Tech Column: Nintendoomed?

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The mushroom-eating, princess-saving, star-collecting plumber has seen better days. Since Nintendo’s establishment in 1889, the company has made significant profits meeting its annual forecasts. Fast-forward to 2014, and it is estimated that Nintendo will report an annual loss for its third consecutive year in March. Does this spell doom for the company that has brought forth the rebirth of video games?

Nintendo’s fan base is bleeding out. In the past, they’ve been able to depend on three key markets: Children, casual gamers, and hardcore gamers.

With kids and casual gamers now playing on mobile smart devices, Nintendo’s target audience has been disrupted. And with the recent release of much stronger home consoles from Sony and Microsoft—Playstation 4 and Xbox One—Nintendo’s Wii U simply cannot cater to the majority of hardcore gamers. Not even its biggest game of the 2013 holiday season, Super Mario 3D World, could keep the Wii U sales afloat (although sales numbers did increase).

So, does the house of Mario need a 1up?
Nintendo’s philosophy has always been to create experiences that integrate software and hardware features. That’s why the company traditionally releases software and games only for its own platforms, akin to Apple only releasing OS X and iOS on its own hardware. But industry analysts predict that if Nintendo goes the way of SEGA and exits the hardware market—producing games for Sony, Microsoft and Apple instead—that it could see an annual profit of $1.1B, versus its current $366M loss.

This sounds like the easy way out, but the old philosophy has made Nintendo the trailblazer it historically is. The “D-pad,” thumb-sticks and rumble feedback emerged from the brains behind the company, bringing touch screen gaming to the masses, glasses-free 3D and ultimately, motion controls. With Mario, Zelda, Samus and Donkey Kong, Nintendo has proven that its crazy inventions have been worthwhile.

…and what happens if the Wii U failed?
If Nintendo’s eighth generation home console ultimately fails, it wouldn’t hurt the company financially, with a cash reserve estimated at $11B. It would sully Nintendo’s reputation as a stable company, further weakening third party game support. Nintendo’s handheld, the 3DS, is doing great–maybe not as well as the company expected, but it has sold over 31 million units worldwide. This is pretty reassuring considering a world dominated by iPhones and Android devices.

Can’t teach an old Nintendog new tricks?
Pundits say that Nintendo is stuck in their old ways: Archaic online infrastructure, no support for third party games and studios and so on. With the company’s annual investor meeting on January 30, gamers and Nintendo stockholders are expecting a big shake-up. This could concern shuffling management or reassuring updates on how Nintendo expects to dig itself out of a hole with something new. Price cuts? New hardware? Only time will tell.

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