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Hypable

For the first time since the publisher went public, Nintendo reported a financial loss for the fiscal year of $530 million. While the company projects a return to profit next year due to a reduction in production costs for the 3DS and the release of the Wii U, some analysts are advising them to ditch the first-party stranglehold they have on their most popular franchises.

“Nintendo has to deal with the change and let Mario games be played on non-Nintendo devices,” Japanese analyst Nanako Imazu told Games Industry after the losses were revealed.

It is well known that tablets and smartphones pose significant competition to Nintendo, maybe even more so, at least at the moment, than Sony’s struggling PlayStation Vita.

President Satoru Iwata has said before the company has no plans to have its franchises appear on outside hardware, including smartphones.

This presents an interesting dilemma for gaming’s arguably most beloved company. Would it be better to open up software such as Mario to non-Nintendo systems in order to increase the volume sold or stay the course and keep your main selling points close to the chest?

On one hand, opening up Nintendo’s most famous franchises will dramatically increase sales numbers for software, something the company could benefit from. Despite selling roughly 95 million Wii consoles to date, Nintendo’s most touted exclusive of last year, The Legend of Zelda: Skyward Sword, only managed to sell roughly 3.4 million copies of the game as of the beginning of this year. While this remains an impressive number of units sold, it’s nothing compared to the amount that could be moved if it were on multiple platforms.

Even classic Nintendo properties would benefit from a port to outside hardware. When a fake Pokemon Yellow was released to the App Store in February, people jumped at the chance to pick it up, making it the number one selling application despite the low ratings of the scam. There are countless thinly-veiled Mario rip-offs on the App Store already, also. It’s obvious people want to play Nintendo software, why not make it more accessible?

However, any benefits Nintendo would gain by putting software on other platforms would probably come back to hurt their own hardware sales. There’s a reason why the DS and Wii are two of the best selling systems of all time. The Wii was an underpowered system even at launch, but what helped sell it, in addition to the unique control system, was the promise of new Mario games and other key Nintendo titles.

The 3DS struggled mightily at launch because of the lack of software that fans wanted to play. While the price cut certainly helped sell the new handheld, what really put it over the edge was the release of Super Mario 3D Land and Mario Kart 7, the former selling over five million copies.

Personally, while I’m happy with my Vita as a handheld, I’ve even considered picking up a 3DS solely to play Mario titles, including the recently announced New Super Mario Bros. 2.

Nintendo is especially reliant on first-party titles as its systems are rarely as well supported by third parties as Sony or Microsoft.

If Nintendo does not have the rumored Mario or Pikmin titles ready for the Wii U’s release date later this year, sales numbers will surely suffer for the system early on. If this happens, they may be forced to cut the price similar to the 3DS and take a loss on another system.

While fans may want to play Pokemon or Metroid elsewhere, the fact that they can’t is actually to Nintendo’s advantage. Exclusive software is the reason fans buy into Nintendo hardware, and giving away their biggest advantage to competitors, while possibly beneficial in the short term, will only come back to hurt them in the end.

  • http://twitter.com/jtinch Jackson Tinch

    Emulators

    • gcw07

      Nintendo has recently got a patent for many functionality of emulators. So they can and will protect their IP. There will always be people stealing games through emulators, just like people steal movies, but that doesn’t make it a real option or a legal one.

  • Vincent

    I really don’t think Nintendo has anything to worry about after the phenomenal success that was the Wii. They came back from the Gamecube debacle and there is no reason in hell they should allow Mario titles on other platforms. Could you imagine playing Mario Kart on your Xbox? BLASPHEMY! 

  • http://hypable.com John Thrasher

    Here’s the situation. Nintendo isn’t going to open up its software until there’s a reason to do so. 1 quarter loss in the 30+ years of video games isn’t something to panic over. And since the loss had mostly do to with production costs it’s not a problem for where the games are going. Of course it would help to distribute on third party hardware, but to me, that takes away the experience! They don’t NEED to be making the extra millions at the moment so I have a hunch they’re saving this idea for if/when they are in dire circumstances as a business.

    • http://hypable.com John Thrasher

      I also think people are misinterpreting the news as meaning Nintendo is a failing company that needs to act quick. This isn’t Netflix we’re talking about here!

    • http://www.hypable.com/ Andrew Sims

      I think they are in dire circumstances because, this story aside, their device and game sales don’t hold a candle to Apple’s, and that’s obvious where the future is going.  Why not act now?  I don’t need a DS or Wii to get the full Mario experience.  I think I’d enjoy it just as much on an iPhone. 

      • TheHamburglar

        I don’t think it’s necessarily fair to directly compare Nintendo to Apple. The day Nintendo opens up its games to other systems is the day it dies. Exclusives are huge in the video game industry. For example, Xbox 360 probably wouldn’t exist if Halo never came out for the original Xbox. Exclusive games give neutral buyers a reason to buy one system over another.

      • JCman7

         The 3DS sales are rising and its only going to get better. I love my 3DS and I have an ipod touch and buy tons of apps but there is nothing like my 3DS games, putting nintendo apps on the appstore would be nice mainly because they would be cheaper but the experience will not be the same

      • http://twitter.com/ivangatewood Ivan Gatewood

        As long as Nintendo continues to produce Pokemon and Mario, they will not be in dire circumstances. I am sure if Pokemon Black and White 2 were to be solely released on the 3DS, many fans would rush out to buy the system. 

      • gcw07

        You can’t really compare a $1 game on the iPad to a $30 or $60 game on the xbox, playstation or nintendo. They are nothing alike. Don’t get me wrong I love my iPad and enjoy the games I play on it, but they aren’t real games to me. They are fun little mini games that kill time, but very few are challenging or keep you interested for more then 5 hours. When games are $1 they will always outsell in quantity compared to something that is 30 times the price and is of much better quality.

      • http://hypable.com John Thrasher

        From an overall numbers standpoint it’s easy to compare but they actually aren’t the same market. I feel like it would be comparing board games to video games. Yes they’re both games but aren’t made for the same reason.

    • Azeem

      Nintendo may not need to sell their software to different companies, however they need to start updating their software so it can compete with Apple’s. In the last few years, more and more people own Apple products in their homes, as opposed to Nintendo and in some cases, more than Microsoft products. Apple is going to be a super power in the technology industry, and if companies like Nintendo want to prevent that, then they need to make their games cheaper, better looking and something which is completely different from their previous products, whether that be design, user interface, games or all of them. 

  • Guest02

    If both the wiiu and 3ds fail, then I see nintendo possibly lending out their games. It feels like like rocky and  uncertain times for nintendo what with the 3ds price drop and attempting to create another console that will even try to live up to the expectations of what the wii did. It’s pretty clear nintendo sees their software as exclusive and they see the iphone as a friendly rival, but a rival nonetheless.

  • Weatherworn

    Nintendo isn’t going to become a third party developer anytime soon. To me the lack of games on the Wii the last year suggests their working on Wii U titles, and I expect an incredible launch of the Wii U later this year. Their not down and out, they know what their doing.

  • http://twitter.com/w_lowry Will Lowry

    *Inevitable

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