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Nintendo is a master at building portable gaming gadgets, as evidenced by the recent release of the company’s  3DS device. But don’t look for the video game powerhouse to build its own branded mobile phone anytime soon. Executives at the company tell CNN that the costs associated with phone development are just too high, adding that the company wants to stick to entertainment-based devices.

“We don’t want to be in the phone business,” Nintendo of America President Reggie Fils-Aime told CNN. “We don’t see that as an opportunity. Phones are utilities. Phones are not by definition entertainment devices.”

The strategy could backfire. After all, Microsoft is building advanced gaming capabilities into its Windows Phone 7 platform, including deep integration with Xbox Live.

The rise of the iPhone and Android also pose serious threats as consumers increasingly play games on these multi-purpose devices.

The Nintendo 3DS — featuring a 3.5 inch screen and 3D effects — is not cheap. It costs $249.99, more than the 16 GB iPhone (which retails for $199).

Of course, consumers must pay monthly service fees to the carriers if they want the iPhone or another smartphone. Nonetheless, many of the mobile games on the these devices are free or cost under $5.

Games on the 3DS cost $40 per title.

The rise of cheap or free mobile games has been a sore point for Nintendo, which has recently touted the quality of its high-quality games over the mobile phone alternatives.

“You win with great content,” said Fils-Aime in a recent CNBC interview.

Previously: Nintendo releases 3DS, and it already has one huge fan in Jimmy Fallon: ‘This is insane’

John Cook is co-founder of GeekWire. Follow on Twitter: @geekwirenews and Facebook.

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