Nintendo delays launch of smartphone video games; shares plunge
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Nintendo Co. on Thursday pushed back the much-anticipated launch of its video game service for smartphones by a few months to March 2016, disappointing gaming fans as well as investors, who drove its shares down by more than 10 percent.
Under a strategy announced by its previous chief executive, who died of cancer earlier this year, Nintendo had said it would introduce its first smartphone games by the end of 2015. Fans and investors had hoped that would include its best-selling Mario video game franchise in the first lineup.
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Shares in the maker of Wii consoles and Super Mario games fell as much as 13 percent to ¥20,085 in Tokyo after President Tatsumi Kimishima said a joint project with online games platform operator DeNA Co. will not debut this calendar year. The new app will be called Miitomo and will be free to play at the start.
Nintendo and DeNA are developing original games optimized for smart devices rather than modifying titles already available for the Wii U console and 3DS handheld player. Nintendo ended its resistance to games played on smartphones years after consumers started shifting to the simpler titles and turning away from dedicated game machines.
“Nintendo’s world-famous contents are Mario and Zelda; instead we saw Miitomo,” said Tomoaki Kawasaki, an analyst at Iwai Cosmo Securities Co. “The expectations were for a game release this year, so it’s a clear negative that the earnings recovery will now come later.”
Before Thursday’s plunge, the stock had surged by more than 80 percent this year, fueled by late President Satoru Iwata’s announcement in March that the company was entering the smartphone game market. DeNA fell as much as 20 percent, the most since its 2005 listing, to ¥1,945.
Nintendo’s first app will feature Miitomo user-made characters. Miitomo will act as users’ avatars when communicating with other players and also will ask questions directly to their owners, such as inquiring about their weekend plans.
“The app itself is already functional,” Kimishima said. “December is the biggest selling season in our traditional business, and we want to do right by our lineup of software and hardware. We thought it best the smartphone application would follow after that.”
The delay’s impact on earnings will be minor, Kimishima said. The company is sticking to its original plan to release five games for smartphones by March 2017.
Nintendo also announced a new service called My Nintendo that works with its own machines and mobile phones. Users can log in through social media or email and share saved data between devices.
“We are in the business of searching for explosive opportunities,” said Shigeru Miyamoto, a senior managing director who was involved in creating Mario and Zelda. “Smartphones are part of that business.”
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