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Nintendo needs to move more software, and digital can help – analysts

Wednesday, 16th January 2013 16:23 GMT By Stephany Nunneley

Nintendo needs to move more software, and industry analysts believe the firm should push digital releases more, and embrace mobile devices in order to pad its coffers.

Speaking with GI International, various analysts said they felt there was a slim chance Nintendo would ever go platform agnostic, like SEGA; however, one felt a plausible scenario involving the release Gameboy titles on mobile and tablet devices wasn’t too far fetched.

“So long as [Satoru] Iwata is CEO, I don’t think there is a prayer that they allow their software to show up on third-party platforms,” said Michael Pachter of Wedbush Securities. “If they are considering it, we’ll see GBA software on mobile phones first… If Nintendo decides to go the way of Sega, it will be because a new CEO takes them in that direction.

“I don’t see Iwata making a decision like that, it is not his nature.”

EEDAR’s Jesse Divnich agreed, but feels it would be hard for Nintendo to as a company to embrace other platforms due to hardware being “crucial to Nintendo’s overall strategy.”

“Nintendo’s market dominance has always come on the back of its hardware,” he said. “heir hardware has been a key factor in driving the growth of their brands and products. While I do agree that Nintendo should explore releasing products on other platforms, there holds a significant risk that it could marginalize the benefits of owning a piece of Nintendo hardware and could create a cascading impact on the health of their hardware division.

“If the Wii U turns into a market failure, I’d suspect that a software-only approach becomes a serious consideration; however, it would likely cut the company’s valuation in half. The transition alone would spiritually kill the company for many years.”

With the release of Wii U and 3DS, the eShop’s library of digital titles continues to grow, and analysts believe Nintendo should follow through with its new-found confidence in non-physical releases. As digital becomes the go-to method for gaming more and more, Inside Network’s Billy Pidgeon believes Nintendo will be forced to offer more items on the eShop, as will Sony and Microsoft with each’s respective virtual stores.

“I believe the console business has changed fundamentally, and there will be slow uptake and increased downward price pressure not only for the Wii U but also for the next generation from Microsoft and Sony,” he said. “Hardware expectations will be overly high for all three vendors, but I don’t expect the numbers to match this generation.

“Nintendo can realize strong profits with a smaller base if Wii U and 3DS gamers buy more software, particularly paid digital downloads.”

You can read more Nintendo-related analyst observations through the link.

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2 Comments

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  1. Francis O

    Pachter is a fool who doesn’t know what he is talking about. Nintendo’s success doesn’t depend on releasing GBA games on mobile devices. And going the way of SEGA would imply your franchises don’t sell that great and the company had multiple hardware failures like the 32X, Sega CD, and Sega Saturn, which Nintendo had none of.

    #1 1 year ago
  2. OlderGamer

    Francis O +1

    #2 1 year ago