Mario ontheiphone
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Mario ontheiphone

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Nintendo's fortunes are sagging. Is it time to brings Mario to smartphones?

Nintendo's fortunes are sagging. Is it time to brings Mario to smartphones?

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    Mario ontheiphone Mario ontheiphone Presentation Transcript

    • Super Mario on the iPhone?
    • The Background • Nintendo experienced its first ever annual loss as a public company in 2012. • The culprit was not only flagging Wii sales, but also struggles from its newest mobile gaming system the 3DS. • Nintendo’s sales last fiscal year were $6.7 billion. That’s off a whopping 64% from fiscal 2009, when the company pulled in $18.5 billion in sales
    • Nintendo’s Recent Struggles
    • Wii U Sales Fading… • Last quarter – its third quarter since launch - only 160,000 Wii U units were shipped globally. In its third quarter after launch, the original Wii shipped more than 3 million units. • Even more troubling is that both Microsoft and Sony are preparing their own next generation launches this holiday. Major developers are focusing on those consoles while largely ignoring Nintendo’s fading console.
    • Trouble with the 3DS as Well • The portable DS was Nintendo’s most successful gaming system ever, with global sales just south of 154 million. • However, its successor the 3DS has struggled to reach the same popularity. Just four months after its launch, Nintendo had to slash its price from $249 to $169.
    • More 3DS • The 3DS has managed to sell over 32 million units so far, which is an impressive number. However, it faces more competition than the DS. Not only has the idea of 3D failed in other mediums like television, but smartphones have become more of a viable option for many consumers’ mobile gaming needs.
    • Smartphones are Saturated… • Smartphones have passed 700 million units a year globally. They’re essentially saturated in developed markets like the United States and Japan.
    • Tablets Aren’t Far Behind • Close behind smartphones are tablets, which increasingly offer a mobile gaming opportunity as well.
    • The Pros and Cons of Smartphones Many analysts are now asking whether Nintendo should begin offering many of its classic games on smartphones. On one hand, that means its games and franchises are available to the more than one billion consumers who own smartphones and tablets. On the other hand, Nintendo fears moving to smartphone platforms dominated by Google and Apple would be a death wish for its own mobile consoles.
    • The Size of App Stores • To be sure, app stores are a huge opportunity. Apple’s App Store has already seen more than 50 billion downloads.
    • The Size of App Stores • This year, global app sales will zoom above $25 billion. That’s about four times Nintendo’s yearly revenue… But, its also a highly competitive market.
    • The Opportunity in App Stores… For example, the highest grossing game on Apple’s U.S. App Store right now is Candy Crush Saga. The game is available for free, but offers “in app” purchases. Its estimated to take in more than $600,000 per day. At a run rate of more than $230 million per year that’s very impressive…
    • … And the Pitfalls Yet, even the most impressive app store games still pale in comparison to revenue Nintendo has been able to generate from its top mobile games in recent years. For example, Mario Kart DS has sold more than 23 million units. At an average price of about $30 per game sold, that would leave Mario Kart DS at nearly $700 million in lifetime sales. Further complicating matters is how hit-and-miss top app games are. Falling off top sales charts can mean a quick trip to irrelevance.
    • Nintendo’s Decision… Ultimately, Nintendo’s CEO has said the company isn’t interested in putting its games on app stores in spite of analyst calls to do so. Yet, at the end of the day if Nintendo’s newest consoles continue struggling, the company might have to go where the general gaming populace is moving: smartphones and tablets. That’s a move that won’t be popular with its core fan base, but Nintendo will have little choice if Wii U sales don’t pick up across the latter half of the year. Will Mario be on the iPhone? If the company’s sales keep sliding, Nintendo might not have a choice.