Nintendo Needs Apple, but Apple Also Needs Nintendo

By Rick

Image source: Nintendo.

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There's a lot ofNintendo(NASDAQOTH: NTDOY)going on atApple(NASDAQ: AAPL)these days. Super Mario Run -- Nintendo's first mobile app devoted to its signature side-scrolling gaming franchise -- made its debut exclusively on devices running Apple's iOS last week with record-setting success. This week we saw Pokemon Go introduced for Apple Watch, also exclusively for Apple's smartwatch.

Nintendo reports that there were 40 million downloads of Super Mario Run through Apple's App Store in its first four days of availability. The record-breaking pace followed a third-party report that just 25 million downloads had taken place in that time. Heavy initial activity doesn't necessarily mean Nintendo has a financial hit on its hands. Super Mario Run is a free download, and a third-party report indicates that fewer than 10% of the players downloading the game have paid over the $10 price to unlock more features and loosen up restrictions.

Super Mario Run is drumming up mixed reviews, but a lot of the knocks have to do with the limitations for the free account. There's no doubt we'll be hearing mixed reviews for the Pokemon Go Apple Watch app, but in this case mostly on the restrictions of the small smartwatch screens in duplicating this summer's hot app experience.

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An unlikely pairing

Image source: Niantic Labs.

It makes sense for Nintendo to team up with Apple to make sure that Super Mario Run and a smartwatch version of Pokemon Go hit the market on Apple devices first. Android has the wider established base, but Apple fans spend money.

Aiming for iPhone and iPad owners with Super Mario Run is a bet that folks will pay $10 for a mobile game if it's iconic enough. The Apple Watch move with Pokemon Go is simply a matter of riding the only smartwatch platform that matters.

Still, it's an odd partnership, considering where this relationship stood just a few years ago.Nintendo of America President Reggie Fils-Aime had some choice words in attacking Apple back in 2010, when it seemed as if Apple's gadgetry was eating into the popularity of Nintendo's portable system.

"It doesn't look like their platform is a viable profit platform for game development, because so many of the games are free versus paid downloads," Fils-Aime said at the time.

Fils-Aime also dismissed mobile gaming as a niche where gamers were treated to just snacks instead of hearty meals. A lot has changed now that Nintendo is turning to Apple gamers first, and shareholders are seeing the difference. Nintendo stock soared 29% the day Apple unveiled Super Mario Run, a big deal since it stands to make a lot more money this time than it does with its minority stake in Pokemon Go. However, we can't dismiss what Apple stands to gain here.

Nintendo's preference to iOS vindicates the premium consumers pay for Apple products. The $10 price point for the premium version of the game should also educate users to pay more for their mobile diversions. Both companies have a lot riding on this month's new Nintendo iOS releases.

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Rick Munarriz owns shares of Apple. The Motley Fool owns shares of and recommends Apple. The Motley Fool has the following options: long January 2018 $90 calls on Apple and short January 2018 $95 calls on Apple. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.