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Consoleation: Nintendo's big gamble

Peter Skerritt's picture

The Legend of Zelda: The Wind Waker HD (Wii U) Screenshot

News of Nintendo electing not to hold a press conference at the Electronic Entertainment Expo (E3) this year is getting all kinds of reactions across the Internet. The two main camps that people are setting up in are these:

  1. Good move for Nintendo. Less money spent, plus Nintendo Direct events have basically replaced the traditional press event.
  2. Bad move for Nintendo. It shows weakness and risks losing valuable coverage from the mainstream press.

When Nintendo started rolling out its Direct events during E3 last year, I wondered then if this would be Nintendo's new direction. Then we got a Nintendo Direct event after E3 which announced many of the games that we would have seen at E3 in past years. It seemed to me that E3 was no longer as much of a priority for Nintendo as it once was, and I firmly believe that this latest move reinforces that line of thinking. It's important to note that Nintendo will still have some sort of presence at E3 this year, despite the lack of a press conference. Closed-door press gatherings and events for retailers will be held, and Nintendo will most likely have a booth/area for attendees to see what the House of Mario has up its sleeve for the next year. It's less complicated and likely less expensive to use this new, bold approach than it is to rent out the Nokia Theater and invest in light shows and set pieces.

My concern with the decision is that Nintendo Direct events don't have a wide reach outside of the Nintendo ecosystem. Nintendo fans watch them religiously, and gaming press does a great job of summarizing and reporting on these events during and after they happen… but what about those who haven't yet bought into what Nintendo is selling? Mainstream media like USA Today or network news aren't going to follow Nintendo Direct events. Worse, the lack of a press conference similar to what the competition will be delivering does arguably show a sign of surrender, as if to say, "Yeah, we were gonna get blown away by Sony and Microsoft anyway, so we decided to cut our losses." When Spike TV, Game Trailers, and many other gaming press sites streamed Nintendo's press conferences, people of all kinds would watch… not just the Nintendo faithful, and not necessarily just core gaming consumers. Now there's nothing to stream. Nintendo broadcasts its Nintendo Direct events on its own terms, via its own streaming networks, and if you don't actively seek them out, you'll miss out. Then Sony and Microsoft really will have all of the draw, and Nintendo will be left to its loyal fanbase to buy their games while others go elsewhere.

If I was Satoru Iwata (which I'm certainly not), I would have used the press conference to assert the fact that despite its perceived troubles, Nintendo is in great shape. Split the event in two, starting with Wii U and showing off the games that the company has slated for the rest of 2013, including the very important Q4 period. Take the time to explain to the audience exactly what Wii U is, and what it can do. Eliminate the confusion. Show confidence in it. Then deliver the 3DS side, showing off the games that are finally on their way which will propel the handheld back to positive YOY comps. Show Pokemon. Show Zelda. Drop a surprise. Make the audience believe. The press conference, in my estimation, didn't have to be about rolling out anything new at all—it could have been a re-roll opportunity for Wii U and a great chance to show the masses that 3DS is in great shape moving forward and that 2012 was an aberration.

But that's me. The only things that Mr. Iwata and I have in common are wearing glasses and playing Rollerball for the NES (a game that he was a producer on). I don't run a major video game company worth billions of dollars. It's far too easy for me to sit here in front of my laptop at 2am and talk about what I would do since there are no ramifications for me. My idea is just that: an idea, and not necessarily the right thing to do.

The thing that we must do right now is to wait and see how the decision affects the overall outcome. If sales improve significantly, those who criticized the decision will have to eat some crow and Nintendo potentially sets a precedent for other companies to follow. If results don't improve that much, we can again talk about Iwata's fate and how his poor decision-making have put Nintendo in a delicate state. We won't know—we can't know—for quite some time.

I do have my reservations about Nintendo's big gamble, but the die has been cast and I'll be very curious to see whether the company doubles down or busts. No outcome is guaranteed, and it'll be fascinating to watch things unfold during E3 and beyond.

Category Tags
Platform(s): Wii U   3DS  
Articles: Editorials   Columns  
Topic(s): Game Design & Dev   Business  

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E3 SchmeeThree.

E3 SchmeeThree.

Interesting to hacks, and perhaps allows wall street analysts better assess potential revenue pipelines and estimate target share price. Also may provide a few cheap, but ultimately meaningless thrills relating to the potential next big thing. But by and large, completely irrelevant to the game buying and playing public i.e your readership.

Every year, I read the same old excited crap about E3 on gaming sites, but frankly, I really couldn't care less about it. When a game gets published, it gets reviewed, and if the reviews are good enough, people rave about it, and Amazon get my 40 quid. Simple As. Where exactly does E3 come into all of this, apart from perhaps affecting share price temporarily (though highly doubtful whether mega corporates such as Microsoft and Sony are overly affected by the performance of their games divisions)?

So for E3's increasing irrelevance in today's online world, I applaud Nintendo for not bothering with it.

However:

Quote:

Show Zelda. Drop a surprise

Sorry, but 'Zelda' and 'surprise' is an oxymoron.

As are 'Mario' and 'surprise'. And 'Pokemon' and 'surprise'.

For all of Nintendo's hardware innovation, they re-hash the same old IPs, year after year in their games. Frankly, this reliance on gaming-equivalents of Mickey Mouse and Daffy Duck is extremely boring and uninteresting. Even Disney have moved on, and Nintendo need to do likewise.

Still need E3... for now

I'm not going to argue for E3 too much because I believe it isn't as necessary as it used to be especially now that so many other conventions and industry conferences have popped up as venues for similar news and announcements.

But I would like to point out that it still gets the mainstream medias attention.

Time Warner Cable subscribers in the NY/NJ area get an exclusive channel called NY1. (I think it is for all Time Warner Cable subscribers.) It is essentially does local news. It is available to all subscribers but I don't know what its ratings are.

Anyway, NY1 sends someone to E3 every year. And four or so times a day during the week of E3, you get to see the spectacle of E3. It's not in-depth coverage--it only lasts about 3 minutes. But those 3 minutes were so important to its audience that this local channel thought it worth the cost to fly someone down there to cover it. That is the draw of E3.

To my knowledge NY1 have never covered any of Nintendo's Nintendo Directs. It would be far easier and cheaper to do so, but it just is not big enough news.

So again I am not against Nintendo going low-key next year or whatever, but this year when you have to essentially relaunch a system after losing all of that momentum, you need as many eyeballs as possible and a press conference at E3 is still the way to go.

Dale Weir wrote: So again I

Dale Weir wrote:

So again I am not against Nintendo going low-key next year or whatever, but this year when you have to essentially relaunch a system after losing all of that momentum, you need as many eyeballs as possible and a press conference at E3 is still the way to go.

I'm not sure that I agree that WiiU needs relaunching. We all know it exists, but we sure as hell aren't convinced that it has the titles necessary to justify that existence - yet!

On the basis of it's technical superiority over Xbox and PS3 being somewhat marginal, especially given the current crop of titles available, it desperately needs some major titles that emphasise its unusual form factor. Unless the form factor is maximised, the benefits of marginal technical superiority become somewhat redundant especially given the noises that MS and Sony are making in relation to their next gen platforms just around the corner. This is in the same vein that the motion controller and supporting titles were revolutionary for the Wii, single handedly creating the 'casual gaming' sector, and causing the Xbox and PS3 to forever play catch up in sales despite their outright technical superiority.

However, wary that of the three current gen consoles, it's the Wii that is the one most commonly ending up being used as a door wedge, many consumers are patently holding out for MS and Sony to make their moves - especially in these tough economic circumstances. After all, we all know what Nintendo will offer - more Zelda, more Mario, more Pokemon, and if the Wii ended up being a door wedge despite some great titles, then what's to prevent the WiiU from ending up the same?

Additionally, with some recently outstanding releases on the 3DS that must be cannibalizing WiiU hardware and software sales (my 3DSXL + Fire Emblem is currently on order), I'm also wondering if Nintendo have their strategy right?

All told, unless Nintendo can recreate their market-making trick with some titles that emphasise the WiiU form-factor, or properly surprise the market with some genuinely new IP, I fear that relaunching / advertising may be enough - they'd have to work extremely hard to convince consumers that the form-factor is both i) distinct from tablet gaming, and ii) that there is a pipeline of gameplay that is only possible on that form-factor.

The first point is especially poignant given the tablet market works on a 1-2 year upgrade cycle whereas Nintendo probably intends for the WiiU to have a multi-year lifespan. If after a couple of years, the Nintendo hardware will already be technically obsolete, a unique form-factor becomes all the more important (as per Wii).

Whatever they do, Nintendo need to get it right with the WiiU before the next Xbox launches, or it may find itself without a market, getting squeezed by the Apple / Google behemoths on the one side and the Microsoft / Sony juggernauts on the other. An wholly unenviable position...

Relaunch at E3

Alv wrote:

I'm not sure that I agree that WiiU needs relaunching. We all know it exists, but we sure as hell aren't convinced that it has the titles necessary to justify that existence - yet!

Great points Alv, but let me try to clarify why it needs a relaunch at E3.

I believe there are essentially three types of people out there when it comes to the Wii U. Those that know what the Wii U is and are excited or at least own it; those that know what the Wii U is and could not care less; and those that have no idea what the Wii U is. The first group at least bought the system. The second group probably won't get on board before 2014. There are no new games of any significance coming to the Wii U before 2014 at the earliest to change the minds of that second group. There also aren't any third party exclusives that would speak to that crowd. It's the last group that Nintendo needs to talk to.

That third group though is a surprisingly large group. I'd give you figures if I could but I can only go by personal experience. My experience walking around stores and watching and listening to customers is that few parents even know what the Wii U is. There is still a very large segment of Wii owners that still does not realize what the Wii U is a new thing. Many probably still think it is a controller add-on. Things are made worse be the fact that you can not easily explain what the Wii U is or offer games that make the case for you.

So that's why I'm saying the console needs a relaunch. It's nice that you and I know what it is and have made up our minds, but there are many people who after all of this time still haven't a clue. Part of it is messaging and all that, part of it is advertising--I haven't seen a Wii U advertisement in months!

I'm saying that the Wii U needs a relaunch at E3 because it is has been on store shelves for months and few people seem to know it. It needs to come out and say "We are here" at the largest industry show in the world and get non-industry people talking about what's coming this year. That's what these press conferences (and the show overall) still do.

Alv wrote: All told, unless

Alv wrote:

All told, unless Nintendo can recreate their market-making trick with some titles that emphasise the WiiU form-factor, or properly surprise the market with some genuinely new IP, I fear that relaunching / advertising may be enough - they'd have to work extremely hard to convince consumers that the form-factor is both i) distinct from tablet gaming, and ii) that there is a pipeline of gameplay that is only possible on that form-factor.

Having played Nintendo Land with two seven-year olds, I can say that any attempt by Nintendo to capitalize on the newness of the "gimmick" has long sailed off. Nintendo Land is no Wii Sports.

I'm sure Nintendo would have loved Nintendo Land catch fire like Wii Sports, by now they are aware it just ain't happening. Just like how Nintendo doesn't really market the glasses-free 3D much with 3DS, Nintendo needs to focus on the games and pricepoint.

Alv wrote:

Whatever they do, Nintendo need to get it right with the WiiU before the next Xbox launches, or it may find itself without a market, getting squeezed by the Apple / Google behemoths on the one side and the Microsoft / Sony juggernauts on the other. An wholly unenviable position...

How is that any different than present day?

Chi Kong Lui wrote: Alv

Chi Kong Lui wrote:
Alv wrote:

Whatever they do, Nintendo need to get it right with the WiiU before the next Xbox launches, or it may find itself without a market, getting squeezed by the Apple / Google behemoths on the one side and the Microsoft / Sony juggernauts on the other. An wholly unenviable position...

How is that any different than present day?

Different to the present day because Nintendo hardware has the technological advantage over current offerings from MS and Sony.

Different to the present day because MS and Sony are near the end of the hardware cycle and have realised the majority of returns (or losses) on their capital investments in the previous gen. Nintendo on the other hand are near the beginning, and face a future of asset write downs, and lowering sales forecasts should they fail to capitalise on their first mover advantage in the current gen.

Different to the present day because if there is one thing you can be sure of, even in today's economic climate, is that table and tablet gaming will have higher market penetration by the time Xbox launches than it does today.

Different to the present day because if there is another thing you can be sure of, is that the stable of tablet manufacturers will continue to launch new improved models between now and the new Xbox launch (and after) while Nintendo, inevitably, stands still.

I agree that Nintendo is already caught between a rock and a hard place, but increasing competition, changing consumer preferences, and emerging technologies that lower entry barriers, means we can't use the past as a guide to the future in relation to whether or not Nintendo can ride out another flopping platform. Let's just hope tablets don't start eating too much into (3)DS sales, otherwise not even the miracle of a global economic recovery may be enough to save Nintendo going the way of Sega (which actually may be a positive thing, depending on your point of view).

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