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Iwata: Assumptions about shrinking handheld market are untrue
Iwata: Assumptions about shrinking handheld market are untrue
August 21, 2012 | By Eric Caoili

August 21, 2012 | By Eric Caoili
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    14 comments
More: Console/PC, Smartphone/Tablet, Business/Marketing



"[There's a] premise that the handheld gaming device market is shrinking or vanishing, and I don't think that is true."
- Nintendo CEO and president Satoru Iwata dismissing the notion of iPhones hogging all the portable game players, and making dedicated handhelds irrelevant.

Though there's a belief that the flourishing mobile game market is killing off dedicated handhelds, the executive claims that Nintendo's hardware and software sales in that space have been healthy despite signs that might indicate otherwise.

3DS system sales in Japan, for instance, reached 7 million last week, which is close to keeping pace with sales for the original DS and DS Lite (which benefited from two Christmases at this point, instead of one), even though it's now competing with mobiles, tablets, and free-to-play games.

Iwata also noted that software sales for 3DS are exceeding those of the original DS. Those points give some credence to his argument, but it all goes against the trends many have seen in their own lives, as well as the data published by analysts.


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Comments


Ardney Carter
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I have always maintained that the market for games on mobile devices and handhelds are largely separate markets that are not at risk of cannibalizing each other. Gamers (people who play video games as their primary hobby) are not going to abandon the lengthy experiences available on dedicated handhelds just because cheap, (mosly) bite-sized experiences are available on their phones or other devices. They may add those experiences to their rotation but they won't abandon what they've already been doing for them.

And by and large, non-gamers are not necessarily going to take up gaming as their primary hobby merely because they are using their phones to kill time at a bus stop or while they wait at the doctor's office. And those that DO aren't likely to stay with the simple experiences forever as they'll want to advance to the more complex stuff available on the dedicated machines.

It's my guess that the handheld market is staying roughly the same size while the market for mobile games is exploding. This is totally understandable though as phones are ubiquitous whereas handhelds are not. Everyone likes to play games from time to time but not everyone is a gamer. The mere fact that the former market is larger than the latter however does not in any way imply that the latter is in danger of disappearing.

Michael Pianta
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Exactly. Every once in a while I try out a phone game, but after about a minute I'm thinking "I wish this was on a real system." In the end, I really don't like playing on my phone, and the reason is because I actually value games and take them seriously. Phones just aren't good enough for me.

Saul Gonzalez
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The problem is that the runaway success of the DS and the Wii was largely due to the non-gamers. Iwata specifically talked about the expansion of the player population.
So, yes, even if you keep the traditional gamers, without the non-gamers the 3DS will never be nearly as large as the DS was.

Leon T
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"Those points give some credence to his argument, but it all goes against the trends many have seen in their own lives, as well as the data published by analysts."

Anecdotal evidence is meaningless and just saying that revenue from mobile is hurting handhelds does not prove anything. Mobile revenue was growing while the DS userbase was growing and its sales were breaking records.

They're two different markets with some overlap. One is not going to kill the other. Sames as with PC and consoles. As for pointless enecdotal evidence there are two Ipads and smartphones in my house. We still play games on dedicated handhelds.

Matt Robb
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Well, I'll admit I've been playing Spectral Souls on my phone (port of the PSP version), but I had no intention of getting a PSP, plus it's turn-based, so it works fine.

That said, I agree with the people before me. Different markets. You can combine any two related markets into one, where one is new and growing rapidly, and claim the new one is taking market share. Doesn't mean the statement has meaning.

Kevin Fisk
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I agree with Iwata but at the same time I think the handheld market can't afford not to be innovative or they will lose their market as we've seen with the PSP Vita. Nintendo does it better but so far the breadth of quality titles in differing genres is extremely lacking when comparing 3DS to the DS in my opinion. They really need to get the ball rolling and push to localize/market some of the bigger Japanese titles in EU/US markets as well.

As always, anecdotal evidence is misleading. Ofcourse more people are seen playing games on smartphones as there are literally hundreds of millions of them out there. Also if those are the same Flurry analyst numbers from before I think Gamasutra should genuinely attempt to defend them if they are going to report them here. When I looked before they didn't even count the 3DS in there "Portable Gaming" piece of the pie.

Merc Hoffner
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I think Japanese developers were a lot more willing to experiment with new kinds of gameplay in the early days of the DS (Warioware, Feel the Magic XX/XY, Another Code: Two memories), and I don't know why they aren't now - it was a very successful period. Perhaps there's less genre innovation leadership from Nintendo; perhaps it's due to higher dev costs, but I agree and this is not a good thing. I can imagine Nintendo has designed the Wii-U as a canvas of I/O technologies to replicate the freedoms of the DS, in the hope that the options will spur gameplay innovation and not dev costs, but making devs bite this kind of opportunity seems to be an intractable problem nowadays - particularly in the West. The iOS gold rush is simply warping the whole luster.

Ian Uniacke
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Yeah it's kind of ridiculous. How many people did you see playing ds on the train before smart phones? It's not replacing the old market just introducing a new one. I see it more as people who used their pc's to play games casually at home discovering portable computing. It's much more successful than that traditional market because people always have their phones.

Saul Gonzalez
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@Ian Maybe not what you meant to ask, but in Japan during 2007-2009 I couldn't get a train ride without seeing multiple DSs on each car. Now they're all gone, replaced by smartphones. And almost no 3DSs in sight just yet.

Kevin Fisk
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@Saul and others who've replied.

Here's a little survey I remember going around GAF and other gaming forums about the time the DS was fresh and new. I remember people saying portable gaming would be dead in Japan because phones were able to play graphically intense games in Japan.

http://whatjapanthinks.com/2006/05/24/gaming-in-japan/

So even back then, mobile was the largest gaming audience as Japan had gaming capable phones long before we saw in the states. In hindsight the markets were much more exclusive than people theorized and dedicated portables are stronger in Japan than everywhere else. It might not play out like that in other territories but it shows that the demise of dedicated handhelds isn't inevitable.

[User Banned]
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This user violated Gamasutra’s Comment Guidelines and has been banned.

Merc Hoffner
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Well even Iwata himself recently stated that Western 3DS sales are not where they should be, but one might suppose that given the sales rate they are achieving even with market weaknesses, then should they manage to address those weaknesses then they'd really be flying. It's hard to paint the picture very negatively when your 'worst performance' is better than one of the best performances in history. Nintendo has yet to make new 3DS genres that resonates internationally the way Brain training, Animal crossing, Nintendogs and Professor Layton did (which is a real problem). And yet if they can crack it (and they have a track record like few others) then sales may go from 'good' to 'astounding'. Still it's getting late in the day to get their stride on.

Jeremy Alessi
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There's also the fact that Nintendo caters to kids whose parents may not want them to have a device quite as powerful as an iPod Touch. The Vita seems to be struggling more with its traditionally older audience.

Joseph Flemming
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If I have to read one more unfounded "smartphones are killing dedicated handhelds" article.. last month (according to GAF) 3DS did 125k+ Vita did 40k.. there is some slight weakness, but I promise after the just launched 3DS XL and NSMB2 + the Holidays every one will stop doubting.


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