Nintendo's Handheld Gaming Device Sales on the Decline

Nintendo has reported a near $25 million loss for the 6 month period ending September 30th. Sales of the Nintendo DS (handheld, modern-day game boy) are down roughly 45% from the previous year, and Wii sales are down about not quite as much, a little less than 10% (from 5.75 million to 4.97 million).

To compensate for these diminishing sales and lost revenues, Nintendo plans on releasing a 3DS, which will be an improved version of the DS, but it will produce a 3D screen without the need for 3D glasses - projecting holographs. However, this new console will not be available sometime in 2011, and will likely be fairly expensive.

Similar to trends I noticed last week in my blog regarding "20 Dying Technologies", many gamers are reporting playing games on their Smartphones. Once again, in the world of iPhones, Droids, and Blackberry Torches, people want their cell phones, cameras, entertainment, music all CONSOLIDATED. It seems that consolidation is key to survive in the next generation of technological entertainment.

Nintendo should take Sony's lead and begin developing video games that are able to be played through Smartphones, securing a market share of this blossoming. It could achieve even higher profit margins by selling separate gaming equipment to play the games on the Smartphones.

Nintendo is a video game electronics company, so developing and implementing this modified software would not be straying very far from its core competency. Either way, Nintendo needs to act and adapt soon, because in 10 years nearly all video games will be played either through consumers HDTVs with NO consoles, or through their Smartphones.

Twenty Dying Technologies

I am only 26 years old, but when I learned that these 20 technologies will soon be non-existent in the marketplace, I was shocked. However, when taking a step back and thinking about the new technologies that are currently dominating the marketplace, it should come as no surprise that many of these technologies I grew up with and still use to this day (for the most part) will all vanish from consumers' eyes within the next ten years. Here's the of the 20 products listed in the article, followed by the main catalyst which will soon cause them to be obsolete.

1. Combustible Engines --> Environmental concerns, economic concerns/problems (Oil being a major player)
2. Video Cameras --> SmartPhones
3. Credit Cards --> Direct payments from bank accounts; merchants desiring to avoid "swipe fees"
4. Desktop/Tower PCs --> Laptops, SmartPhones, Tablets
5. DVDs/Blue Ray Discs --> Netflix; downloading/streaming movies online
6. Digital Music Players --> SmartPhones
7. E-readers --> Tablets
8. Video Game Consoles --> broadband in living rooms, combined with online gameplay
9. Pagers --> more powerful SmartPhones
10. Fax Machines --> Electronic signatures
11. Dash-Mounted GPS --> SmartPhones
12. Keys --> ID Cards/Biometrics
13. Landline Telephones --> Cellphones/Skype
14. 3D TV with Glasses --> Holographic Projections
15. Metronomes and Tuners --> Apps like "Guitar Toolkit"
16. Personal Digital Assistants (PDAs) --> Smartphones
17. Point and Shoot Digital Cameras --> Smartphones
18. Power Chords --> Wireless Chargers
19. Remote Controls --> Smartphones/Tablets; motion/voice controlled TVs
20. USB Memory Cards --> Cloud Computing; emailing to yourself for storing over in protected network

A cursory glance at this list of catalysts reveals one glaring point - SmartPhones have already taken substantial bites out of a variety of marketshares. Businesses from video cameras to remote controls are being negatively affected by the recent domination of SmartPhones (led by the emergence of the iPhone). The same ideas and principles behind the success of social networks applies to the success of SmartPhones - people want to feel connected, in the loop, wanted, and liked. What better way than a cell phone? The cell phone was the pioneer to enabling consumers to enjoy this "connected" feeling, so it's the most important, and after the advent of text messaging they were here to stay.

Add cameras, video capabilities(not to mention the recent improved quality of the previous two), musical downloading/listening capabilities, GPS, email, and it centralizes/consolidates all these modern-day necessities into one object - the most important object - the cellphone. Of course the ease of having all these capabilities in a device that can fit into our pockets will make a multitude of products we took for granted as being essential/eternal obsolete.

Since many of these soon-to-be-obsolete products constitute core-competencies of their respective manufacturers/producers, outsourcing would not be a good idea (what other products would many of these companies offer if they outsourced their "core-competencies?). The logical solution would appear to be 1) identify the products that are making their technologies obsolete, 2) invest heavily in IT and R&D in these new technologies, 3) and try to gain a marketshare foothold before it's too late. The enormous problem here is that the majority of times the answer to the first question will be "smart phones." What is the likelihood of success of a remote-control manufacturer, metronome maker, or GPS manufacturer breaking into the already saturated SmartPhone market with any success?

The most difficult question I'll leave you with is --- "Would you like to be a (fill in the blank) manufacturer today?"

Spencer Schoonenberg