Nintendo Forms Partnership to Develop Mobile Games

For years, Nintendo had insisted that it would not take its beloved cast of video game characters, including Mario and Zelda, to the smartphones and tablets that tens of millions of people now use to play games.

But on Tuesday, Nintendo reversed its position on mobile devices, dropping a pledge that had come to seem increasingly detached from the habits of game players.

The company said it had formed a partnership with another Japanese company that specializes in mobile games, DeNA, to develop games based on Nintendo brands for smartphones and tablets. The two companies said they planned to create an online gaming service to be introduced this fall that will be accessible from mobile devices, PCs and Nintendo’s own game systems.

Nintendo promised that it was not abandoning the business of making its own game hardware, saying that it had a new game platform under development. The company’s president, Satoru Iwata, said Nintendo would share more details about the product, code-named NX, next year.

For Nintendo, the risk of ignoring mobile was that its whimsical games would lose relevance to popular mobile games like Minecraft, Angry Birds and Clash of Clans, especially among younger players. Other established companies and figures in the game industry, including Electronic Arts, came to recognize the importance of mobile games much earlier.

“Welcome to three years ago, Nintendo,” Cliff Bleszinski, a prominent game designer, cracked on Twitter.

No matter the timing, investors seemed to welcome the news. A flood of buy orders bid up the company’s stock price by its daily limit of 3,000 yen — or 21 percent — in Tokyo on Wednesday.

Nintendo has long favored its traditional approach of designing games only for its own hardware, including the Wii U console and portable players like the Nintendo 3DS. Its position was somewhat like that of Apple, which believes it can create high-quality products only by controlling devices and the software that runs them.

Even Apple, though, swiftly bowed to the realities of the PC market, creating its iTunes software and service for dominant Windows computers. Nintendo’s aversion to mobile devices, in contrast, came to seem dogmatic and hazardous to the future of the company.

“Clearly the issue for Nintendo was they were losing that customer base they had — preteens and kids who get introduced to Nintendo products at an early age,” said David Cole, an analyst at DFC Intelligence, a game research firm. “Now these kids are getting introduced to mobile.”

Nintendo’s sales and profits suffered badly in recent years as game-playing on smartphones and tablets skyrocketed. Most mobile games are far cheaper than Nintendo games, especially the free-to-play games that are so common on mobile devices. Analysts believe Nintendo teamed up with DeNA partly because it has so little experience with the methods of generating revenue from today’s mobile games.

The rise of mobile gaming is particularly galling for Nintendo, which practically invented the concept of playing games on the go with devices like the Game Boy and the more recent 3DS.

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As successful as Nintendo’s portable devices have been, they are far more limited devices than modern smartphones, more than a billion of which are sold every year. Mr. Cole estimates the revenue from smartphone and tablet games was about $15 billion last year, compared with about $4 billion for portable games.

Despite the recent struggles, it is hard to count Nintendo out completely. The company has more than $7 billion in cash and short-term securities in its coffers. In an industry in which famed companies like Atari, Sega and 3DO have faded or vanished, Nintendo has shown a remarkable ability to reinvent itself again and again.

The company, founded by Fusajiro Yamauchi, started out as a maker of playing cards in the late 1800s. His successors eventually led the company into toys and video games, after they began to take off in the 1970s.

Much of the credit for its modern success lies with Shigeru Miyamoto, the Nintendo game designer who is the closest the industry comes to a Walt Disney. Mr. Miyamoto, who joined Nintendo in the late 1970s, created Mario, Donkey Kong and Zelda, three of the best-selling game franchises of all time.

Nintendo began to falter as Sony and Microsoft poured fortunes into building consoles with the most powerful graphics available. In response, Nintendo created the original Wii, a console that lacked the best graphics but made up for it with an innovative motion-based controller. For several years, it was the hottest game system around, finding avid users among large portions of the public who had never played games before.

It was precisely those casual game users whom Nintendo lost to smartphones and tablets, when games emerged as a category for those devices. But some analysts do not think it is too late for Nintendo to be successful in mobile.

Michael A. Swierczek, an analyst at Evercore ISI, a stock research firm, said a handful of mobile games had stood the test of time and vastly more had faded quickly from memory.

He said the type of games that Nintendo specializes in, with their cartoony, playful graphics, will be more easily adapted to mobile devices than more complex console games. “They are so much simpler and easier to convey on a smaller screen and in much shorter snippets of time,” he said.

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