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Game Change

First Draught
Game Change
By M.G. Siegler • Issue #161 • View online
At the risk of sounding like a broken cartridge, I think it’s time for Apple to seriously look at buying Nintendo.
Yes, I’ve been going on about this for years. (Many have.) And yes, major hurdles remain: namely that Nintendo remains a profitable company with seemingly little or no desire to sell. But come on, it’s starting to make too much sense. 
I found myself thinking about this once again last week on the news that Apple was promoting their head of M&A, Adrian Perica, to report directly to Tim Cook. Mark Gurman reads this as an indication that Apple is about to get more serious about larger acquisitions. And he could be right — I’ve been thinking about this myself recently, given the current state of Apple.
But just as important here is something that was announced two weeks ago: Apple Arcade. While the details were light — we don’t know the launch date beyond the fall, nor do we know the price Apple will charge — we do now know that it’s one of the key cogs in Apple’s move towards their services-oriented future. 
Even at a high level, Apple Arcade was one of the more interesting things the company announced on stage. It seems like a clever way to combat the race-to-the-bottom with regard to app prices, and more specifically, paid game prices in the era of free-to-play.
Oh and by the way, Apple will be commissioning games to be a part of this bundle. 
Which game developer would be the best in the world to work with in this regard? Well from a pure IP perspective, there are a few names that come to mind – Mario. Zelda. Donkey Kong. – all Linked together by a single company.
Would Nintendo work with Apple on such an offering? There was obviously no indication of this on stage. But given the rather lackluster mobile offerings for Nintendo’s games thus far, perhaps they’re open to the idea. But I believe both sides should be open to another idea: Apple acquiring the company outright.
With the unfortunate passing of CEO Satoru Iwata a few years ago, and the recently announced departure of American head Reggie Fils-Aime, Nintendo is back in a state of flux. Sure, the Switch has been a hit, but signs are already pointing to a rather quick fade — which is why we’re already hearing about two new devices scheduled for this year. The Switch is a good system, but that’s first and foremost because of the IP
In the past, Apple has treated the gaming business quite casually, even though it has seemingly been right there for the taking, given the popularity on iOS devices. But now they’re diving in. Again, Apple Arcade is interesting, but it could be a total game changer if it featured Nintendo IP. Who doesn’t sign up for such a service? 
Let’s say Apple charges $10/month for that service. If a million people sign up, that’s $120M a year for Apple. Apple would undoubtedly charge more with Nintendo IP. And more people would undoubtedly sign up with Nintendo IP. At $20/month, with 10 million people signed up, that’s $2.4 billion a year. Have I mentioned that there are 1.4 billion iOS devices out there?
You do the math.
I know, I know. It’s a crazy idea. Nintendo currently has a market cap of about $40B. A deal would require a pretty healthy premium. Apple has $250B in cash. More importantly, they finally have the pressure to… think differently, and to do a crazy deal like this.
Game on?
Drinking: a Calicraft Oaktown 🍻

A Few Gaming-Related Links
Nintendo to Launch Two New Switch Models
Cadence of Hyrule is an Indie-Developed Zelda Spinoff for the Switch
Google Unveils Stadia Cloud Gaming Service
A Giphy To Go
Apple's appetite for services...
Apple's appetite for services...
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M.G. Siegler

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