After years of hesitance, Nintendo finally appears to be bowing to pressure--and the move may just save it.
Over the weekend, The Pokemon Company officially confirmed that it is working to release an iPad version of its popular Pokemon Trading Card Game. The Pokemon Company is a wholly-owned subsidiary of Nintendo, so this marks the first time the Japanese company is embracing mobile devices as a platform for games.
"Hesitance" may be an understatement. For years, Nintendo has had an allergic reaction to the suggestion of its games on other platforms. This includes all platforms, even those like iOS that are not in direct competition on the console market, but that had been stealing away its casual market share. While calls for the company to switch to software have been misguided, its head-in-sand approach to the burgeoning smartphone market has hurt its bottom line.
Investors have been putting pressure on the company to consider its options for years. As far back as 2011, investors have told Nintendo president Satoru Iwata to properly look into the market. Stats Investment Management Co. fund manager Masamitsu Ohki presciently called it the "new battlefield" for gaming and urged Nintendo to "buy its way into this platform or develop something totally new."
Iwata refused, and continued to refuse for quite a while. He finally announced a small team to explore smartphone development in January, but the messaging was inconsistent. In the March earnings call, Iwata again posed smartphones more as a tool to promote its console games instead of a platform in and of itself.
This has been remarkably short-sighted. Nintendo may be an innovator devoted to its own hardware, but its bread-and-butter has always been younger and casual players. Those are the ones being snatched away most quickly by the smartphone and tablet market. The Wii U's GamePad seems to have been an attempt to stick to its guns while offering a similar experience, but it simply hasn't caught on. People apparently don't want a console that acts sort of like an iPad--they want the device they already own to offer the full range of gaming experiences, including those from Nintendo.
That's not to say that developing for iOS will kill Nintendo's standard development efforts. Many publishers like EA and Ubisoft have established successful mobile arms, where they regularly put out casual games with smaller budgets. These likely recoup their costs and then some, which can then go back into the pipeline towards its bigger-budget console development. The two can complement each other, and Nintendo could certainly use the injection of a consistent, low-cost money-maker given its disappointing sales.
Depending on its monetization strategy, the Pokemon TCG could be just that. Look at Blizzard's success with Hearthstone for example. The name isn't particularly compelling, and the most recognizable part of the brand ("Warcraft") is buried at the end. Its solid mechanics and accessibility have made it a hit for Blizzard, and the Pokemon TCG has both of those factors going for it as well. Plus, unlike Hearthstone, Pokemon will have an established brand name and almost 20 years of history.
Smart strategy also would dictate that Nintendo not blindly rush to stick its franchises where they don't belong. Pokemon TCG is a natural fit, but that doesn't mean investors have always been on the mark in their advice to pursue a smartphone strategy. Iwata has maintained that he doesn't want to put Mario on smartphones, and given that investors are encouraging Nintendo to let Mario jump higher with in-app purchases, it's no wonder. As insightful as investors may have been to suggest smartphone development, some of their ideas are truly awful.
In the long-term, one game probably won't do the trick. Even if Pokemon TCG turns out to be a smashing success, games taper off. Nintendo will need to develop a regular flow of new releases on smartphone and tablet devices to get the most impact and turn them into reliable revenue generators. This card game is likely a test, though. If it's a success, Nintendo might finally understand how valuable the platform can be.