Nintendo Tribulations: Factors And Options

Last time was my own general analysis of Nintendo’s problems from a cultural perspective but I think I can go a little bit over what Nintendo can and can’t do about it. I don’t profess to give a multi-billion dollar company any suggestions but doing the last update got me thinking about the factors involved and what Nintendo’s options may be.

Over the last few weeks or so (and months) people have suggested various third party software solutions and various other hardware solutions. When you sit back and look at what Nintendo has done and can do, some seem more viable than others.

Possibly most obvious of course is the suggestion of Nintendo becoming a third party software company or releasing its software on other hardware in some capacity, including mobile devices. I still don’t think this really works for one main reason: Nintendo’s profit structure.

Right now Nintendo’s software is pretty much the sole reason people buy its hardware. That includes older classics Nintendo releases on Virtual Console — all that stuff is adding value to Nintendo’s hardware, which diminishes once it’s available elsewhere. Nintendo can’t give up its hardware production because that’s where most of the company’s money comes from. Without hardware or with less valuable hardware, Nintendo would probably have to downsize significantly, and the company’s president has already said he doesn’t like laying off people because he thinks it hurts company morale. In regards to mobile specifically, not only does Satoru Iwata believe mobile pricing infringes on the value of its games, but mobile software makes much less money than Nintendo makes on its software. Basically, Nintendo would only stand to shrink significantly if it began to look at itself as only a software company.

But of course Nintendo’s hardware isn’t selling. The 3DS is still selling alright but I feel like that’s just from a somewhat fragile grasp on the Japanese market that’s definitely shrinking. Look at what’s happened to dedicated handhelds in the last few years, and who knows what could happen to them in the next few. In both the console and handheld areas, Nintendo needs to change something up. It needs to stay on its own platforms but it needs to make platforms that are appealing.

A recent popular idea is that Nintendo just make some kind of hybrid system or a handheld that also connects to a TV somehow. Nintendo seems to be stronger with handheld games than console games (or what the console games industry has become). I even think Nintendo’s 3DS software has been cannibalizing its Wii U software, but I still think Nintendo wants and needs the revenue stream of two machines. The thing is, Nintendo has already both confirmed and denied its working on something like this.

A little over a year ago a report came out of Nikkei that Nintendo merged its console and handheld hardware divisions to have more compatible architecture between the two. In the same report someone from Nintendo specifically said this was not to design a console and handheld as one in the same machine. So, Nintendo is aiming for more interoperability between its future handhelds and consoles, but there will still likely be two separate machines.

At the very least I think this will result in Nintendo making it as easy as possible to port games between its future handheld and console. Beyond that however, it could possibly mean Nintendo is trying to make some kind of unified platform — a pair of systems that might have the same architecture, run the same OS, and possibly run all the same software, like the relationship between the iPad and iPhone.

The biggest reason I think this is interesting is because no conventional gaming hardware manufacturer has done this before. Customers have become accustomed to this experience with iOS devices and might reasonably expect it from dedicated gaming hardware. Sony is trying to approximate this feeling with the PlayStation Vita’s remote play but that’s just streaming, not natively running software on multiple machines. Also, Sony and Microsoft can’t really do it because it’s a strategy that essentially limits the console hardware to whatever the handheld can achieve. Nintendo has a lot less to lose in releasing a console based on the same architecture as a handheld.

Something like this would be advantageous in the software area because it would let Nintendo’s first party studios focus on one pipeline of content that would feed both pieces of hardware. The Japanese developers that currently support Nintendo handhelds because they can’t hang with the big console publishers would have a window back into the living room as well. Personally, I think it’s a plan that makes sense. At the very least making a console that can benefit readily from a strong handheld is a good idea for Nintendo.

But what about that handheld? The 3DS is healthy enough now for pretty much being a continuation of the original DS despite losing much of its casual audience, but mobile is still growing fast, even in Japan which is Nintendo’s handheld stronghold. Nintendo can’t ignore mobile anymore but must also maintain its own hardware presence to stay whole.

I think the idea of Nintendo introducing its own hardware in the mobile space has been suggested fairly often over the past 15 years in one form or another. Personally I still think the idea of a Nintendo phone is ludicrous but people probably said the same of Apple before 2008. I still think there’s merit in the tablet option though.

Actually I think it’s what Sony should have done with the Vita — position it as a 4” alternative to the Kindle Fire or Nexus that plays games way better than any other tablet. All it needs is the right general software. I think it might not be a totally stupid idea because no one has really nailed the “gaming tablet” yet. Tablets play games well enough for the casual audience but haven’t really cut it beyond time-wasters and money-grubbing schemes. I would be interesting to see if Nintendo could actually design a good enough tablet that browses the web, checks email, checks Facebook, but also has Mario and Pokémon on it.

This is kind of the approach Amazon has taken with the Kindle Fire which it positions as a tablet that does everything people expect of a tablet, but is especially good for reading eBooks. I don’t know how well the Kindle Fire has been doing (Amazon withholds numbers), but I think its strategy is worth observing for companies threatened by the proliferation of general-purpose devices but do one thing really well, like Nintendo.

Even taking all this into consideration though, Nintendo’s biggest problem is still third party software support. Nintendo already has problems attracting third parties for gaming, much less the software ecosystem to support a tablet (Sony would face the same problem), just look at Samsung’s attempts. Nintendo could get the typical Japanese developer support and probably even indies but I don’t know who else.

That brings me back to the third party problem: whatever Nintendo does it needs to create a platform that attracts developers. I don’t think it can do that by simply bringing people another innovative control interface.

BULLETS:

  • I don’t see what the Candy Crush Saga guys gain from going after a game like The Banner Saga, but search “Candy Crush Saga” on iTunes and see how many blatant rip-offs you get. Something hast to be done, but I’m starting to think Apple should be the one to take care of it. I still think the central problem is all that content has to be sold on one store.
  • Nice Dark Souls II preview from Edge. http://t.co/OkFfdESM2f
  • New Raid 2 trailer. http://t.co/e3qnIHRfvl
  • If you have a Live Gold account, please get Witcher 2. http://t.co/HG6p6uO3M2
  • The Xbox version of Dark Souls is also $5. http://t.co/vViOyBpofL
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