Nintendo warns iPhone may damage its sales
Just recently considered the king of handheld gaming, Nintendo is now sending an alert that it could be trouble over its next fiscal year as Apple's iPhone and iPod touch might cut into its sales.
Known equally for its DS handheld and its Wii console, the company said on Thursday that it anticipates its first profit decline in four years not only because of a rough economy playing havoc with game sales but also due to harsher competition in the portable arena stemming directly from Apple devices.
In a conference call discussing the results, Nintendo didn't outline just how much it saw coming from the iPhone and iPod but tellingly didn't mention the Sony PSP, its veteran rival since 2004, as a threat. The pocket PlayStation posed little danger as its own sales were cut in half from levels that were already significantly lower than those of the DS.
Nintendo's comments are the first on-the-record statements from the Japanese company that treat Apple as a genuine competitor. The iPhone maker itself has been quick to challenge Nintendo, calling the iPod touch a "console experience," but until now hasn't been acknowledged in return.
It echoes a mounting preference for Apple's business model and for the hardware itself. With the exception of its fledgling DSiWare store, Nintendo has depended almost exclusively on physical copies to sell games and, as a consequence, has always had to charge a much higher price to ship and stock games at retail stores -- something Apple has never had to do for its touchscreen devices, either of which relies solely on downloads. A cursory check many retailers prices most Nintendo DS games between $30 and $35 while an iPhone game is regularly below $10, sometimes below $5, and other times free. The wide gap has made it easier for gamers to fill their iPhones and iPods with games and lured developers with the promise of much wider exposure. Even with less than a week of the App Store being open, about a quarter of all apps for the iPhone and iPod touch were games.
Moreover, as the iPhone technology itself is at least three years more recent than the 2004-era components in Nintendo's product even when discounting the multi-touch controls, the possibilities for games have been particularly tempting for developers. Famed id Software co-founder John Carmack once described even the original iPhone processing power as superior to the DS and PSP put together and has chosen it as the sole modern handheld platform to receive ports and other games based on Doom, Quake and other properties well known by gamers but usually impractical on other consoles and phones, including the Nintendo DS line.
But while the iPhone might already be casting a shadow over sales Nintendo once thought very secure, new signs are emerging that the company may want to be fearful for sales of consoles for the living room as well. Despite the Wii being much faster than the DS, a developer from Telltale Games just this week said the iPhone was more powerful than the much larger and more expensive game system both because of genuinely speedier components but also because of arbitrary limits imposed by Nintendo on downloadable Wii games. He speculated that the company's latest adventure game series, Tales of Monkey Island, might actually look better and run faster on Apple's cellphone, which itself got a direct port of the earlier Secret of Monkey Island in recent days.
"The voices and textures [in Tales] are the way they are because we're limited to 40 megs for WiiWare titles," he said. "Frame rate issues will probably get sorted out eventually, but keep in mind that the Wii is just not a powerful console. An iPhone is much more powerful than a Wii, even."
Known equally for its DS handheld and its Wii console, the company said on Thursday that it anticipates its first profit decline in four years not only because of a rough economy playing havoc with game sales but also due to harsher competition in the portable arena stemming directly from Apple devices.
In a conference call discussing the results, Nintendo didn't outline just how much it saw coming from the iPhone and iPod but tellingly didn't mention the Sony PSP, its veteran rival since 2004, as a threat. The pocket PlayStation posed little danger as its own sales were cut in half from levels that were already significantly lower than those of the DS.
Nintendo's comments are the first on-the-record statements from the Japanese company that treat Apple as a genuine competitor. The iPhone maker itself has been quick to challenge Nintendo, calling the iPod touch a "console experience," but until now hasn't been acknowledged in return.
It echoes a mounting preference for Apple's business model and for the hardware itself. With the exception of its fledgling DSiWare store, Nintendo has depended almost exclusively on physical copies to sell games and, as a consequence, has always had to charge a much higher price to ship and stock games at retail stores -- something Apple has never had to do for its touchscreen devices, either of which relies solely on downloads. A cursory check many retailers prices most Nintendo DS games between $30 and $35 while an iPhone game is regularly below $10, sometimes below $5, and other times free. The wide gap has made it easier for gamers to fill their iPhones and iPods with games and lured developers with the promise of much wider exposure. Even with less than a week of the App Store being open, about a quarter of all apps for the iPhone and iPod touch were games.
Moreover, as the iPhone technology itself is at least three years more recent than the 2004-era components in Nintendo's product even when discounting the multi-touch controls, the possibilities for games have been particularly tempting for developers. Famed id Software co-founder John Carmack once described even the original iPhone processing power as superior to the DS and PSP put together and has chosen it as the sole modern handheld platform to receive ports and other games based on Doom, Quake and other properties well known by gamers but usually impractical on other consoles and phones, including the Nintendo DS line.
But while the iPhone might already be casting a shadow over sales Nintendo once thought very secure, new signs are emerging that the company may want to be fearful for sales of consoles for the living room as well. Despite the Wii being much faster than the DS, a developer from Telltale Games just this week said the iPhone was more powerful than the much larger and more expensive game system both because of genuinely speedier components but also because of arbitrary limits imposed by Nintendo on downloadable Wii games. He speculated that the company's latest adventure game series, Tales of Monkey Island, might actually look better and run faster on Apple's cellphone, which itself got a direct port of the earlier Secret of Monkey Island in recent days.
"The voices and textures [in Tales] are the way they are because we're limited to 40 megs for WiiWare titles," he said. "Frame rate issues will probably get sorted out eventually, but keep in mind that the Wii is just not a powerful console. An iPhone is much more powerful than a Wii, even."
Comments
I know I would have gotten my kids iPod Touches instead of Nintendo DS's if they (and the current App Store) had been available then...
Apple is developing the future face and direction of tech. But some of you still refuse to believe the sheer power and influence of this company, that is making even giants like MS look like weekend startups when it comes to sheer R&D effectiveness in the consumer market.
Sure, it's going to put a huge dent in their DS/GB earnings. But as we've seen with the Wii, Nintendo has a history of re-inventing the wheel. maybe it's all just smoke and mirrors for a major update to the DS.
IMO, Nintendo has to get past the whole cartridge gaming. Make the next DS like the touch with online downloads and greater storage capacity. But, then it's too much like the touch, so why bother.
They need a big advancement. LIke the Wii. Make the DS something that bridges the generational gaps we have in computing. Senior Centers now have Wii's as fitness programs. I'd like to see Apple create something that both a 90 year-old and an 11 year-old WANTS to own.
man, i wish nintendo would offer their Gen 1 games for the touch and phone. Perfect format.
Sure, it's going to put a huge dent in their DS/GB earnings. But as we've seen with the Wii, Nintendo has a history of re-inventing the wheel. maybe it's all just smoke and mirrors for a major update to the DS.
IMO, Nintendo has to get past the whole cartridge gaming. Make the next DS like the touch with online downloads and greater storage capacity. But, then it's too much like the touch, so why bother.
They need a big advancement. LIke the Wii. Make the DS something that bridges the generational gaps we have in computing. Senior Centers now have Wii's as fitness programs. I'd like to see Apple create something that both a 90 year-old and an 11 year-old WANTS to own.
Wii≠Big advancement
Just as
Natal≠Big advancement
Wii≠Big advancement
Just as
Natal≠Big advancement
you may not see the Wii as an advancement in Technology (which it clearly isn't, nor did i say that) but it is in other ways. People of ALL ages and backgrounds like the Wii and benefit from it. It was a HUGE advancement from the standard cartridge/disc-based gaming console. In Senior Centers to Daycares. It can get the couch potato overweight children off their butts and bed-sore-ridden elderly out and exercise.
you may not see the Wii as an advancement in Technology (which it clearly isn't, nor did i say that) but it is in other ways. People of ALL ages and backgrounds like the Wii and benefit from it. It was a HUGE advancement from the standard cartridge/disc-based gaming console. In Senior Centers to Daycares. It can get the couch potato overweight children off their butts and bed-sore-ridden elderly out and exercise.
Indeed. I play Wii Sports every once in a while, but other than that I have not played any video games since Gran Turismo 4 for the PS2. (5 years ago) I do wish, though, the Wii was more Natal-like (eg. it does not need a controller), and it had an on-demand game service (like OnLive). Off-topic, sorry.
Anyway, hasn't this been obvious for a while? Especially with the release of the 3GS. If more major developers like EA make games for the iPhone then there will be a significant drop in sales of other hand-held gaming devices.
Nintendo would really be crying if the aTV gets turned into a console capable of playing iPhone/Touch games. Seems more likely that Apple being able to push 1080p across the internet anytime soon.
We're talking about handhelds here.
you may not see the Wii as an advancement in Technology (which it clearly isn't, nor did i say that) but it is in other ways. People of ALL ages and backgrounds like the Wii and benefit from it. It was a HUGE advancement from the standard cartridge/disc-based gaming console. In Senior Centers to Daycares. It can get the couch potato overweight children off their butts and bed-sore-ridden elderly out and exercise.
I agree. The Wii was a laughingstock before it was released, lest we forget--it was coming out too late and with not nearly enough processing power to compete. And that stupid name!! But it changed the way millions of people look at console gaming and brought uther millions into a market they previously had no interest in. It clearly was a (sorry for the pun) game changer.
The parallel to the iPhone is not insignificant. Laughed at by the industry, but quickly turning the market upside down...
Why are people bringing up the Wii?
We're talking about handhelds here.
Did you read the entire article?
new signs are emerging that the company may want to be fearful for sales of consoles for the living room as well. Despite the Wii being much faster than the DS, a developer from Telltale Games just this week said the iPhone was more powerful than the much larger and more expensive game system both because of genuinely speedier components but also because of arbitrary limits imposed by Nintendo on downloadable Wii games.
Personally, as a gamer, I don't like the iPod Touch as a gaming device. I think the touch interface isn't responsive enough nor are the games very good...
Agreed. While it has some high quality games that can show what the platform is capable of, the touchscreen is just not sufficient enough. Now if they perhaps allowed a controller to be created and attached via the dock connector, then it will get even better.
Did you read the entire article?
I wouldn't go so far as to say it'll challenge consoles. That seems to be reaching a bit too far. But it's an ineresting pospect noneheless. Apple is full if surprises and is able to reshape entre markets, however. It might go much deeper thatn simply handhelds - it's possible.