It also ignores what Nintendo is. Nintendo is vertically integrated. It makes game machines, games, and game characters (i.e. Mario). It doesn't make money by making a better FPS machine. It makes money by making a cheap machine with some wacky creative edge (i.e. a new type of controller). Then its game division creates the best games, with their internal know-how. Then they leverage the Mario brand, and sell they can sell the whole package (along with the sequels they crank out) with a massive margin.
If it flops, who cares? They didn't spend huge amounts on loss-leading hardware, and they didn't need to make a huge investment in a cutting edge FPS only to be told it's not as good as Halo.
Apple (along with the Angry Birds developers) stole their lunch, with another cheap game machine, with an even cooler new control system. Eventually, that market will start to mature, and you will need 100 developers to make a good iOS game. And Nintendo won't want to touch that market with a barge pole, because it becomes a winner-takes-all bloodbath with huge entry costs.
The question is, is iOS an existential threat to the gaming market as a whole? If so, Nintendo will lose. If not, Nintendo will come up with some other wacky control system, and build a few fun (but simple) games staring Mario. People will buy it, because they want a bit of a change from their familiar, mature, and eventually boring touch games. Apple won't hurt them this cycle, because they are busy consolidating their monopoly on tables. Apple doesn't want to take over the gaming market - the 3DS was just a piece of collateral damage. Apple wants to sell a boring mature platform (with simple updates to performance, but no fundamental changes), not novelties that will need to be redesigned every 5 years. But the iPad just happens to be new enough to still be a novelty, and thus devastate Nintendo.
If it flops, who cares? They didn't spend huge amounts on loss-leading hardware, and they didn't need to make a huge investment in a cutting edge FPS only to be told it's not as good as Halo.
Apple (along with the Angry Birds developers) stole their lunch, with another cheap game machine, with an even cooler new control system. Eventually, that market will start to mature, and you will need 100 developers to make a good iOS game. And Nintendo won't want to touch that market with a barge pole, because it becomes a winner-takes-all bloodbath with huge entry costs.
The question is, is iOS an existential threat to the gaming market as a whole? If so, Nintendo will lose. If not, Nintendo will come up with some other wacky control system, and build a few fun (but simple) games staring Mario. People will buy it, because they want a bit of a change from their familiar, mature, and eventually boring touch games. Apple won't hurt them this cycle, because they are busy consolidating their monopoly on tables. Apple doesn't want to take over the gaming market - the 3DS was just a piece of collateral damage. Apple wants to sell a boring mature platform (with simple updates to performance, but no fundamental changes), not novelties that will need to be redesigned every 5 years. But the iPad just happens to be new enough to still be a novelty, and thus devastate Nintendo.