Nintendo is scaling back its mobile gaming business to focus on the Switch
In the last few years, one of gaming’s juggernauts, Nintendo, has been trying to compete in the mobile gaming space. While Nintendo was once fully invested in only launching games on their own platforms, we’ve seen the Japanese company launch games such as Mario Kart Tour and Super Mario Run on iOS and Android. Nintendo’s decision to launch games on smartphones makes sense, at least financially. Mobile games can be highly profitable despite the comparatively lower development costs, pretty much everyone has a smartphone these days, Nintendo has a very strong brand and IP lineup, and mobile gaming is on the rise around the world. In fact, mobile gaming is predicted to grow to become a $77 billion business this year, in large part thanks to COVID-19 forcing people to stay at home. However, it seems that Nintendo is dialing back its presence in the mobile gaming business a bit, according to a recent report from Bloomberg.
Nintendo had first entered the mobile gaming market out of necessity owing to the Wii U’s failure. Investors hoped the highly lucrative mobile gaming market could offset Nintendo’s (at the time) struggling sales. In fact, Nintendo President Shuntaro Furukawa previously said that mobile games could become a $1 billion business for Nintendo while former Nintendo President Tatsumi Kimishima said the company would release 2-3 mobile titles a year. However, with the Nintendo Switch being a smashing success, there’s not much of a need for Nintendo to focus on the smartphone gaming market right now. Switch titles like Animal Crossing: New Horizons and Fire Emblem: Three Houses have proved to be gigantic successes for Nintendo while the company’s mobile games including Mario Kart Tour, Animal Crossing: Pocket Camp, and Fire Emblem: Heroes aren’t growing nearly as much as they would have liked in relation to other top earners in the market.
Source: Sensor Tower
Because of this, Mr. Furukawa has said that the company won’t release many new mobile games in the near future. In fact, their mobile release pipeline after Mario Kart Tour is reportedly empty, and the company is not expected to launch another mobile game until at least the end of this year.
The original Bloomberg report cites a few reasons why Nintendo is struggling in the mobile gaming market right now. The mobile market is currently saturated with “Gacha” games: games that, while usually free-to-play, encourage users to spend huge sums of money on virtual skins, loot boxes, characters, items, and more. While Nintendo has toyed with this business model for some of its titles like Fire Emblem: Heroes, the company reportedly fears that going all-in on this model with their most popular franchises can hurt their brand reputation. Additionally, Nintendo doesn’t actually have a lot of series that they can effectively convert to the Gacha business model.
This is not to say that Nintendo will completely retreat from the mobile gaming market, but they definitely won’t be as invested in it as they were before. New games will likely only come in order to appease their shareholders, but they won’t be the company’s focus right now as the Switch is proving to be really successful.