Why Apple should buy Nintendo

“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.

51 Comments

  1. 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.

    1. 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.

      1. 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.

        1. 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.

          1. 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.

      2. 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.

    2. “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.

  2. 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.

  3. 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.

    1. 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.

  4. … 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.

  5. 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….

        1. 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. 🙁

        2. 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.

        3. 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.

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