What Nintendo Needs to Change

When I first learned about Nintendo’s new president, I was generally positive about it. The late Satoru Iwata was a brilliant leader, but I can’t deny that Nintendo had several missteps with the way they are handling the Wii U. Nintendo’s newly appointed president Tatsumi Kimishima, in an interview with the Japanese news publication Nikkei, has already said that he plans on sticking with the basic strategies outlined by Iwata. While I love the way Nintendo continues to innovate how video games are played, there’s one thing that I wish they’d change and the change in leadership offers an opportunity for this.

So what do I want Nintendo to change? Well… I’d like Nintendo to start “competing” with Sony and Microsoft again, because they stopped. If you don’t believe this, here’s an interview that Reggie Fils-Aime (president and CEO of Nintendo of America) did with Re/code back in November 2014. Fils-Aime said a lot, but there’s one thing that stood out to me in this interview:

“I’d much rather be where Nintendo is, with a differentiated platform, differentiated set-up experiences that we can provide uniquely to the consumer. Let those other guys battle it out over, you know, which visual representation of Call of Duty is most compelling. I like our chances of having a differentiated console and a differentiated series of experiences.”

Rather than directly compete with Microsoft and Sony, Nintendo opted to follow the “Blue Ocean Strategy” which is to create a new consumer market by offering a product that’s different from what competitors are offering. Why did they do this? Well, let’s take a look at hardware sales figures from VGChartz:

vgchartz 6th gen

Despite being technically superior, the Nintendo GameCube was outsold by the Sony PlayStation 2 by a huge margin.

As you can see, the GameCube (Nintendo’s sixth generation console) was not only outsold by a huge margin by Sony’s PlayStation 2, it couldn’t even sell as many units as Microsoft’s original Xbox. During this time, Nintendo was still trying to compete by coming up with a console that was as powerful as what competitors had. Even with a launch price that’s $100 less, the Gamecube was outsold by the PlayStation 2 and the Xbox. There are several factors that contributed to the GameCube’s “failure” so it’s hard to say if the main factor that lead to this is the similarity between all four (yes, let’s include Sega’s Dreamcast) game consoles being sold at that time. But I can understand why Nintendo opted to change things up with their next console.

During the seventh generation of video games, Nintendo took a different approach by introducing the Nintendo Wii – a device that was vastly underpowered but offered a new gameplay experience via motion controls. Let’s look at the hardware sales for that generation (again, from VGChartz):

vgchartz 7th gen

The success of the Nintendo Wii was largely attributed to its motion controls. Sony and Microsoft eventually followed suit with similar technology in the form of PS Move and Kinect.

The Wii not only employed “Blue Ocean” by creating a new market via its use of innovative motion controls, but Nintendo went back to the late Gunpei Yokoi’s “Lateral Thinking” strategy of avoiding the use of expensive cutting edge technology in developing video games. The Nintendo Wii outsold both Sony’s PlayStation 3 and Microsoft’s Xbox 360 and “won” that generation. Note that the chart above reflects lifetime sales and both the Xbox 360 and PlayStation 3 managed to catch up in recent years. Back in 2009, however, the Nintendo Wii had a much larger lead over its competitors:

Console_wars

Nintendo’s strategies worked – at least, for one generation. Personally, I was disappointed with the Nintendo Wii even if it was considered successful. Sure, it had a decent game library and had a lot of critically acclaimed titles (mainly first party ones), but sticking with Nintendo meant that I missed out on multi-platform releases like Batman: Arkham Asylum, Portal, BioShock, and Super Street Fighter IV, which weren’t released on that system. And I’m not even talking about all the other criticisms that the Wii faced, such as its poor online functionality and the lack of HD visuals.

With the Wii U, Nintendo took the same approach by offering another game console that wasn’t cutting edge but provided a “different” gameplay experience via it’s GamePad. The Wii was a massive success, so I can’t blame Nintendo for doing this. But let’s look at how the Wii U is doing:

vgchartz 8th gen

The audience that Nintendo captured with the Wii wasn’t there for the Wii U.

Despite hitting the market one full year after the release of the Wii U, both the Xbox One and the PlayStation 4 have now sold significantly more. Similar to the GameCube, there are several factors that lead to the Wii U’s poor sales. I think it’s safe to conclude that one of those factors is because a “differentiated console” providing “a differentiated series of experiences” is not what consumers want, at least not anymore.

The reasons I was disappointed with the Wii are the same reasons that I’m not that interested in getting a Wii U. Sure, the Wii U has excellent exclusives like Super Smash Bros., Bayonetta 2, Mario Kart 8, and Super Mario Maker. But it doesn’t have games like Grand Theft Auto V, Metal Gear Solid V: The Phantom Pain, or Batman: Arkham Knight. If the Wii U was your only game console, you would have been left out.

gta v different editions

Games like Grand Theft Auto V were released for all the major video game consoles – except for Nintendo’s Wii and Wii U.

I’m a big fan of Nintendo’s ability to continue to innovate the way video games are played. I had a lot of fun with motion controls, I love the glasses-free 3D functionality of the Nintendo 3DS, and I enjoy gaming with two screens. But I also believe in something that, ironically, Satoru Iwata himself said in an interview with The Guardian way back in 2013: “Software sells hardware.” Because of the Wii U’s limited software library, it’s become such a hard sell, even for a Nintendo fan like me.

The question then is, why aren’t multi-platform games being released for the Wii U? There are several answers to this, but the simplest and most obvious one in my opinion is the fact that the Wii U is less powerful than its contemporaries. If I were a game developer, why would I release a game for a console that isn’t technologically capable of running my game? Similarly, even if a game console is powerful enough but employs technology that is too different from the norm (e.g. motion controls of the Wii, the Wii U Gamepad), game developers will need to put in additional effort to convert their code so that it would run on the said device.

What I don’t get is why we can’t have a “differentiated console” that also has the ability to play games that other consoles can run. Imagine this scenario: Nintendo releases a version of the Wii U that is equal to Microsoft’s XBox One and Sony’s PlayStation 4 in terms of power and similar in its architecture. With that Wii U version, game developers are more likely to release their multi-platform titles on it, giving consumers the option to play both Nintendo’s exclusive titles AND these multi-platform games. Is that idea too far-fetched? Wouldn’t hardware sales shift towards Nintendo’s favor in this scenario?

Xbox-One-vs-Ps4-vs-WiiU-Results1-600x337

Despite having critically acclaimed games and unique gameplay controls, the Wii U has sold the fewest amongst the three major current gen consoles.

And this is really what I’d like Nintendo to change when it comes to their strategy. Creating “a differentiated series of experiences” is fine but this shouldn’t limit our options. I think it’s safe to say that a significant number of consumers can only afford to buy one console. As one such consumer who is limited to just one console, I know that I would get the most out of my money if I get a console that can play most of the games being released. Just look at the PlayStation 4 – it boasts a software library of good exclusives (The Last of Us, LittleBigPlanet 3) and a good selection of multi-platform titles (the aforementioned Grand Theft Auto V and Batman: Arkham Knight). The PlayStation 4 is more expensive than a Wii U, and yet more consumers are buying it.

Nintendo, in my opinion, has been too focused on following their established approach and has been neglecting what its competitors are doing right. I’d like Nintendo to continue innovating gameplay but also consider offering game experiences that Sony and Microsoft is providing us. That’s how you succeed, right? Do what your competitors are doing but be better at it, and offer something that your competitors don’t have.

Nintendo is currently developing their next-gen console. I’m not sure how far they are with their development, but I hope that they’ve already looked beyond themselves and started looking at the playing field. Despite what Nintendo thinks, I think they are in the same market as Sony and Microsoft, and I believe that they need to consider both in their strategies in order to seize the market again. I’m hoping that Mr. Kimishima sees this as a competition and get Nintendo to start competing again.

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