Nintendo's in an awfully tough spot here. Their success in expanding the market to non-gamers (the "blue ocean strategy") puts them in exactly the wrong place for 2011 where it appears likely that most dedicated gaming systems are going to be owned by the hardcore going forward. Many of their newly-won customers from the last few years now have all the games they could want on systems they already own and those games have average price tags of maybe 20% of what they are on traditional platforms. And they're better connected for social, too.
So Nintendo doesn't have room to make particularly enticing hardware - it'd have to be super-cheap to tear people away from platforms they already own for other reasons but it'd probably have to be super-expensive to be different enough to be exciting.
And, even worse for them, the bottom has completely dropped out of software pricing. It's tough to pay $40 for a 3DS game that I'm likely to play less than something for $2.99 on the App Store. I'd buy Mario and Zelda for it, but that's probably it.
With the very Nintendo "make something cheap but that's so different and so cool that everybody with an iPad would still want it" option off the table, what can they do? Can they survive just selling <$10 games on somebody else's hardware? Maybe a partnership? An Android partnership doesn't seem likely to deliver Nintendo quality in the short term at least and Apple is quite unlikely to partner with them. No other mobile platform seems worth their time.
I do wonder if there's a team working on Zelda for iOS... And another team preparing a massive reorganization. Seems like a terrible option but I don't see what else is going to be available to them. Hope they can find a good way out of it because they're one of the most innovative companies in the world.
I agree with the general gist of your post, but I actually think there is still a large market for casual gaming hardware in the living room.
Consider that the Microsoft Kinect broke the record for consumer electronic devices for selling the most units in 60 days. Yes, it even outsold the iPad.
Are casual gamers the ones who buy devices in the first 60 days after launch, though? Most "casual" gamers probably still aren't really sure exactly what a Kinect is or what it does. (I know I'm not...)
Casual gamers are driven by trends and early adopters. A lot of these people know what Kinect is because their "nerd friend Alphonso" won't stop talking about how cool it is. Don't knock the early adopter crowd just because they are small; while they may be that, their extended social circle is generally large enough to sway even the mainstream numbers.
it's probably also worth noting that every time there are new apple tv rumors they're about it including its own app store - if that ever happens it will be very interesting to see what people go for.
Nintendo have two things going for them: quality products, and the willingness and ability to innovate. They could still be relevant. I hope so. I think they're a great company.
So Nintendo doesn't have room to make particularly enticing hardware - it'd have to be super-cheap to tear people away from platforms they already own for other reasons but it'd probably have to be super-expensive to be different enough to be exciting.
And, even worse for them, the bottom has completely dropped out of software pricing. It's tough to pay $40 for a 3DS game that I'm likely to play less than something for $2.99 on the App Store. I'd buy Mario and Zelda for it, but that's probably it.
With the very Nintendo "make something cheap but that's so different and so cool that everybody with an iPad would still want it" option off the table, what can they do? Can they survive just selling <$10 games on somebody else's hardware? Maybe a partnership? An Android partnership doesn't seem likely to deliver Nintendo quality in the short term at least and Apple is quite unlikely to partner with them. No other mobile platform seems worth their time.
I do wonder if there's a team working on Zelda for iOS... And another team preparing a massive reorganization. Seems like a terrible option but I don't see what else is going to be available to them. Hope they can find a good way out of it because they're one of the most innovative companies in the world.