Angry Birds makes Nintendo boss... erm... angry, actually

Downloadable games is one of the two fastest-growing sectors of the mobile industry (the other is social media and networking); Satoru Iwata knows it and is threatened by it. That's why he spent so much of his keynote speech at last week's Game Developers Conference in San Diego, California, dissing the quality of experience users get when they play games on a mobile handset.

The point is, of course, that downloadable video games for smartphones are generally low cost - and so they are being taken up in ever-increasing numbers by enthusiastic users and that is causing a swing away from expensive games of the type traditionally produced by Nintendo. It's a classic quantity versus quality equation and cheapness and choice will always win out where smartphones are concerned.

A worried Iwata told his audience, “I fear our business is dividing in a way that that threatens the continued employment of those of us who make games." He then asked, “Is maintaining high value games a top priority, or not?” Well, the answer is that it's not as much of a top priority as it used to be, that's for sure.

Satoru Iwata continued, “They [smartphones] are not like gaming consoles, there’s no motivation high-value video games. Social networks and mobile-software platforms like Apple’s iOS and Google’s Android operating system focus on getting as many apps as possible. Smartphone manufacturers naturally want to sell devices, while social media sites seek to have as many active users as possible."

And your point is?

Let's look at this dispassionately. Third party companies aren't interested in selling iPhones, Apple and the operators do that.

However, third party companies are very interested in selling apps and as there getting on for 400,000 Apple apps, let alone those from other sources, developers have a vested interest in coming up with the best, most innovative and most robust games they can if they are to make any money and stay in business.

And surely the fact that gamers have paid for and downloaded some 10 BILLION Apple game apps is prima facie evidence that they are indeed economically viable? That is why, back in 2010, Nintendo officially declared Apple to be its main enemy, relegating traditional foe Sony to second place and Microsoft to third. This begs the question, if Apple's games are as bad as Nintendo says, how come it's now Public Enemy Number One?

As usual, this is about money. Nintendo’s profits are on the slide - they were down by a whopping  50 percent in Q3 last year and until it comes up with a new Wii the company is completely reliant on the Nintendo 3DS -  an expensive cartridge-based 3D gaming machine that doesn't require users to wear cumbersome and uncomfortable glasses. It's a sell-out in Japan but won't be released in the US or Europe until much later this year, allowing Apple and the smartphone makers even more time to bite into Nintendo's market share.

So far, Angry Birds has been downloaded 100 million times and its popularity continues unabated. It is also now in the same league as Nintendo money-spinners such as Mario, and Satoru Iwata doesn't like it but seems to be too stiff-necked to do anything about it other than fulminate and grumble - and a lot of good that'll do him and his company.

As the old saying has it, pride must abide. It also comes before a fall.

Colin Sebstian, an analyst with Lazard Capital Markets comments, “There’s no doubt, in my mind at least, that these smartphones are legitimate game platforms and legitimate competitors. The argument [that they are not] gets harder for Nintendo to make every year.”