Nintendo's Nightmare: "Just Good Enough"

Nintendo doesn't have a unique problem, but in the gaming world it's handling it uniquely badly. The Japanese company's financial numbers for the past year revealed not only Nintendo's first annual loss in its history, but the fact that it was forced to slash the price of the 3DS portable below cost just to persuade players to consider it. It's not game apathy: look to the number of people playing games on their phones, and you'll see it's rocketing. Nintendo's stubbornness comes with a big price.

Read through the comments in recent days and you'd think the company had no problems whatsoever, though, as the Nintendo faithful emerged to put their spin on the financial results. It's not just our news coverage that gets people talking. Don Reisinger has been looking at Nintendo's track record over the past few months, creating some of the most popular discussion topics on the site in the process. His calls for Nintendo to broaden its horizons when it comes to platform support have turned out to be hugely contentious, despite being echoed by investors.

Nintendo's problem isn't its hardcore gaming enthusiasts – those who are commenting so enthusiastically – but the rest of the market: casual gamers, those who five years ago might have picked up a DS or similar but who now simply grab a game or two from the App Store or Play Market. Smartphones may still lag dedicated handheld consoles like the PS Vita in terms of power, but they make up for it in ubiquity.

[aquote]For many, their phones are "just good enough"[/aquote]

That shortage of power might effect the outlier gamers, but for many others their phones are "just good enough" to scratch the gaming itch. The range of titles is "just good enough"; the screen and control options are "just good enough." Just as the smartphone has eaten so comprehensively into the dedicated PMP market, and the standalone camera segment, so has gaming fallen under its broadening umbrella.

Nintendo has obviously woken up to digital distribution: the eShop on the 3DS shows that, as does the decision to begin offering full titles for download at the same time as in-store availability on the upcoming Wii U. Yet that strategy continues to play to its existing audience, rather than broaden the playing field to encompass those who wouldn't consider grabbing a 3DS or indeed any dedicated games device.

Microsoft gets it. Windows Phone may not have become the gaming rival to the iPhone that OEMs have hoped it might, but the promise of cross-platform Xbox and Windows Phone 8 gaming in the pipeline still shows Microsoft has a clue when it comes to convergence. Sony gets it, too. Its PlayStation Suite promises to make cooking games for PS Vita that also work on Xperia (or other PlayStation-certified phones and tablets) so straightforward for developers that adopting the platform is a no-brainer.

Will Nintendo embracing digital downloads make for a better user experience for 3DS owners and, eventually, Wii U owners? Certainly. Is it better than what Nintendo was doing before? Of course. But Nintendo doesn't operate in a bubble, and its microcosm approach entirely fails to acknowledge the rest of the gaming market and the inescapable shift it's undergoing.