Legendary Game Creator In Need of a 1-Up

It isn’t far-fetched to say that most college students today probably played video games at some point in their life. For many people, their first exposure to video games was with a Super Mario Bros title. When it comes to video games, young children and pre-teens, there is no better game maker than Nintendo. The house that Mario built has been a staple of living rooms for nearly thirty years now with their home consoles like the Wii and handheld devices like the Game Boy and DS.

Multiple generations have grown up with Nintendo and their iconic franchises like The Legend of Zelda, Super Mario Bros, and Metroid. It is very common for parents to direct their children towards Nintendo games as a way to satisfy their urge for video games while not exposing them to the plethora of games with graphic violence today.

When one generation’s college graduates settle down and have children they often try to recreate their childhood memories of playing Nintendo’s popular game series with their children. It’s sort of cyclical, a generation grows up with Nintendo’s games, drifts away from them as they age only to rediscover them when they have kids of their own. This is why its concerning to see the company struggling right now, as it brings up questions about whether future generations will be able to enjoy Nintendo’s fantastic games.

Just how bad are things going for Nintendo? Their latest home console, the Wii U, hasn’t sold well since it released in late 2012. The company upset their investors when they revised their sales goals for this fiscal year down from 9 million units to 2.8 million. Yes, that’s a sharp drop of 6.2 million consoles that they thought they were going to sell and that just isn’t going to happen. All the while Sony and Microsoft’s latest video game consoles have already outsold the Wii U’s entire lifetime to date in a matter of months.

The worst part of this is that every unit they sell is sold to consumers at a loss so they aren’t even making any money back on the device. This leads them to a projected $240 million loss overall for the company when their fiscal year ends on March 31st. It is key to keep in mind that the company that had never posted an annual loss until recent years. Now they’re set up to have their third consecutive annual loss, something that is very dangerous for them considering that they are a relatively small company when compared to electronics giants with deeper pockets like Samsung, Sony and Microsoft.

Investors and Industry analysts have been calling for the company to put their famous intellectual properties on non-Nintendo hardware, like smartphones and tablets. These people believe Nintendo should stop trying to sell $40-$60 priced games and sell their software for mobile platforms at low prices or using in-app purchases. Many believe that the rise of tablets and smartphones has cannibalized the market that Nintendo once dominated as parents would rather let their children play with cheap apps on their phones or tablets then buying $200+ hardware dedicated solely to playing video games.

Nintendo President Satoru Iwata says the company has no plans to satisfy the demands of investors and analysts. “The spread of smart devices does not spell the end of game consoles. It’s not that simple,” says the 54-year old game designer turned CEO who took over the company in 2002. “It doesn’t mean that we should put Mario on smartphones.” To his credit he’s taking a 50% pay cut for the next few months to show how serious he is about turning Nintendo’s business around, a move that is far more common in Japanese culture than it is here in America.

This puts the company in a hard position. They can’t cut prices on their products because they sell them at a loss thus they can’t make the product any more attractive to consumers than it already is. It looks like they will continue to bleed money for the next few years as they try to prepare some sort of comeback.

There’s also the very real possibility that the company will fire their current CEO at some point in the near future as it is very odd to see a company maintain the executives that have lead them to three straight years of losses. Whoever takes that position will decide the fate of the company and could potentially change how consumers receive the game maker’s iconic brands and software. Should things get worse the company could cave in and stop making their dedicated game hardware or possibly sell off their intellectual properties to other companies.

The future is uncertain for Nintendo, the company that single handedly saved the video game industry in the mid-80’s with their first home console, the Nintendo Entertainment System. There is a chance that our generation won’t be able to raise our children on their products just as we were or that we’ll have to do so in a dramatically different way. Kids use to play the original Super Mario Bros games for months on end, trying to get to the final castle and save Princess Peach from King Koopa. Depending on how things go from here, children might still be raised on Nintendo’s games but instead of being told that they’re princess is in another castle they’ll be asked for their parent’s credit card to keep playing.