“This is absolutely not under consideration…If we did this, Nintendo would cease to be Nintendo,” explained Nintendo President and CEO Satoru Iwata to questions from Nikkei about Nintendo entering the mobile gaming market in 2011. All positions can change given due time, and this appears to be one of those instances. With Nintendo expanding their brand into the mobile gaming fray announcing a surprise partnership with DeNA, Nintendo is taking on a brand new market. After the initial announcement, Iwata has spoken with Time Magazine and filled in more details of the deal, and given his reasoning behind the decision in an exclusive interview.
One of the biggest shocks in the move is the partnership with DeNA. The stakes and money in play are significant. With this move, both companies will be investing over $181 million in shares of the other company. What this means is that Nintendo will be acquiring about 10.00% stake in DeNA and about 1.24% stake in Nintendo would belong to DeNA. The number might be seen as uneven, but Nintendo allowing for such a large share of their company to a mobile gaming company is a huge deal when considering Nintendo's value can be approximated at over $14.5 billion. This move is already making big waves, with Nintendo's stock skyrocketing about 26% near Wednesday's stock market closing.
Certainly though, the fears of Nintendo ceasing to be Nintendo have caused this move to be more calculated than first impressions give off. Iwata remained consistent in his answers concerning the Nintendo brand. “We will not do anything that may hurt Nintendo’s brand image—that parents can feel safe giving their children access to it.” Iwata insisted. This is an important thing to remember when considering how Nintendo will handle the world of micro-transactions that mobile gaming has brought to life. Iwata did explain that with each release Nintendo would be consulting DeNA for the best possible option in regards to payment structure. It is clear that Nintendo realizes that payment models are still evolving and wishes to utilize strategies optimal in expanding the NIntendo IP.
The Nintendo IP will be expanding into new territory, and Iwata's answers demonstrate a key understanding that a move like this can't rely on simple ports of existing titles. Iwata confirmed that even though titles would be showcasing familiar faces, they would be treated as their own entities built from scratch. The goal is to expose more consumers to the Nintendo IP and garner interest in the traditional model Nintendo has provided up until now. Iwata was clear that while profit margins will be influencing decisions, this move is focused on expanding the Nintendo IP and its consumption.
Excited to learn more about the moves Nintendo is making? Come join me in the discussion about this and more (such as the current #TwitchPocalypse) on Twitter. -Xiivi
The Nintendo IP will be expanding into new territory, and Iwata's answers demonstrate a key understanding that a move like this can't rely on simple ports of existing titles. Iwata confirmed that even though titles would be showcasing familiar faces, they would be treated as their own entities built from scratch. The goal is to expose more consumers to the Nintendo IP and garner interest in the traditional model Nintendo has provided up until now. Iwata was clear that while profit margins will be influencing decisions, this move is focused on expanding the Nintendo IP and its consumption.
Excited to learn more about the moves Nintendo is making? Come join me in the discussion about this and more (such as the current #TwitchPocalypse) on Twitter. -Xiivi
