Bowing to mobile, Nintendo forms gaming tie-up with DeNA

The alliance, which involves the two companies holding stakes in each other, will focus on building apps for smart devices and setting up a worldwide membership service to launch this fall, the companies said Tuesday at a hastily arranged press conference in Tokyo.

Nintendo was keen to emphasize it is not abandoning consoles, with Nintendo President Satoru Iwata confirming that his company is working on a new dedicated console code-named NX, with details to come next year.

The new apps for the partnership will include iconic Nintendo characters but will not involve porting games developed for the Nintendo Wii U or 3Ds systems. Only new games will be created, the companies said.

However, all Nintendo intellectual property like its games and characters could be used in new game development by the alliance, which has yet to announce a game lineup and availability. The global online membership service will be open to mobile devices, as well as Nintendo consoles and PC platforms.

Iwata said he hopes the service will reach hundreds of millions of users. In one slideshow illustration shown by the companies, the new membership service was shown surrounded by and linked to tablets, smartphones, PCs, the 3DS, the Wii U and the NX device.

The move represents a path forward for Nintendo, which has struggled to find a way to embrace the lucrative mobile gaming market while preserving its heritage and presence in video game consoles, which it has produced for decades.

"We do not share this pessimistic view of the future for dedicated video game systems," Iwata said in reference to negativity related to the future of consoles. "We are challenging ourselves to redefine what 'Nintendo platform' means."

After years of hearing Nintendo express hesitation about mobile games, industry observers reacted with shock to the news.

"This is basically a bombshell, especially given that Nintendo hasn't been really fond of the smartphone gaming market," said Serkan Toto, a video game consultant based in Tokyo. "Nintendo is planning to go beyond consoles, which they have never done. They never even did anything on the PC before. So they just shook up the entire game world."

DeNA, which has built a large e-commerce, online auction and mobile gaming empire in Japan, has seen its profitability take hits in recent years, just as Nintendo seemed lost amid the mobile game surge, Toto said. The alliance of the struggling partners will make Nintendo the biggest shareholder in DeNA after Tomoko Namba, who founded the company in 1999.

"Mobile gaming is a hit-driven business, and we believe our alliance with Nintendo will significantly increase the possibility of creating hit titles with Nintendo's beloved IP," DeNA spokesman Tomoyuki Akiyama said via email when asked about the company's profit slide.

Tim Hornyak covers Japan and emerging technologies for The IDG News Service. Follow Tim on Twitter at @robotopia.