There’s not a lot of room left for game systems that aren’t also media centers and social gaming hubs, both of which Nintendo is still terrible at. And even those systems aren’t very profitable or compelling anymore.
The software side of gaming has also lost most of its middle class. At the high end, there’s room for a small number of huge-budget blockbuster titles that usually involve realistic sports simulations or killing people, none of which Nintendo does well. They compete by pushing the boundaries of cutting-edge graphics hardware, which Nintendo doesn’t produce anymore, and licensing real-life sports teams, which Nintendo doesn’t do. Or, more often on the PC side, they operate massively multiplayer online social fantasy worlds, which Nintendo also doesn’t do well. These successful blockbusters can charge $50.
At the low end is casual gaming, including the entire iOS gaming market, which is rapidly eroding demand for high-end gaming. Modern casual gaming almost always happens on computers or computer-like platforms, not traditional game systems connected to TVs. It relies much more on social features, which Nintendo doesn’t do well. Many of the big hits succeed by taking advantage of psychological tricks or gambling mentalities, which Nintendo is probably too proud to do. Casual games are usually free or nearly free up front, and they get money from frequent in-app purchases or advertising, which Nintendo would probably also hesitate to do.
Nintendo needs the profits of the high end, but they can’t compete there anymore. All of the growth is happening at the low end, which is mostly games that they can’t or won’t make. And even if they succeeded in casual gaming, it probably wouldn’t bring the kind of profit that they need.
This is an old post, but I’ve been wanting to talk about it for a while now. It mimics a lot of feelings I’ve had for the past several years about Nintendo and the gaming industry in general. Nintendo’s announcement of an A Link to the Past sequel, the news about Nintendo’s weak presence at E3 this year, as well as the scathing report that EA has no games in development for Wii U, have prompted me to finally post my feelings on this matter.
Since Nintendo announced the Nintendo 3DS system in 2010, I began to think that Nintendo was confused in its path to follow on the Wii and DS’s success. The 3DS failed to represent the reasons why the Wii and DS were so successful. It also painted Nintendo at its worst in a modern gaming era driven by online, social interaction. When it was finally released to little fanfare, reviews - including my own - lambasted its limited social features, chunky design, poor ergonomics, unacceptable battery life, and gimmicky 3D screen.
It always seemed odd that Nintendo could make such a massive misstep after it appeared like it knew what it was doing with the Wii and DS. However, looking back, there’s evidence that suggests that Nintendo has never known what it was doing in the hardware business.
Nintendo’s hardware cycle is marred by flops nearly every other generation. As many consoles as we fondly remember from the company, there seem to be just as many failures: the Virtual Boy, the GameCube, the 3DS, and now the Wii U all sit atop Nintendo’s list of good intentions. The real Nintendo doesn’t know innovation from gimmick. Although its earlier consoles seem to show true promise, the Nintendo 64 and the Wii seem more like luck; darts thrown blindfolded at a wall full of possible features.
Thinking of Nintendo this way explains a lot. Nintendo didn’t know why the DS was so successful, so it chose to follow up by building a DS with an added feature that looked like what consumers wanted. Why was the Wii successful? I’ll be damned if Nintendo knows, but its followup was a Wii with an added feature that looked like what consumers wanted.
Marco’s post is insightful and reflects the reality of the situation Nintendo has put itself in. By having a limited presence at E3 this year, Nintendo is forfeiting both their largest software opportunity and their only opportunity to prove that the Wii U was the right hardware decision.
The more I think about it, the more I’m unsure that Nintendo can have a good future. Nintendo frequently fails at making hardware; Nintendo has never understood social gaming; Nintendo will always refuse to make software for other platforms. In a few years, will there be a market for what Nintendo does? I’m not so sure. Knowing Nintendo, though, they’ll go down kicking and screaming. It will be slow and painful, because they’ll do it to themselves. In the end - if there is an end - we won’t have another Sega; we just won’t have a Nintendo.