Don’t count Nintendo out

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So the fanfare of E3 is over. Games, features and gimmicks have been announced left, right and centre, and so the console war begins anew. But between the new titles and console controversy, how is the third horse, Nintendo, shaping up?

As the longest running player in the console market the quirky developer is nothing if not resilient

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[pullquote style=”left” quote=”dark”] Critics are suggesting that Nintendo should follow in Sega’s footsteps and leave the hardware market [/pullquote]

The early launch of the Wii U last year was met with poor sales and a lukewarm reaction from critics. This was, in part, due to a bland slew of launch titles and the reluctance of third party developers to support the console. Indeed, both Electronic Arts and Bethesda have stated that they have no plans to develop for the Wii U.

The poor market performance meant that Nintendo was only kept afloat by 3DS sales in the first quarter of this year. Recent financial difficulties are not entirely Nintendo’s fault however. The 2011 Japanese Earthquake slowed the Japanese economy to a standstill, negatively impacting all aspects of the tech industry.

However, inexplicable changes in the Wii U’s announcement and awkward hardwiring did nothing to mitigate the Earthquake’s impact. Even the innovation factor appears somewhat trumped by the new PS4 App which allows the console to connect to a tablet. The inability to compete on a financial level and produce enhancements such as this lead to Nintendo abstaining from this year’s E3 press conference, instead opting for small tech demonstrations and relying on it’s own news outlet, Nintendo Direct, to make announcements. This has lead to some critics suggesting that Nintendo should follow in Sega’s footsteps and leave the hardware market to develop third party games with its licenses.[divider]

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Is Nintendo to become the next ‘quirky’ console of our past?

This view is a little extreme. As the longest running player in the console market the quirky developer is nothing if not resilient. For example, a glance at recent figures shows Nintendo’s overwhelming success over the past generation. This is particularly true in the console market where the 3DS outsole the PSVita 4 to 1 despite poor early sales.

Also, looking at Nintendo’s raw finances, with $10 billion in liquid assets, they could technically afford to lose $250 million per year until 2052. This was in spite of the risks of a new controller format (which both Sony and Microsoft have since adopted), the lack of DVD/Blue Ray support and the inferior hardware specs in comparison to the PS3 and Xbox 360.

Indeed, the past 40 years of gaming have shown that raw graphics and processing power offer little inherent financial advantage in terms of sales with each generation being “won” by one of the technically ‘weaker’ consoles. Sadly for gamers, however, this financial success is the result of catering to the casual market. 

Even Nintendo’s dominance of the casual segment of the market however, is somewhat endangered by the Xbox One’s new features. Though presenting itself as multimedia entertainment system has disappointed gamers, it is highly appealing to the silent casual majority who are less likely to care about the internet connection, lack of pre-owned games and the renewed focus on gaming touted by Sony at E3 this year.

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While the focus on casual gaming has been criticised it has, at least partially, been stymied by the series of game announcements in Nintendo Direct earlier this month. Staple Nintendo franchises including; Pikmin, Pokemon, Super Smash Brothers and Mario Kart will all be receiving new additions by 2014, signaling a renewed focus on classic gameplay in contrast to the casual trend of the last generation. In addition the Wii U’s catalogue includes a variety of cross-platform titles (Just Dance, Rayman Origins and Deus Ex 4 among them). This should help Nintendo remain competitive in the mainstream market, though due to the reluctance of third party developers to experiment with the Wii U, the back catalogue is likely to be less flavourful than Sony or Microsoft’s.

zeldaCritics may also deride the lack of new additions to the Nintendo roster, the most blatant example being Legend of Zelda: A Link to thePast 2, as flogging old franchises. However, Nintendo are not alone in this trend. The main titles of both Sony and Microsoft consoles usually involve an ever-increasing number at the end of the Title, (Assassin’s Creed 4, Dead Rising 3, Battlefield 4, Halo 5 and Final Fantasy XV to name a few). With the exception of the samey New Super Mario Bros games, most of the these franchises (Nintendo or otherwise), from the renewal of Thief and Donkey King Country to the next Arkham and Pikmin, are still around because they are by and large, good quality games. A high quality game, regardless of maturity and genre, will attract fans and hunger for sequels.

As such, the Wii U has raised clear complications to Nintendo’s continued presence on the console market. The financial difficulties and skepticism surrounding its new hardware will be difficult hurdles to overcome. The new challenges it faces from Microsoft’s multimedia monster and Sony’s drive to focus on gaming are no empty threats. Though as we have seen in previous years, the combination of a willingness to innovate and quality software has triumphed over safer options and raw hardware power. If Nintendo makes good on its promises of quality games over the next few years, it seems highly likely that Nintendo will be sticking around for at least another generation.

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Comments (3)

  • Clearest response to the issue: Nintendo just need to release the new Mario/Mario Kart/Zelda game and everything will be rosy enough to turn a profit, which is what they’ve always done. I like the article, it does a good job of exploring the strengths and weaknesses of Nintendo’s console position after a frankly dismal console launch period. Glad you factored in the 3DS, though – if nothing else, Nintendo know how to roll up the handheld market and lock it away.

    Also of note, however: it’s been clear for a while that Nintendo would rather die and throw their franchises under a bus than cave and place them on another system. Nintendo are a very conservative, very traditional company which, even under the recent veneer of innovation, has a very formulaic approach to its company infrastructure. Their consoles are rarely explosive or shocking when you get down to it. They are cheap, reliable, and sturdy gaming machines that innovate purely in new ways to play the games they create, of which they have a fair stock of quality, in house productions. This system turns a sizeable profit even with low market share. Even their biggest market share ‘loss’, the gamecube, was a financial success in a way that Microsoft could only dream the original XBOX was. The most drastic thing they as a company have done in recent memory is mandate a price cut on the newly released 3DS to combat flagging sales. As such, the idea of shaking up the company so drastically and breaking away from the development system that the company has followed since its entry into the video game industry is, on an ideological level, abhorrent to them.

    That’s not to mention that the idea of placing their iconic franchises on other consoles seems unthinkable to them, or at the very least alien. The company often claims (and supports those claims through its products) that Nintendo franchises are made with Nintendo consoles in mind; no Nintendo consoles, no Nintendo franchises. This article gives the most recent staunch demonstration of this, along with the obvious ‘why would we give our franchises to the competition’ line of argument:
    http://uk.gamespot.com/news/iwata-explains-why-nintendo-wont-release-its-games-on-other-platforms-6412687

    Basically, the day Nintendo stops producing consoles is the day that:

    a) The console market collapses;
    b) Their stockholders hold them hostage and force them to at gunpoint; or
    c) They get a new CEO who somehow managed to rise to the top without embodying Nintendo’s central ideology of ‘stick with what you know’

    And even then, I genuinely think the current management would rather have Nintendo go into liquidation than see Mario on the Japanese rival Sony (or, worse, American Microsoft) console. Stuff like that goes deep.

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