Nintendo's "What If?"

What if Nintendo Had Released a Phone?

There are a lot of “what if” stories in tech, and gaming is no exception. What if Facebook bought Unity in 2015? What if Sega did not give up on the Dreamcast so quickly? What if Blizzard did not allow users to mod Warcraft? There are tons of moments in gaming’s history where one can look and ask that simple but deep question of what if?

One that is almost never talked about even though it involves arguably the most recognizable brand in gaming is “what if Nintendo had released a mobile phone?” Looking at the past 20 years of consumer trends and Nintendo’s success in gaming, we actually think it might have worked. Let’s dive in.

Danger - the first “smartphone”: The story starts with a company called Danger (Wayback Machine) founded by Andy Rubin (who later cofounded Android), Matt Hershenson, and Joe Britt (all Apple Alumni) and later acquired by Microsoft in 2008. Danger was the original developer of the “hiptop” phone, or as most consumers would recognize it, the T-Mobile Sidekick. This was the first-ever always-on, internet-connected smartphone. It was also the first phone to popularize the idea of an app store (or app marketplace). There is a lot more to their story but we are going to focus on the what ifmoment that occurred in 2004.

Introduce gaming content to the app store: Internally at Danger, there was a “skunkworks project” to merge Game Boy hardware with a hiptop (called the “G1”) which would enable distribution of Game Boy ROMs on a phone (it actually worked!). Through the G1, their vision was that you would be able to browse Game Boy games in the app store, buy them, download them, and play them without the game cartridge. While there were some attempts at digital downloads before (the earliest being Intellivision's PlayCable in 1981 that allowed users to download games via a coaxial cable line), integrated digital download software was not truly commercialized until the Xbox 360. The G1, even though it was largely theoretical and never officially made it to market, was ahead of its time.

Death by licensing: Now that the G1 prototype was built, the team at Danger had to pitch it to Nintendo. While the pitch went well, the main hold-up was the fact that Nintendo’s license for their games did not include rights for electronic distribution (just physical distribution through cartridges). Due to the time it would take to get those rights, build out the catalog, and launch by the holidays, there was no way Nintendo could commit. While the G1 had high aspirations, the project fizzled out over the next year and was discontinued. You can read more about Danger here.

There are many reasons to brush this off as nothing more than a failed hardware project, but there are three core reasons to believe Nintendo was in a position to lead the mobile game distribution market:

(1) Consumer Dominance: At the time, Nintendo was one of the most recognizable brands in consumer tech, and particularly in gaming. They had already launched one of the most important handheld devices (Game Boy) along with the NES, SNES and N64. By 2004, Nintendo had sold 61m units of the NES, 119m units of the Game Boy, 49m units of the SNES, and 34m units of the N64 (NeoGAF). This is a total of ~265m units between 1982 and 2004, before they released the first DS product in 2004, which to this day is one of top 3 most popular console product lines of all time with 154m units sold (Nintendo).

Nintendo had already managed to attract consumers to their handheld device, the Game Boy, which could have offered a seamless launchpad to release a phone that supported Nintendo games and Nintendo’s most popular consumer hardware at the time. When Apple launched the iPhone in 2007, which merged its iPod with a phone, the iPod had already sold 67m units between 2002 and 2006 (BusinessInsider).

(2) Hardware Bundling: Hardware bundling has been highly attractive to consumers, and continues to become more prevalent through further technological advancement (other examples: Tivo + Cable Box, PlayStation + PlayStation TV, GPS + Phones, Watch + Health Data, Routers + Modems). Apple was a great example of hardware bundling with the launch of the iPhone in 2007 that combined their iPod media player with cellular phone technology. Nintendo had the opportunity to do this three years earlier and could have cemented itself as a leader in mobile gaming ahead of Apple’s iPhone. It can be argued that Apple had a more strategic position due to stronger overlap between iPod and mobile phone consumers, whereas Nintendo largely had a handheld consumer base of children. But by partnering with Danger, Nintendo would have launched a phone with the first app store, including Nintendo’s portfolio of games, four years before Apple and Google launched their respective app stores and would have presumably managed to launch further audio and video media support.

(3) Hindsight: When looking at Nintendo from 2004 to today, handheld gaming devices have become their brand. They released the Game Boy Advance (handheld), Gamecube (console), the Nintendo DS line (handheld), Wii (console), 3DS (handheld), Wii U (handheld / console), and the Nintendo Switch (handheld). Across these devices, Nintendo has sold roughly 427m units (Slash Gear and NeoGAF). Across the top selling consoles in history, as of April 2022, Nintendo has three of the top five. All three of which are handheld devices (Nintendo Switch, Game Boy, Nintendo DS). Nintendo has proven to be a leader in handheld gaming; given gaming today is responsible for >70% of all revenue on iOS and Android app stores, they had a strong opportunity to move into the mobile phone market.

Takeaway: Nintendo was well positioned to launch their own mobile phone yet passed on the opportunity due to timeline issues for the holiday season. At the time, they were arguably the best positioned company to launch a hardware bundled mobile phone, expand their IP to digital downloads, and grow their successful handheld business to the ultimate handheld: the smartphone. Nintendo would certainly have been up against intense competition in the upcoming years following 2004 given the rise of the iPod and other mobile phone entrants. Perhaps Nintendo would have eventually lost out to Apple, Google, or at the time, Blackberry or Nokia. Yet with hindsight twenty twenty, it is hard not to imagine… “what if Nintendo had launched their own mobile phone?”