Future Developments Will Rely On "Outside Specialists"
The key draw of any Nintendo console are its first-party franchises, and we've recently bemoaned the worrying lack of them on the 3DS (and even on the Wii of late). As we've long suspected, Ninty are having trouble keeping their internal games development above water - and in a recent financial statement, President Satoru Iwata has confirmed that they can't "keep up with the current pace of change." Things are apparently going to change at the Big N, and we have the full details below.
In a Nintendo financial results briefing, Iwata explains that Nintendo have always focused on the concept of "Jimae-shugi," which is to say, "doing things by one's bootstraps" and keeping games development as internalised as possible... but that this dated business model is now simply unable to keep up with the changing face of the games industry. They were forced to outsource titles like Kirby's Dream Land, Super Smash Bros. and Pilotwings Resort to other developers - and considering the strong critical response, will continue to do so in future.
The policy "Jimae-shugi" (doing things by one's bootstraps) you mentioned has two aspects: it is a great honor to succeed in a business by making the best use of our own unique strengths, but on the other hand, it is a shame to fall behind the times clinging to it. I believe that it is the key to Nintendo, which develops both hardware and software in-house, to create new experiences which have been neither enjoyed nor requested by consumers, and let them say, "This is the very thing I have been wanting to play" once they have actually tried it. The more we depend on outside resources for this point, the more strength Nintendo will lose. It is vital for Nintendo to reinforce this point and cultivate developers inside the company.
On the other hand, it is not true that Nintendo is able to internally develop everything and keep up with the current pace of change. In fact, some of the software titles published by Nintendo are developed by outside developing companies, called "second-party developers" in this industry.
Iwata also believes that the Wii could have been much more successful if Nintendo had forged links with third party developers at an early stage - and that aspects of "future developments" (such as their new next-gen console) will be outsourced to other studios and specialists.
Honestly speaking, Wii's future could have been different if Nintendo had made better partnerships with outside companies in the field of network services at the early stages of the penetration of Wii. In other words, Nintendo might have been a little obsessed with the policy "Jimae-shugi" at that time. Although we have already put ourselves back on track, we would like to clearly differentiate what is our true strength from what we can basically do by ourselves but can be done better by more skillful outside specialists in order not to fall into that trap again.
You may be aware of some features which I am implying now in relation to the future developments of Nintendo 3DS and Wii's successor system that we announced yesterday. I am sorry I cannot say anything more specific today.
It's all well and good that Nintendo have identified problems with their first party lineup - but we've also recently brought you the news that they're "struggling" to find suitable Western dev partners to work with. They'll need to do their utmost to court strong third party studio support for Project Cafe. [Nintendo Investors]