The iPhone & iPad Are Killing Nintendo As Famous Game Maker Posts First Ever Annual Loss

The iPhone & iPad Are Killing Nintendo As Famous Game Maker Posts First Ever Annual Loss

Is it time to retire game consoles? That’s the question buzzing around in the wake of Nintendo announcing its first yearly loss, forcing a downgrade of the 3DS future. The creator of Super Mario said it lost $575 million (45 billion yen), surprising experts forecasting a $52 million (4.2 billion yen) deficit. The unspoken push over the precipice: the iPad and iTunes App Store games.

Coming just a day after Apple announced monster profits, Nintendo revealed profits that fell to $529 million (40.9 billion yen) for the usually strong holiday 2011 fourth quarter which ended Dec. 31. Analysts polled by Reuters were expecting $670 million in profits, or 52 billion yen.

As a result, Nintendo cut its annual sales forecast for the Wii console to 10 million units, down from 12 million devices. Likewise, the company announced a lower forecast for the 3DS handheld gaming system to 14 million units, down from 16 million. Already the company has chopped the price of the 3DS system. The move is similar to other devices, such as Android tablets, that have been forced to drastically lower prices to compete with Apple.

But now experts are questioning whether traditional game consoles can even survive competition from the Cupertino, Calif. tech giant. “We think we need to consider the possibility that home consoles could become a thing of the past,” Citigroup analyst Soichiro Fukuda recently told investors.

However, Apple isn’t the only threat to Nintendo’s future. Along with the growth of Apple’s iPod touch as a gaming system and the App Store becoming a prime source for game shoppers, there is Microsoft’s Kinect and Google TV. As Apple prepares its next-generation iPad 3, eyes are on the tablet leader’s next move.

“We think the direction taken by marketing trendsetter Apple will be important and we will be watching the company’s announcements at future events with interest,” Kukuda said.

  • stevearm

    I’d rather play 1 45 hour long Legend of Zelda game than 100 iOS games.

  • FriarNurgle

    3DS is silly and the Wii U is going to be even worse. I bet Nintendo comes out with a gaming phone or opens up their games to the Android and iOS app stores. 

  • Erik

    We can only hope that they’ll accept defeat and bring games to iOS

  • Erik

    Agreed that the 3DS is dumb, but how is the Wii U going to be anything but incredible?! That system looks amazing.

  • baby_Twitty

    i bought and played the full blown 3D remake of Final Fantasy III on my iPhone. (just $11.99) 
    I completed the game after clocking 60 HOURS of extremely enjoyable gameplay.

    The plus side? I could bring my phone ANYWHERE to continue playing it.
    On the train, in the restaurants, at work, etc.

    iOS is the future, and the future is now.

  • Jonathan Ober

    I game on both iOS (iPhone/iPad), 3DS, Xbox 360 and Wii. I will say that for great long games, sitting with a controller and the Wii or Xbox 360 trumps anything on the iOS. In smaller doses though and for more casual game play I pick up the 3DS or the iPhone/iPad combo. It really depends on what I am playing. I have a hard time sitting for too long with my iPhone or iPad focused on a screen really close to my face. Also the Phone and iPad have more distractions on them like jumping to iMessage or the web while still maintaining my games place. I think Nintendo does need to start thinking about bringing its franchises or creating new ones, else we will continue to see Mario Kart clones and Zelda ‘wannabes’ on the App Store.

  • stevearm

    Good for you. I’d rather play big adventure games from the comfort of my own home, on a 50 inch screen with gorgeous graphics and amazing sound, rather than in a restaurant.

    Nintendo won’t open up their excellent games to iOS, they don’t make brainless one tap games.

  • stevearm

    Good for you. I’d rather play big adventure games from the comfort of my own home, on a 50 inch screen with gorgeous graphics and amazing sound, rather than in a restaurant.

    Nintendo won’t open up their excellent games to iOS, they don’t make brainless one tap games.

  • Sean Smith

    Because it probably still won’t have a decent online multiplayer system that doesn’t involve 16-digit hexadecimal codes.

  • Sean Smith

    Why is there a picture of Snake from Metal Gear Solid on a 3DS screen?
    EDIT: Nevermind. I never knew there was an actual Metal Gear Solid game on any system made by somebody other than Sony.

  • Jonathan Badger

    There needs to be better controls for iPhone gaming to really replace consoles. Yes, there are things like the iCade and iControlPad, but they aren’t all that well supported

  • Karl

    In the past, casual gaming was on PCs/Macs and dedicated consoles. Now with iOS and Android platforms the casual gaming experience has shifted. 

    For hardcore gaming, a dedicated console (or a PC) is where it’s at. Unfortunately that market is smaller once you remove the casual gamer who used to buy those gaming systems.

    Nintendo (and probably Sony/Microsoft to some degree.) are feeling that shift. 

    I think Nintendo should stick to their guns and not release their games on iOS. The should make their own iOS platform phone/mp3 player. I know my son would push to have that just so he could get to the library of Nintendo games/characters.

  • vistarox

    Nintendo is going to be like Kodak soon. They need to learn to compete if the want to win

  • sunjay joseph

    Who would forget a dedicated gaming console or a pc for iOS?!?!?!? That’s like saying you rather play Modern Combat instead of Call of Duty, Nova instead of Halo and Angry Birds instead of Need For Speed.

    FAIL!!!!!

  • GeoFarrell

    Why don’t they port their legacy games like Super Mario Bros 1, 2 & 3 and Zelda for iOS? They would sell a ton.

  • Elsic1975a

    Actually, it’s less about the dedicated gaming consoles and more about handheld gaming. The Wii is over five years old and has hit the point of market saturation, so sales of their console are on a huge decline. Their plan was for the 3DS to make up the sales until the launch of the new Wii U. Unfortunately, that’s failed because the 3DS is coming up against iOS and Android devices. Once the Wii U launches, then Nintendo may see a pickup of console sales, depending on if people like it and it’s unique enough. Handheld sales, though, are a tougher pitch now than they were even five years ago.

  • RonBlatto

    That’s exactly why they lost $575 million last year.  If you think iOS games are just ‘brainelss one tap games’ then you’ve never played an iOS game and didn’t even pay attention to B?by Twitty’s post (FF III?). 

    If Nintendo is smart, they will, at the very least, release older games on iOS.  I know plenty of iOS users who would pay $9.99 a pop for Super Metroid and Super Zelda.

  • RonBlatto

    I would buy those.

  • baby_Twitty

    Exactly, if mobile gaming isnt big, then why the heck would they make 3DS and PS VITA

  • Bogie635

    The company shareholders recently asked the same thing, but Nintendo’s boss said no.

    http://www.bloomberg.com/news/

  • David Addoteye

    My friend, Apple is making that kind of sales because it is doing what people  modern people like and enjoy. Nintendo is rather focusing… hmmmm… I don’t know. and they will soon fall into oblivion, and start struggling like YAHOO. How on earth do you think Microsoft will shift the attention of its new OS “WINDOWS 8″ for mobile devices. I side with Ron Blatto and Twitty. I Think nintendo need a new vision to see the world today.

  • SevanGrim

    um….no. Nintendo is taking a loss because the 3DS was a really mediocre system with a really bad launch. this garbage about iOS being the greatest and must used gaming platform is just that: garbage. Apple is using the numbers of people who own an iphone and applying that to how many people play games on it, which is not the same number. plenty of people own multiple iphones, or only use them for business. But apple keeps insisting they have these massive numbers…
     Once nintendo creates a better handheld, they will go right back into their old numbers. Nintendo handhelds are notoriously durable, easy to use, chock full of games for everyone, and eventually they go under 150 bucks.
     ios devices? not as durable, not as easy to play games on, full of “micro payment” games, and never that cheap. on top of that, to get the greatest games on iOS you need the newest and most expensive device, which most people would never want to give to their kids because they break and loose EVERYTHING!

     Nintendo ruined itself, and it will fix itself. iOS is not destroying them.

About the author

Ed SutherlandEd Sutherland is a veteran technology journalist who first heard of Apple when they grew on trees, Yahoo was run out of a Stanford dorm and Google was an unknown upstart. Since then, Sutherland has covered the whole technology landscape, concentrating on tracking the trends and figuring out the finances of large (and small) technology companies.

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