Nintendo has had a rough ride these last couple of years. Following on from the (surprising) success of the DS and then the phenomenal craze of the Wii, they have found their fortunes reversed.
They have had to announce a loss for the first time and continually revise down both hardware and software sales. The trouble it seems is multi-faceted. They didn’t replace the Wii or DS with the WiiU and 3DS early enough. In addition part of the market segment that fueled the growth of the DS and Wii have either moved onto tablets OR are still quite happy with their Wiis. In addition, due to the explosion of smart phone and tablet based apps, many of developers who created simple and easy to pick up software for the DS have abandoned Nintendo (and perhaps traditional console eco-systems in general) resulting in a modest release schedule and software which seems a little expensive when compared with apps.
Now, all is not lost. Nintendo have shown they can reverse bad fortune. The release of the 3DS was awful, BUT they turned it around. They did a price cut, a really big one. They then offered existing owners lots of free games. Even recently, if you bought a 3DS since launch you could get a free digital copy of a major game such as Mario 3D land. Oh, and the other thing they did was to release Mario 3D Land, and Mario Kart 7, and New Super Duper Mario set on a 2D plane, along with Zelda and some other really great titles.
You see, it’s titles that sell Nintendo consoles, and normally the first party ones. There isn’t a reason WHY third party software can’t do well on Nintendo consoles, it’s just that when a game costs £35 you buy the franchise that on an emotional level pulls more of your ‘affection chords’. Mario, Zelda and other first party IPs do this whilst a third party game doesn’t as much. This in turn then discourages third party developers to get involved in the platform. Ironically though, when a Nintendo platform is not doing well, as was the case with the 3DS and currently with the WiiU, the third party developers call out for Nintendo to release some of their major franchises as a way of boosting the user base size and overall market opportunity.
Now the 3DS still isn’t the cultural fad that the DS became. It never will be. However it is now, and will continue to be a commercial success for Nintendo. It is most probably the last of their two screen machines (why do I get the feeling Ill eat my words for that claim!), but it’ll be around for a few years, sell around 50-70 million units (similar to what the PSP sold), and ship a lot of software over a five year lifespan. More importantly it is now profitable for Nintendo.
Yet Nintendo have repeated the mistakes of the 3DS with the launch of the WiiU. This is remarkable, as if there was a device which could take and embrace the changes in people’s gadget behaviour and turn it to it’s advantage it would be the WiiU. For all the tablets sold, most people do not have one. Even those that do, very few take them out of the house, and hence the WiiU at the right price fills a void in their lives. The ability to sell them something which runs all their old Wii software, has an amazing browser (which it does) and which could have many apps released for it, plus doubles as a console more powerful than an Xbox should be compelling. Most people still don’t have a PS3 or Xbox in their house. Many of those without a Xbox or PS3, worldwide, have a Wii, and would be willing to upgrade if they understood what the system could offer them.
So what has gone wrong?
Well whilst the launch games were there, many were old reworkings from the Xbox/PS3. Secondly there were no Nintendo mascot games, except Mario WiiU. This is a great title, but probably got lost in the PR being dedicated to the New Super Mario game for 3DS. There was no marketing. This is a problem. If people do not know the machine exists they won’t buy it. Relying on press isn’t enough nowadays, especially if your traditional customer base isn’t the type that reads Eurogamer every hour. Contrast for a moment: even Apple, with all it’s brand power and support from the specialist and mainstream press, advertise. I saw some WiiU ads, but they looked like something made from the early 1990s for the Commodore Amiga. Advertising mainstream tech has moved on since then.
So what do they need to do now? Well they need to do something and fast. Unit sales for the WiiU are a disaster and in around 6-9 months we shall have the PS4 and possibly the new Xbox competing. They might only be a little bit more in price, or via a content related subsidy be cheaper. In the short term Nintendo know what they need to do. Price needs to come down, probably for the premium version to eventually be £150-£250 maximum. This would seem excellent value against tablets and other consoles. The major Nintendo titles need to be released. Ironically we know officially or unofficially about a lot of great, mainstream third party titles, which will come to the console in 2013. What we don’t have is a real timeline for Nintendo content. The last part of the puzzle is lots of content on the E-store to encourage people to pick up and ‘play’ with the device. Games AND apps. Nintendo need to make the development process less controlled and encourage more content on their platform. With content, some should be AAA expensive, some cheap and as with the recently released Tank Tank Tank!, some free to play with micro transactions.
As stated above Nintendo need to bring their big franchises to the system, again in 2013. This can’t wait till 2014. Consoles don’t have 3 years to become established anymore, they must hit the ground running. Both with games and services working. The fact that the WiiU TV aggregate service is not up and running yet properly is a disaster. The WiiU is due some software upgrades – why the wait?
Clearly Nintendo are very stretched, and that perhaps is why they have recently merged their handheld and console departments together. Future products seem clear – a tablet style device with physical controls, and a home console. Both of which can be used together to create something similar to er, the WiiU! However both would be running the same OS, similar graphic chips, CPU family, and hence would save Nintendo time and money.
The WiiU is a great machine. Hopefully, even if successful, Nintendo will upgrade or replace it within 3-5 years as they can’t keep it in the market place for as long as they kept the Wii out there. The only thing holding it back at present is Nintendo itself.
Love Nintendo like us? Then what do you think they need to do?