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Have Nintendo Gone Mad? Smart Devices, Licencing IPs, and Quality of Life

Author:
Matt Gardner
Category:
Features
Tags:
Nintendo, Wii U, Wii U games

Have Nintendo Gone Mad? Smart Devices, Licencing IPs, and Quality of Life

Yes, this is what we've all been waiting for: Nintendo springing into action, facing up to their mistakes, being candid about the challenges ahead, and coming out swinging. It's action stations, and president Satoru Iwata has outlined the path ahead for Nintendo. This is the road to redemption!

Hopefully.

Let's recap. Nintendo's corporate strategy meeting today yielded some very interesting information. You can read through the whole thing here, but here are the main points in bullet point form:

  • Mario Kart 8 will arrive on Wii U in May 2014
  • Nintendo will focus on trying to communicate the value and importance of the Game Pad, with games showing off the controller's unique features to be fast tracked
  • Move from device-based systems to account-based systems: Nintendo Network IDs will become a platform in and of themselves, allowing for unified Nintendo experiences across Nintendo hardware and smart technology
  • Nintendo to explore opportunities on smart devices -- "no restrictions" on dev teams
  • "The possibility of making games or using [Nintendo] game characters" for smart-based apps hasn't been ruled out, though saying "Nintendo are bringing Mario to smart devices" would be "completely" misleading
  • Nintendo will launch a “quality of life” platform in 2015 as they look to redefine entertainment

There's a lot to unpack from that, and some things that we've heard Nintendo say before and then fail to execute. But there's also a lot of new stuff to pick apart, particularly when it comes to smart devices and this new idea for a QOL-improving service.

Have Nintendo Gone Mad? Smart Devices, Licencing IPs, and Quality of Life

Nintendo's biggest difficulty with the Wii U has been making it seem essential in any way, shape, or fashion. And I don't just mean for us gamers, but actually mainly for the millions of people who'd never call themselves "gamers" who bought a Wii or a Nintendo DS. Nintendo haven't found a way to capture the minds of those people, and that barrier begins with the Game Pad. We've said it ever since we first had a Wii U in our hands; that people would see the Wii U as some sort of tablet accessory -- a mere extension of its predecessor, and therefore unessential.

That's not lost on Iwata either.

Unfortunately, as the current situation of Wii U shows, we have not been able to fully communicate the value of the GamePad. We also realize that we have not been successful in answering consumers’ questions such as, “What is the difference between Wii U and the previous platform, Wii, and what is the benefit of upgrading it?” By looking at the current sales situation, I am aware that this is due to our lack of effort. What’s even worse is that there even appear to be not a small number of consumers who think the GamePad is one of the accessories for the previous platform, Wii.

It is more challenging to convey the appeal of the GamePad to consumers who do not engage with video games that often since they do not actively gather information about video games.

That last point is crucial: Nintendo Direct presentations are absolutely useless in terms of expansion. Sure, they give us gamers a great heads-up on what to expect from Nintendo over the coming months, but that's precisely the problem. Those videos are only ever going to be seen by us gamers. We who check in on gaming websites every day, and keep up to date with industry news and new releases. There are legions of Wii owners out there who have never heard of Eurogamer or Polygon.

In all honesty, ploughing money into games that show off the Game Pad is going to be difficult. The fact is that, as gimmicks go, it's a rubbish USP. It's a terrible tablet, we've had dual-screen with the DS for years, and there's nothing particularly brilliant about it. The Game Pad is quirky, but ultimately an enormous error. It's no wonder people think that it's an accessory for the Wii because its conception is rooted in archaic thinking that actually probably would have been laughable last-gen too. On second thoughts it's not just Wii owners, Nintendo have yet to convince gamers that the Game Pad is anything special outside of party games.

It's okay, though; Miyamoto is on the case.

Have Nintendo Gone Mad? Smart Devices, Licencing IPs, and Quality of Life

In terms of reaching a larger consumer base, however, Iwata is bang on the money with smart devices. Imagine an NNID app or, better yet, Miiverse on mobile and tablet. The unique appeal of Miiverse is something that we've praised continuously here on Dealspwn, and expanding the potential audience for that service would seem to be a no-brainer -- allowing people who don't have access to Nintendo hardware for whatever reason to still engage with the community and with Nintendo themselves. Don't expect Mario on mobile, though; and that's a good thing.

I have often heard the opinion from many that Nintendo should release its first-party content on smart devices. The rationale behind such a suggestion, in my view, is that it would be illogical not to expand our business on smart devices given that they have outsold dedicated video game systems by a large margin.

Many people say that releasing Nintendo’s software assets for smart devices would expand our business. However, we believe that we cannot show our strength as an integrated hardware-software business in this field, and therefore it would difficult to continue the same scale of business in the medium- to long term.

[...] We feel that simply releasing our games just as they are on smart devices would not provide the best entertainment for smart devices, so we are not going to take any approach of this nature. Having said that, however, in the current environment surrounding smart devices, we feel that we will not be able to gain the support of many consumers unless we are able to provide something truly valuable that is unique to Nintendo. Accordingly, I have not given any restrictions to the development team, even not ruling out the possibility of making games or using our game characters. However, if you report that we will release Mario on smart devices, it would be a completely misleading statement. It is our intention to release some application on smart devices this year that is capable of attracting consumer attention and communicating the value of our entertainment offerings, so I would encourage you to see how our approach yields results. - Satoru Iwata

The above is enormously exciting statement, and the caveat is understandable. But we've seen little apps across the 3DS and Wii U that are an utter delight, and would have no difficulty in transferring to a mobile platform. The mobile space is an excellent arena for Nintendo to showcase, if nothing new, their ridiculous heritage and elements of their back catalogue. But that lack of restriction from Iwata when it comes to development is incredibly exciting, because it means that all bets are off effectively. It'll be a while before we see fully-fledged games on mobile platforms, with Nintendo likely to better consolidate this shift from a device-based network to an account-based one, but anything they can do to expand in this space will be a huge leap forward for them.

Have Nintendo Gone Mad? Smart Devices, Licencing IPs, and Quality of Life

Iwata's opening statement revealed why it would be difficult for Nintendo to directly compete with the likes of Microsoft and Sony: they're smaller than the other fish in the ocean, to borrow his metaphor:

Nintendo is not a resource-rich company, with only a little more than 5,000 employees on a consolidated basis. We cannot achieve a strong presence by imitating others and simply competing in terms of size. We have often received advice on overcoming our weaknesses in comparison with other companies and have been questioned about why Nintendo doesn’t follow suit when something is already booming. From a medium- to long-term standpoint, however, we don’t believe that following trends will lead to a positive outcome for Nintendo as an entertainment company. Instead, we should continue to make our best efforts to seek a blue ocean with no rivals and create a new market with innovative offerings as a medium- to long-term goal.

It's easy to see why this would be their approach, from both positive and negative perspectives. With regard to the former, well, it worked for the Wii. Being different, being affordable, appealling to those beyond the core -- that's what won them last-gen. However, having effectively created a little generational gap between themselves and their supposed competition, Nintendo are left with little choice. The fact of the matter is that actually, at this point, with the choices they've made, the headstart Microsoft and Sony have in terms of connected services, corporate infrastructure, third-party backing, and online expertise, there's no going back for Nintendo.

Have Nintendo Gone Mad? Smart Devices, Licencing IPs, and Quality of Life

Which brings us to new markets and new initiatives, specifically this pledge to launch of quality of life "improving" platform in 2015. At first, it sounds bizarre, but it's not so farfetched for a company who enjoyed one of their biggest early hits for the DS with a game called Brain Training and is having continued success with the Wii Fit brand:

Nintendo has released a series of games entitled “Touch Generations” that seek to expand the definition of games by releasing games in various fields including health-themed titles such as “Brain Age” and “Wii Fit,” or educational titles such as “English Training” and “Art Academy,” or lifestyle software such as “Cooking Navigator” (translation of Japanese title, only available in Japan). The know-how and experience we have acquired about entertainment through these games, or to put it differently, the ability to keep consumers engaged and entertained on a continual basis and the hospitality we can offer is something that we can take advantage of now in order to increase the value of our QOL-improving platform.

Iwata was vague on the details, referring to this QOL initiative as a "hardware-software platform business" that “improves people's QOL in enjoyable ways”. The business will run alongside Nintendo's video game interests -- Iwata stated that the company will “continue to devote its energy” into dedicated video games platforms -- but that new horizons in this case mean something rather different, and QOL will be its “first step into a new business area”.

Games as educational tools, games as a means towards self-improvement, Nintendo has spearheaded such things on a large scale. The Wii was just a games console, for many it was an essential, fun, lifestyle tool. How Nintendo will go beyond the games industry to create a "synergistic effect" that feeds back into their gaming interests is unclear at this point, but if they succeed in truly expanding and solidifying their position as a gaming brand favoured by families and those outside of the "core", it can only be a good thing.

Hopefully.

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