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Opinion: Nintendo's overwhelming DS success as much to blame for current woes as mobile momentum

Giant being blitzkrieged

Opinion: Nintendo's overwhelming DS success as much to blame for current woes as mobile momentum
In war, they say dealing with victory is a far more dangerous proposition than coping with defeat.

As German Panzers rolled through the Ardennes in the late spring of 1940, the French turned to their battle manuals to look for a means of defence – manuals that detailed the tactics the nation's army had employed during the previous war.

Problem was, two decades later, the Germans had re-written the rule book. Licking their wounds from their narrow, but ultimately humiliating defeat in 1918, the German army learned from its mistakes and changed the way war was fought.

It might sound a little extreme, but there are notable similarities between the fall of France to the Third Reich and the situation Nintendo currently finds itself in: mobile, for so long the much-maligned and ultimately limited cousin of more powerful handhelds, has revolutionised the nature of the portable market.

Burning issue

It's a contest that, owing to the release of stats by analytics specialist Flurry, is high on the agenda right now.

Indeed, given Flurry's Peter Farago has been criticised by some for claiming Nintendo is standing on a burning platform, my suggesting its situation is akin to the surrender of France in the second World War is unlikely to appease many.

Nonetheless, DS game revenue is ultimately on the decline: Flurry states that, in the US at least, DS has gone from a 70 percent share of an annual market worth $2.7 billion to a 36 percent share of $3.3 billion.

The real question, however, is whether that's as a result of the rise of the smartphone, or whether the fact Nintendo's record-breaking device is nearing the end of its lifecycle is to blame.

In my view, they both have a role to play: 3DS may not have made the splash Nintendo was hoping for, but it will form the firm's focus in the coming years. As a result, DS is becoming less and less of a priority for Iwata and co., and efforts to promote it are naturally winding down.

Indeed, make no mistake – seven years in, it's likely DS software sales would always have been well off the platform's peak.

Going social

Still, it'd be foolish to suggest smartphone games haven't been an aggregator in all of this.

Not only has their form factor made Nintendo's once bleeding edge tech look positively archaic – Steve Jobs's decision to take a poke at stylus-based touchscreens during the iPhone's unveiling at MacWorld 2007 as prophetic as it was cheeky – but the price (or, indeed, lack of) of the smartphone games and the audience they're willing to attract has changed the way consumers see £40 boxed games, whatever the format.

It says a lot, in fact, that the medium that threatens to impinge on the smartphone surge the most is not handhelds, but rather social games on the web – an attack HTML5 looks likely to resolve, with developers able to bring web-based games to smartphone via web apps with little fuss.

Whether you're talking full-on freemium releases, paid games backed up by in-app purchases, or the social focus currently gripping the mobile industry, the market Nintendo looked down upon five or so years ago is unquestionably different now.

An old hand

Like the French, Nintendo's response – and with some success, it has to be said – has not been to alter its own approach, taking on the lessons its new found rival has mastered and using it to bolster its own defences.

Instead, Nintendo has been studying its battle manuals from previous victories, deploying the weapons that served it so well in the past. The company's reply to a lack of third-party support for DS's successor has not been to alter 3DS to accommodate mobile's social focus, but to launch scores of big first party franchises.

The likes of Mario will always have an impact. Media Create reports 3DS sales have jumped more than 100 percent in Japan following the launch of Super Mario 3D Land. Once its effect has faded, however, Nintendo will find the threat of smartphones to its handheld business hasn't diminished.

What makes things even more infuriating for the developers and consumers alike who believe in Nintendo's portable exploits is that it's former enemy, Sony, has modified its plan of attack with smartphones in mind.

Xperia Play hasn't blown iPhone away as hoped, but PS Vita's social strength and the company's €1.05 billion buyout of Sony Ericsson suggests the company is finally willing to learn from the smartphone market, rather than dismiss it.

Like the Russians, the decision to adjust its approach and exercise the tactics that initially caused it so much damage may see Sony push into its enemy's heartland in the year's ahead.

Turning the tide

It would be unfair to suggest Nintendo is close to collapse like 1940's France, however, despite the similarities.

As a friend has pointed out to me, that's a drum its detractors have been banging ever since N64, and the very fact the company has been able to bite back in the past suggests it's perfectly capable of doing it again in the future.

There's very little to be gained from Nintendo retreating into its own barracks, however.

One of the major strengths of smartphone games is that they never set out to surpass to supersede those on handhelds, either in terms of quality or content.

On the contrary, they offer an entirely different proposition, with their social focus set to even have an impact on the home console market in this generation and the next – Microsoft's aim to form close ties between Xbox 360, Windows 8 and Windows Phone a direct reaction to the strength of the iOS ecosystem.

Right now, Nintendo still has a window of opportunity to alter its 3DS approach, whether through a hardware revision that better equips the handheld for the new battlefield, or a renewed attempt to deliver a digital marketplace aligned to the App Store model, rather than opposed to it.

What's certain, however, is that the tactics Nintendo previously used to beat off former enemies is not going to nullify this new foe, nor will turning its back on the approaching armies in the hope they'll simply pass on by.

Indeed, with the talent Nintendo can call upon, it wouldn't take all too big a shift in approach for Apple, Google and co. to realise that, rather than defeating a sleeping beast, they'd actually awoken it.

With a fine eye for detail, Keith Andrew is fuelled by strong coffee, Kylie Minogue and the shapely curve of a san serif font.