While some analysts believe that Nintendo's handheld business will be impacted by the growing importance of Apple's App Store and the popularity of devices like iPhone, iPod Touch and now the iPad, Nintendo remains extremely confident in its DS offerings. Speaking to Kotaku recently, Nintendo of America president Reggie Fils-Aime downplayed the competition of Apple in the games sector.
"[Apple] is not having an impact on Nintendo when you look at our business, our volume, our hardware, our software," Fils-Aime stated. "I've seen data that suggests that while consumers are constantly downloading apps, they play with them for a few times and then they are moving on to the next thing. Clearly it doesn't look like their platform is a viable profit platform for game development because so many of the games are free versus paid downloads."
He continued, "If our games represent a range between snacks of entertainment and full meals depending on the type of game, [Apple's] aren't even a mouthful, in terms of the gaming experience you get."
Fils-Aime does raise a valid point about the economics of games on the App Store. More and more are being made available for free - in fact, publisher ngmoco recently switched to a "freemium" model for its iPhone titles. But that doesn't mean that iPhone games aren't profitable. They don't cost that much to develop, and as the social gaming space on Facebook has demonstrated, micro-transactions and virtual item purchases can be a very lucrative business, easily enabling publishers to recoup development costs and then some.
5 Comments
April 5, 2010
Clearly a number of developers are making a profit on iPhone games. It's probably true that if Nintendo developed iPhone games the same way it develops DS or Wii games, it probably wouldn't make a profit. Then again, Nintendo isn't known for swiftly changing its business models. They hung onto cartridges for years after CDs had helped drive the PS1 to first place in sales. Nintendo restricts its innovation to design and keeps it well away from business.
April 5, 2010
I love Nintendo,nintendo's game consoles are the biggest portal for "shovelware" there has ever been..
April 6, 2010
Steve, small developers, yes, but the juggernaut developers? Hardly.
I almost fell over when I read the Flurry PR that said they estimated iPhone and iPod Touch games generated life-to-date sales of $500MM. That's as far from the mark as you can get. I estimate between $70MM-$85MM. It's not peanuts, but when you consider that one console title alone can generate revenue like that in a single month ... well, Apple's not exactly delivering the holy grail it promised (and continues to promise) the major industry players.
April 6, 2010
What is the definition of a game and success? Clearly very different metrics for a Nintendo vs an independent developer. It will be interesting to see how these markets evolve. I think Android and the coming tablets will be a sleeper opportunity for big and small alike.
April 7, 2010
I wouldn't expect big developers to make money doing iPhone/iPod Touch games unless they change their usual development process. I don't recall where Apple ever promised major industry players much of anything... I think Apple's attitude toward the game industry has usually ranged from mild to severe neglect. I do find it interesting that EA claims to be one of the largest players on the iPhone... why would they bother if they weren't making money, or expecting to make money?
Yes, one console title can generate $75 million in a month... which would be really great if it cost you less than that to develop and market such a title. Unfortunately, it usually costs more... that's the basic problem the big industry players are having right now.