Nintendo: Mobile Games Are Not Cannibalizing Retail

With the rapid growth in social and mobile gaming over the last few years, along with the slow decline of video game retail sales, it is easy to assume that these new opportunities are eating into the sales of traditional video games. Not so, says Nintendo of America president Reggie Fils-Aime, who argues that they may, in fact, help console and handheld game sales grow. "The fact is, disruption happens. But often it's not clear," the executive said during a presentation at BMO Capital Markets' Digital Entertainment Conference on Thursday. "The fact is that it's a lot more complex, a lot more complicated, than conventional wisdom would have you believe." Citing recent research from the ESA, Fils-Aime showed that the number of homes in the U.S. with people who play games jumped up five points during the last twelve months, from 67 to 72 percent. And while that number could be explained at a glance by mobile and social trends, the same research also showed that the number of homes with dedicated consoles is also on the rise: from 32.6 percent in 2007 to 50.5 percent. "What becomes clear is that gamers aren't necessarily cannibalizing time from other forms of gaming so much as they're tkaing it from other forms of entertainment," said Fils-Aime. "New forms of games are growing, but not necessarily at the expense of other forms of gaming." While Nintendo's revenues still skew heavily toward traditional retail sales (only 14 percent of its sales over the past 12 months were from digital purchases), Fils-Aime says the company is adapting, and already offers digital games for the majority of its franchises. "This is more than just an experimentation on our part, it's already a growing part of our business," he said. "As the video game industry continues to see disruption, Nintendo will both respond and continue to contribute to those disruptions."