“It upsets me to no end when I hear people talk about what companies Apple should acquire,” David Talley blogs for The Motley Fool.
“It is usually an extremely overvalued business with extreme growth prospects but very little in actual profit or profit potential,” Talley writes. “My counter is always the same: if Apple is going to make a fairly large acquisition, they better be buying Nintendo.”
“If Apple were to buy Nintendo, they would acquire valuable hardware, experience, and an audience. Nintendo has always been on the cutting edge of gaming. Their last round of innovation, the Wii, was the first to introduce motion control gaming,” Talley writes. “The final, and most valuable, asset Apple would obtain is Mario, Zelda, and Donkey Kong. These characters (along with the rest of the Nintendo cast) are icons. They are recognized around the world, and for many, just seeing these childhood games in the app store would require immediate download. These titles would help push iPod and iPad sales and secure these platforms as gaming mainstays. For these reasons, I strongly believe Nintendo would be the best large acquisition Apple could make.”
Read more in the full article here.
There is really no reason why Apple would want to get into the portable gaming business. That’s what third party developers are for. Nintendo doesn’t bring anything of value for Apple’s platforms (neither iOS, nor Mac OS) that would accelerate innovation.
Buying speech recognition, chip makers, memory makers and similar does make sense, as this is Apple’s bread and butter. Buying a company just because there is this small percentage of population that is passionate about portable gaming and likes certain game titles is not exactly the best business move.
Agreed.
Actually, if Nintendo doesn’t start porting them over to the iPhone/iPads (like EA) those character will be gone. Nintendo would do much better just to sell ALL their titles on for Apple devices and forget making hardware with minimal profit.
That’s the part MS didn’t understand with the Xbox. They are already selling the Xbox at a lose and try to make it up on the games. In a very short time, that model will be dead as well.
MS is not selling the Xbox at a loss. They are making profit per every console sold currently. The 360 redesign in 2010 allowed them to add wireless and still profit due to lower component and build costs.
If MS had not experienced the RROD issue(s) the first couple of years they would have been pulling profit from the console starting in late 2006.
Generally console manufacturers only take a loss at the beginning when the component costs on the new generation hardware is high. They bank on making that up during the later years when component costs come down.
Nintendo up until the 3DS had never sold a console at a loss, it was against their own rules and beliefs. They played that game with the 3DS price cut in an effort to get the device out there and I doubt they’ll ever do it again considering the way the CEO spoke about it on Oct 31st 2011.
I think Nintendo could do some cool things on iOS, but I’m not surprised they have so far decided against it. They like to control the entire experience and believe it makes a better product which is a lot like Apple.
Correct, MS is over the hump of losing money on each Xbox but can they do that with the next version planned in a few years?
Back to the point I guess, it doesn’t look like Apple buying Nintendo just to get known games is a smart investment when those games will probably come anyway to Apple’s devices. Plus, as a developer you don’t make shit making games for consoles (3-6%) when you can make games and have Apple be the distributor and you get to keep 70%.
I know if I was still in the gaming business which “platform” I would be making games for.
Did you just imply that Nintendo distributors take a 96 % out of console titles? Of course that can’t be right. Nintendo distributors take less than 50 % in traditional game distribution, on much higher ASPs. That’s why Nintendo’s 2 platforms are pulling in about $10 billion in revenue per year, compared to maybe $2 bn for iOS games this year (retail prices). What you were suggesting is that developers should go indie and start self-publishing their one-man projects. This has nothing with the question at hand. Overall Nintendo’s platforms are still far too large for them to just migrate into iOS. For you to claim they could improve their bottom line by giving up their platforms ignores those figures.
Dude, they are giving away Xbox with every purchase of a Kinect.
That is selling at a loss.
Oh please, these icons aren’t going anywhere. I agree Nintendo would be smart to release for iOS but it sounds like you’re suggesting that if the games aren’t released for iOS then they are doomed to fail ?
No that model isn’t going to die, have you not witnessed the insane profits console games are making ? MS gets significant royalties on the several-hundred million sales of games like MW3. Someone has to make the consoles and it has to be someone who can get some return via the royalties ! No serious gamer is going to settle for an iPad or iPod for all their gaming. I won’t. I play some games on my iPad but most are frustrating to control.
You have no clue what you’re talking about. At all. Nintendo’s annual revenue is higher than the annual revenue for the entire app store.
“There is really no reason why Apple would want to get into the portable gaming business.”
They already are. iPod Touch is selling millions this xmas.
iPod Touch will sell more than Sony and Nintendo combined.
There is absolutely no reason for Apple to buy Nintendo. Apple already has the hardware what it needs (iPod Touch, iPad, iPhone, Apple TV and Mac) and they are selling more games in AppStore than anybody else.
What disturbs me is that nobody calculates Apple in to these figures. They always talks only about Sony and Nintendo and never mentions the biggest player ie Apple.
I think Apple should buy Kimberly-Clarke. This way they can manufacture a ton of diapers to deal with all the shitty business advice they get from industry experts.
just my $0.02
Thats pretty good! Thanks for the laugh! Merry holidays all..
I think those gaming icons have seen their better days. My kids talk about Super Smash Bros., Mario & Luigi, but rarely to do they bust out the old games any more. And nostalgia is only worth so much . . . the problem is that Nintendo hasn’t really done anything new with the characters besides yet another version of Mario Cart, Mario Baseball, Mario Soccer, etc.
The problem is that they don’t need the R&D, hardware or distribution sides of the business. And owning the games would make it difficult to continue building the developer base for games.
Apple can do it (taking over the game market) on their own.
“If Apple were to buy Nintendo, they would acquire valuable hardware, experience, and an audience.”
Doesn’t Apple already have those things?
Apple is probably the best hardware company around. I don’t think they need Nintendo’s hardware since they could probably do that much themselves if they really wanted to. Apple is heavily into touch only, which frankly puzzles me since I have a PSP and PS3 and I like buttons and stuff. I haven’t bought a iPhone or iPod Touch yet, so I can’t say if I tried both whether it would make a difference.
However, Apple seems to prefer touch displays and that’s how it is. I see no Nintendo gaming console copycat coming from Apple. They seem to be turning their hand-held hardware into controllers for other devices.
Apple needs a wireless worldwide network. Buy Sprint/Clearwire instead for about $9B.
Clearwire is, in Steve Jobs’ term, a bag of hurt.
Apple will be wise to stay away from them
Uh… I think David Tally is making a joke here. It is, after all, the Motley Fool he’s writing for. Apple’s doing just fine without having to save the Princess.
I also thought it was tongue in cheek.
Sadly, Motley Fools don’t get tongue in cheeks.
… at the start of that article. “IF” Apple were going to be buying a “competitor”. I don’t expect that’s where Apple is headed, though. Speech recognition? Sure. Chip logic? Seems likely. Games? Not a lot of legs in that market. Oh, the GAMES market has legs. But few games have ever had any. Even the good ones.
Yeah I don’t think Apple needs to buy Nintendo.
Nintendo will either bring themselves back with new innovation, or they’ll change their strategy.
They’d be better off buying Nabisco…
I want Apple to buy Adobe, shut down Photoshop for Windows and polish PS until it’s shiny and doesn’t suck anymore and put it on the MAS for 199 Dollar (or whatever).
Hey, I am allowed to dream….
So in other words, buy a company full price, kill more than half it’s revenue so they can sell you cheaper software. I am so glad you are NOT running Apple.
It’s called scaling effect. Apple sells FCPX for 299 instead of 999, Logic Pro 199 instead of 499 on the MAS.
It’s not that unrealistic…
Realistic or not I love your dream!
Keep the dream alive! 😀
No it’s called a bell curve. Beyond a certain point what you lose in revenue can’t be made up in units. Since this is their main line of business Adobe certainly has already tested the price curve and found the sweet spot, wether we like it or not. 🙁
That’s the elasticity of demand you’re describing … from Economics 101.
It’s not achieving scale when you do something that eliminates >50% of sales. It’s called wasting corporate assets. Shareholder assets.
That $80+ billion in cash and securities that Apple has provides the opportunity to carry out such plans — including goofy ideas like buying Nintendo, Clearwire, Netflix, etc.
That’s why it’s foolish for Apple to continue accumulating cash instead of paying a dividend. If Apple has a business plan that requires all of that cash (plus another $30-$40 billion it’ll generate over the next year), it should execute those plans. Otherwise, mail checks to shareholders.
It’s not achieving scale when you do something that eliminates >50% of sales. It’s called wasting corporate assets. Shareholder assets.
That $80+ billion in cash and securities that Apple has provides the opportunity to carry out such plans — including goofy ideas like buying Nintendo, Clearwire, Netflix, etc.
That’s why it’s foolish for Apple to continue accumulating cash instead of paying a dividend. If Apple has a business plan which requires all of that cash (plus another $30-$40 billion it’ll generate over the next year), it should execute that plan. Otherwise, mail checks to shareholders.
Nintendo can make killer content, and they know how to work with custom hardware.
So, the Motley Fool says Wii Wii Wii all the way.
Sounds like a lot of huffing and puffing to me.
+1!
Dear Analysts,
Let 2012 be the year you all don’t make half-ass predictions or recommendations, k?
If Apple did what you guys said, Apple would be another Dell, Microsoft or Hewlett Packard.
No thanks.
absolute fucking rubbish.
I like the part in the first comment where the idiot said…. That “the small percentage of portable gamers” I’m sorry but look at all the portable devices on the market! There is hardly a “small percentage” where did you get your stats from? A preschool? There are ALOT of portable gamers out there if you tally up 3DS, PSP, iOS, plus any other portables I may have forgot… Point is that… Apple is already in the portable gaming market.
Actually, I have advocated this before. Mario and company are worth a lot, and Apple is now into portable gaming. It could license the Mario IP to iOS developers to inject new life into the brand.
It’s quite obvious many of you know little about gaming.
So Dave Talley is an idiot.
NEXT!
Nintendo owns the Seattle mariners. No need to say more.
Paul Allen, cofounder of Microsoft, owns the Seattle Seahawks, apiece of the Seattle Sounders (pro soccer). Also the Portland Trailblazers.
And your point was?
Hmm! There are Reasons why I agree with this being a reasonable aquisation. At the same time, there are reasons to debate.
I would agree that this would be a good investment because of the many iconic figures Nintendo has popularised. Mario, Zelda, etc.
But even though, most of the content we find on the app store are from 3rd party developers. So, if Apple can just somehow convince Nintendo to become one of these third party developers and start making games for iOS, acquiring the company will no longer be necessary. In addition, the presence of these iconic titles on the app store will boost Apple hardware sales, which is what they will most likely do after acquiring the company anyways.
Not.
Apple has been making hardware a lot longer than Nintendo and if if things continue the way they have Nintendo will go the way of Sega and create their signiture titles for other platforms including the iPhone and itouch. Let Nintendo be Nintendo and keep Apples pocket full of cash for important intellectual acquisitions that keep them ahead of the pack. Apples
Game users are growing daily as the iOS platform gains traction. Nintendo is Becoming a software company ow that their hardware business is fading.
Nintendo has been making game hardware since 1973. The company has been in business since 1889.
Well this opinion certainly makes more sense than offering shareholders a dividend. In essence though I don’t care what Apple buys or does not. If I was paid to maybe I would. As a friend of mine put it Apple products just work. While that might be thought of as simplistic – there are other products that really do not work and very few that a 3 or 4 year old can pick up and use without instruction (except how to keep the unit safe perhaps) and a manual isn’t needed… That’s it, so whether there is a video game character eventually associated with Apple or not is irrelevant to me… But I appreciate that thus article had some sense of logic to it…
Has anyone seen the new Wii console. It has a 6″ inch tablet controller so you can do things on the tablet and the tv at the same time. Much like the IPad 2 and the AppleTv when using AirPlay and both screens. Apple and Nintendo are about to go head-to-head only the apple tv/iPad costs more but you can do more. I think Nintendo, Sony, and MS are in trouble down the road as consoles become old tech. MS is trying to make the Xbox into something more so we will see….
This debate is missing the point. Would purchase of NIntendo make sense for Apple *just* to get their hands on Nintendo IP? It’s an expensive proposition, yes. Worth it? Yes. The author somewhat soft peddles this aspect by boiling it down to Zelda, Mario, and DK. Look at it this way: Apple would be buying one of the best entertainment software development teams on Earth and getting Super Mario Galaxy, Super Smash Brothers, The Legend of Zelda, Metroid, Kid Icarus, Mario Kart, Pokemon, Kirby, Earth Bound, Pikmin, Star Fox, and Punch Out. Remember Microsoft built it’s entire XBox division by buying *one* franchise this large- Halo. Yes, it’s a very expensive idea. It’s also a very reasonable idea.