Just what exactly is going on with Nintendo?

Bill Loguidice's picture

This new Bloomberg article sums everything up nicely, with some much needed direct quotes from Nintendo's president, Satoru Iwata. It's both stunning and kind of sad we're getting this "we're going to embrace a new business model" rhetoric from Nintendo leadership, and that they're "going to study" mobile markets and what-not. It's stunning in that Nintendo is finally acknowledging that it may not be a bad thing to not always go against the grain and follow their own path. It's sad in that this smacks of Nintendo's snail-like move to HD and other modern technologies, which caused a lot of their problems in the first place, i.e., slow to produce new games, behind-the-times online services, etc. Once they're done with their studying and assumed eventual embracing of at least some of these things, how much more time will have passed? Maybe it's indeed time for Iwata to step down like promised and have new, more inspired - and quicker acting and reacting - leadership to take his place. Sometimes it's just time to move on and let someone younger have a crack at the future of the company--just ask Microsoft's Steve Ballmer.

It was bad enough Nintendo squandered all Wii momentum by letting the platform languish in its final few years, but it's even worse that they've failed to find their footing with the Wii U, which is kind of embarrassing in light of what the competition has done with their systems. Indeed, if the PS4 and Xbox One had failed to catch on, it would have clearly been an unavoidable trend, but instead it just highlights Nintendo's own missteps. The 3DS is of course doing well, but, as expected, nowhere near as well as its predecessor, and you still have to wonder how much momentum that modest (but unique) handheld can maintain going forward in light of continued competitive mobile initiatives from Android- and iOS-related products.

Clearly certain companies have strengths that others don't, and similarly, weaknesses that others don't. For instance, Apple makes wonderful hardware, but they're really dreadful at most online, Web, and social services. In Nintendo's case, they're wonderful at character and game design, passable at hardware design, and pretty dreadful at online and connected services.

Those weaknesses are the root of a lot of these often uninformed calls for Nintendo to pull a Sega and go software only. Naturally, it's not that simple, but it's clear that if Nintendo doesn't right the ship this year, nothing will be off the board room table for consideration. At the very least, we know that it's at least one of the things they'll finally consider if things get bad enough, rather than stubbornly deny any path but one.

As the company's defenders like to say, they've got money in the bank, so they at least have this year to get the company on a healthy path for 2015 and beyond. Similarly, as the company's defenders also like to point out as if it's a negative, both Sony and Microsoft have other businesses they have to worry about--for Nintendo it's just videogames. Well, clearly, while those other businesses can be a drag on operations, those other businesses also provide both a backup plan and a point of leverage to right the videogame ship when it needs it. Nintendo is all in on the videogame thing. Being all in in such a high stakes game is not necessarily a good thing--just ask BlackBerry (nee, Rim). In any case, expect to hear a lot more from Nintendo in the coming months, particularly as the numbers continue to roll in.

Sound off in the comments and let me know what you think!

Comments

retroc64
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Joined: 05/11/2008
Like I said before

When the Wii U first came out.

1... nobody wants to play with Gimmicks, and the WII and WII U have gimmick controllers. It is great if they are optional, but you can't force it down people's throats.

2.... They are a game software company, nothing more, nothing less. True there wasn't anything better in the NES days, and they needed to make a console to allow there games to shine, but this isn't necessary anymore. Dump the console crap, and make IP for all hardware. There sales will go through the roof.

Just my two cents. LOL!

Bill Loguidice
Bill Loguidice's picture
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Joined: 12/31/1969
Great points

retroc64 wrote:
When the Wii U first came out.
1... nobody wants to play with Gimmicks, and the WII and WII U have gimmick controllers. It is great if they are optional, but you can't force it down people's throats.
2.... They are a game software company, nothing more, nothing less. True there wasn't anything better in the NES days, and they needed to make a console to allow there games to shine, but this isn't necessary anymore. Dump the console crap, and make IP for all hardware. There sales will go through the roof.
Just my two cents. LOL!

Great points. In regards to 1, however, I don't think that's necessarily an issue per se, but I must say that despite the illusion of simplicity, Nintendo has made the Wii U control options (a holdover from the height of the Wii) overbearing, and, as a result, over-complicated. It's straightforward enough using the touchscreen gamepad, but then you don't know if something supports the Wii-mote, the nunchuk, the Pro Controller, etc., or any combination thereof. You add in something like Wii Fit U, which throws the Balance Board into the mix, and it's really something of a mess. I think in some ways, that can scare off the same casuals who found the Wii appealing (and relatively quickly lost interest in it).

In regards to 2, they made great hardware right through to the SNES, but then decided to start to go against the grain with each subsequent product release. The N64, it was cartridges. The GameCube, it was propriety, low capacity mini-discs. The Wii, it was SD and last gen power. With the Wii U, it's last gen power and no Blu-Ray/DVD movie support (not that that's a major deal, but it is still a curious omission). At some point, that's going to catch up with you, and I think it finally did. Everyone likes to point to the success of the Wii - and its sales of 100 million units prove that - but the reality is it limped along in its last few years, thanks in part to Nintendo's lack of support. That lack of momentum did the Wii U no favors, as did the odd impression that it was a Wii add-on (seems obvious to us, but for some reason the average person just didn't make the connection).

Now, belying that idea, they've had great success with handhelds that were never the best technologically on the market, but that too I think has caught up with them to a degree. We expected that, however. We predicted right here that the 3DS would sell quite well, but not reach the heights of the DS (a tough act to follow, much like the reach and sales of the Wii). Well, it's definitely selling well, but it looks like it's also starting to lose steam, which, when combined with the Wii U stuff, is not a good sign. Nintendo already played its platform hands and has to live with them for at least the next few years. In any case, I stand by the idea that smartphone and tablet growth will continue to eat into gaming handhelds, and that includes the 3DS. Though they likely will, I'm not sure Nintendo can logically follow the 3DS/2DS with another dedicated gaming handheld. Again, diminshing returns.

It will be fascinating to see how this all plays out, and of course how Nintendo's competition continues to perform in 2014.

n/a
retroc64
Offline
Joined: 05/11/2008
Iwata says, "... It’s not as

Iwata says, "... It’s not as simple as enabling Mario to move on a smartphone.”

My question: Why not?

Thanks for pointing out this article. Hopefully by the end of this year they will have seem my previous threads and offer me a job in management. :-)

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