NTDOY Nintendo Co Ltd (PK)

TOKYO—Nintendo Co. said Thursday that its first mobile game would be called Miitomo, clearing up a mystery that has gripped the videogame industry since the company said in spring that it would make the leap to smartphones.

The company said it would delay the introduction of the title, previously planned by the end of 2015, until March 2016.

Miitomo, which will allow users to create avatars called Mii, is a new franchise for Nintendo. The company is saving its most famous character, Mario the plumber, and other well-known characters for a later date. Analysts said the company probably didn't want to risk Mario on an unproven mobile format, but might introduce him in subsequent mobile titles.

Nintendo said it was creating a new membership service, called "Nintendo Account," to connect users of its hardware as well as PCs and mobile devices. It said it would use a cloud-based service to transfer data between mobile games and console games.

Nintendo long resisted using any of its characters for smartphone games, preferring to stick with its time-tested console-based business model. After revenue and profits stumbled in recent years, it reversed course in March, announcing a partnership with DeNA Co., which develops games and operates a mobile game platform. The companies said they would release five games by March 2017.

It isn't the first big shift for Nintendo, a 126-year-old company that used to make playing cards. This time, Nintendo's hand was forced by a big change in the game-playing market, with smartphone games cutting into the traditional console-based gaming audience.

Analysts are divided on Nintendo's prospects, with some saying the advent of smartphone gaming could unleash new revenue streams, while others say the company is coming to the table too late. The smartphone game market is crowded with countless titles jockeying for consumers' attention.

Most of these games are free to download, with game providers trying to earn revenue through advertising and in-game purchases. That is a different business model from console games, which are generally bought as packaged software, either in stores or from online services.

"One of our major concerns about all this mobile gaming-related excitement is that we don't know how long these huge number of free mobile games being released can be sustained by in-game content sales as total sales become ever more diluted across more and more titles," said Amir Anvarzadeh, head of Japan equity sales at BGC Partners.

Others say the company's cast of well-known characters gives it a huge advantage in the clamor for gamers' attention.

"Nintendo could generate ¥ 6 billion ($50 million) in operating profit a year from one smartphone game," said Osamu Kamada, an analyst at Tokai Tokyo Securities.

The challenge facing Nintendo was underscored by its latest earnings report, on Wednesday, in which the company's profit for the six months through September fell short of analyst expectations, held back by sluggish sales of the Wii U console and 3DS hand-held devices.

Nintendo isn't giving up on consoles. It has a new system, code-named NX, under development.

Write to Mayumi Negishi at mayumi.negishi@wsj.com and Takashi Mochizuki at takashi.mochizuki@wsj.com

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(END) Dow Jones Newswires

October 29, 2015 00:05 ET (04:05 GMT)

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