“Iwata’s comments also sidestepped many of the factors that often force traditional game prices upwards. Nintendo despite its Internet services is dependent on cartridge-based game sales at retail, and its developers have to both account for manufacturing and for the cut demanded by retail stores. Android and iOS developers are only bound by the revenue split with Apple or Google and often have much reduced overhead. A typical 3DS game in the US will cost $40 where most smartphone-class games cost $10 or less, even when they represent direct ports of DSi titles.”
Iwata is near delusional in his comment about producing value. His company monetizes value, specifically the value is in the bundle of the game plus the device that runs it. Apple and Android have simply made it far more difficult for Nintendo to monetize the part of that bundle, i.e. the game, it has in the past. Nintendo was able to lock the game up in a cartridge to control how the end consumer can enjoy the value that Nintendo “creates.” Apple and Android destroyed that by using the Internet as distribution rather than expensive physical cartridges in retail stores. And we’ve seen this movie before with CD’s and now DVD’s. (No wonder Apple is no rush to get into Blu-ray.)
Upton Sinclair said, “It is difficult to get a man to understand something when his salary depends on his not understanding it.” But in truth Iwata is paid to understand and it’s sad he doesn’t.