Nintendo Closing Großostheim Headquarters

Look for Nintendo to double-down on 内向き (uchimuki; internal focus) in the future, with an even stronger emphasis on the domestic market to the exclusion of the world market.

It doesn’t take the prognostication talents of Nostradamus to predict this, since it has precedent. One weakness that was repeatedly pointed out in the release of the original Wii was Nintendo’s seeming disinterest in how well their new console was selling overseas. Supply was rarely impacted in Japan, and despite sales that were better than double in North America and Europe compared to Japan’s, they held back on production to the point where some saw it as a marketing tactic. It took 3 years after release for the supply outside Japan to meet the demand. The ramp-up of production was slow and cautious, probably because they didn’t want to get burned if the popularity of the Wii wasn’t sustained.

Globally, the PS4 might be outselling the Wii U, but in Japan, it’s a different story. Nintendo’s sales are phenomenally better in Japan. Considering that with the original Wii the non-Japanese markets were doing everything short of promising sloppy wet blowjobs contingent upon a better supply of consoles and Nintendo’s response was <yawn>, foreigners who love Nintendo games might want to start brushing up on their Japanese now, because it’s a pretty good bet that there will be significantly delayed releases and very short supplies for overseas markets for further Wii U revisions or successor consoles.

Game Over?

Horace Dediu makes a strong case that both console and portable gaming are in irreversible decline. He thinks that gaming on mobile phones is disrupting the industry to the point where new gamers are not even considering the traditional console or handheld platforms.

I think he's right. Certainly, I've argued that Nintendo should have gone down a different design path with the Wii U, and the advent of the PS Vita TV shows that I was thinking in the right direction for the next generation of 'tween consoles, as peripherals of handheld gaming devices that provide extensions of capabilities at home.

I'm even more convinced that Apple is prototyping console-type experiences through Apple TV, given the recently-announced support for game controllers in iOS 7 and official APIs for sprite graphics. AirPlay streaming is already feasible for some games, though it lags a bit too much for a really solid feeling on slower wireless networks.

I've seen speculation here and there that Apple will implement games as apps on Apple TV, but I don't think that will happen precisely because mobile gaming is where the puck is going. Any Apple TV integration will be an extension of iPhone or iPad games, not a replacement for them.

Nintendo Wii U: Death By Apathy

Matt Martin:

The Wii U has been defeated by the most humbling of challengers - consumer apathy. When the inevitable "Nintendo halts Wii U production" stories hit, the majority of those that bought the original Wii won't even notice. The mainstream bought the Wii because it was a fun novelty, they didn't buy it for a new Zelda game. What's the Wii U's novelty? That it does everything a current-gen console does but a little bit slower and with a Fisher Price tablet attached?

Why was the original Wii successful? The Wii controller was the first commercially successful motion control system. There had been many, many attempts at motion controls, but the Wii was the first to catch on. The controller made the Wii extremely accessible to non-gamers.

I remember using an original Xbox controller after nearly 10 years out of console gaming. The last controller I'd used was an original NES with nothing more complicated than a D-pad and two buttons.

While I'd been out of console gaming, I had played some games, including some FPS games like Marathon, which I played with a mouse and keyboard. But I sucked at using a controller to play Halo. I couldn't shoot, I couldn't duck, and even if the game physics would have supported it, there was no way I'd have the coordination to pull off something like a grenade jump, which, since it was almost mandatory for reaching certain parts of Marathon maps, I'd gotten good at doing with a keyboard and mouse.

I spent a good part of the first couple of weeks being terrible at controlling my character. I liked games enough to keep playing and got better at it, but most normal people would have given up after 5–10 minutes of dying a lot.

The Wii controller flattened out the learning curve enough to make it easy for both young children and inept adults to pick up a video game and just start playing. Similarly, touch controls feel intuitive after a brief introduction period, which is part of why iOS games have done so well. The game types were perfect for the controller, with a distinctive style that Nintendo had refined on earlier platforms. The games felt like they had been created with the controller in mind, and indeed they had been.

What does the Wii U bring to the mix? Nothing focused, and that's the problem. In an article last year, I had doubts about the lack of focus, and recent events have shown that while there are plenty of tools on the Wii U controller, there's no coherent hook, no holistic approach to using these disparate abilities to create something compelling. Nintendo itself doesn't seem to have been very successful at creating a suite of games that exploit the capabilities of the system, unlike the handful of first-party games they released alongside the original Wii.

Nintendo Looking to Boost Wii U Sales with Smartphone Apps

From an earlier post:

The recent gimmicky 3DS (why not 3D too?) and upcoming Wii U (do we still have room for a frikkin’ laser beam in our big-assed does-everything controller?) seems to me to be a break with that customary tight focus, so we’ll see how that plays out.

Looks like not that well.

Nintendo should have focused on making a great stand-alone handheld that also tied into a console unit. Instead, they did it the other way around. While they performed wi-fi wizardry with their controller (screen mirroring is reportedly nearly synchronous with one controller active, and streaming to two controllers at 30 fps is still pretty damn good) it would have been awesome if they had created something like an iPad with physical controls that was capable of interfacing with a console unit. That console could provide expanded storage, a connection to your TV, and a boost in processing power. You know, like AirPlay Mirroring that doesn't suck for gaming. Nintendo's merger of handheld and console divisions is a sign that they might be moving in that direction.

Unlike some other commentators, I don't expect Nintendo to transition to being a software company. They have always made a profit on their consoles and handheld units. Expecting them to forego that revenue is as futile a wish as the bad old days when everyone kept pushing for Apple to license Mac OS. That was actually done briefly in the late 90s when Apple was desperate and flailing, and it was rightly regarded as a mistake.

Nintendo won't transition to making games on other people's platforms because they won't cede control to another company. I can safely say that an official Mario or Zelda game is never going to appear on Apple's iOS App Store. At the same time, Nintendo has shown that they aren't capable of successfully running their own online store. People put up with the Wii store because they loved the crap out of their Wii console and the legacy games that were only available through that avenue. That tolerance would be short-lived if those customers had alternatives on the same device, which would be true for any smartphone platform; Android, iOS, or other.

Part of the problem Nintendo has (which is a weakness shared by many other Japanese companies) is that they don't get online services. Sony's PlayStation Network is a tardy and crappier also-ran next to Microsoft Live, and Nintendo's cumbersome Mii codes, clunky online store, and crippled download system made it clear that they were even more clueless than Sony.

Bottom line: the Wii U is probably not going to sell particularly well, certainly not as well as the original Wii. It probably won't be a total failure, but the future is in handheld units or smartphones, particularly in Japan where HDTV adoption is still fairly low.

[Paraphrased:] "4Gamer readers report only 48.5% have an HDTV in their household. The Ministry of Internal Affairs reports 60.7% of Japanese households have an HD receiver, which is not necessarily the same thing as an HD display."

Nintendo's current Wii U console may well be its last traditional-style console. The question now is whether Apple will exploit its position as a de facto gaming company and create an Apple TV that enhances and expands iOS device capabilities before Nintendo creates a system like the one I outlined above. If that's the case, Nintendo will be competing in very much the same hardware space with the current best computer hardware company in the world, that also has an established and successful multi-billion dollar software store with a fully backwards-compatible library of games and a very low barrier to entry for new potential game developers. Pretty much the opposite of a Blue Ocean Strategy.