Nintendo’s recent financial troubles have opened the floodgates for discussion on where the gaming company went wrong. The recent stock price drop and projected decrease in sales numbers are just one of many woes in the wake of the release of the Wii-U. Nintendo’s third-party relationships have failed and a formerly strong user base has been left feeling alienated by a company that seems stuck in the past.
Where did Nintendo go wrong? The lack of first-party titles? Marketing the Wii-U as a family device and failing to show consumers a difference between the new console and the Wii?
Any of these and more are valid criticism. The biggest contributors to the failure of the Wii-U are a poor and misguided use of technology and the internet, the rise and prevalence of game sales changing how consumers view the worth of Nintendo software, and Nintendo’s outright snubbing of an independent game developer community in their own back yard.
Nintendo has never been afraid to buck popular gaming trends in hardware and go their own direction. In the mid 90’s when CDs were becoming the favored media format, the company stuck with physical cartridges. The move would result in the creation of the PlayStation and the loss of the Final Fantasy franchise on Nintendo consoles for almost a decade. The GameCube saw Nintendo’s hesitance towards the growing trend of incorporating internet functionality into home consoles, giving the company a distinct disadvantage going forth. The Wii, for all of it’s originality in motion control, was viewed more as a toy than a game console, ignoring the high definition trend that Sony and Microsoft had already adopted.
This shirking of current technology has continued into the present day, with the Wii-U being considerably under powered when compared to the likes of the PlayStation 4 and X-Box One. Likewise, Nintendo’s digital distribution policies and inability to understand what consumers want out of internet functionality in the new age of gaming is puzzling. An anonymous developer that talked with EuroGamer confirmed these suspicions:
“[We]asked how certain scenarios might work with the Mii friends and networking, all the time referencing how Xbox Live and PSN achieve the same thing. At some point in this conversation we were informed that it was no good referencing Live and PSN as nobody in their development teams used those systems, so could we provide more detailed explanations for them? My only thought after this call was that they were struggling – badly – with the networking side as it was far more complicated than they anticipated. They were trying to play catch-up with the rival systems, but without the years of experience to back it up.”
Nintendo has acted as if the company is allergic to current and popular hardware and software trends, an issue that is coming back to haunt them in the current console generation. Consumers require their system to be functional and up to date with what makes console gaming so appealing. The Wii-U lacks the functionality of PSN or XBLA and has none of the accessibility that makes Steam popular. Of course, another thing that Nintendo lacks that Steam does so well is the ability to move software.
However, the advent of the “Steam Sale” and the seeming decline in value of software may also be a contributor to Nintendo’s downfall.
Rampant game sales change consumer purchasing habits and how they relate to the software they buy. Whether consumers want to admit it or not, there is a mindset of waiting for a game to go on sale that–in combination with the idea that a game is only worth your time if it’s giving you quality content measured in hours played–has changed how consumers view software and the methods in which they purchase said software.
The comic book industry suffers from a similar problem where single issues of specific books will suffer in sales due to the consumer mindset of waiting for collected volumes called “trades.” In an industry where pre-orders and opening day sales can mean the difference between a book continuing or being cancelled after a few issues, this consumer mindset can be deadly to a creative team.
There is reason to believe that Nintendo is suffering from something very similar.
While everyone loves a good Steam sale, the mindset of waiting for the sale in question has changed how buyers view the value of the software. Unless the software is a AAA, high profile release like Grand Theft Auto or Bioshock Infinite, the resounding opinion is that buying a title can wait until said game goes on sale. This concept has changed how developers and consumers view the worth and timing of buying a game. In a recent interview with GiantBomb’s Patrick Klepek, independent game developer Jason Rohrer said:
“There’s a rush among game developers,” he told me. “All of my friends that I know that are multimillionaires, they made more than half of their money in these Steam sales. Over the past couple of years, I’ve just been hearing all these stories from people. ‘Oh, yeah, the sales are where you’re going to make your money, man! I did a midweek madness, and that doubled my money right there!” [laughs] ‘I was deal of the day a few weeks later–and again! I doubled!’ And they just act like this is the way it is and this is amazing. If you stop and ask one of them, ‘you realize that most of those people who bought it, when it was midweek madness or whatever, don’t actually play it?’ And they just shrug. ‘Who cares, as long as I get their money, right?'”
Nintendo has always been somewhat allergic to devaluing their first-party titles and placing the likes of Mario and Zelda on sale. The most expensive titles on the three most recent Nintendo home consoles have always been the games that the company is most known for. Even now, first-party Wii titles such as The Legend of Zelda: Skyward Sword, Mario Party, Mario Kart, and Super Mario Galaxy 2 are at or near their original full price MSRP, according to a price check on sites like GameStop and Target.
The reason is simple: Nintendo holds their top-tier games in high regard. The internal philosophy at Nintendo is that their games are quality of the highest and people will go out of their way to buy the Mario and Zelda of their console. Nintendo isn’t wrong. These games are the best of the best that the company has to offer, but the growing change of how consumers review games–especially older games that typically go on sale–has changed how consumers view Nintendo’s stance. It’s hard to convince consumers that older games are worth their full price in a world where the likes of Grand Theft Auto V and The Last of Us are 40% off, or more.
The issue of game sales has also exposed Nintendo’s poor execution with digital distribution. An influx of users attempting to access the 3DS and Wii-U EShop over the Christmas holiday saw the service taken offline, most likely from the massive amount of new traffic. The apparent issue is that Nintendo had never planned for such a strain on their weak network infrastructure, as the outages lasted for almost two weeks after Christmas day.
This lack of reinforcing a cogent online strategy has hurt the independent gaming development community the most. Indie gaming has taken off and seen high sales numbers on the likes of PSN, Steam, and XBLA. Between Sony striking a deal with indie developers on the PS4 and Steam GreenLight, the current gaming cycle is seeing the rise of new talented developers expressing new ideas via digital distribution.
Meanwhile, Nintendo has been telling indie developers in their own country to not bother.
This stance by Nintendo is a shame, as Japan has a thriving indie scene that is looking for the same chance at success that their brethren in other countries have received. In a country where Steam and PC gaming don’t see the same success and numbers, the Japanese indie scene is desperate for a big company to give a helping hand. Nintendo could be that company, but considering their poor relationship with indie developers around the world and the small selection of games they offer on their service, the snub might be for the best. Nintendo doesn’t seem interested in growing the next generation of developers and is more concerned with what kind of suit they’ll put Mario in next.
With Nintendo’s sales forecast projections cut by almost 70 percent, it appears that the company is preparing for the worst. What this means for the future of the company remains unclear. At this point, ditching the Wii-U and starting from scratch so soon with a new home console would almost reek of the same desperation that SEGA suffered from towards the end of the Dreamcast era, when the company’s hardware hopes were all but over.
Maybe Nintendo is to face a similar endgame. Maybe the 3DS is enough to sustain the aging Japanese company. Who knows? While I think that the legacy of Mario, Metroid, and Zelda will live on, we as consumers may very well be seeing the dying days of Nintendo as the hardware giant that some of us grew up with.