Nintendo CEO's definition of 'value' doesn't translate to handsets

Nintendo CEO's definition of 'value' doesn't translate to handsets

Summary: A new breed of gamers is used to paying very little for software. But are they receiving any less value than Nintendo customers?

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Nintendo president Satoru Iwata raised eyebrows at last month's Game Developers Conference when he said the video game market is "drowning" thanks to mobile and social games. But finding a fix is much trickier. It's not the handset makers' fault, nor is it the fault of the developers. Really, at the end of the day, it's the customers' fault, and their insatiable desire for free or near-free content.

Iwata underscored the difference between the traditional video game makers like Nintendo and mobile handset manufacturers like Apple - and the companies that increasingly offer content for devices like the iPhone and iPad.

"Game development is drowning" thanks to the flood of mobile and social games, said Iwata. All handset makers are interested in is volume, and they "have no motivation to release high quality software," he said, adding that their business is simply "to gather as much software as possible."

That is, of course, a distortion. Certainly handset makers like Apple emphasize the number of titles available for their platforms, but they're no more interested in seeing lousy software released than is Nintendo.

"What we produce is value, and we should protect that value," said Iwata. But there's apparently a gulf between Nintendo's definition of value and the consumer's.

Value, in the eyes of Iwata, means being able to charge a premium price. Launch titles for the new Nintendo 3DS handheld game system are priced around $40. Protecting that "value," Iwata implies, means charging more for it.

Compare that with software available for the iPhone. One of the most popular games ever for the iPhone, Angry Birds, costs $1. "Premium" games for the iPhone rarely cost more than $10 - and those that do almost never make it into the App Store's list of top-grossing games.

A new breed of gamers is used to paying very little for software. But are they receiving any less value than Nintendo customers?

There are a lot of throwaway games for iOS, but there are a lot of really deep, enjoyable games that can be played for dozens of hours without losing their appeal.

What's more, the usage case for mobile gaming is very different. Gamers on iPhones, Android handsets and other mobile devices outside of the Nintendo DS and PSP often will only play for a few minutes at a stretch; while they're commuting, or in the bathroom, over lunch, or at their desk between meetings.

Whatever the case, handset gamers often have a different expectation of how long they're going to play and how deep they want that play to be.

Sony tried to turn this value equation on its head by offering "Minis" - smaller games for its PlayStation Portable and PSP Go handhelds, sold exclusively for online download. The company has seen some limited success with them, but Minis didn't stop the PSP Go from being a relative failure.

It seems that consumers flocking to dedicated handheld gaming systems are looking for a fundamentally different experience than iOS or Android users, who are also gamers.

And ultimately for either class of gamer, "value" is likely to have a very different meaning.

Topics: Operating Systems, Apple, iPhone, Mobile OS, Mobility

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34 comments
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  • Ahhh the cry for the "status quo"

    Every established industry threatened by change makes the same case.
    oncall
    • They missed the initial opportunity to take advange of a new industry

      @oncall:

      Agreed. Nintendo, Sony, EA, etc basically missed out on the initial "social/mobile" game craze. All of the major gaming companies didn't see how a cheap mobile phone game could net millions and increase exposure to their more expensive games. They only saw (or continue to see) Apple as a competitor and didn't really vet the idea of making simple games for the iPhone, iPad, & Android phones.

      They could have "written the book" on these silly, simple games, but thought it was better to only focus on software for the dedicated gaming systems.
      jlt0x
  • RE: Nintendo CEO's definition of 'value' doesn't translate to handsets

    Anyone who believes that even the best iOS games can be compared to traditonal gaming devices is silly. Most are shallow time wasters, and the ones that aren't are usually awkward to play because of entirely on screen controls.

    I actually love Infinity Blade for iOS, but anybody that says it or anything else is a deep game is outright lying to you.
    Aerowind
    • "Most are shallow time wasters"

      @Aerowind

      As opposed to what? Deep time wasters? LOL. Games are time wasters, all of them.

      The problem for Nintendo is the casual gamers, that used to have no real choice but buy a Gameboy and $40 games, can now get their fix elsewhere. Nintendo has a great game library filled with shallow and deep games and its challenge is to find a way to monetize those games to recapture the "casual gamer" money it is now losing. Or it can ignore the casual gamer and point fingers as it is doing now. It's not the consumers "fault", there is no fault here, the market is taking a new direction and the game makers can jump on or stay put. Like the movie, music and book industry, adapt or perish. It really doesn't matter to me if Nintendo doesn't want the business, there are plenty of games out there.
      oncall
      • RE: Nintendo CEO's definition of 'value' doesn't translate to handsets

        @oncall
        If thats the case, then books, movies, drawing... all of it is time waister's. Gaming is an artform... smartphone platforms specialize in dumb little apps that are passed off as "games", they are NOT.
        timotim
      • Somebodies taking their gaming addiction way too seriously

        @timotim
        "Gaming is an artform."

        LOL.

        You sound like the many PC heads on some other sites "PC games are the only REAL games and consoles are for kiddies". This sound familiar? It should.

        While I agree there is a need for artful skill to make video games and some games have much more of this skill applied than others, they are time wasters, pure and simple. There is nothing really artful about Ms. Pacman, perhaps the biggest video game in the history of video games and available on most consoles computers and handhelds. Yet by your definition, it is a "video game" on lets say an xbox 360 yet a "dumb little app" on the iPhone. They are predominantly mindless diversions to provide entertainment.

        Get over it, just because iPhone games do not fit your shallow definition of a "manly REAL game" doesn't mean squat.
        oncall
      • P.S.

        @timotim

        I don't wish to ramble on here. However, you must keep in mind that Nintendo is making a "business decision" not to port it's games over to iOS or other devices. Nintendo is gambling that it can make more money by supporting its own hardware than it could porting its game library to competing devices. That gamble may or may not pay off in the long run. It has, IMHO, absolutely nothing to do with an iPad or iPhones ability to actually be used for games. It is merely PR fluff to appease stockholders who are asking the obvious question "Why are you not cashing in by porting games over to iOS?" do not mistake it for some underlying truth.
        oncall
      • RE: Nintendo CEO's definition of 'value' doesn't translate to handsets

        @oncall
        Thats interesting. So you don't feel that a gaming in today's age isn't an artform? I have never considered myself a "PC gamer" though I do own about 8-10 PC games. However, anytime all a "game" consist of is selling a 99 cent app where you tilt your phone from side to side as an on-screen character jumps from platform to platform, it stops qualifying as an art and jumps into the realm of a time waister. Your confusing sales numbers of free-99 cent "games" that all people buy for a phone for those "what can I do now" times (I'm guilty of it myself) with real game developers that actually design real games for real gamers that actually want to be immersed in it and play for luxury. Yes, fast food chains have cut into more luxury restaurant profits but they both serve their own purpose. I'm never sitting down on my free time to get immersed in Angry Birds, just like you'll never see me attempt to bring a battery powered Xbox 360 on the bus with me... but to compare the level of gaming from a title like Forza 3 to the likes of Real Racing on iOS is LAUGHABLE. The only reason I would even consider RR is because its cheap!

        Your also wrong about Nintendo. First off, why would Nintendo want to put their games on iOS? Their games (for the most part) are too skill-based for a touch only device and require button combos. And, since they make more immersive games, its no way they could compete with the prices of your typical smartphone "game"...and since most are just looking for something cheap to past the time on those platforms it wouldn't be worth the effort. Secondly, Nintendo has no problem selling DS, and games to go with it. What Nintendo is saying is that they don't want the game's industry to drop the quality of games that they help build. That instead of making a very shallow app for 99 cent, that these start up devs should put more thought and creativity into their apps and sell them for a little higher. I agree!

        For the record, I'm a console gamer (Xbox 360) who also has a WP7 (Samsung Focus) for my Xbox on the go fix. Theirs no way smartphone apps can touch the experience I get on my Xbox... not in quality of the game or money generated in sales. A smartphone dev COULD make a nice living for him/herself but a real gaming studio is generating tons more money. I use them both for what their good at and keep it moving.
        timotim
      • RE: Nintendo CEO's definition of 'value' doesn't translate to handsets

        @oncall

        Also, your Ms Pacman argument is exactly what I'm talking about. First off Ms Pacman came out in the 70 (I believe) when gaming was in fact A TIME WAISTER... thats not the case anymore as gaming has evolved into an artform...right up there with novels, movies and the like. However, as arcade and "quick hit" as Ms Pacman is... it still has more strategy and immersive gameplay then most smartphone apps being produced today! Angry Birds is WAY MORE shallow by comparison!
        timotim
      • Still not buying it

        @timotim

        Just because you're calling it an "art form" doesn't make it any less of a "time waster". You're life is not enriched in any way because you played GTA, give me a break. At least you admit Pacman is a video game and iOS has plenty of those.

        Exactly right, Nintendo made a "business decision", thanks for restating what I thought was obvious.

        And for the record, since you think it means something, I currently own and use an xbox360, Wii, PSP and PC, iPhone and iPad and I play games on all of them. I would agree that each delivers games appropriate for the platform. However saying that iOS games are "not games" because some company hasn't poured millions into each game is just being silly.
        oncall
      • RE: Nintendo CEO's definition of 'value' doesn't translate to handsets

        @oncall

        Nintendo never skipped over casual gamers. I dare say the casual gamer was created, at least in part, to the success of the wii.
        KBot
      • I won't argue that

        @kbot

        Nintendo did effectively create a platform for the "casual gamer". That's not what's in question here. The real question for Nintendo is: What can it do to keep them? I do not think it is a trivial matter. Casual gamers, while not spending the kind of money "hard core" gamers spend, still bought games and systems and those sales are in jeopardy. Yes they are "drowning". Is it because they cannot monetize their wares in a $0.99 dominated app world, or because they are not even trying? If timotim and LiquidLeaarner are correct and there are no, or almost no, apps of value in the iOS store it should be a trivial matter for Nintendo to step in and dominate that market.

        P.S. This entire discussion and Nintendo's reaction are totally reminiscent of a few other industries. Like the publishing industry for example, deny there is any threat, then explain away the threat as not providing the same "value" (this is where Nintendo is right now), then...
        oncall
      • RE: Nintendo CEO's definition of 'value' doesn't translate to handsets

        @oncall

        Again...if today's videogames aren't in large part an art form, than movies and novels are just as much of time waisters and also not an art form. I'm sorry but you are wrong.

        Yes, iOS games are videogames, you are correct about that. However, thats not saying much. So are those little Tiger handhelds that play Madden or Sonic, However the level of gaming isn't up to par on those either. Yes, I can get them for cheap and they may provide some level of entertainment for certain people but that doesn't make them compete with the likes of Halo, Mario, Zelda, Forza, God of War etc. Nintendo is saying that even at the smartphone level, that game devs must get more creative and not take the shallow game for cheap approach if videogames are to continue to evolve as an artform.
        timotim
      • You seem stuck on this whole "art" thing

        @timotim

        Why is that? Almost taking it personally. Are you involved in game production somewhere? Like art and "waste of time" are mutually exclusive concepts? Personally I find a lot of movies and many books "wastes of time" as well. And since someone already said regarding, ummm, art "I know it when I see it" we can just leave it at that. But, since you are big enough to admit that iOS games are "really games" I can admit that games can be art to some AND time wasters to others.

        As far as the medium evolving, it is evolving, and will evolve. Just as every information industry is evolving right now. Nintendo may not like where it's going, but that's irrelevant.
        oncall
      • RE: Nintendo CEO's definition of 'value' doesn't translate to handsets

        @oncall

        I read what you wrote to Kbot... you really don't get it do you. smartphone games ARE growing and wont be going anywhere anytime soon. However, that doesn't mean its going to REPLACE console/handheld gaming. This isn't the same as the publishing industry because smartphone gaming ONLY compliments console/handhelds. No sports gamer is going to quite playing Madden on NBA2K just to play it on a smartphone. No FPS fan is going to quite playing Halo or Crysis just to play a watered down version of it on a smartphone. No Racing fan is going to stop playing Forza 4 to play Real Racing on an iPad... smartphones and tablets CAN NOT make the experience better... it only makes it PORTABLE and is cheap enough (for the games) that we don't mind paying for it!
        timotim
      • Excuse me

        @timotim

        I never said they were going to "replace " consoles. Please tell me where I said that? I said Nintendo is losing casual gamer money that is going to smart phones and tablets that it isn't even trying to recapture. If you are a business owner, losing any profitable business is a problem. "Profits are made at the margins" that's what knocked other industries for a loop. The casual game player, the casual movie watcher, the casual book buyer, these "casual" folks and their "casual" money can make or break companies.
        oncall
      • RE: Nintendo CEO's definition of 'value' doesn't translate to handsets

        @oncall

        Fair enough... but you are acting as if the casual gamer is just buying their games on smartphones/tablets. What about the #1 consumer electronic device out right now in Kinect? What about the Wii? PS Move? Yes, the casuals are coming out in the gaming industry in large numbers but they are all over the place and support even consoles and handhelds and both those platforms are also seeing growth. Xbox 360 had its best non holiday month ever in Feb. due to Kinect. Their are plenty of casuals that play PSN, XBLA games... its just that the smartphone/tablet versions are the portable version of that equation and are most likely watered down. Again, Nintendo is simply saying that even on that level, games must still uphold the quality.
        timotim
      • I cannot speak for everyone

        @timotim

        I still buy console games. However, me and my wife both owned GBA's that we used for travel and I own a couple hundred dollars in games. Not counting my PSP games (a few hundred more there). We have not purchased any new games for these portable devices since the iOS store opened and my xbox 360 and PC purchases have been reduced to very few, well less than half what I used to spend. I don't think twice about spending $10-20 on a decent iOS game. OK maybe that is not "typical" but you can see where this is going. Does it mean the end of consoles? Of course not. does it mean adjustments may be ahead? Probably.
        oncall
      • RE: Nintendo CEO's definition of 'value' doesn't translate to handsets

        @oncall

        You don't have to speak for everyone... I already know the trends of 2010 and whats been happening so far this year and I'm telling you, you are NOT the norm. $10-20 iOS games does not come anywhere near sales of XBLA games. This also includes Kinect games, Wii games, PSN games etc. Right now the casual crowd is all about Kinect and Wii dance games as Dance Central, Kinect Sports, Just Dance 2, Michael Jackson Experience, Kinectimals, Kinect Adventures and others are kicking everyone ass. Casual gamers are just as much on the consoles (and spend more money) than they are on the smartphones/tablets. You say their maybe an adjustment coming...their is... but its the form of controller free (or as little as possible) gaming. As smartphones and tablets increase in sales, so will games for those platforms, but make no mistake...it only increases there to give us a gaming fix on the go, never to diminish sales of the real entertainment at home. What are you going to pull out when friends come over, your iPad or your Kinect? What are you going to play when you want to connect with your friends online to play some games, your iPhone or your Xbox Live? We really only buy games on mobile because its there and it gives us something to do, but we actually plan and invest in our gaming on the big screen for enjoyment... these are facts.

        Yes, one could sell 2 million units of a mobile game on iOS in its life time for 99 cent to $1.99... thats chump change compared to MS selling 3.5 million copies of Halo Reach in its FIRST 24 HOURS at $60-150 a pop! Or, Black Ops going for 8 in its first month at the same price points. Your getting what you pay for. Yes, Angry Birds Rio was downloaded 10 million times in 10 days but they gave it away for FREE...you damn right its going to be popular...I don't even like Angry Birds but I would have downloaded it for that price. However, Android devs are complaining left and right that their not making enough money on the platform because prices are so low, but they cant raised them because no one will buy them. If these smartphone devs would start to listen to Nintendo and make the games meatier then they could get away with selling higher priced games.
        http://gadget.blogdig.net/archives/articles/January2011/26/Google_unhappy_with_slow_Android_app_sales.html
        and this is the #1 selling mobile OS on the market we're talking about.

        The adjustment is in the types of games that are being ADDED to these traditional hardcore mostly consoles not in the platforms that they buy them on. Casuals/gamers like to play games, so that means they all reap the benefits going forward, but the level of casual/hardcore games on smartphones and tablets need to increase.
        timotim
    • That's the Nintendo propaganda. But is it true?

      @Aerowind There are loads of deep, complex iOS games. Look at Chaos Rings, Final Fantasy III both with 40 hours +, both every bit as good as anything the DS can muster. Look at Lara Croft and the Guardian of Light: the exact same game (same levels everything) for PS3, Xbox and iOS (not for DS: processor can't handle it!). I can play the whole of Doom, Monkey Island 1 and 2 on iOS and even new episodes of these games franchises.

      The best developers release for both DS and iOS and, you know what, it's the exact same game most of the time! Except that the 1980s DS cartridges mean subtitles only but full voice acting on the iOS version.

      Some iOS games are shallow but then so are some DS games. There's absolutely no evidence of games on the DS being consistently better in any respect to those on iOS. This is just a canard put about by Nintendo to justify their stratospheric pricing.

      Don't believe Nintendo propaganda, look at what's available on iOS (www.toucharcade.com) and you will change your mind.
      The Star King