Crazy right? But if you think about it their two main strengths which are their first party games and their gaming focus as well as an old blindside, distribution, are all going to bite them in the butt.
People like to compare Nintendos first party games to other first party games from other first party console manufacturers. Game, set, match. Take that as an easy win. However Nintendo's first party games compare differently to the current model of small 3rd party developers each trying to make unique innovative games. Nintendo cannot compete with the pricing model now in place for small pick up and play games and if they try to incorperate that model into their handhelds they risk reducing the average sale price of their titles and increasing competition for their own offerings. Beyond this great handheld games are no longer the preserve of a Nintendo handheld almost exclusively. They could lose revenue either way due to their reliance on the business model of the status quo and the low prices of the new styles of games.
If your company has <1% of one fast growing market and >33% in another stagnant market is your company a disrupter or the disrupted? The former is the online market where Nintendo barely has a presence, which according to EA will grow larger than the retail market this year. All of Nintendos main competitors have significantly more presence in the online market than they do. This is a significant oversight when Nintendo faces competition from many sides between Apple and Android with the phone market to the PSP2 which will likely bridge both markets successfully, with all of them and especially Apple having a significant presence online. However it also extends outwards to the more open nature of these devices and their ability to access games on the internet as well.
Nintendo is a gaming company as many companies previously were typewriter companies. If Nintendo is defining itself by the games then it is vulnerable to companies which don't call themselves game companies coming into the market. Sure the multipurpose companies don't do buttons on their devices which makes it harder to do complex games, too bad the touch screens are great for pick up and play games which is the main value of the handheld market. If all someone wants to do is a pick up and play kind of game, the easiest device to pick up and play with is the one close to hand which is of course the smartphone or tablet PC.
Im not trying to diss Nintendo (hopefully thats obvious). I just wanted to discuss how vulnerable I percieve their business model to be at the present time.
Tease.
