June 14, 2011
The goal of innovation is to serve every player. The new platform will provide deeper game experiences than what even the most passionate gamer has realized before... It can satisfy all tastes.
It seems like Nintendo heard the voice of the hardcore gamer.
Nintendo is at a crossroads. Again. Despite the extraordinary success of the Wii (86 million units) and DS (146 million units), the company finds itself on shaky ground facing an uncertain future. Its stock fell 5% on the day it unveiled the Wii U and dropped another 7% the following day. Its share price is now the lowest it has been in more than five years.
Want more gloom? Profits at Nintendo have dropped by more than 66%. The company has sold 5 million fewer Wiis and 10 million fewer DSs than the previous year. Nintendo also fell short of its 4 million target for 3DS, selling only 3.61 million units by the end of March - a figure president Satoru Iwata acknowledged as disappointing.
Contrast Nintendo’s trajectory to Microsoft’s. In the seventh year of its lifecycle, the Xbox 360 is on pace to sell more units than in any year of its history - a feat unmatched by any previous console. May marked its seventeenth month of year-over-year hardware sales increases.
It’s not just about hardware. Video game spending is down 13% year-over-year, and physical game sales have plummeted 19%, their lowest level since October 2006. This figure is especially damaging to Nintendo, which derives little benefit from the growing DLC market. Perhaps most telling of all: not a single Nintendo-published title appears on the most recent NPD list of Top 10 best-selling games.
And so along comes E3 and Nintendo's recent press briefing, a convergence of timing and careful messaging. And weirdness.
The event opened strong with Shigeru Miyamoto hosting a lovely 25th-anniversary Legend of Zelda retrospective, accompanied by a live orchestra that could have used a little more rehearsal. An oddly humorless Reggie Fils-Aime presented a showcase of forthcoming 3DS games, followed by the Wii U reveal and a segment featuring developers promising to support it.
Then, with no transitional intro, attendees were jolted by an incongruous tonal shift that collided with the briefing’s other 87 minutes. Nintendo brought the mayhem. A sizzle reel of guns, chain saws, explosions, and splattering blood. One FPS after another. “A Whole New Future,” proclaimed Nintendo. “See?” Reggie seemed to say, “We can sever limbs and blow stuff up too! The Wii U is for everyone!”
Baffling as it was, Nintendo’s E3 briefing makes sense as a mixture of hope and desperation. The company has big news to trumpet, but it's also losing ground and battling competitors (iOS, Android, Zynga, et al) that didn't exist when its newest hardware was being designed. Nintendo can be an arrogant frontrunner, but when it plays underdog, nobody is scrappier or more tenacious.
As an entertainment company, Nintendo has always balanced conservative preservation of its characters and history with audacious (and risky) innovation. History shows that when Nintendo has its back against the wall, it dreams up something new, and bets the farm on it. They did it with the Wii, and they’re at it again with its successor. This strategy hasn’t always succeeded, but Nintendo’s failures often function as first drafts for future successes (e.g. Power Pad, Virtual Boy).
Nintendo wobbles when it plays me-too. The Gamecube was a me-too device, and it never had a chance. The company also tends to stumble by clinging to old ideas. It built a better machine with the Nintendo 64, but ignoring the advantages of optical media doomed it from the start. More recently, dismissing online connectivity as "unnecessary" suggested the folks at Nintendo were out of touch with contemporary gamers.
All of this makes prognosticating about the Wii U tricky business. On one hand, I’m excited by the possibilities of a game system designed to exploit the fact that LAN parties are the most fun you can possibly have playing video games. I love the idea of asynchronous play, and I’m crazy for the simple notion that I can continue playing Zelda uninterrupted when my wife turns the TV to Project Runway. I’m not entirely convinced by Tadhg Kelly's case for the Wii U as “The Ultimate Machine,” but I do see terrific possibilities for interfacing with games in exciting new ways.
We hear you
Unfortunately, Nintendo appears to be positioning the Wii U as a device to finally bridge the gap between ‘casuals’ and ‘hardcores.’ Iwata and Fils-Aime each hammered home the new system’s attractiveness to developers who currently ignore the Wii. Rather than focusing on game design possibilities unleashed by a touchscreen-enabled controller, the company seemed intent on repeating its mantra to serious gamers: “We hear you.” One could easily walk away from Nintendo's press briefing with the impression that the biggest advantage offered by the Wii U is the possibility of playing Assassin’s Creed on it.
As always, time will tell about the marketplace response to Nintendo’s new console. I suspect players who currently enjoy playing FPS games on their Xbox 360s will see little reason to abandon that system (and, importantly, their online friends and achievements) for a Nintendo system that may offer compelling UI advantages, but not compelling enough to jump ship.
If Nintendo and a slew of clever 3rd-party developers capitalize on the Wii U’s blend of touchscreen interface and motion-control, the future looks bright for Nintendo. Until it dims again. Which it will. And Nintendo will bet the farm on another big idea. That's what they do, and it's why I always root for them a little more than the others.