NEW YORK (TheStreet) -- It's no secret that Nintendo NTDOY is going through problems, and that's hurting the company, its shareholders and the House that Mario built.
With cries that Nintendo accept the reality it's in and start developing games for mobile devices growing ever louder, it's hard to ignore. Unless you're Nintendo.
The Wii U, the sequel to the popular Wii console, hasn't really taken off, especially when compared to other gaming consoles, like the PlayStation 4 or the Xbox One, despite having a significant head start on them.
Nintendo's other devices, the 3DS, and the Wii, are seeing their Internet-connected services removed, effectively putting even more pressure on the company to come up with a new strategy for an increasingly mobile world. One hedge fund manager, Seth Fischer of Oasis Management, has asked Nintendo's President Satoru Iwata to start making mobile games, despite Iwata's continued resistance to do so.
In a a report from The Wall Street Journal, Fischer told Iwata he wants Nintendo to move in this direction, since it's "well placed to make an immediate entry into mobile."
Fisher makes a good point, noting that Nintendo sits on arguably the largest library of casual games, including Super Mario, Donkey Kong, and Zelda. The people who grew up playing those games (yours truly included) are now active on smartphones and tablets. This is a demographics whose engagement on the smartphone is worth over $100 billion, according to Fisher and, it looks like Nintendo is missing out on a big opportunity.In the past, Iwata has said Nintendo won't make games for either Apple's (AAPL) iOS or Google's (GOOG) Android operating systems, but Nintendo would use smartphones and other mobile devices to "make connections with customers," according to the company's investor meeting. Iwata wants to make games more interactive, using the Wii Pad and other devices to bring people into Nintendo's ecosystem. By passing on the smartphone market, and putting Mario, Luigi and the Princess on iOS or Android, Iwata appears to be making a huge mistake. Though Zynga has had its fair share of troubles, there are other companies that have done exceptionally well developing mobile games, including King's (the maker of Candy Crush), EA (Simpsons Tapped Out) and Flappy Birds, which looked incredibly similar to Nintendo's games. (Flappy Birds has since been removed from the App Store). Over the past decade, Nintendo has been about appealing to the retro-market, and adding on to it, with new releases of games of old characters. It's still the same world of Nintendo characters (Mario, Luigi, Toad, Princess, Bowser, etc.), just in a different time and setting.
The company is focusing on "non-wearables" (whatever that means) in hopes that it will reconnect with gamers. This seems like a very dicey strategy, and not one that's likely to pay off in 2014, or perhaps 2015. --Written by Chris Ciaccia in New York >Contact by Email. Follow @Chris_Ciaccia
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