Nintendo: Still a lot to play for?

After announcing its first public loss, is this game over for the console giant - or will its new Wii come to the rescue?

In every Super Mario Bros game, a key task for the titular Italian plumber has been to collect coins. Get a 100 and you get another chance after you die. Unfortunately, in real life, coins aren't just hanging in the air above gormless Koopa Troopas. But that's not stopped Nintendo coining it in in the past.

From the Nintendo Entertainment System in the 1980s, to the living room-bashing release of the Wii in 2006, the firm, which started out as playing card company in Kyoto in 1889, has made billions from selling software, hardware and even cuddly Mario merchandise.

But yesterday, the firm announced that, for the first time since the company went public in 1962, it had made a loss of £329m, compared to a 2011 profit of £591m.

The reasons are myriad, but include the fact that sales of the Wii have slowed down while its latest handheld device, the innovative 3DS performed poorly. Nintendo even reduced its price by 40 per cent in an attempt to revive sales.

Does that mean the day has come for gaming's most famous company?

Most likely not, but Nintendo finds itself stuck between two markets. A decade ago it walked away from hardcore gaming after its GameCube was bullied out by the Xbox and PlayStations. It did so to focus on casual gamers – those who play occasionally rather than daily, like, says Jeff Ryan, author of Super Mario: How Nintendo Conquered America, they would with "a board game".

The problem, Ryan explains , is that, not long after the Wii redefined family gaming, the rise of smartphones brought casual gaming to everyone's pocket. "All of a sudden," says Ryan, "anyone who had a mobile device could play. Nintendo always made money because you needed to buy their hardware at 40 bucks a game. If you're looking at the smartphone games you can find a 50p game and it may not be as good as a Nintendo game, but is [Nintendo's] really 40 times better?"

Dave Neal, a reporter for technology news site The Inquirer agrees that the 3DS, which was released in the UK last spring, is going to find the handheld gaming market tough to thrive in. "I can remember queuing up in Dixons to play a Game Boy," says Neal, "but with titles like Angry Birds and Draw Something available for free, it's hard to find a reason to buy and carry around separate hardware, regardless of whether it has Mario Kart on it."

But despite a troubled year financially – 2011 saw Nintendo's stock price plummet – Nintendo still has two aces up its sleeve.

The first is a new Wii console. The Wii U features HD output and a tablet-like controller with its own touchscreen that will allow users to take their games on the move. It's a departure from other mainstream gaming consoles and one that might, like the Wii did in 2006, give Nintendo a real jab in the arm.

But will those busy with Angry Birds buy it? "In America it's rumoured to be $350 at least," warns Jeff Ryan, "the Wii originally launched at $250 and Nintendo was making the better part of $100 profit on that from day one."

"It will have to come bursting out of a box with a lot of fireworks if it is going to make an impact," says Neal.

Nintendo's other golden bullet is its most valuable asset: its software. Decades after his debut, Mario remains a great sell. And the popularity of games like Mario Kart and Mario Galaxy ensure that hardware sales stay steady.

"They always have a 'break glass in case of emergency' option," suggests Ryan, "they could always make games for other consoles. If they started to make Zelda games for the PS3 and Mario games for the Xbox that would keep them in business for the next 30 years."

Sega, Nintendo's rival in the 1990s gaming boom, took a similar approach after the failure of their Dreamcast machine and still operates as a software firm. For the planet's largest console maker to make that move would be both unlikely, drastic and for many, a tragedy.

But maybe that's what they said when they stopped making playing cards and focused on computer games.

Suggested Topics
News
peoplePair enliven the Emirates bore-draw
Arts and Entertainment
tvPoldark episode 8, review
News
Britain's opposition Labour Party leader Ed Miliband (R) and Boris Johnson, mayor of London, talk on the Andrew Marr show in London April 26
General electionAndrew Marr forced to intervene as Boris and Miliband clash on TV
News
news
Life and Style
ebookNow available in paperback
ebooks
ebookPart of The Independent’s new eBook series The Great Composers
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

ES Rentals

    iJobs Job Widget
    iJobs Gadgets & Tech

    Ashdown Group: Head of IT - Hertfordshire - £90,000

    £70000 - £90000 per annum + bonus + car allowance + benefits: Ashdown Group: H...

    Ashdown Group: Application Support Analyst - SQL Server, T-SQL

    £28000 - £32000 per annum + Excellent benefits: Ashdown Group: Application Sup...

    Ashdown Group: Systems Analyst / Data Analyst (SQL Server, T-SQL, data)

    £28000 - £32000 per annum + Excellent benefits: Ashdown Group: Systems Analyst...

    Ashdown Group: European Recruitment Manager - Cheshire - up to £48,000

    £40000 - £48000 per annum + bonus and benefits: Ashdown Group: European Recrui...

    Day In a Page

    Not even the 'putrid throat' could stop the Ross Poldark swoon-fest'

    Not even the 'putrid throat' could stop the Ross Poldark swoon-fest'

    How a costume drama became a Sunday night staple
    Miliband promises no stamp duty for first-time buyers as he pushes Tories on housing

    Miliband promises no stamp duty for first-time buyers

    Labour leader pushes Tories on housing
    Aviation history is littered with grand failures - from the the Bristol Brabazon to Concorde - but what went wrong with the SuperJumbo?

    Aviation history is littered with grand failures

    But what went wrong with the SuperJumbo?
    Fear of Putin, Islamists and immigration is giving rise to a new generation of Soviet-style 'iron curtains' right across Europe

    Fortress Europe?

    Fear of Putin, Islamists and immigration is giving rise to a new generation of 'iron curtains'
    Never mind what you're wearing, it's what you're reclining on

    Never mind what you're wearing

    It's what you're reclining on that matters
    General Election 2015: Chuka Umunna on the benefits of immigration, humility – and his leader Ed Miliband

    Chuka Umunna: A virus of racism runs through Ukip

    The shadow business secretary on the benefits of immigration, humility – and his leader Ed Miliband
    Yemen crisis: This exotic war will soon become Europe's problem

    Yemen's exotic war will soon affect Europe

    Terrorism and boatloads of desperate migrants will be the outcome of the Saudi air campaign, says Patrick Cockburn
    Marginal Streets project aims to document voters in the run-up to the General Election

    Marginal Streets project documents voters

    Independent photographers Joseph Fox and Orlando Gili are uploading two portraits of constituents to their website for each day of the campaign
    Game of Thrones: Visit the real-life kingdom of Westeros to see where violent history ends and telly tourism begins

    The real-life kingdom of Westeros

    Is there something a little uncomfortable about Game of Thrones shooting in Northern Ireland?
    How to survive a social-media mauling, by the tough women of Twitter

    How to survive a Twitter mauling

    Mary Beard, Caroline Criado-Perez, Louise Mensch, Bunny La Roche and Courtney Barrasford reveal how to trounce the trolls
    Gallipoli centenary: At dawn, the young remember the young who perished in one of the First World War's bloodiest battles

    At dawn, the young remember the young

    A century ago, soldiers of the Empire – many no more than boys – spilt on to Gallipoli’s beaches. On this 100th Anzac Day, there are personal, poetic tributes to their sacrifice
    Dissent is slowly building against the billions spent on presidential campaigns – even among politicians themselves

    Follow the money as never before

    Dissent is slowly building against the billions spent on presidential campaigns – even among politicians themselves, reports Rupert Cornwell
    Samuel West interview: The actor and director on austerity, unionisation, and not mentioning his famous parents

    Samuel West interview

    The actor and director on austerity, unionisation, and not mentioning his famous parents
    General Election 2015: Imagine if the leading political parties were fashion labels

    Imagine if the leading political parties were fashion labels

    Fashion editor, Alexander Fury, on what the leaders' appearances tell us about them
    Phumzile Mlambo-Ngcuka: Home can be the unsafest place for women

    Phumzile Mlambo-Ngcuka: Home can be the unsafest place for women

    The architect of the HeForShe movement and head of UN Women on the world's failure to combat domestic violence