Nintendo’s Fateful Hour

How 2014 could change the fortunes of our beloved Japanese company.

By Joshua A. Johnston. Posted 06/25/2013 10:00 3 Comments     ShareThis

E3 is the NFL Draft of gaming experiences. The NFL Draft, as some know, is the annual rite where professional football teams get to pick college players to bolster their ranks and improve their talent. The NFL Draft is a dreamy time for pro football fans, because they all come away believing they found the people necessary to turn their team around. By the end of the year, those hopes may be dashed against the brutal rocks of reality, but in the summer everyone’s team looks like a Super Bowl contender.

So it is for gamers. At E3 consoles have promise, with loads of hyped games on the horizon. This E3 is even bigger, as two console makers, Sony and Microsoft, not only have new software to tout, but two brand new consoles just months away from launch. The gaming world is long on hype but, at present, short on products. Nintendo, like the others, has its own E3 dreams to sell.

The question is: can they deliver, and will the masses buy in?  To answer that, we need to step back and look at the current state of Big N.

Nintendo’s Pillars

As we all know, the company makes its living in three primary areas:

  • Home consoles, from NES to Wii U
  • Portable handhelds, from Game Boy to 3DS
  • First and second party IPs, notably those involving Mario, Link, and Samus

One of these is consistently profitable, one of these is in some doubt, and one of these faces serious questions.

Nintendo’s IPs are safe, at least for the foreseeable future. Even if, for some reason, Nintendo were to somehow exit out of the hardware business, their software would presumably find a home elsewhere and continue to profit for the company. Not every Nintendo game is perfect, of course, but it’s hard to think of a first party developer with a better home-run rate, both critically and commercially. Nintendo IPs are usually somewhere between good and awesome and their sales numbers run from the solid to the epic. That doesn’t even include their second parties, like Retro and Monolith Soft, who have done a fantastic job of giving Nintendo’s library a more core gamer element.

Nintendo’s portable market is in decent shape, although there are questions looming. 3DS has been reasonably successful, especially compared to the PlayStation Vita. Of course, the Vita may be 3DS’s least relevant competitor; the rise of powerful Android and iOS-powered smartphones, whose gaming capabilities are rapidly catching up with gaming handhelds, poses a much greater threat to the 3DS and may eventually doom the likes of 3DS to historical obscurity. As a rule, technology changes faster than we think it will, so I suspect this will happen sooner rather than later.

And then there is Wii U. At this year’s E3 Nintendo opted for a recorded Nintendo Direct announcement rather than the live pressers that have been the standard in the industry for so long. In doing so Nintendo signaled strongly that it is no longer competing directly with Sony and Microsoft’s market. Nintendo is trying very hard to frame its system, not as a “PS4 vs. Wii U” or “Xbox One vs. Wii U” proposition, but as its own separate beast. This is noble but, let’s face it, Wii U is going to be viewed by gamers as one of the “big three” systems, especially when prospective buyers drift into Walmart and see them all sitting side-by-side in the electronics department. So, as much as Nintendo is trying to say it’s not competing with Microsoft and Sony… it is competing with Microsoft and Sony.

State of the Wii U

Now, one thing I’m not as worried about is the current Wii U release drought, at least not imminently. Droughts after the launch window are typical to even the most successful systems. Launch titles are equally overrated and rarely, if ever, stand among a system’s best come the end of the system’s life cycle. Most systems take at least a year to start putting out the good stuff, and the best of a console may not come until three or four years into a system. Chrono Trigger and Xenoblade Chronicles, for example, came out in America about a year or so before the next console cycle got underway.

There are other uncertainties, though. Wii U is about as powerful as PlayStation 3 or Xbox 360, and is nowhere near as robust in any way as the forthcoming Xbox One or PlayStation 4. Wii U’s processor is far less powerful, its memory much smaller, and its flash storage capacity distressingly low. Wii U’s online infrastructure is, like Wii’s, mediocre and more easily hacked than other consoles, and the fact that it uses an older PowerPC processor compared to the x86-based CPUs in PlayStation 4 and Xbox One serves as a barrier to porting and multiplatform titles. Already there are some third parties that are either skeptical of Wii U or off the boat altogether (for now, at least).

Wii U’s predecessor, Wii, was also underpowered and overmatched compared to its counterparts. At the same time, Wii also had a few factors working in its favor, including the novelty of its motion control, the PlayStation 3’s outrageous $500-600 launch price, and serious questions involving Xbox 360’s hardware reliability. Sony and Microsoft seem bent on rectifying some of those last gen missteps: PS4 will debut at a less laughable $400 and Microsoft has opted not to rush the Xbox One to market the way it did with Xbox 360 to better polish the hardware. (Microsoft has another problem on its hands, though, still reeling from the PR nightmare it brought upon itself.)

Wii U, for its part, is not without one key advantage: time. Launching before the competition is not a guarantee of generational domination (see Sega Genesis) but it does give first and third party developers time to grasp the intricacies of the system (see PlayStation 2, another console that was less powerful than its peers). Developers are just starting to get their hands dirty with Xbox One and PlayStation 4, two systems with completely different architectures than their predecessors, and it will be some time yet before those systems hit their stride. Wii U is similar in design to Wii and has been out for a bit, so developers have had some time now to work with the new system and its new touchscreen controller. It’s even possible– possible– that some of the third party skeptics may yet reverse course and begin developing for the system once they see how others are using it.

Looking to 2014

We know Nintendo will bring quality games. It always does. As E3 reaffirmed, over the next year Wii U will have some top-of-the line properties headed to its console, including a few familiar faces, a new IP or two, and at least one sprawling helping of awesome. Our own Marc Deschamps has played some of them and reports that both the games and fan enthusiasm for them seem strong.

However, a handful of great quality games alone does not equate to console success. Consoles need a quantity– a quantity — of good games, too. The difference between having just quality versus quality and quantity is the difference between the Dreamcast and the PlayStation, the difference between the GameCube and the PlayStation 2. Wii U will most assuredly have some quality, but it needs quantity, too. Don’t just take my word for it; Nintendo’s global CEO himself has conceded that Wii U’s dearth of games, a situation in part caused by a resource logjam at Nintendo that led to delays, is one of the primary reasons Wii U has sold below expectations. Add to that the aforementioned third party misgivings, including the absolute wasteland that is sports titles on Wii, and you have to wonder what the future holds for this system.

This year, being part of the system’s first year, is important but not automatically vital to the system’s future, and for reasons I’ve already laid out. By contrast, I think 2014 will be a pivotal year in answering the question of Wii U’s viability. At that point Wii U will be a bit over two years old and if there is a time for developers to be hitting their stride on the system, that will be it.

In my opinion, there are two futures with Wii U.

One future sees Wii U picking up some steam as Nintendo’s delayed first party releases hit the market and more third parties take the plunge with the system. Wii U sales run strong in 2014 as would-be Xbox One and PlayStation 4 owners discover those systems, as powerful as they are, don’t have much to offer yet in terms of actual game titles, not yet. The Wii U, with its more established library, begins to grow, creating a snowball effect with third parties much as PlayStation 3 did after its early stumbles. Wii U also benefits from lingering resentment over Xbox One digital rights management and similar schemes by third parties releasing to PlayStation 4. By the end of 2014, Wii U remains the top-selling current gen console and the future looks better than it did in 2013.

A second future sees Wii U languishing under the competition of rival consoles and its own lack of titles. Gamers going to Walmart and GameStop turn away from Wii U in 2014 once they get a look at how small the Wii U game section is, instead putting their money on the equally small but more promising Xbox One or PlayStation 4. August 2014 makes for an especially sad day as millions of Madden owners line up to sink into football on a system other than one made by Nintendo. By Christmas 2014, Nintendo has desperately but fruitlessly cut Wii U prices, but its fate is sealed: 3DS will endure, but this is the last home Nintendo console.

Which of those futures will be written remains to be seen, but either way, next year will probably be one of Nintendo’s most pivotal.

3 Responses to “Nintendo’s Fateful Hour”

  • 1291 points
    Robert Marrujo says...

    An interesting examination, but I’m not as inclined to agree with the E3 evaluation. Not having a traditional stage presence doesn’t mean Nintendo is trying to avoid direct conflict with Sony and Microsoft, but rather take an alternative approach to tackling that conflict. In 2013 the means of disseminating information has become nebulous with the prevalence of the internet. Whether at E3 or through a Nintendo Direct, Nintendo’s announcements will be heard. What I think Nintendo signaled this year is that they simply aren’t interested in the typical back and forth of traditional console wars. Nintendo’s distancing simply allowed them to focus on what E3 is all about; games. As you said, if the games are there and if there are enough of them, people will come. Nintendo proved this with the 3DS (which I don’t agree is on such a perilous cliff) and they have every opportunity to do it with Wii U.

  • 1291 points
    Robert Marrujo says...

    What Nintendo should be wary of is failing to take advantage of its own unique strengths. The Virtual Console could be infinitely more alluring if it’s software selection were better. The current trickling pace of releases is inexcusable. Nintendo should also be actively pursuing avenues of getting old, non-first party games back out there; if Duck Tales can get a remake surely it can get a re-release. The Wii U would also greatly benefit from some sort of meta game akin to the 3DS and its Street Pass/Spot Pass system. In terms of implementation that could be tricky, but some sort of reward for playing/being on your Wii U would be great to see. Achievements and trophies are fun, but Nintendo’s shown us that Play Coins and puzzles are better; now give the Wii U something similar! Finally, the online needs a boost. Even if it can’t compete with Live, Nintendo can at least work towards cross-game chat and easy party forming, especially with MK8 and Smash coming; better to have those network issues resolved sooner rather than later.

  • 697 points
    Adam Sorice says...

    Fab article Josh, although I’m not sure a poor 2014 for Wii U would signal the end of Nintendo home consoles. I remember back in the days of the GCN when UK retailers just stopped selling the system, instead lumping for the Xbox and PS2, and people said much the same about the company’s hardware future. (Obviously those failings inspired Nintendo to go in a very different direction that proved ridiculously profitable, although a repeat of that is far less likely.) While Wii U may continue to struggle in the coming years, I’m not certain that Nintendo would bow out of hardware so easily, although a software-only version of the company could equally prove successful.

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