Why did it take Nintendo so long?

    Naveed Moosa

    As Pokémon Go smashes records, delights fans and scares parents across the mobile app world, we’re wondering why it took Nintendo so long to jump into the fray. Location aware games have been around for many years.  Fans and investors have been begging Nintendo to unleash Mario & Luigi, Donkey Kong, Zelda, and Pokémon onto the omnipresent mobile phone platforms. Location aware games even advance Nintendo’s mission of ‘Connecting People’. Oh and, by the way, free games with in-app purchases have created sizeable profits for Niantic, the Pokémon Co and Nintendo.  So why the late entry into a live and profitable market, we wondered?

    Protecting the core business

    The main culprit, we find, is the seemingly sensible belief held by many industry leaders that all company assets must be focused entirely on the current business.  The belief is not wrong in a healthy business cycle but when the market shifts and the core business is under threat focusing all assets on the core can be fatal.  For Nintendo, Mario and his pals were a bulwark to protect the Wii console and Nintendo DS systems from the hordes developing games for mobile phones.  There was no law of physics that prevented Nintendo from creating Pokeman Go years ago – just a seemingly deep belief that ‘All assets must be used to drive their core gaming devices business’1.

    A sense of urgency

    The underlying fear was that releasing their games on mobile phone platforms would accelerate the decline of their gaming devices business.  After seeing profits drop precipitously, year after year, the company licensed the Pokemon property to Niantic, an app developer spun out of Google in 2010 and Pokémon Go emerged to save the day. Given the prevailing assumption is that Nintendo will learn rapidly and continue to populate mobile phone platforms with the their beloved creatures, the company is worth $12 billion more than it was last week.2

    Breaking the orthodoxy

    We submit that it should not take a near death experience for a company to continually explore and test emerging business models. A rigorous innovation program with access to the core assets and the full capabilities of the company is a necessity for maintaining industry leadership in all industries -not just the hyper fast world of gaming. We trust Nintendo has blown up the ‘we are in the console game player business‘ orthodoxy and look forward to  running headlong behind Mario into a fully immersive virtual world.

    1Horie, Masatsugu, and Takashi Amano. “Nintendo Mulls New Business Model After Forecasting Loss.” Bloomberg.com. Bloomberg, 17 Jan. 2014. Web. 14 July 2016.

    2Takashi Mochizuki. “Nintendo Chases ‘Pokemon” Profit.” Wall Street Journal. July 13, 2016.