• 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
• 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
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
Trouble with the 3DS as Well
• The portable DS was Nintendo’s most successful
gaming system ever, with global sales just south of 154
• 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.
• 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
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
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.
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.