Admit it, the first thing you said when you saw that was “Nokia? Are they still around?” Yes, they are. Well, barely.
Nokia’s problem is pretty straightforward; they spent years and millions on the Symbian OS, without ever realizing that that name is way, way too close to, ah, an infamous “marital aid” (sorry, link is work-safe), and that, keeping with the dirty theme, not realizing that Apple and Google were about to tag team them big time. To say the iPhone and Android are the worst things that have ever happened to the company are an understatement.
To be fair to Nokia, they’ve owned up to their failures, and they’ve bet it all on Windows Phone Mango. And Nokia’s CEO is equally blunt about what’s going to happen if it doesn’t work: when asked what will happen if Mango bombs, he replied, “That’s it.”
Expiration Date: We won’t know until the start of 2012, but Nokia might not make it to the spring.
Might Be Saved By: Their bet on Mango paying off. Mango’s only problem, really, is a lack of promotion; it’s a solid, well-designed OS, and a lot of companies now using Android want to get off the Google train now that they’re making cellphones as well. If Mango can catch on, Nokia will be around for a while yet.
Nintendo’s Console Division
Slam on the brakes, console fanboys, and read first: Nintendo is in real trouble.
Video games are brutal, as an industry, and nowhere is it more brutal than consoles. Just ask Sega, or NEC, or Phillips, or Apple, or…you get the idea. If a console tanks, it tanks hard and can take an entire company with it. And Nintendo might be in the middle of just that.
First, you need to understand that Nintendo, financially, is a different beast entirely from its competitors. Sony and Microsoft are happy to sell you systems at a loss because they’ll make up the profit (in theory) from your purchasing controllers, games, online access, avatars, and various and sundry other crap. Nintendo, meanwhile, sells everything at a profit, and it’s never not controlled one sector of the gaming industry: namely, portables.
Nintendo moved over 200 million of the Game Boy, and nearly 150 million of the DS. There are 50 million DS units floating around the US alone. The DS is the single most successful video game platform of the last ten years, and it was massively profitable.
Similarly, Nintendo played the last console generation smartly with the Wii, wisely deciding a cheap system with easy controls would sell to a lot more people than a beast of a console. They were right to the tune of 90 million systems out the door.
But the magic may be over. Portable gaming in general is facing a problem: why would anybody buy a $200 game system with a bunch of peripherals and $20 games when they can buy a smartphone, which is rapidly becoming the only option anyway, get games for a buck, and not have two objects weighing down your pockets? The problem is compounded with tablets taking off.
And Nintendo deserves credit: they saw this problem coming, found it to be tricky, and came back with a device, the 3DS, that offered something different from smartphones. The problem being that it gives you eyestrain, if you can even align your head to see the effect correctly in the first place. The 3DS has sold so badly that Nintendo’s president and board of directors had to drop the price and ate a 50% pay cut for doing it.
Then there’s the Wii U. Again, Nintendo deserves credit: they are doing a lot right. The system is backwards compatible with Wii games and controllers; the bizarre new smartphone-like controllers are USB 2.0 instead of some B.S. proprietary connector; and the graphics are better. In short, Nintendo listened to every single complaint they’d ever received about the Wii and offered something genuinely new that addressed those concerns. Not many companies with a device selling 90 million units would be willing to do that.
The big question is whether people will buy a new console with 9% unemployment, and whether the controller, which is literally a smartphone without the cellular service, right down to having a camera, is going to cost too much. Suddenly a lot depends on a system that should be a slam dunk.
Expiration Date: Even if the 3DS slows down more and the Wii U bombs completely, Nintendo still has huge reserves of cash, so the company itself would have to be massively mismanaged to die completely. But they might decide to ditch electronics entirely if that happens and go the Sega route: after all, Pokemon is still going strong, and Nintendo’s franchises are beloved. But that would still effectively mean the end of the company as everyone knows it.
Might Be Saved By: The Wii U being even a modest hit. Realistically speaking, this is not the first time Nintendo has made a major misstep, it’s just the first time it’s made a major misstep without a successful system to fall back on. But if the Wii U has a cost over $200, expect a lot of problems and for them to show up fast.