Will Nintendo lose its last life by ignoring mobile?

There’s been a little bit of confusion about the future of Nintendo and mobile devices these past few days, but the company has now made it quite clear that it won’t be developing games for smartphones or tablets. Instead, Nintendo is planning to release a new platform, with accompanying software, which focuses on improving the customer’s health and “quality of life”. This has left many business analysts concerned about the future of the gaming company, especially as Nintendo’s Wii U console looks to be a total failure.

Recently, Nintendo estimated it would sell 9 million Wii U units in 2014 but has now cut its forecast by nearly 70% to 2.8 million units. The company also reduced the sales forecast for its 3DS console from 18 million to 13.5 million units. The chart below, which shows quarterly sales following each console’s launch, demonstrating why Nintendo has had to reduce its forecast.

Nintendo’s latest console, the Wii U, is underperforming by a huge margin, which has led many analysts to suggest that the company should stop selling hardware and move into the mobile space. A bit of a strange conclusion considering that Nintendo’s newest handheld device, the 3DS, is outselling its predecessor.

If we think 20 years down the line, we may look back at the decision not to supply Nintendo games to smartphones and think that is the reason why the company is still here. Satoru Iwata

There’s no need for the company to resort to drastic changes at the moment, Nintendo’s handheld devices are selling well and its next living room console might be a massive success.

Iwata gives a pretty clear message that the company isn’t interested in making games for mobile, and there are plenty of good reasons why Nintendo isn’t ready to make the leap, yet. Most importantly, Nintendo probably wants to maintain control over its software and ecosystem, going mobile would give Google or Apple a slice which Nintendo would rather keep to itself, and not to mention the fear of its titles disappearing amongst the sea of casual mobile games. There’s also the “freemium” aspect of mobile gaming to consider too.

There’s also no need for the company to resort to drastic changes at the moment, Nintendo’s handheld devices are selling well and its next living room console might be a massive success. However, the latest update from Nintendo suggests that things could be about to go from bad to worse, as CEO Satoru Iwata has just outlined the company’s plan to create a third, health orientated platform to run alongside its existing products.

What Nintendo will try to achieve in the next 10 years is a platform business that improves people’s [quality of life] in enjoyable ways, Satoru Iwata

Wii Fit might have been a short lived success, but surely a niche health orientated product is a much more risky venture than smartphone gaming. Is Nintendo about to make another big mistake, whilst simultaneously missing out on the opportunity to leap in early on the next big thing in gaming?

Hardware

A few of years ago I probably would have agreed with Nintendo’s sentiments. The tablet market was still small, mobile operating systems were still maturing, but mainly the hardware wasn’t really worth investing in. However the world of smartphones is now very different, processor and graphics technology has come a long way, and not to mention that digital distribution has reinvigorated software development.

Could the company be missing out on the opportunity to leap in early on the next big thing in gaming?

Nvidia’s upcoming Tegra K1 chipset goes to show just how far mobile graphics hardware as come, and where it’s likely to be heading in the future. We won’t delve into specs here, but the important stuff to know is that the Tegra K1 will supposedly offer performance around the level of the Playstation 3 and Xbox360, and brings full support for technologies used in high-end PC and console GPU technology.

Qualcomm’s Adreno 420 and Imagination Technologies’ upcoming PowerVR Series6 chips are also promising big boosts in gaming performance for mobile devices. Nvidia Shield has already given us a glimpse at what Android gaming could be like, and with better hardware and improved software support things can only improve.

Remember that this is just the first generation of truly powerful mobile GPUs, Nvidia’s upcoming high-end Maxwell design is on the way to mobile devices too. Whilst mobile technology isn’t quite up to scratch with the new Xbox One or Playstation 4, in a couple of years’ time the gap might not seem so large, and the generation after that will probably be even closer still.

There are also other mobile hardware developments that are of interest to gamers. Even higher resolution displays and 64-bit mobile processors are both coming to mobile soon and could give a hardware developer a big advantage over existing handheld gaming platforms. Innovative virtual reality companies, like Oculus Rift, are also potentially big game changers which are working in more open platforms than consoles, which could also be making their way to Android.

Intel’s quick switch dual-OS is also very promising. A Nintendo/Android dual-OS tablet or handheld could be a very tempting prospect for gamers, and wouldn’t see Nintendo give up control of its franchises to Google’s platform. There’s bags of potential on the horizon, but Nintendo seems content in its own world.

Development and APIs

One of the biggest problems with bringing console-like gaming to mobile devices is the huge array of hardware. Fortunately, Android is now starting to receive a decent level of API support with new pieces of graphics hardware, which is making Android a much more appealing platform for developers.

For those unfamiliar with the lingo, graphics APIs act as common libraries of code used to develop game engines. Hardware needs to support the same libraries as the software, so newer games tend to require newer hardware.

Nintendo has been struggling to secure third party development and ports from other platforms for its Wii and Wii U home consoles, but opening up development to the latest graphics APIs would go a long way to bring more developers to its platform.

Android API support isn’t a new thing, and most mobile SoCs support some version of OpenGL ES. However, console developers use platform specific API’s designed for specific hardware, and PC developers have been moving on to newer versions of DirectX and OpenGL. It’s only recently that mobile hardware has started to catch up with the common software technologies being used by high-end game developers.

Unreal Engine 4, the successor to Epic’s game development engine that powers popular console titles like Gears of War, makes use of OpenGL 4.3 and has already been demoed running on Nvidia’s new Tegra K1. If you look closely in the video below, you can see the familiar Android onscreen navigation buttons.

Nintendo has been struggling to secure third party development and ports from other platforms for its Wii and Wii U home consoles, but opening up development to the latest graphics APIs would go a long way to bring more developers to its platform. In the future, shared development tools between mobile, consoles, and PCs, are likely to make cross-platform development much more common.

Multi-platform gaming is on the rise, mobile gaming needs a leader

But perhaps one of the biggest reasons to bridge the gap between mobile and existing platforms is the sheer number of consumers that can be reached. With yearly smartphone shipments having reached the one billion mark, there’s money to be made even if you can reach just a tiny percentage of consumers.

Amazingly, yearly smartphone shipments eclipse that of games consoles, despite the newly released Playstation 4 and Xbox One shipping at the end of last year. These two new consoles have sold a respectable 8 million combined units so far. Looking at the combined lifetime sales of all the current and last-gen consoles, yearly smartphone shipments still dominate by a factor of almost 3 to 1. Even if a developer could reach just 1% of people who buy a new phone each year, that’s still more potential customers than the total number of people who own next-gen devices.

There’s also plenty of evidence to suggest that smartphone users are quite into gaming. On average, users spend most of their time playing games on their smartphones, and games represent around 40% of application downloads from Apple’s Appstore and Google Play. It’s plain to see that there’s a massive market for mobile based games out there.

It won’t be long before Android has the hardware and software support needed to branch out from simple casual gaming.

But it’s not just smartphone gaming that’s on the move, there’s also an interesting shift in gaming which is putting more focus on open platforms, such as Linux. Valve’s SteamOS and Steam Machines have been making the news recently, and developers seem keen to sell their wares across as many platforms as possible. The age of exclusive platforms might soon be on the decline.

According to the Steam Database, there are already 383 games with Linux support, even though a lot of them are either indie developments or ports of older games. However a few AAA quality games, like Metro: Last Light, are making their way onto Linux, via SteamOS, as well as PC and games consoles. Open graphics developments, such as OpenGL, are helping developers diversify away from Microsoft’s DirectX and thereby reaching a wider range of consumers. This trend is only likely to increase as mobile technology catches up to consoles.

We build our games with OpenGL and C#, so porting to Linux only consists of a few days of figuring how to package the damn thing up. Zach Barth, developer behind SpaceChem and Ironclad Tactics

Android still has a way to go

But let’s not get too far ahead of ourselves, it takes more than some hardware and a few developers to build a successful platform. What smartphone/tablet gaming is really missing is a unified front for gamers. Nvidia is probing in the right direction with its TegraZone software, and platforms like OUYA have tried to offer some of the services that gamers need. Perhaps it will be Nvidia, or maybe Amazon, that finally breaks free from the idea that porting Angry Birds to the big screen is the end-game for mobile gaming.

There’s little doubt, in my mind, that it won’t be long before Android has the hardware and software support needed to branch out from simple casual gaming. But if Android is ever to capture a decent gaming market it needs companies that are willing to do much more than stick a controller in a box and call it a console. Someone has to be willing to work on a proper eco-system, with hardware, a marketplace, and a library of content that offers gamers what they really need.

With its experience of hardware development and a library of popular game titles behind it, Nintendo could have been the first company to embrace the changing nature of mobile gaming. Porting Mario to Android probably would be a mistake, but writing off the range of hardware and business potentials that exist in the mobile space could be an even more costly error.

Gaming is already here on Android, and the future is only looking brighter. Sadly, it doesn’t seem like Nintendo is keen to be a part of it, instead we’ll have to see which company, if any, will be able to grasp these trends and offer gamers something that may just change the nature of the industry. Do you shed a tear for Mario?

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