Is Nintendo Abandoning The Console Business?
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I think it's probably safe to assume that Nintendo has been disappointed by the Wii U's performance, but some of the publisher's recent decisions have many gamers speculating about Nintendo’s future in the console industry.

Obviously, Nintendo has been doing fairly well in the mobile gaming market. The DS and 3DS handhelds have a comfortable lead over Sony's portable systems. However, mobile phones and tablets are quickly becoming a major problem for what has historically been Nintendo's forte. In 2012, Android and iOS devices accounted for nearly 58 percent of the mobile gaming market while Sony and Nintendo's portables accounted for only 36 percent. By comparison, Nintendo held nearly 70 percent of the entire mobile market in 2009. So, things are probably getting tense at 3DS headquarters.

Considering the slippage that Nintendo has been experiencing over the last few months, it’s probably unsurprising that some analysts are predicting Nintendo's unceremonious exit from the console industry. I, however, think that Nintendo is playing the long game.

Most of the anti-Nintendo speculation can be traced back to the cancelation of the E3 press conference. I even joked about selling my Wii U on Craigslist at the time. But this year, very few people are going to be focusing on Nintendo's news. Sony and Microsoft are going to be taking up the majority of the limelight and Nintendo is simply taking a few steps back.

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Plus, even though they're backing away from E3, they're doing something pretty interesting. During today's Nintendo Direct presentation, Reggie Fils-Aime announced that they would be partnering with Best Buy to give gamers access to several unreleased titles during E3. "This year, we're making E3 for the people," he quipped.

Don't forget, Nintendo is the fourth largest publisher in the video game industry (behind Activision, EA, and Ubisoft), and every single one of their games is exclusive. So, even if Call of Duty and Skylanders will sell far more copies than any Nintendo IP, Nintendo's profits never leave the building.

In fact, if I forced you to name 20 of the most iconic video game franchises, I bet over half of those would belong to Nintendo. When the 3DS was struggling they simply dropped the price on their console and churned out games like Super Mario 3D Land, Star Fox 64 3D, and Mario Kart 7. I think we'll probably see a similar strategy with the Wii U, but they'll wait until Microsoft and Sony have had their moment in the spotlight.

I'll admit, though, Nintendo has been acting strange lately. The constant delays and money-grabbing behavior regarding YouTube videos seems a little bit desperate. But, console transitions are tricky, and the Wii U has proven to be more difficult to market than Nintendo originally expected. And with third party developers avoiding the console like it has hepatitis, Nintendo has their work cut out for them.

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Don't worry, though. Nintendo isn't stupid. Once they pull themselves together, drop the price, and release a few good games, we'll probably see things start to turn around. And there's a really good chance that all of this is going to happen during the holiday season. After all, Nintendo can't let Sony and Microsoft have all the fun.

Josh Engen
Josh Engen
@joshengen

News Content Director
Date: 05/17/2013

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