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Is Nintendo hitting the skids?

Last week’s announcement of the Wii U had most folks playing the “cautiously optimistic” card. I came away impressed by the promise of what the console may be able to do and the suggestion that it will- at very least- bring Nintendo’s console specs more or less in line with this generation’s other consoles. Which are, of course, now approaching five and six years old. Ironically, Nintendo foolishly chose to show footage of games running on those consoles instead of theirs. Along with this ersatz footage came promises of support from third parties just like last year’s 3DS presentation, little of which seems to be materializing. After a week’s cooldown, I’m much less enthusiastic about the Wii U. Particularly in light of all that promise and potential that was squandered (or possibly illusory) in the Wii’s original incarnation.

Then of course there’s the tablet controller and a host of technical and logistical unknowns surrounding it including uncertainties as to how or if game makers will even invest the time and money to develop for a non-standard peripheral for an unestablished platform. When I saw the controller, my first thought was “$500”. Investors also took notice of Nintendo’s presentation and the laundry list of confused points and unestablished facts, and their stocks took a dive. Introducing what appears to be a very expensive (and among mainstream and casual gamers, unasked for) follow-up to the Wii in a declining market environment with fairly bleak forecast feels like a total mistake- particularly when Nintendo is trying to phase out two extremely successful platforms while playing catch-up with the competion and struggling to find a market for the 3DS. Is Nintendo on the ropes?

Eurogamer.net ran an article yesterday detailing Nintendo’s slumping sales in the US based on a report pubilshed by market analysts Wedbush Secuirties, and there are some pretty bleak figures. Wii sales are completely in the dump at this point with only 236,000 units sold in May. That’s still more than the PS3 is moving, but a 30 percent decline for the console. The firm noted that 3DS figures were “well below” an expected 180,000 units. That’s a 50 percent downturn from its second month on the market. Software sales for the new handheld were cited as being an all-time low for a new hardware launch.

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It looks grim.

Of course, it isn’t like Nintendo is filing for bankruptcy and we’re not anywhere near reporting that their stock is being delisted. But it does seem that the writing is on the walls that after five years of success, the House that Mario Built needs to take a hard look at its strategies. Mario and Zelda brands no longer sell systems in the long term when the competition is so stiff, and the fad gamers that dropped $250 to play Wii Sports for a month or two are hardly return customers. Gimmicky hardware with built-in novelties does little to encourage reasonable people to drop the same amount of money on a handheld system when there is no software available for it, let alone when the software that is on the shelf is sub-par and anyone can download a better game for a dollar on their cellphone.

More and more, Nintendo is looking like a lumbering, hubristic giant overconfident in their brand identity and almost unresponsive to industry trends and changes. Most DS owners are perfectly content with their portables and aren’t looking to upgrade any time soon, and the vestigal 3D feature is hardly a selling point. Sure, the Wii U looks impressive. But no Blu-Ray or DVD support? Really? As Microsoft and Sony move ever closer to evolving into that mythological set-top box that does it all, how do you justify buying a presumably expensive console that does just one thing anymore? And the company’s insistence on novelty might turn mainstream heads and incite core gamers to speculate on potential, but at the end of the day a gimmick is a gimmick and if it doesn’t change the way we play games, it adds up to zero.

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Yeah, we all know that Nintendo’s first party development is the best in the business, but what difference does that make when third parties either treat your gimmicky platform as an anathema or as a way to turn a quick buck. Let alone when you invest in a Nintendo console and the generation’s top titles either pass you buy or turn up on your system as shoddy ports or crap spin-offs. With Wii development practically at a full stop, core DS game releases all but dried up, and the 3DS release schedule already looking barren aside from ports and remakes, it’s pretty clear that Nintendo’s slump is tied specifically to software. It strikes me that- once again- Nintendo’s greatest failings are in its third party licensing and software development.

They know this, which is why they bend over backwards to assure everyone that they have the support of firms like EA, Activision, THQ, and Ubisoft. But when you’re releasing behind-the-times hardware that has features and peripherals completely different than competing platforms, it makes the prospect- and return on investment- of developing much riskier. If I were a developer, I’d be thinking twice about putting any money into 3DS titles and I’d be extremely gunshy about the Wii U given the Wii’s notorious history as a shovelware player and Nintendo’s fading stature with core audiences. In other words, the people who actually buy new hardware and the games to go with them over the long term.

Of course, the Wii U is itself an overture to this crowd- even the name suggests “you” instead of “we”- meaning that this isn’t as much a family affair. Yet Nintendo understandably doesn’t want to let the Wii brand or product design go because it was so successful. So they’re at a loggerheads. Make the appeal to the core gamers and alienate the larger mainstream market that they’ve taken to the bank for the past several years, or make it to the casual crowd and continuing losing the bulk of their fanbase to Microsoft and Sony. It’s a can’t win situation, and it’s one that I think is going to spell trouble for the company over the next several years as they struggle to figure out where they can succeed the most in a rapidly changing business.

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Nintendo simply has to get with the times. Announcing Arkham Asylum, Colonial Marines, and Darksiders II as “launch titles” was bold. But are these games releasing a year or more after their PS3 and 360 counterparts? And what happens when Microsoft announces its next console- which is likely to be early in the Wii U’s lifespan? Is the 3DS just totally doomed at this point, particularly when the PSVita has been announced at the same price with huge titles already lined up for its launch?

I’m not a financial analyst, I don’t watch stocks, and I don’t have any investment in the games industry other than as a writer and game player. But more and more Nintendo is looking like they’re on the verge of getting left in the dust by companies that weren’t even in the video games racket until 15 and 20 years after Nintendo was practically ruling the market. But it’s not 1985, 1991, or 2006 anymore. Everybody’s got a phone in their pocket that plays games we never imagined possible on any version of a Nintendo handheld. The HD consoles are changing and adapting to mainstream lifestyles, not faddish whims. Nintendo has got to figure out where its place is, who its audience is, and how to compete if it’s going to remain a viable player and avoid slumps like those sales figures becoming a sign of a consistent decline. But this is also a company that’s close to losing ground and losing touch, trotting out beloved mascots and remakes of classic games at industry events to remind people of past glories, fiddling the theme song from Ocarina of Time while Rome might be burning.

Bill Abner

Bill has been writing about games for the past 16 years for such outlets as Computer Games Magazine, GameSpy, The Escapist, GameShark, and Crispy Gamer. He will continue to do so until his wife tells him to get a real job.

13 thoughts to “Is Nintendo hitting the skids?”

  1. Thoughtful post. I was really surprised when the Wii took off exactly for the same reasons you state now. I didn’t realize there was a huge market of casual players that thought $600 was “way to much” but $300 as “cheap!”. Nintendo found a underutilized niche market that turned out to be big. I doubt they can catch lighting in the bottle twice. I don’t think the new controller will convince HD console gamers to buy the “U” and for the casual fan it’s not a main selling point either. I think they either needed to go for broke and be the first player in the next generation or go cheap and produce an updated Wii at a low price point trying to convince the casual crowd that it’s worth upgrading the Wii. I think they ended up in the middle and it just doesn’t seem like a good place to be. Let’s hope for Nintendo that I’m wrong

  2. My sentiments exactly and the Xbox rumors right on the heels? Although I have a friend at Microsoft whom stated that the Kinect was expected to stretch the lifespan of the 360 5-10 years.

  3. And a well thought out post, one I tend to agree with. Wish I could add more, but back to work I go.

  4. It was also a case of Nintendo striking at the right time, at sort of at a flashpoint for casual gaming, which is why they hit that underutilized market. Then, there was also the fact that it was marketed and shown in uncommon places- daytime TV talk shows, for example. It was pitched as a very mainstream, very “normal” device. Not something that a smelly teen hunkers over in the basement of their parents’ house, frittering away all of their ambition and potential in life. It was a just-right mix of ingredients…the custom Mii thing, Wii Sports, the novelty, and even the fact that it was all white with that sexy blue streak sold that console. It absolutely helped that you could buy a hot new console (if you could find one in a store) for $250- and the PS3 looked like a big, expensive $600 dinosaur that only the five richest kings of Europe could afford.

    I think you’re right on the money with Nintendo landing in the middle of casual and core, and that’s a pretty desolate no man’s land between extremes that just don’t mesh well. They’re trying to pitch this as “yoUr” console, and they’re trying to prove that they’ve got the blood and guts like the other consoles have. But who the hell is going to buy a U to play these games? I bought a Wii to play Mario, Zelda, Metroid, et. al.- and that’s really where their strength lies. Great first party development. But nothing else, really.

    My parents and my sisters all bought Wiis. I told them about Wii U. They couldn’t care less about it, regardless of the tablet. They aren’t even saying “I’ll wait for a price drop”. They’re saying “why would I want to buy another one?” because they don’t get that they’ll be able to play Darksiders II on it. Nor will they ever care. And I’ll be playing Darksiders II on the 360.

  5. Of course we’ve also been here before after the SNES. The 64 and GC were good consoles if what you were interested in was first-party games. PC gaming and the release of the PS1 pushed Nintendo consoles off to the side. So for 10 years they basically existed, but I don’t remember anyone really taking them seriously. That is until the Wii happened, and even before the Wii was released it was pretty much panned. At best the gamers and the press thought it could be interesting. I doubt even Nintendo foresaw the success of the Wii.

    So the U can completely flounder with pretty much only the serious Nintendo fans buying them up and they will still be around for another console generation. I really don’t see them repeating the success of the Wii, but really the Wii was the perfect storm of price, gimmick, and unserved market. I must add that as someone who’s never even played with a Wii the U intrigues me, but really if only they get good third-party game support.

  6. What I really don’t understand is why the Vita the clear winner against a console that just launched? What are those games? Why do you want to play a game in a portable that seems that would be better in a bigger screen instead of taking advantage of the possibilities of the console? I mean, if I wanted to play uncharted, i would just buy a PS3 and play uncharted there without clumsy touch controls tacked-on.

    Sorry if I sound a little bit jerkish, but it seems to me that a lot of people are just dissmising the 3DS just like they dissmissed the DS at launch, as far as I see it, the 3DS and the vita have the same problem more or less: Why should I buy a new console when the last one is cheaper and has lots of games, most of them better aand cheaper than the launch games? How many games, complete with release dates has the vita so far? Are those, better than the current selection of the PSP? The 3DS has the same problem, in fact it might be a lot worse than the comparation between PSP and vita, mainly because(and I’m pretty sure that I’m not the only one in this) the DS, to me, is THE console. Not THE portable console, but THE console. Yes, better than PS1, SNES, NES, PS2, etc. Last time I tried to make a list of all the games I’m really interested in playing that I haven’t played for the DS. Result? at least 50 games. Those are only the JRPGs, If I counted puzzles, action and random genres then the number goes to double that at least. The PSP has, for me, a lot less of games, I don’t own a PSP right now but if they start selling under 99 dollars(and my wife doesn’t kill me with a withering glare that are so lovely :D) I would be buying one of those and all the games that I passed on now that they are cheaper than ever.

    That is real battle this generation, not the launch games, i mean, can you tell me the launch games of the DS and psp? Feel the magic? a demo of prime hunters? that launch was crappy as hell, we waited a long for games that were good and now look at the library of the DS and PSP and its filled with great, awesome games.

    Yes, the system could be cheaper, but then again, the Vita could be cheaper too(I mean, i don’t want a Vita right now, but if you sell me one at 50 dollars then I will buy one and give you a free hug too), the system could have better games, but so every console ever, I know that the 3DS has a hard battle but come on, is not like the company is going to die if the 3DS doesn’t have the best first year ever. Just look at PSP in japan, now it outsells(AFAIK) everything everyweek, but that was not the case a couple of years ago, portables are harder to predict and first years of the consoles are even harder

    In closing, yes, I own a 3DS, mainly because I’m a portable guy, but the main reason was this: Nintendo -especially Kirby-has won me over in their portable arena when they are using unproven tech:
    -They introduced tilt controls in Kirby tilt and Tumble for GBC. That is the only GBC game I own, love it to death
    -They introduced touchscreen, then gave us Kirby Canvas Course. Incredible game
    -Now, they have the 3DS, I gave them the benefit of doubt(sp?) And I know I will fist-pump the day they show the first 3DS Kirby game.
    -Also, I goes where pokemon goes, that is obvious

    —————————————–
    Sorry If I sound fanboyish, but this blog really seems like a place that gives fair criticism and to me, comparing a already in the market console with a console that hasn’t launched seems kinda pointless. Also, please forgive my spelling errors, english is not my native language

  7. I bought my first console back in 1986 and have been using Nintendo products ever since. When it looked like nintendo was going the in the right direction with N64 I again bought it. Then I grew up. When faced with the choice between adult games and characters the game cube wasn’t gonna cut it so I choose the PS1 then I moved on to and Xbox and Xbox 360. I bought a Wii because my wife said it would be cool and we used it at some parties but otherwise it was such a disappointment that we sold it and I will probably never go to another Nintendo console because at 34 years old Nintendo just doesn’t excite me anymore. Nintendo you have let me down. Please take a look at my blog and apps if you get the chance. It would be greatly appreciated.

    Thanks

    Dead Ed

    Decayed Arts twitter @decayedarts

  8. I bought my first console back in 1986 and have been using Nintendo products ever since. When it looked like nintendo was going the in the right direction with N64 I again bought it. Then I grew up. When faced with the choice between adult games and characters the game cube wasn’t gonna cut it so I choose the PS1 then I moved on to and Xbox and Xbox 360. I bought a Wii because my wife said it would be cool and we used it at some parties but otherwise it was such a disappointment that we sold it and I will probably never go to another Nintendo console because at 34 years old Nintendo just doesn’t excite me anymore. Nintendo you have let me down. Please take a look at my blog and apps if you get the chance. It would be greatly appreciated.

    Thanks

    Dead Ed

    Decayed Arts

  9. “I know people complain about games like Assassin’s Creed and Call of Duty coming out every year, but Nintendo has gone off the cliff in the other direction.”

    Damn straight. It’s sad to see franchises get milked at any speed. Nintendo milks its franchises in slow motion.

  10. I remember growing up with the Intellivision, 2600, 5200…straight through to PSX. I was growing up, and the control interfaces were growing up with me. Black joystick with red button. Evil sharp-edged game pad. Eventually, the DualShock.

    Some of the new gamers Wii picked up are probably more than casual – it’s just that, for them, the Wiimote is their their black joystick with a single red button in the corner. Instead of just blowing those guys off, the industry should be trying to evolve the system that drew those new gamers in.

    Seems to me that the motion controls will only stop being a gimmick when motion control games start demanding more precision inputs from the player – when the fun isn’t just that it feels like you’re really swinging a sword, but that the game is teaching you the difference between a saber slash and an epee thrust, and rewarding you for making the distinction. I think the market is so obsessed with making it “just like real life”, they forget that we don’t necessarily want real life. We want lightsabers. We don’t want to haul ourselves to the real bowling alley. We can probably accept that you want us to perform the movement a certain way…if the instructions are clear, there’s room for individual achievement, and the gameplay payoff is worth it.

    Adding yet another custom interface to the Wii U is what makes me afraid to care. Is that basically admitting that improving the usefulness of motion control just isn’t possible? Or that Nintendo thought of it as a gimmick all along, and are just fishing around for the next one?

  11. I remember growing up with the Intellivision, the Atari, the NES, the Master System…straight through to PSX. I was growing up, and the control interfaces were growing up with me. Black joystick with red button. Evil sharp-edged game pad. Eventually, their sensitivity increased, and they didn’t murder our hands.

    Some of the new gamers Wii picked up are probably more than casual. It’s just that, for them, the Wiimote is their their black joystick with a single red button in the corner. Instead of just blowing those guys off, the industry should be trying to evolve the system that drew those new gamers in.

    Seems to me that the motion controls will only stop being a gimmick when motion control games start demanding more precision inputs from the player. When the fun isn’t just that it feels like you’re really swinging a sword, but that the game is teaching you the difference between a saber slash and an epee thrust, and rewarding you for making the distinction. We can probably accept less “just like real life” motion gameplay…if the instructions are clear, there’s room for individual achievement, and the gameplay payoff is worth it.

    Adding yet another custom interface to the Wii U is what makes me afraid to care. Is that basically admitting that improving the usefulness of motion control just isn’t possible? Or that Nintendo thought of it as a gimmick all along, and are just fishing around for the next one?

  12. Very good article! I think the biggest problem with Nintendo’s strategy is their inability to produce with their big franchises. I know people complain about games like Assassin’s Creed and Call of Duty coming out every year, but Nintendo has gone off the cliff in the other direction. Twilight Princess was released in 2006 – that is five years ago. And I played it on a Gamecube. Nintendo seems to be doing what a lot of the Japanese industry is doing: churning out remakes and re-releases.

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