Nintendo’s Last Chance

This past Sunday, Nintendo released Super Mario 3D Land, its first Mario game made for the 3DS. Rather than being a celebration of video gaming’s most successful franchise, it’s more likely an opportunity to mourn the demise of a company responsible for so many great products and games. Because if Nintendo doesn’t change its strategy soon, the company’s future will be very bleak indeed.

Super Mario Land 3D is coming out in the format preferred by the Big N since the original NES: A plastic cartridge. And with that cartridge comes a hefty $39 price tag, a price that while once considered reasonable now looks completely out-of-place in a world where Angry Birds sells for 99 cents on the Apple App Store, is free on the Android Market if you don’t mind advertisements, and sells for the princely sum of $2.99 on the Windows Phone Marketplace. About the only place you won’t find Angry Birds is on RIM’s BlackBerry App World, and for good reason, as that company’s leadership has been about as clueless as Nintendo’s.

This year, faced with stagnant sales of the 3DS, Nintendo responded with a price cut, from $249 to $169. But Nintendo’s problem isn’t hardware pricing. It’s that with a smartphone in everybody’s pocket, nobody needs a second portable gaming device. In just two years, Nintendo’s share of portable gaming has gone from 70% to 36%, while Android and iOS’ combined share has climbed from 19% to 58%. No gimmick like the extra dimension provided by the 3D in 3DS can compensate for consumers unwillingness to spend more money on a device when they already have one in their pocket.

Earlier this month, Angry Birds maker Rovio announced it had topped 500 million downloads of the game. And it further enforced just how shortsighted Nintendo has been. When I say Nintendo, I specifically mean its leadership and CEO Satoru Iwata, who has emphatically stated that Nintendo’s games won’t go to smartphones while he’s around. In Kyoto, where Nintendo is headquartered, there’s got to be a group of game designers and engineers that are frustrated with the decision to keep Nintendo games exclusively on Nintendo hardware. My message to frustrated Nintendo employees: Start a revolt from within the company. If not, Nintendo’s future will be in the hands of other companies and not its own.

Everybody knows Nintendo makes terrific games. It is a shame they’re now stuck on portable consoles most people don’t want. If Nintendo were to launch Super Mario Bros. or Mario Kart for the iPhone and other devices, not only would they smash all game download records, they could charge a premium for it. People would pay $4.99 or $9.99 for Mario on iOS. Heck, they could make the case for $14.99 if they did it right, with updates that added content and levels. The Nintendo brand is worth that much. But by sticking to $39 cartridges on proprietary devices, they’re setting themselves up to lose a generation of gamers more than happy to spend their gaming hours with Whale Trail (my new favourite) or other console franchises that have made the jump to smartphones, like Final Fantasy.

Nintendo doesn’t necessarily need to get out of the hardware business to go to iOS: They could create a gamepad that plugs into the iPhone’s dock connector or works via bluetooth to add buttons to their games, and duplicate it on other platforms as well. But make no mistake: Making games only for their own handheld devices is a strategy that can only tread water for so long. Long term, it’s untenable.

Seven years after the launch of the Nintendo DS, it’s time for the Kyoto-headquartered company to rip up their play book and make bold moves to stay relevant in the smartphone gaming age. Nintendo is still a credible giant in the industry. Something tells me that if they wanted to come to iOS, Apple would be willing to make that entry extra-special on the App Store.