Nintendo’s arrogance over smartphone gaming could prove costly

There’s an in-depth interview at Gamasutra with Nintendo’s Hideki Konno, the man who headed development of the Nintendo 3DS. In it, Konno discusses a range of subjects, but this quote about $1 smartphone games (games that could yet threaten Nintendo’s dominance in handheld gaming) stuck out to me:

“We’re not going to try to match [smartphone game prices]. We’re just going to continually strive to not just maintain, but increase, the quality of the entertainment that we’re providing, and let it sort itself out. Again, we’re not worried about competing at a price point level. Now of course as a customer, if somebody said to me, ‘Hey, we’ve got Call of Duty on your portable device and it’s only going to cost you [$1],’ yeah, I’d be super stoked, really excited about that.”

“And I’d be really excited to see a great game at a really cheap price, but I just don’t think that you could make a game that’s immersive and as big as, let’s say Call of Duty, or any other large title, and sell it at that price point; it’s just not possible. The only way that you’re going to get a game at that price point is if it’s a limited version with limited levels or something. They’re going to have to reduce it to sell at that price. So that other game – because the content is valuable – it’s still going to be a viable product at a higher price point.”

In short, Konno is confident that customers will pay more if they know they’re getting a quality product. Hence Nintendo will continue charging a full $50 for a Nintendo 3DS game, arguing that the greater quality of the game makes it worth it, compared to a $1 smartphone title.

Sadly, I fear Konno might have called this wrong.

It’s not advisable to question Nintendo where portable gaming is concerned. Since the Game Boy launched in 1989, the handheld games arena has been utterly ruled by the company. Sony’s PSP posed the biggest threat to date, yet even that was heavily outsold by the Nintendo DS.

However, the iPhone and other smartphones are a serious threat to the 3DS. These new phones already have an installed userbase in the tens of millions, and can produce graphically beautiful games, like Infinity Blade:

Not too shabby, right? Most importantly of all, these games often sell for a few bucks at most.

Konno is right to point out that Nintendo’s console will have higher quality games. I have absolutely no doubt it will. It also has big brands such as Mario, Zelda, Donkey Kong, and Nintendogs. And yes, most of the iPhone library really is junk. Yet what Konno fails to recognize is that people are happy playing Flight Control and Angry Birds (both of which cost a buck each).

Consumers are satisfied by such games, and it’s astonishingly short-sighted of Konno and Nintendo at large not to appreciate this.

A new Zelda game will be a more immersive, content-rich game than Angry Birds. Yet people don’t seem to care. Why should they pay fifty notes, they might argue, when they can spend hours occupied with Angry Birds for a single dollar? But instead of competing with the Apps Store and pushing its downloadable games service for the 3DS (the 3DS eShop), Nintendo has delayed the launch of the eShop until May. For the next two months, the only 3DS software available to customers will be full price $50 games – hardly the stuff of impulse purchases.

I truly hope Konno is right and I am wrong. As a huge lover of all things Nintendo, I am buying a 3DS myself at the European launch this Friday. I hope I’m buying a console with a rosy future, and not one developers will abandon en masse to create cheap money-spinning smartphone games three or four years down the line.

The future, however, is unpredictable. Against smartphones, Nintendo could be in for the fight of its handheld gaming life.

[Konno interview via Gamasutra]