of younger smart device users.

Ultimately, Iwata’s goal is to “construct a bridge between smart devices and dedicated video game hardware that connects consumers to our dedicated video game systems.” Though the best-case scenario for Nintendo involves mobile customers making the jump to these dedicated video game systems, Nintendo could still potentially cannibalize part of its console audience. After all, why buy "a Nintendo" if I can get Mario on my phone? Though that may seem like a silly question, I guarantee more than one parent will want to know the answer.

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I’m also curious to see if the combination of Nintendo’s mobile and QoL plans signify a shift in their overall console strategy. Last year, in an interview with Edge Magazine, Shigeru Miyamoto had the following to say regarding casual gamers:

Their attitude is, 'okay, I am the customer. You are supposed to entertain me.' It's kind of a passive attitude they're taking, and to me it's kind of a pathetic thing. They do not know how interesting it is if you move one step further and try to challenge yourself [with more advanced games].

In the days of DS and Wii, Nintendo tried its best to expand the gaming population. Fortunately, because of the spread of smart devices, people take games for granted now. It's a good thing for us, because we do not have to worry about making games something that are relevant to general people's daily lives.

Perhaps mobile and QoL will serve as Nintendo’s means of recapturing part of the casual Wii/DS audience and NX will be positioned as a device for more dedicated gamers. Wii U simply doesn’t appeal to the masses for reasons that have been well documented elsewhere. However, if early PS4 and Xbox One sales are any indication, the dedicated gaming audience is still quite interested in traditional hardware. Though Nintendo doesn’t always view Sony and Microsoft as its competition, they’d be foolish not to keep each company’s rabid, money-spending fans in mind when launching the NX.

To summarize: Yes, Nintendo is going (a little bit) mobile. No, the world is not ending. Though those two sentences may have seemed contradictory just a few short weeks ago, Nintendo has once again managed to surprise the entire industry. If a card this important was played in March, I can’t wait to see the rest of Nintendo’s hand in the coming months.

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Excited about the DeNA announcement, or does it upset you on a genetic level? Please let us know in the comments!
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