Never Count Nintendo Out

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.