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

A new breed of gamers is used to paying very little for software. But are they receiving any less value than Nintendo customers?
Written by Peter Cohen, Inactive on

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.

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