Never Count Nintendo Out

Chris

If there are any universal rules or golden constants by which the game industry is governed, one of them is surely this: never count Nintendo out.  It is not an exaggeration to call the Kyoto firm the world leader in video game production.  They have sold more video game hardware than anybody else (Nintendo dominates the top-selling console list; the DS is the best selling game system of all time), their software is among the best in the industry (Metacritic suggests that the only game superior to Super Mario Galaxy 1 and 2 is GTA 4), and they are one of the few giants in this industry that is willing to take risks.  Nintendo does occasionally stumble; their attempts at digital distribution and online games have, thus far, been infantile compared to Microsoft and even Sony, and they can’t be happy about dropping the price of the 3DS by $80 only a few months after launch.  Their WiiU announcement earlier this year was met with a lot of head scratching, and they recently reported their first quarterly loss since 2004.

But whatever you do, never, ever count Nintendo out.

Nintendo can’t be ignored because they are fundamentally different than the other large game industry companies.  They take risks no other company would take, from the PowerPad to the original GameBoy to the Virtual Boy to the DS, Wii and now WiiU.  Sometimes these experiments fail, but mostly they do not.  When Satoru Iwata announced Nintendogs and Brain Age, two games that resemble nothing else in the industry and are arguably not even games, the incredulity felt by the developer community was palpable.  Many developers had a good chuckle over Nintendo’s utter cluelessness.  Nintendogs and Brain Age went on to sell over 20 million units apiece, putting them both in the top 20 best selling games of all time (a list which, by the way, contains only one non-Nintendo title, GTA: San Andreas).  To put that in perspective, Brain Age has been sold more times since 2006 than The Grapes of Wrath since its first publication in 1937.  Hell, even Brain Age 2 outsold old Steinbeck.

The key difference between Nintendo and Sony or Microsoft is that they build hardware around their games, rather than the other way around.  This approach often results in hardware that is hard to pin down at first.  People had no idea what to do with the DS’ two screens until Nintendo showed them; they had no clue how motion control was going to work until Wii Sports proved it.  Right now I’m sure people are struggling to understand the benefit of the weirdo controller that is the main selling point of the WiiU, but I’m confident that it’s a design that was prompted by the needs of a game.

Nintendo is best when they do this sort of crazy risk-taking.  Sony and Microsoft sure aren’t going to do it.  Nintendo falters when they do not take enough risk; the Nintendo 64 suffered from their decision to stick with cartage-based media, the GameCube was too conservative, and the Virtual Boy was just a bad product.  The problem with the 3DS is that it’s only an incremental improvement over the DS, and so far there hasn’t really been any of that compelling first-party content to back it up.  I think we’ll see what happens to that console this Christmas; all it really takes is a few great games to give the rest of the industry confidence in the platform.

So it is unwise to bet against Nintendo.  This year hasn’t been great for them, but to count them out now would be a very foolish mistake.

That said, here at Robot Invader we are not interested in developing for Nintendo platforms, at least not at the moment.  Nor, for that matter, are we interested in Sony or Microsoft consoles.  We believe that the era of traditional consoles is coming to a close.

I recently wrote an article about how the Sony Ericsson Xperia PLAY has the potential to change the game industry.  It’s a long article, but the point is this: when phones are as fast as consoles, the only reason to keep a console around is for the buttons on the controller.  If phones with buttons like the PLAY succeed, I think the market for consoles will vanish.  It will be increasingly difficult for console manufactures to differentiate themselves from your average smartphone as the quality of smartphones improves, and it’s improving at a breakneck pace.  Nintendo wasn’t even able to be first to market with a 3D screen for the 3DS; an Android phone in Japan with a similar screen shipped a few months before the 3DS launch.  I look at the Playstation Vita and I see hardware that will be in phones extremely soon, perhaps even before the Vita itself launches.  The business model for consoles for the last few decades has been about selling hardware that could be stretched out over a multi-year lifespan, and in the face of rapidly improving phone and tablet technology that model is no longer viable.

We’re in the middle of a transitional moment where the console makers must struggle to remain relevant.  The internet is like a plague of locusts, spreading over traditional business models and eating them alive, and if consoles do not change they too will fall.  Iwata has talked about “preserving the value” of video games (by which he means the existing pricing structure), but I don’t think value is something that any single company is able to control.  Once there’s a market for similar content at much lower cost, traditional $40 – $60 games start to look pretty expensive.  How can any hardware company compete with a platform that does more and has more content for less?

One solution might be to try to adapt existing technologies to weather this storm; I think Microsoft is headed in this direction with their Xbox Live integration in Windows Phone 7.  Another approach might be to stick it out and hope for the best; this seems to be Sony’s idea with the Vita (though, large company as they are, they are also part of the swarm with their various Android devices).

The question in my mind is this: how will Nintendo respond?

Of the three console makers I think the big N is the best positioned to survive this transition.  Their hardware is unique and can succeed without being the most technically brilliant box on the shelf.  Their (game) software is amazing, and their brand power is unbeatable.  But as a company with a lot of pride, I am sure that Nintendo is not content to simply develop for somebody else’s device.  Guessing what Nintendo will do next is always tough, but whatever they decide to do will help shape the future of game development.

Make no mistake: Nintendo isn’t down for the count.  In fact, if there’s one company to keep an eye on as the game industry shifts to new types of platforms, it’s Nintendo.  Developing for consoles doesn’t make any sense for a studio like Robot Invader right now, but who knows which companies will stand out in the post-console world?  I bet the big N does alright.

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10 Responses to Never Count Nintendo Out

  1. justinhj says:

    I totally agree about Ninendo. But as for console games going mobile, they already are with the psp, and yet I don’t think people want that. The kind of game that works on a mobile device is very different to the kind of game you want to play at home, where you are focused on it, you have a big tv and sound system. In other words consoles won’t die, they will just become a niche of the gaming industry, with several high budget titles making up the bulk of the market.

    • Chris says:

      Check out the article I linked to above about the Xperia PLAY. I don’t see why your mobile phone can’t drive your TV too.

      • Justin says:

        Yes, another interesting article. I don’t think I agree that mobile is the new venue for console games. I never really took to playing console games on the psp. Instead I liked to play puzzle games on it, the kind of games that became successful on iphone. This is nothing to do with the technology, it’s to do with how you interact with your phone, and how your phone interacts with your life. Game designs have to be completely different to succeed as mobile titles.

        Interestingly it does work the other way around. I would like to play angry birds on my tv using my phone as the controller.

        You have much more experience in mobile than I, but this is my opinion as a consumer.

  2. Jeff Elrod says:

    I agree about the big TV and sound system comment. If anything is going to take the consoles it is Internet TV (eg. Google TV). Especially if the prices are comparable to those of mobile games. Panasonic developed a dual core processor for their TVs. Only a matter of time.

  3. EdEN says:

    Don’t really see consoles go away. As fun as gaming on my iPhone 4 is I’ve still only put in 20 hours total of gaming on it VS over 6,000 hours on my DS (which, granted, I’ve owned for 4 years more than my iPhone 3G-4) and 1,000 on my PSP (which I got at the same time as my first iPhone). I’ve also only spent $40 in two years vs thousands of dollars on the other. It’s NICE to have the option, but for console gaming experience on the go I can just get a 3DS (which I will before the year is over) or a Vita (eventually) as no game on the mobile scene can substitute for it. Plus, I just love Nintendo’s franchises and those won’t (legally) be made available on mobiles until Nintendo goes the way of SEGA (which, as the article says, won’t happen anything soon if at all).

  4. bryan says:

    if we assume that the incremental increases in smartphone computing power continue to the point where they are literally as potent as a good gaming desktop, then i’d buy that consoles are going to bite it – because a console is essentially a desktop computer dedicated to graphics and sound output.

    however, i don’t think you’re going to see that much computing power packed into a cell phone that won’t weigh five pounds, because we are not yet able to bend the fabric of space and time and physical limitations still exist in how small and how powerful you can make things things.

    also, cell phone games are simple, because they are designed to be very small games with simple, addictive gameplay, but which can be put down at a moment’s notice when, say, the real life that you are blatantly ignoring around you intrudes. console games offer a much different experience – or should, if they wish to thrive. sure, you’ll sell a lot of popcorn games if you make them, but nintendo has wisely identified that those sorts of games do not belong on a home console, which can and should offer much more than angry birds to the consumer – otherwise you might as well just play on your phone.

    it could be that games like angry birds are the future of gaming – that people have so little attention these days that they’d rather play a game with the complexity of an old tiger electronic handheld than play a game that attempts to tell a story or features more than a few gameplay elements. i’m beginning to think that it’s because that’s what entertains most adults that it is so successful – i know many people who dismiss video games as a child’s entertainment but will spend hours playing farmville or solitaire and not give that use of their time a second thought.

    i still think the console gaming experience has a place in the world – though there needn’t necessarily be console systems to deliver that experience. if your cell phone becomes so potent that they eclipse home consoles in power, they could easily do that provided they can hook up with your tv.

    i do not, however, believe that games like angry birds should ‘win out’ over console games, because that would essentially devolve video games as a medium back to pong and galaga in terms of complexity and gameplay.

    • Chris says:

      I don’t think games like Angry Birds should (or will) “win out” over more complicated console-style games; the two target different markets that are both commercially viable. I just think they’ll both be hosted by the same hardware.

      It’s true that console hardware can always be better. But I think what we’re seeing is the gaming public not seeing the value in hardware improvement alone. This gen the move to HD worked because it was accompanied by a push to HD displays. Next gen, I’m sure hardware makers are going to try to push 3D or something else, because just increasing graphics quality without increasing viewable resolution means that many gamers won’t be able to tell the difference. Try plugging a 360 or PS3 into an SD TV; it looks a little better than a PS2 or XBOX, and if you know what to look for you can see things that could not have been done on prior consoles (e.g. zombies in Dead Rising), but the difference is not major. It’s not enough to warrant a new $400 – $600 box for your TV.

      At the same time, phones are already pushing hardware that is competitive with last gen consoles. A year ago they were competing with the PS2 and this year they are competing with the 360/PS3 in terms of visual quality. Your phone is probably rendering at something close (or above!) 720p already, and it probably has an HDMI out. And it’s cheap, because you bought it with a plan. $99 + a two year phone contract you need anyway is a lot easier to sell the consumer than a $400 box that isn’t appreciably better than the one they already have.

      If people cared about yet-better graphics technology, the Wii would not have trounced the PS3 and 360 in sales. The DS would not have trounced the PSP. People don’t care that much–they care about content. And your phone has a lot of content, and it will continue to have even more content. And, even if you do care about graphics quality, it has that too (see also: Carmack arguing that phones will surpass consoles in performance in the next year or two).

      The argument I make in the Xperia PLAY article is that phones only lack two major features: a way to get very big data to them (e.g. no BluRay equivalent; games are large), and physical buttons. But, then again, the PLAY has physical buttons. Android can already support bluetooth and wired game controllers.

      If your phone does everything your console does, and has the same games, and plugs into your TV and becomes a console when you are at home but can also provide quick-and-simple mobile games while you’re out and about, what is the value to you of buying another console?

      Nintendo is the wild card here, though, as they haven’t even tried to compete on raw tech specs for years. They compete by making their devices obviously distinct from their competition, generally through innovative control schemes. It doesn’t matter if the Wii is an SD-only device; people see value in it because you can play games a different way than you can on Microsoft’s or Sony’s console. Nintendo also controls the most powerful brands, hands down, in the industry. So I think whatever happens, they are well-poised to survive over the long term. How exactly they do that is going to be interesting.

  5. Alocaly says:

    First, I essentially agree with all of this article.
    I have a enormous respect for Nintendo, and for what they’ve been doing, and a lot of hope in the future games they will bring to us.

    But I’m not sure that nintendo is winning anything with their different hardware.

    I’ve just seen a Microsoft conference on Kinect, and kinect is also a different kind of hardware. I think they really took as much risks as nintendo with this new way of playing – and it looks like it’s paying off -. And it was incredible to see how they could make this device, because there is much more that I would have think in it.

    I think THE big thing that Nintendo has and makes them able to still be as strong as they _really_ are, is just their games. How incredible are their games, how FUN they are ! And with this fun games, they created some powerful brands. That is, in my opinion, the real strength of Nintendo.

    For instance, I’m not attracted at all by the 3DS, I feel like it’s just a better DS, with a 3D that is not a feature that I really want to try. I feel like it’s something I will try at start, for the fun of it, then I would switch off to play more comfortably.
    I really think the Vita is more powerful, have some nicer controller : it just has more potential !
    But I though the same of the DS : I was not interested in the touch screen, I didn’t seen any interest to have two different screens, it was expensive for what was inside the device, and the PSP was really a better platform.
    But I bough a DS, because of the games. Because of Mario Kart, Super Mario Bros, Zelda…

    With a Mario Kart, a platformer Mario, a Zelda, some pokemons for my son, I’m not sure I will still feel indifferent for the 3DS.

    I’m in the game industry for (too many) years, I know how hard it is to make a game so nice to play, and Nintendo has more of this knowledge than any of video game firm in the world.
    Mario Kart is a simple game, with no technological challenge, but it is so perfectly tuned that you can play for hours and hours…
    Every Zelda is a reference for action / adventure games…
    Even recently, I bough Kirby’s Epic Yarn for my kids. And I feel this game is incredible, it’s so cute, and there are so many imaginative situations. I love to play this game, just to be amazed by what they can find for every levels.

    I do agree they don’t hesitate to take some risks : each of their hardware is strange beast, something nobody would have expected.
    Their new games are often some risk, like wii fit, or Dc Brain Age.
    Even their classic brands are exposed : Zelda went throw a classic 3D display on N64, to a cartoon display on Gamecube, to a realistic display on wii, Mario Sunshine or Mario Galaxy were really different from the precedent Mario, …
    But every time, they are achieving an incredible work on their games…

    They have some marvelous brands, and their customers ( me included ) know that will do a awesome job with each of their brands…

    Whatever the plateform behind it, I know for sure I will love their games.

    And I will finally buy their consoles !

  6. Brad D. says:

    “The problem with the 3DS is that it’s only an incremental improvement over the DS…”

    I disagree with this.

    It’s a BIG improvement over the DS. It isn’t just a DS with 3D. The graphics are a major leap (generation sized). If anything the 3DS is the same leap, if not bigger, in comparison to the leap from the GBA to the original DS.

    I also don’t see consoles going away due to phones. No one really buys a phone for the sole purpose of playing games. Games are a “bonus”.