• by Steve Smith , Staff Writer @popeyesm, September 19, 2011

With the underwhelming performance of the Nintendo 3DS this year, and continued evidence of the great gaming company losing handheld gamers to mobile devices, isn't it time Nintendo started porting its tremendous franchises outside of its own platforms? That is the question many industry analysts have raised -- along with investors in the company.

Last month Bloomberg reported that Nintendo stockholders were arguing that Mario, Zelda, Pokemon and other key properties in the Nintendo empire would do well on the iPhone if company President Satoru Iwata would take back his persistent vow never to let his treasures move off the company's own hardware.

But in recent days, Iwata has answered firmly. When asked by a Japanese news organization whether he will let Nintendo develop for other platforms, he said, "This is absolutely not under consideration."

This issue has been raised before. Fans of the Nintendo franchises were always hungry to see their favorite characters and inarguably brilliant game designs brought to other platforms -- a gamer's dream. But Nintendo has a long legacy of winning from tying its franchises to its own hardware. If a gamer wants to play the greatest platformers on the planet (usually a Mario game) or the most entertaining RPG (usually a Zelda title) they have to get a Wii or a DS. That is the model that made the company, and no sane Nintendo executive wants to be the one responsible for turning one of the greatest entertainment technology innovators we have ever seen into just another software company.

For all of the glory laid upon Apple, Nintendo is a parallel success grounded in similar principles. Like Apple (perhaps even more so), Nintendo has been fearless in leading consumers rather than following. From touch-based handhelds (DS) to motion controlled gaming (Wii), this company told us gamers what we would like before we knew we would like it. In fact, many of its innovations have been met with tepid responses from the gaming press, yet ended up being embraced by consumers. And it has failed before. Both Sony and Xbox stole a march or two in a console gaming market that Nintendo once wholly owned.

But the company is really up against it this time. The 3DS 3D handheld successor to the DS has trailed its target by 16%, according to Bloomberg. Even a 40% price cut, while it has goosed sales, can't make up for the dearth of titles. And the next generation of Wii could well face serious headwinds against well-entrenched Sony and Microsoft rivals. And most of all, it is being seriously challenged by mobile gaming. The sophistication of iPhone/Android games is such that the viability of dedicated handheld game systems is questionable. With its large price drop, Nintendo announced that the 3DS sales hit 235,000 units in the U.S. in August, up 260% over the previous month sales. But in the long term, the 3DS fails to deliver much extra value to a platform that was in the latter end of its lifecycle anyway.

So will Mario and Zelda come to the iPhone? Nah! It is hard to believe that Nintendo will undermine the model it rode in on because of some current missteps. This is a brand that has won and lost across many generations of gaming. Even if it does see its handheld business go south, it likely will focus instead on the living room and do what it usually does -- innovate itself out of crisis. Whether that will work is anyone's guess, but we are a generator or two of hardware away from seeing iMario show up in the App Store.