It’s official: Mario and Luigi are headed to your smartphone. This morning, Nintendo announced a partnership with a mobile gaming company to bring the console maker’s iconic characters to Android and iOS devices. In the widely expected announcement, Nintendo said they are entering into a partnership with Japanese firm DeNA (Marvel War of Heroes, Star Wars Galactic Defense) to create new games and launch an online membership service for mobile devices.
“This will allow us to build a bridge between smart devices and gaming consoles,” Reuters quoted Nintendo president Satoru Iwata as saying at a press conference. “It doesn’t mean smart devices will eat away at gaming consoles, it will create an entirely new type of demand.”
As part of the deal, Nintendo and DeNA will buy 22 billion yen ($181 million) worth of shares in each other; Nintendo will own approximately 10% of DeNA while the mobile gaming company will own approximately 1.25% of the iconic console firm.
While hardcore gamers still stick to souped-up gaming PCs or console systems, smartphones and tablets have come to dominate the market. According to consulting firm Newzoo, mobile games are expected to produce more revenue than console titles for the first time in 2015, with $30.3 billion in sales. The popularity of the “freemium” gaming model (where games are free to download and players pay for virtual online currency or extra lives) and low-cost downloadable games have severely eroded into the profits of industry heavyweights like Nintendo, Sony, and Microsoft. Much of this growth is due to soaring smartphone ownership rates in China and India, which has put games in the hands of hundreds of millions of new users.
DeNA is also getting some benefits that possibly outweigh Nintendo owning a considerable part of the company: The company’s revenues dipped 4% last quarter and it has been going through a difficult restructuring process. Nintendo’s cash infusions are helping the company–which releases a mix of franchised and original titles aimed at a global market–stay relevant against extremely aggressive competitors like game giant GungHo.