Ninty shuns iphone - investors unhappy.

[Ail]

ioi said:

Ail said:

Yep I don't see tablets as competing with portables either.

Smartphones on the other hand.........

The issue for portable is do you continue trying to build your own portable machines of which at best you will send 100 million if it is very successfull or do you tap the increasingly growing smartphone market which is already much bigger than the portable market and probably will be a 500 million phones market in a few years...

The only issue there is that noone has yet demonstrated how successfull one can be selling apps for lets say 20-30$ instead of the current 1$ price point....

If you can successfully sell a rich gaming app for lets say 20$ , then inevitably the portable market will die as it just can not compete with the size of the smart phone market....

I mean selling 20 million Nintendogs at 50$ or selling 100 millions at 20$ ? The choice isn't hard......

Problem is that it doesn't scale like that. You can sell 100m units of a $1 game but you won't be selling 100m units of a $20 game. Games sell hardware to some extent - people wanted Nintendogs so they got a DS to play the game. They are happy to pay $120 + $30 for a game they are interested in and assume they will buy a futher 3-4 games in the future. The smartphone model is different, a lot of people do just buy games on a whim and I really don't see as you'd have 100m people forking out $20 for any game on smartphones. The reason you get those kind of numbers with something like Angry Birds is due to the low price point - at that price it isn't a huge decision to buy the game.

As you rightly say though, there isn't much experience of this yet so it remains to be seen how successful apps can be at that kind of price point. Clearly as price goes up the number of consumers go down but until we see significant volumes of software being made available at ~$20 it is hard to say for sure...

One thing you could try too is to use the smartphone market as a marketing/advertising tool and release cheaper version of your games with much less functionalities on those smartphones and see if it helps at all boost the sales on your portables. In that case you could sell a cheap Nintendog demo for 1-2$ and see what effect it has.

Nintendo has enough resources to try those kind of experiments but in all cases putting your head in the sand and totally ignoring the smart phone market and saying it doesn't impact your sales  is not the rationnal way to handle it.......

Suddenly in the space of 5 years Nintendo went from being visionaries ( with the original Wii release) to reactionaries( there is no smart phone impact !)...