Narrative: Nintendo’s Mobile Renaissance

Updated: January 31, 2017

Until 2016, Nintendo has always shunned the mobile gaming market, and instead focused on its dedicated home and portable game consoles. However, that began to change in 2016, as Nintendo first licensed some of its Pokemon intellectual property as part of the massively successful Pokemon Go launch, and then took a more direct role in launching a mobile game with Super Mario Run for the iPhone in December. The popularity of Pokemon Go seems to have finally convinced Nintendo management that its combination of familiar characters, gameplay expertise, and an ability to trade on nostalgia can be powerful and lucrative in mobile gaming.

However, Nintendo was only a minority partner in Pokemon Go, taking home far less money than some less savvy investors originally believed it would, and there are lingering questions over its staying power with large numbers of users. Super Mario Run was highly anticipated, but Nintendo’s attempt to break the in-app-purchase model which dominates mobile gaming seems to have backfired, resulting in terrible reviews.

In late January 2017, it also became clear that the business model wasn’t paying off in a big way, delivering a higher conversion rate (though on a basis that isn’t really comparable to other big games) and lower revenue per paying user than competitors.

I continue to believe that Nintendo is absolutely right to invest much more heavily in mobile gaming, and will likely have several more massively popular games in the coming years, but it needs to tread carefully and not assume that its brand and other assets will allow it to break the mold in mobile gaming.