Nintendo Co., Ltd publicized on Tuesday about teaming up with pioneer Japanese mobile games developer, DeNA in a bid to capture some market share. The company aims to woo gamers by introducing its iconic Italian plumber, Mario to smartphones and other handheld devices.
Nintendo cites descending growth to be caused by sliding consoles sales. Analysts explain Nintendo has lost substantial market share to mobile gaming apps and other leading game consoles with the likes of industry leaders, Sony Corp.’s (NYSE: SNE) PlayStation and Microsoft Corporation’s (NASDAQ: MSFT) Xbox.
The move comes a surprise as video game developer, Nintendo has long stood against offering its games on any platform other than on its consoles such as Wii or its handled console 3DS. The deal between Nintendo and DeNA is reported to be worth not less than $182 million, as Nintendo acquires a 10% stake in the company, DeNA will be able get ahold of 1.24% stake in Nintendo for the same price.
Leading industry experts believe the move by Nintendo to be an effort to inject much needed growth in the business as the company slashed its operating earnings target by at least half to $169 million for the fiscal year.
Nintendo’s President, Chairman and Chief Executive Officer Satoru Iwata is reported to have commented while speaking to reporters today: “This will allow us to build a bridge between smart devices and gaming consoles. It doesn’t mean smart devices will eat away at gaming consoles, but it will create an entirely new type of demand.”
Nintendo games will not be limited to just smartphones, rather they are reported to be made available on many other handheld devices such as tablets, laptops, and even PCs. The company also aspires to draw in more demand for video games by rolling out a “multi-device membership service for the global market,” said Mr Iwata. The service, which will enable Nintendo to reach out a new threshold of demand, is expected to be launched in the second half of the current year.
The shift in gaming platforms will require Japan-based video games developing giant, Nintendo to overhaul most of its business model, which has solely focused on console based games distribution, but this doesn’t mean the end of Nintendo consoles. The company is reported to have launched a new console in the near future, named NX.
DeNA, founded by Tomoko Namba, was launched in 1999 but has struggled to gain momentum as the games developing industry gets saturated. However, the company is expected by analysts to make remarkable growth by partnering with Nintendo to launch the new initiative.