Nintendo of America President Reggie Fils-Aime has said that Apple is currently his company's greatest threat, not the rival console makers.
Speaking with Forbes, Fils-Aime pointed out that, with 20 million gaming devices sold, Nintendo shifted more systems in 2009 than Sony and Microsoft combined.
However, with 14.1 million iPhones sold in the last quarter, Apple has emerged as a rival that could "absolutely hurt us more than Microsoft in the near term."
Fils-Aime said that the greatest challenge for the company today is competing for people's time and attention. “It’s all about time,” he said. “I compete with Zynga, I compete with surfing the net, I compete with the newspaper.”
Nevertheless, Nintendo has an advantage over the competition thanks to the depth of its products, he said, pointing to the fact that 14 of the 20 best-selling games for the current generation of gaming devices are from Nintendo.
He argued that, while the iPod and iPhone are great for casual games like Angry Birds that provide a welcome distraction, games on the Nintendo DS, by contrast, can consume larger amounts of time. By way of example, Fils-Aime admitted he’s spent 150 hours playing Nintendo’s Dragon Quest IX.
Earlier this summer, Fils-Amie countered claims that sales of Nintendo's Wii were slowing claiming that the system "continues to extend its advantage".
It's true that some of the games in the DS catalog are hardcore, like Dragon Quest, but a lot of the best sellers are directed more to casual market (or "welcome distraction" category). I.e: Fashion designer games, horse riding, new-gen tamagotchies...
It'll be interesting to see if Nintendo redirects its focus to this type of games and leaves aside the Nintendogs and the like.
"a lot of the best sellers are directed more to casual market (or "welcome distraction" category)"
Are they? Show us some figures. I was under the impression the best sellers on the DS were things like Mario Kart, Pokemon, New Super Mario Bros, Lego Batman and so on. And Nintendogs, obviously.
Lots of people assume lots of things about 'casual' games by default when we're talking Nintendo.
In the top 5 best selling games for ds you have nintendogs and a couple of brain age / brain training titles.
Yes its true nintendo its not responsible for a big amount of the casual market games (see ubisoft for more details) but it's allowed them, and now sees how other companies want to get into that market. Fair enough, I think.
"In the top 5 best selling games for ds you have nintendogs and a couple of brain age / brain training titles. "
In the top 5 best selling games for the ds you don't have "a couple of brain age / brain training" games, you have one title. Nintendogs on the other hand is a lot, but it surely isn't a casual game, that fits into a welcome distraction category, the game needs constant attention by it's player, it can't be played for 5 minutes on the train now and then, like the typical casual handheld game.
But even if I would count Brain Train and Nintendogs as pure casual titles, fitting in a "welcome distraction" category (something, that doesn't work for Brain Train either), there are 2 of them in the Top 5 and 3 of them in the Top 10 of the best selling DS games.
This means, they aren't anything like a majority amongst the best selling games.
What makes you say that fashion games are a "casual distraction"? For people who like playing them, they may very well play them a lot. I'm going to hazard a guess that you know little to nothing about these games but you're happy to dismiss them as "casual distractions". Plus while these make up a significant portion of the market they hardly make up the majority.
I own an older iPhone and currently use a Droid X (also a Wii and PS3) I've played a lot of games on all of these devices and I just can't see cellphone (or tablet) games being competition for consoles,Wii or otherwise.
Mobile convergence is long overdue, and Nintendo faces new competitive pressures on multiple fronts. However, Nintendo's more than two decades of handheld gaming leadership will not be easily undone, and the launch of the 3DS should help it fend off any potential threats over the short term.
By comparison, iPhone games lack the polish of most DS titles, but iPhone gaming is good enough for many non-gamers who want to pass some time at the airport or bus station (i.e. people who do not have the time or inclination to spend 150 hours on a game).
"for many non-gamers who want to pass some time at the airport or bus station (i.e. people who do not have the time or inclination to spend 150 hours on a game)"
I think you're not making the argument you mean to make (or I'm mis-understanding). A lot of these 'casual' games - the ones that are really making gamers out of everyone, are absolutely monstrous time sinks. My non gamer friends have easily spent 150 hours apiece on that stupid fantasy football game on facebook. I don't know. As a 'gamer' I've avoided that whole phenomenon and spend substantially less time actually playing games. Perhaps what we mean is protracted disengaged gaming, vs intense focused gaming.
Smart phones are a direct threat to the DS.[1] Reggie and Nintendo are smart enough to understand the 'attention economy' we all live in: next to money, the most valuable thing is our time![2] Kids and parents will ALL have a smart phone in the next decade or two (not only in the rich 'western' countries, btw) - not necessarily all want to carry a DS or any other game gadget.
[1]
"By 2013, mobile phones could easily surpass PCs as the way most people hop onto the Web. Gartner's statistics show that the total number of PCs will reach 1.78 billion in three years, while the number of smartphones and Web-enabled phones will shoot past 1.82 billion units and continue to climb after that."
(CNET article from Jan 2010)
[2]
"The Attention Economy and the Net" by Michael H. Goldhaber (1996)
Just because many parents and kids my have smart phones does not necessitate that they will be using the phone for more than just a phone. With options becoming limited from all cell phone carriers...as phones become damaged or out of date, there will be a need to replace those phones--and if the options are limited to this smartphone or that smartphone---eventually everyone will have one...not truly out of choice but because lack there of.
everyone in my family currently has a general use phone---because we find no need to have the internet, check email, play games, buy apps, etc....none of it really has worth to us.
Though this is true..i do own a DS and PSP--my brother a DS...its really a matter of interest...I think it would be interesting to see facts on the number of people that have smartphones vs the number of people that actually bother with using the internet and download apps/games.
If this were true then the PC would have destroyed console gaming a long time ago. A device that does everything is going to lose to a device dedicated to gaming. And PC games were at least as good (if not better) than console games. These iPhone games are nowhere near the quality of a DS game. I really don't consider the DS and the iPhone to even be in the same market.
Nintendo does not have to fear Apple. The only Nintendo has to fear is Nintendo itself. Either they'll make great games and succeed or they'll make bad games and fail. Apple won't have an effect on them either way.
Smart phones have an input (touch screen) that is limited. Most game types don't work well with a touch screen. Once that changes, and smart phones have a better input option, I expect they will be the main way everyone plays games.
Reggie is right to mention 'time' as the key though. It's where people spend their time that determines the key competition, and that is why mobile/facebook are the biggest competition for Nintendo. All the numbers point to Nintendo players as less likely to play as much as the other systems. That may seem like a slam on Nintendo players, but it also points to them being a little more well-rounded in life...and more likely to become involved in many things that take their time.
The PC/console battle isn't really mappable to the DS/iDevice contest: the PC has generally been more expensive, complex and less user-friendly than a console: a GeForce 1138 GT Turbo Fluffy Dice may put pretty things on screen and the keyboard/mouse combo may allow you to snipe the tail off a dormouse from 300 yards, but it isn't that good when it comes to playing Mario.
Conversely, the iDevices have a number of advantages. They're far more flexible, slightly more portable (smaller/thinner), have superior hardware - and there's *40,000* games at an average price of $1.20.
**EDIT: BAD NUMBERS REMOVED: see below for details **
And according to my back-of-a-cig-packet calculations, App Store developers have sold at least 175 *million* games:
Throw in all the demo/free games out there and you can probably add a zero onto that figure.
So yeah: if I was Nintendo, I'd be worried...
In some ways, this actually feels more like a replay of the Wii launch, when hordes of people (myself included!) derided the Wii and predicted that gamers wouldn't go for it. And in some ways, we were right: what happened is that Nintendo found a new market, which evolved into the casual market we all know and love/hate. And that's what Apple's done. The big question is: can Apple's casual-lite games live alongside Nintendo's casual-friendly games? Personally, I suspect not, but that's a blog-post for another time...
Apart from the fact, that your calculation in your blog entry seems to be completely made up, cause you sum up numbers, from which you say, they are a mere assumption, you say here:
"Then too, there's around 90 million iDevices in the wild: quadruple the number of DS's which have been sold."
What do you mean by this? According to Nintendo, the DS sold over 130 million, why should the 90 million i-things be four times that much?
Ack. S'what happens when you spend too much time sitting on trains...
To fix things up: Nintendo claim that the DS has sold 130 million. Apple claims to have sold 120 million iOS devices (iPhone, iPod Touch, iPad) [1]. Nintendo still has the advantage - not all iOS devices will be used for games, whereas all DS units will be used for games. However, it's still pretty close!
Regarding the calculations: I think it's based on fairly solid ground: we *know* how much revenue the App Store has brought in ($1.33 billion) and we *know* how much the average game sells for ($1.20).
What we don't know is how big a market share games have: given that 15% of all apps are games, this seemed like a reasonable starting point.
Plug 'em together and you get 175 million. If anyone can come up with a better estimation, I'll be all ears!
As it is, I suspect I've come in on the low side *and* it doesn't cover free/ad-supported games. Apple have stated that there's been 6.5 billion downloads from the App Store - again, if we use 15% as a starting point, that means there's been around 1 billion games downloaded.
Those are the kind of numbers Nintendo needs to worry about.
Finally, to dive into an anecdote, I'm currently spending 2 hours a day on a train: there's generally businessmen in the morning and students in the evening. I've now been doing this for a week and I've yet to see a single DS or PSP. However, what I have seen is dozens of people playing with their smartphone - iPhones mostly, with a smattering of Android devices...
Does anyone actual read what Reggie says? He says they're competing with reading, watching tv, going on the internet and so forth. In that sentence he clearly shows Nintendo strategy: to make video games the number 1 time-sink for people. Videogames are a content medium and as such or in competition with other content mediums like books, movies, music and so forth.
Reggie is full aware of a even bigger problem then Apple: the hugely dynamic and huge group of new core-gamers that has been forming since the first flash-games appeared on the internet. These new core-gamers are incredible dynamic, have almost no brand-loyalty and most of all, very critical. When one platform fails it will just move to another one...or three. Apple is also not safe from this "threat" (it's actually a huge opportunity in fact). The most in danger of being screwed by this huge dynamic group of core-gamers are Sony and Microsoft. They almost have none of them on their systems while the old hardcore audience is imploding.
"Nintendo strategy: to make video games the number 1 time-sink for people"
Interesting that they are the only company that I know of to put into their games a pop-up that suggests people stop playing and go outside. That seems counter to the strategy of being the #1 time-sink.
"Interesting that they are the only company that I know of to put into their games a pop-up that suggests people stop playing and go outside. That seems counter to the strategy of being the #1 time-sink."
I've wasted most of my time this year creating art in the believe that I will someday see a net profit from that... But alas, I might as well spend more time playing game were I know my net profit will always be 0.
It'll be interesting to see if Nintendo redirects its focus to this type of games and leaves aside the Nintendogs and the like.
Are they? Show us some figures. I was under the impression the best sellers on the DS were things like Mario Kart, Pokemon, New Super Mario Bros, Lego Batman and so on. And Nintendogs, obviously.
Lots of people assume lots of things about 'casual' games by default when we're talking Nintendo.
Yes its true nintendo its not responsible for a big amount of the casual market games (see ubisoft for more details) but it's allowed them, and now sees how other companies want to get into that market. Fair enough, I think.
In the top 5 best selling games for the ds you don't have "a couple of brain age / brain training" games, you have one title. Nintendogs on the other hand is a lot, but it surely isn't a casual game, that fits into a welcome distraction category, the game needs constant attention by it's player, it can't be played for 5 minutes on the train now and then, like the typical casual handheld game.
But even if I would count Brain Train and Nintendogs as pure casual titles, fitting in a "welcome distraction" category (something, that doesn't work for Brain Train either), there are 2 of them in the Top 5 and 3 of them in the Top 10 of the best selling DS games.
This means, they aren't anything like a majority amongst the best selling games.
By comparison, iPhone games lack the polish of most DS titles, but iPhone gaming is good enough for many non-gamers who want to pass some time at the airport or bus station (i.e. people who do not have the time or inclination to spend 150 hours on a game).
I think you're not making the argument you mean to make (or I'm mis-understanding). A lot of these 'casual' games - the ones that are really making gamers out of everyone, are absolutely monstrous time sinks. My non gamer friends have easily spent 150 hours apiece on that stupid fantasy football game on facebook. I don't know. As a 'gamer' I've avoided that whole phenomenon and spend substantially less time actually playing games. Perhaps what we mean is protracted disengaged gaming, vs intense focused gaming.
[1]
"By 2013, mobile phones could easily surpass PCs as the way most people hop onto the Web. Gartner's statistics show that the total number of PCs will reach 1.78 billion in three years, while the number of smartphones and Web-enabled phones will shoot past 1.82 billion units and continue to climb after that."
(CNET article from Jan 2010)
[2]
"The Attention Economy and the Net" by Michael H. Goldhaber (1996)
http://www.well.com/user/mgoldh/AtEcandNet.html
everyone in my family currently has a general use phone---because we find no need to have the internet, check email, play games, buy apps, etc....none of it really has worth to us.
Though this is true..i do own a DS and PSP--my brother a DS...its really a matter of interest...I think it would be interesting to see facts on the number of people that have smartphones vs the number of people that actually bother with using the internet and download apps/games.
If this were true then the PC would have destroyed console gaming a long time ago. A device that does everything is going to lose to a device dedicated to gaming. And PC games were at least as good (if not better) than console games. These iPhone games are nowhere near the quality of a DS game. I really don't consider the DS and the iPhone to even be in the same market.
Nintendo does not have to fear Apple. The only Nintendo has to fear is Nintendo itself. Either they'll make great games and succeed or they'll make bad games and fail. Apple won't have an effect on them either way.
Smart phones have an input (touch screen) that is limited. Most game types don't work well with a touch screen. Once that changes, and smart phones have a better input option, I expect they will be the main way everyone plays games.
Reggie is right to mention 'time' as the key though. It's where people spend their time that determines the key competition, and that is why mobile/facebook are the biggest competition for Nintendo. All the numbers point to Nintendo players as less likely to play as much as the other systems. That may seem like a slam on Nintendo players, but it also points to them being a little more well-rounded in life...and more likely to become involved in many things that take their time.
Conversely, the iDevices have a number of advantages. They're far more flexible, slightly more portable (smaller/thinner), have superior hardware - and there's *40,000* games at an average price of $1.20.
**EDIT: BAD NUMBERS REMOVED: see below for details **
And according to my back-of-a-cig-packet calculations, App Store developers have sold at least 175 *million* games:
http://www.gamasutra.com/blogs/JamieMann/20101008/6107/Just_How_Big_I s_The_iDevi
ce_Gaming_Market.php
Throw in all the demo/free games out there and you can probably add a zero onto that figure.
So yeah: if I was Nintendo, I'd be worried...
In some ways, this actually feels more like a replay of the Wii launch, when hordes of people (myself included!) derided the Wii and predicted that gamers wouldn't go for it. And in some ways, we were right: what happened is that Nintendo found a new market, which evolved into the casual market we all know and love/hate. And that's what Apple's done. The big question is: can Apple's casual-lite games live alongside Nintendo's casual-friendly games? Personally, I suspect not, but that's a blog-post for another time...
"Then too, there's around 90 million iDevices in the wild: quadruple the number of DS's which have been sold."
What do you mean by this? According to Nintendo, the DS sold over 130 million, why should the 90 million i-things be four times that much?
To fix things up: Nintendo claim that the DS has sold 130 million. Apple claims to have sold 120 million iOS devices (iPhone, iPod Touch, iPad) [1]. Nintendo still has the advantage - not all iOS devices will be used for games, whereas all DS units will be used for games. However, it's still pretty close!
Regarding the calculations: I think it's based on fairly solid ground: we *know* how much revenue the App Store has brought in ($1.33 billion) and we *know* how much the average game sells for ($1.20).
What we don't know is how big a market share games have: given that 15% of all apps are games, this seemed like a reasonable starting point.
Plug 'em together and you get 175 million. If anyone can come up with a better estimation, I'll be all ears!
As it is, I suspect I've come in on the low side *and* it doesn't cover free/ad-supported games. Apple have stated that there's been 6.5 billion downloads from the App Store - again, if we use 15% as a starting point, that means there's been around 1 billion games downloaded.
Those are the kind of numbers Nintendo needs to worry about.
Finally, to dive into an anecdote, I'm currently spending 2 hours a day on a train: there's generally businessmen in the morning and students in the evening. I've now been doing this for a week and I've yet to see a single DS or PSP. However, what I have seen is dozens of people playing with their smartphone - iPhones mostly, with a smattering of Android devices...
[1] http://blog.daveburrows.com/2010/09/01/apple-special-event-compelte-revie w-1st-s
eptember-2010-review/
Reggie is full aware of a even bigger problem then Apple: the hugely dynamic and huge group of new core-gamers that has been forming since the first flash-games appeared on the internet. These new core-gamers are incredible dynamic, have almost no brand-loyalty and most of all, very critical. When one platform fails it will just move to another one...or three. Apple is also not safe from this "threat" (it's actually a huge opportunity in fact). The most in danger of being screwed by this huge dynamic group of core-gamers are Sony and Microsoft. They almost have none of them on their systems while the old hardcore audience is imploding.
This is going to be some fun next 5 years!
Interesting that they are the only company that I know of to put into their games a pop-up that suggests people stop playing and go outside. That seems counter to the strategy of being the #1 time-sink.
It's reverse psychology ;)