Nintendo is Going To Be OK

The thing about non-gaming news sources reporting on gaming news is just that.  You have non-gamers, or casual gamers, claiming to be in the know and mindful of the business. Reporters put their 2-cents in as if they’ve run of multi-billion dollar company before. They give reports without their due diligence which shows and infuriates me.  I’d like to take this moment and tell these reporters to do their homework.  I’d list them here but I don’t want to get personal (also there are too many). Go ahead and google/bing/yahoo/duckduckgo (I don’t judge) “Nintendo fails” or “Nintendo news” and chances are there will be an article on ‘what Nintendo needs to do’ or ‘three ways to save Nintendo’.  These are the reporters I’m addressing.

Earlier this year Nintendo made massive cuts to their projections for the number of consoles they expected to sell for the fiscal year. Initially they predicted that 9 million Wii U consoles and 18 million 3DS consoles to be sold. After a ‘poor’ year of sales, those predictions have been cut to 2.8 million for the Wii U and 13.5 million for the 3DS.  Naturally, Nintendo’s response should be to abandon ship. They need to cut their losses, abandon their hardware and hard work, and put their only decent title, Mario, on iOS because that’s where mobile games are and Nintendo is done for.

Except not. Reporters are claiming the company is doomed after it announced its second consecutive annual operating loss this year. Sorry, second ever consecutive operating loss this year since going public which was in 1962. Not only is this true, but Nintendo was founded in 1889 and has thus been around for 125 years.  That’s 18 years longer than Microsoft and Sony combined. Now you’re thinking, “Well, just because they’ve been around a long time doesn’t mean they’ll survive this flop.” True, but do you remember the company’s venture as a taxi cab company?  How about its chain of love hotels? Or when Nintendo entered the food market with instant noodles and rice?  The vacuum cleaner. You have to remember the vacuum cleaner the Chiritorie, right?  It was featured in Wario Ware! I can’t be sarcastic anymore and you get the point.  Nintendo has had many failures before, this isn’t the company’s first rodeo.

Nintendo forecasted a loss somewhere in the vicinity of 335 million USD. However, the company also has reported 10.5 billion USD in reserves (update: 8.2 billion). That’s a hefty amount of cash to be sitting on. That is to say, Nintendo can afford the loss.  It would have to report a loss of 335 million USD for the next 30 years before it would run out of reserves. THEN we can talk about other possible avenues, like reintroducing the company’s instant noodles and rice.

Many reporters are giving their advice to Nintendo about what it should do since it’s apparently done for. The most over-used and painfully wrong one is that Nintendo should abandon hardware and start developing for Smart Phones since hand held consoles are going the way of the dodo. I would compare this to telling bicycle makers to give up on bicycles and focus on making tires for cars since everyone is going with cars anyway.  It’s a different customer entirely. People who are playing games on their phones aren’t looking for anything more than something to kill the time.  This is seen in the games that make it big on the mobile market. Games like Angry Birds and Candy Crush are simple puzzle games with even simpler game play, because their goal is to help you kill time.  Handheld consoles are meant for you to take the home console experience on the go.  You are now able to experience Zelda, Mario, Metroid, Fire Emblem, or even Call of Duty on the go.  In this analogy we’ll say you lost some customers to the car, but there will always be people traveling by bicycle as long as you’re making them.  “But what if you’re not selling enough bikes to keep operating?” Did you completely skip the paragraph about the 10.5 billion in reserves?

Nintendo has something that the others don’t:  Mario, Zelda, Star Fox, Donkey Kong, Metroid, Super Smash Bros, etc. more franchises than you can shake a Wii Remote at.  We all know that if Nintendo started to put these beloved franchises on other consoles, they would surely be dead. People are buying Nintendo’s consoles to play Nintendo’s games.  Why would they give that up? That is a sweet deal when you have a game that will sell your console. Microsoft and Sony are almost completely dependent on 3^rd party support. They have 1^st party software/exclusives, but the majority of their libraries are 3^rd party titles.

What I’m trying to say is: Nintendo is not doomed.  Far from it. It upsets me that so many people are writing articles about how Nintendo is on its way out.  It upsets me even more to see these people make suggestions of how to save the company when the company does not need saving. Smart phones are not destroying handhelds nor home gaming consoles, they’re separating the gamers from the non-gamers.  Nintendo is not going out of hardware, they’re re-evaluating their hardware goals. Nintendo isn’t going anywhere and I’d rather buy Nintendo’s instant noodles and rice than see Mario on an iPhone.