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Why buy Nintendo Roblocks

Why buy Nintendo Roblocks

David Gibson, CFA, Chief Investment Adviser in Astris Advisory Japan. He specializes in games and the Internet.

Nintendo has elevated Switch to a flagship product that obscures the success of the Wii console, and continues to be one of the most successful games ever made.

While Nintendo’s focus on fun and new experiences has worked in the past, now it faces competition from an unexpected source: its customers. That’s why Nintendo has to spend $ 8 billion to adopt the future and buy the online game platform Roblox.

Only 16% of the console market and 1% of the mobile games market – the fast-growing global games industry currently worth over $ 170 billion – do not care about Nintendo’s market share. Instead, it focuses on console games and expands its brand through mobile games, merchandise, theme parks and movies. What Nintendo really cares about is the fun experience for its customers. The problem is, kids today have more play options than ever before.

I think Nintendo’s core DNA is not compatible with the $ 70 billion + mobile games market, which was built at a very high cost to a large audience and needs something else. Gamers are mostly playing across console, PC and mobile. Some prefer two device combinations, but with almost 50% of the gameplay online, Nintendo is not doing enough to address the changes in user behavior.

Nintendo Switch online is good, if you want to play Splatoon 2 or Mario Kart 8 online. Although Nintendo acknowledges that it has over 200 million Nintendo accounts and over 26 million Nintendo Switch online subscriptions, there are no community chats, services or forums to keep users engaged and excited. Nintendo’s mobile app is cumbersome and rates are low.

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Where is the Animal Crossing Companion app that mimics the Nook phone? The game is expected to sell 40 million copies by March 2021, although Nintendo has done nothing to promote the player community. Nintendo players had to form their own associations in Reddit groups and other forums instead.

A passenger uses the Nintendo Switch to play Animal Crossing on a subway train in Beijing: Nintendo is not doing enough to address changes in consumer behavior. © VCG / Getty Images

Today the largest online gaming communities are Minecraft, with over 130 million monthly active users – excluding China – Fortnite with 80-90 million monthly active users, GTA Online with 90 million monthly active users, and Roblocks with 150 million. These services provide over 1.2 billion hours of gameplay per month. That’s a lot of hours, but Roblox is now doubling down to 2.5 billion hours a month.

The world is no longer about games, but game engines, where users generate and share content on every platform. It constantly brings new experiences and engagement into the growing consumer community, with 50% of children aged 9-12 in the US, Canada, Australia playing Minecraft or Roblox.

Nintendo, which has previously experimented with user-driven content with Super Mario Maker 1 + 2, should be able to see the benefits of this genre. Unfortunately, the company is still structured around making and selling 60 games, and then moves on to the next one. Games as a service that consumers really want today is an ongoing experience that can be shared in the community. Animal Crossing, with its seasonal updates, is a step in that direction, but nowhere near its potential.

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Just like mobile games, Nintendo needs to partner with others to create games like a service. And, since the Nintendo Switch is very difficult and time consuming to build from online, Nintendo should buy Roblocks instead to supercharge the company’s range.

Super Mario Maker on Roblox Steroids‌, a platform for developers and users to create games. Like Minecraft and Super Mario Maker, creativity has driven its huge audience, with Super Mario Maker having 5.5 million fans and Roblocks 150 million. By joining forces, Nintendo and Roblox will create the next generation of Nintendo intellectual property fans that the company does not have today, all in a controlled family-friendly environment.

By investing in Roblox, Nintendo can invest and promote its intellectual property on a new platform. Imagine how Nintendo user communities would love to be able to build their own Super Nintendo World theme parks? Playing at an online theme park is fun, the first one opens in the spring of 2021 and others are uncertain. Animal Crossing can create worlds and still share into a larger community and experience.

Today kids are more online than ever and there are only so many large scale creative businesses like Roblocks and Minecraft. Tencent-Sony has already made slogans to work with the platform Epic-Fortnight. It’s only a matter of time before Roblox becomes the next.

So, do you remember Nintendo President Shuntaro Furukawa, the entertainment leader who embraced games as a service and merged the company into the global online games community while looking forward to 10 years for your legacy? Or want to continue playing $ 60 games with matching t-shirts for the next Nintendo console? It’s time to spend your cash and buy Roblox for $ 8 billion.

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