Nintendo takes a leap of faith

It finally happened. Nintendo has announced that its famous collection of IPs (Intellectual Property) will be gracing mobile devices; and following the announcement were screams from fanboys, and jubilation from investors.

The announcement itself wasn’t a great surprise, we all knew that something like this would arrive eventually, it was just a matter of when, not if. In a way though the announcement isn’t exactly as was anticipated. This is because Nintendo are working with Japanese developer DeNA, who specialise in mobile games, to help bring new games (not ports) to mobile devices. Of course we wait to see what the extent of DeNA ‘s involvement in all of this is, after all Nintendo has been burnt in the past by allowing other developers access to its IP; I think we can all agree that the experience with Philips and the CDi was a massive failure. Then again in recent years there has been success, Capcom have created excellent handheld versions of The Legend of Zelda (which are even canon), Sega developed the excellent F-Zero GX and just recently Koei Techmo and Team Ninja created the surprisingly entertaining Hyrule Warriors. In all of these situations Nintendo a say in the development of these games.

The partnership between Nintendo and DeNA is no casual arrangement, as both companies have exchanged stock and shares with each company acquiring approximately 22 billion yen of the other. As a result DeNA has 1.24 percent of Nintendo’s stock, and Nintendo 10 percent of DeNA’s total stock. The latter aspect of the arrangement is significant as owning 10 percent of DeNA could possibly give Nintendo some influence over the company if it feels the need to reign things in a bit.

The decision to allow for an external company that most people have never heard of access to the crown jewels will sound like a risky move to some, but DeNA know what they’re doing in this marketplace, one which Nintendo has no expertise at all. Therefore bypassing the learning curve that would have been necessary for Nintendo to go through. Nintendo wants to focus on making high quality games for their dedicated videogame systems, and this move allows them to continue to do so, whilst simultaneously broadening their brand an appeal with the hope that the mobile games will attract more people to purchase the dedicated systems.

Following the announcement Nintendo’s shares saw a notable rise of just over 20%, the highest since January 2014, and this increase is largely holding a day later. This is not surprising considering investors have been very vocal in calling for Nintendo to make a move like this. Nintendo has also been vocal in not doing so until it knew it would be able to do so effectively, it just wasn’t expected that they would essentially outsource the process. Both companies have benefited from the announcement, but particularly Nintendo which has seen value added to the company, and some analysts recommending people buy Nintendo stock again.

As Nintendo have made a clear distinction between games for the dedicated systems, and the games that DeNA will be helping to make for mobile devices (Nintendo will be leading development), it does open up the discussion as to which series’ could work best on mobile devices. Obviously there will be some kind of Mario game, and likely a game featuring Pokémon, but the key will be utilising the strengths of certain Nintendo IPs that can perform well on these new devices. WarioWare seems like a perfect fit, as its collection of micro games suit the short bursts of play that define many mobile titles. Plus the series is synonymous for its creative use of inputs. Another series that is made by the same internal studio is the Rhythm Heaven (Rhythm Paradise in Europe) series, as it uses simple inputs to great effect, and could work well on these devices.

As Nintendo is leading development it is hoped that the free2play aspects will not be too prevalent, or that they provide “premium” games (meaning paid games of over 69p/99 cents). although it could also provide a great opportunity to tie in with titles that appear on the dedicated consoles. For example by playing the mobile game can result in additional bonus content for the “main” game.

This is feasible as one of the reasons why DeNA have been brought in is because of their knowledge of how to create a system that works across multiple devices and the construction of networks and servers. Nintendo has been playing catch-up in this area, and this is a positive sign of Nintendo’s commitment to improving in this area. They also announced that they are working on a new membership system (which is what they were referring to when they announced the closure of Club Nintendo), one which would connect existing Nintendo devices with mobile devices; as well as to Nintendo’s next dedicated system, currently codenamed “NX”.

The NX represented the other big announcement from the announcement with DeNA. Very little (i.e nothing) is known about the new system, although the general assumption is that the next system will be a combination of Nintendo’s handheld and home system. This based on the merger of the handheld and home console divisions into one, and the increased unity between the 3DS and the Wii U adds to this assumption. But at the moment this is all speculation.

For now all we can do is wait. The first game of this new partnership might come out this year, but it is likely that the extent of what this partnership means won’t become apparent until next year. Likewise more information about the NX is unlikely to be provided this year, other than a small, but important, tease during E3 this year. 2015 will likely be a transitory year for Nintendo. There are plenty of great games being released by the company, including a new Legend of Zelda title. 2016 will be when everything will start to be unveiled. That will be the time when we will know who was right; the fanboys or the investors.



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