Want a sure sign that investors don't understand the very industry they're investing in? Look at Nintendo, a company that's currently riding on an aging Wii unit and sluggish 3DS portable. Their performance was awful enough last quarter that company president Saturo Iwata took a 50% pay cut.
What does the investor suggest? Port their products to the iOS platform.
Fund manager Masamitsu Ohki stated, "Smartphones are the new battlefield for the gaming industry... Nintendo should try to either buy its way into this platform or develop something totally new."
Mario and company have rarely left the comfy confines of their home hardware, and when they have, it turned disastrous. The PC gained a few educational Mario-oriented titles, and the ill-fated early CD-ROM console by Phillips called the CD-i housed two of the worst Zelda games ever devised.
There's a reason consumers latch onto Nintendo hardware, and that's because they want to play Nintendo games. Educational games and ill-advised multimedia Zelda titles aside, it's always remained this way.
If you take the latest Mario Bros. title (scheduled for later this year on the 3DS) and plopped it onto an App Store, you've greatly devalued the 3DS hardware and the worth of the franchise. Even developing side games, say a mini-game collection, turns Nintendo on to a complex, convoluted market to challenge $1-$5 apps, not the premium product they've thrived on since 1985.
Not only that, it's not a profitable, sustainable market with few exceptions. The likes of Angry Birds, Cut the Rope, and others are flukes. Most apps would kill for even a third of their market penetration. Not even Mario could survive such a hostile, throw-away environment.