Nintendo-DeNA alliance ‘is a good fit’ and will drive dedicated console success, analyst argues

Today’s news of Nintendo’s long-awaited move into mobile gaming will provide a lift to the company’s ongoing hardware aspirations.

That’s according to IHS’ head of games research Piers Harding-Rolls.

The Nintendo-DeNA alliance is a good fit and offers up a number of important synergies for two companies that are no longer leaders in their respective segments,” he said.

Not only is there significant revenue to be made directly from smartphone and tablet consumers for Nintendo, app ecosystems are also very important in reaching new customers to make them aware of the Nintendo brand and to drive a new and broader audience to its dedicated console business.”

Harding-Rolls also says that DeNA’s failure to make significant inroads into Western markets shouldn’t be too much of a concern, either. What could be a worry for gamers, however, is how Nintendo may choose to monetise its mobile titles.

The alliance gives Nintendo access to a large audience in its home market, which remains very important to its overall financial performance,” he added. Japanese consumers spend significantly more per capita on mobile games than in any other country and it remains the biggest market for both smartphone and handheld gaming.

This alliance makes commercial sense on many levels – the main challenge will be knitting together the cultures of both companies and aligning the speed of development and iteration that is needed in the mobile space with Nintendo’s more patient and systematic approach to games content production. How the new games are monetised may also provide a challenge considering the general differences in models used in retail for Nintendo and through in-app purchases for DeNA.”

IHS’ head of mobile media research Jack Kent adds that DeNA’s decline in the mobile market means that an earlier partnership would have been advantageous. Indeed, the two companies first held talks about working together back in 2010.

Despite big investments in smartphone game development and international expansion DeNA has struggled in recent years,” Trent added. Its initial success was based on developing mobile web games for Japanese mobile social games community, as the market has shifted towards native smartphone games it has been overtaken by domestic competitors such as Puzzles & Dragons publisher GungHo.

There is a risk that despite the benefits each party brings it could be too late to take full advantage of their strengths. Partnering established brands has been a focus of its international strategy with titles using Star Wars, NBA and Transformers IP in different markets. Bringing Nintendo’s popular games IP to mobile for the first time represents a coup for DeNA and will help boost its domestic and international position.”

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