Games console makers Nintendo have had a rosy few years, but competition from Apple's iPhone and iPad have seen profits tumble for the first time in six years.
Nintendo president Satoru Iwata is believed to have told executives that Apple, in particular its iPhone and iPad, are the "enemy of the future."
The company’s recent strategy has centred on creating devices aimed not just at children and dedicated — generally male — gamers, but at the whole family. Two years ago, the company claimed to have permanently altered the demographics of video games by raising the average age and the gender mix of gamers. Unfortunately, the very people it claimed to have converted — high-school girls and men aged between 30 and 40 — reported that they would rather have an iPhone than a DS in their pockets or handbags.
It's pretty obvious why ... three reasons spring to mind instantly.
First, the iPhone (or generically, any smartphone) is a convergence device, bringing together multiple features into a single package. A DS is just a hand-held games console. Which would people rather carry?
Second problem, cost. Not the cost of the device so much, but of the games. A game for the iPhone platform will set you back a few bucks, which a games cartridge for the DS will cost you between $20 - $30. Nintendo's plan was to position the DS and Wii so that they were aimed at the casual user, and it worked, for a while. Also, it's easier to justify the cost of a smartphone that does many things than it is to justify the cost of a piece of kit for gaming.
Third problem, access to titles. Getting access to a new game for the DS or Wii means a trip to a store or your favorite online vendor. A new game for the iPhone is only a few clicks away. Don't underestimate the power of instant gratification.
The bottom-line is that Nintendo underestimated the iPhone platform and ended up being outmaneuvered and outflanked by Apple on three fronts - console features, price and ease of access to new games. That's not a good place to be ...