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Mon, 06 Oct 2008 Nintendo president Iwata: iPhone? What iPhone?

Nintendo takes it to the iPhone

Jack Loftus, GamePro Online

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Comparisons between the Nintendo DSi and Apple's iPhone ran rampant Thursday after the portable was unveiled at the company's Japanese autumn press event, but president Satoru Iwata said his company's strategy remains as it always has been.

Put simply, it means Nintendo will continue to compete by not competing with those products at all. And while Iwata's initial reaction to the iPhone comparison was dismissive, additional comments said otherwise.

"We wanted users to have the device on them at all times," he said in remarks translated by Edge Online. "By downloading subway maps and other things, for instance, the DSi can be useful for applications other than playing games. We wanted to create an offering that would fit naturally into people's everyday lives."

Sound familiar? There's more.

As GamePro reported Thursday, the DSi will even have its own application store, or "App Store" as iPhone and iPod touch users have called theirs since Apple launched it earlier this year. With the DSi Shop, slated to launch with the portable in Japan later this year, Nintendo users will have the ability to download free and paid-for software.

However, Iwata still maintained the DSi is not a play against either the iPhone or the fledgling PSP. The goals of the new online functionality, audio options and camera have nothing to do with those systems platforms, he said.

DSI Shop threatens GameStop

On a related note, the DSi Shop already has analysts talking about the future of game distribution, and the news is anything but good for stores like GameStop and Best Buy. Customers using the service will be able to download games in about 10 minutes using a broadband connection, according to Nintendo press materials.

In a research note fired off in the wake of the DSi reveal, Goldman Sachs analyst Matthew J. Fassler called the store a "tangible early threat" to big box chains and retailers. The future of digital distribution - from services like Steam, PSN, Xbox Live Arcade, WiiWare and others - has never been stronger, he seemed to imply.

"While content will be limited at first, we believe it will likely ramp very quickly," Fassler wrote.

All but confirming Fassler's prediction were shares of Best Buy stock, which dropped $2 when the DSi was announced.

The DSi is scheduled to launch in Japan later this year. Nintendo of America president Reggie Fils-Aime told reporters on Thursday that the DSi will launch in the US "well into" 2009, due to healthy DS lite profits in that region.

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Comments received


eldernorm said on Mon, 06 Oct 2008

Hmmmm. The past Motorola CEO said, "Yea, well what is the iPhone going to do about us?"

Hmmm, maybe make them obsolete?? :-)

Just a thought,
en

Synthmeister said on Mon, 06 Oct 2008

Apple is going to become a major player in mobile gaming without even trying. They may not become iPod/iTunes dominant but they will take a major slice of the Nintendo/PSP pie.

The iPhone/iPod touch and App store will be available in over 70 countries by the end of the year and probably have a 40 million user base within a year AND most games cost less than $10!

What would you rather buy your kid? A gaming device or a gaming device that can also can do music, movies, TV shows, email, IM, internet, WiFi, Bluetooth, etc.

Tom Ross said on Mon, 06 Oct 2008

Yeah, 40 Million OS X Mobile users by June 2009, but the majority of them will not buy games and if they do, they will have a selection of mini-games in the $1 to $10 price range.

Nintendo on the other hand will gain the 100 millionth Nintendo DS user in the same time frame, all of whom bought the device specifically for gaming and are ready to spend $30-$50 per game.

Nintendo has the biggest franchises in the industries like Super Mario, Pokemon, Nintendogs and Dr. Kawashima. Each new title in one of these franchises is guaranteed to pull in 9 figure revenues.

Apple has a few 2nd rate third party franchises (that are also on every single other system) besides a bunch of indy games that often resemble tech demos and lack mass market appeal. Only the biggest titles will be able to reach 7 figure revenues.

If you add those figures you will realize that Apple is looking at an iPhone games market 1% to 5% the size of the DS games market.

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