Since its inception Nintendo has been a console manufacturer, primarily focused on building and profiting from the hardware for gaming.
In fact, in a recent interview with Reuters, Serkan Toto, founder of Kantan Games, a Japanese game industry consultancy, said that Nintendo still regarded itself as a console maker and perceived mobile gaming to be the “junk food” of the game industry.
However, with the company's recent success with Pokemon Go, it is facing pressure from investors such as Oasis Management to press for a change in strategy and move towards the world of mobile, said a Reuters article. A spokesperson from Nintendo also said the company’s three main objectives through mobile is to maximise exposure of the gaming brand’s intellectual properties to consumers, drive profits on mobile devices and create a synergy with its console business.
Nintendo's president Satoru Iwata insisted, the move into mobile was not because Nintendo was losing its enthusiasm for the console business.
However, industry players Marketing spoke to agreed that Nintendo should move towards software creation for the world of mobile rather than focus on console. This is mainly because the mobile hardware industry is already densely populated and so creating a new phone like console would be a waste of resources.
Preetham Venkky, director of KRDS Singapore said, “The strategy to shift from hardware to include software is an ideal, and probably the only move for Nintendo." He added that mobile screens have been one of the biggest disruptions and disruptors of the last decade in the industry.
“Instead of television, mobile is becoming the first screen for millennials and Gen Z's as they are spending more time on mobile than they are on fixed devices such as television or desktop computers.”
Prantik Mazumdar, managing partner at Happy Marketer, said Nintendo’s initial hesitance towards mobile gaming, was likely due to the fear of cannibalising its own console business. But he added that taking mobile seriously is the best move forward as "it is far better for Nintendo to disrupt its own business than let other competitors do so."
Creating longevity in the world of mobile
Mobile games however, have been a hit and miss, with many gaming audiences losing interest once the hype wears off. It is also hard to capitalise on given that globally, only 15% of internet users say they have parted with their cash for a mobile game within the last month. As such, to grow a mobile gaming user base is not easy.
Venkky added Nintendo's foray into mobile gaming would not come without challenges. But one way to ensure longevity is by acquiring popular games and companies.
“The best strategy it can take right now is to acquire companies which can allow them to create the software (games) needed to succeed in mobile gaming or undertake some majority investments on the lines of what they've done with Niantic,” Venkky added.
"Identifying the different and main revenue streams is also necessary," added Mazumdar adding:
"Nintendo needs decide which revenue stream would be its primary source – for instance in-game purchases or sponsored locations."