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Reuters/Yuya Shino
SOS.
LEVEL DOWN

Nintendo’s revenues keep sinking, and there’s no lifeboat in sight

By Josh Horwitz

If Nintendo wants to save itself, should it rely on consoles, which have long been its bread and butter? Or smartphone games, which represent the unpleasant-but-inevitable future?

The answer, judging by announcements made during its latest earnings release, is both.

Nintendo’s financials for the fiscal year ending in March 2016 showed revenues dipped slightly, dropping 8.2% to $4.5 billion. Profits, however, tanked 60%, putting the company’s earnings at just $149 million.

The results are part of a consistent downward trend for the firm. For decades, the company has made nearly all its money by selling consoles that plug into a TV, and games that plug into a console. But in recent years it has struggled to adapt to a world where casual video gamers get their fix wherever they are on their smartphones, rather than on expensive devices that sit in the living room.

The company is now stuck between a rock and a hard place. It revealed that Miitomo, its very first smartphone game, has a total of 10 million users. While that’s a solid start, it’s a far cry from the hundreds of millions of downloads that Angry birds and Candy Crush command.

App Store rankings from App Annie show that interest in the game has waned, especially in the US, where its quirky gameplay was met with confusion.

Nintendo announced its next two smartphone games would be called “Animal Crossing” and “Fire Emblem”—two titles that were originally released for its handheld Nintendo 3DS device. No date was given for their release. It also confirmed it will release a brand new console by March 2017. Other than its code name, NX, Nintendo shared no further details about the device.

By the time the so-called NX comes out, however, consoles will likely be an artifact from the past—purchased by hardcore gamers who like niche titles, rather than the softer, more cuddly games Nintendo is known for. Revenues from the mobile games are set to surpass console game revenues this year, and the gap will only grow bigger.

The old doesn’t look any more promising than the new. Mario might be timeless, but Nintendo’s days as a public company might be numbered.