How Can Nintendo Recover?

Nerval's Lobster writes "Nintendo's revenue and profits are tumbling faster than Mario into a bottomless pit. Company executives recently suggested the next-generation Wii U console would sell 2.8 million units between April 2013 and March 2014 — significantly below the 9 million units predicted in previous estimates. Contrast that with Sony's PlayStation 4 and Microsoft's Xbox One, which sold 4.2 million and 3 million units, respectively, in their first six weeks of release. In lowering its hardware and software estimates, Nintendo also expects to take a loss by the end of its fiscal year in March. Nintendo's attempt to carve a niche for itself as an ecosystem for casual gamers has also run into a massive obstacle in the form of smartphones and tablets, which quickly developed into popular gaming platforms. Nintendo is reportedly considering a 'new business model,' according to Bloomberg, with its CEO telling a gathering of reporters in Osaka: 'Given the expansion of smart devices, we are naturally studying how smart devices can be used to grow the game-player business. It's not as simple as enabling Mario to move on a smartphone.' While Nintendo could probably made some good money off legacy gamers by bringing its (much loved) portfolio of older titles to iOS, Android, and other platforms, that move to mobile might further weaken its hardware sales. So what do you think? If you were in charge of Nintendo, how would you turn it around?"

Comments

Erm, the 3DS

[Anonymous Coward]

is doing fine.

Just keep pumping out decent games and don't fuck up the next major console. The 3DS is their lifesaver until the next refresh.

Re:Erm, the 3DS

[dreamchaser]

is doing fine.

Just keep pumping out decent games and don't fuck up the next major console. The 3DS is their lifesaver until the next refresh.

Is that why they are going to post a loss? A company can't rely on aging products to survive these days, at least not in the technology/entertainment sector. I'm not declaring them dead, but they are hardly doing well.

Re:Erm, the 3DS

[Anonymous Coward]

You can't declare a console a successful console a flop so you can preserve the integrity of your argument.

Re:Erm, the 3DS

[luther349]

the lose is from the wii-u collecting dust in the stores. the 3ds still has strong sales.

Re:Erm, the 3DS

[Anonymous Coward]

Nintendo's consoles may have been a "flop" according to you, but remember that historically they were all sold at a profit from the get-go (with the exception of the WiiU of course). So if remaining profitable is a "flop" then I guess you are right.

One of big-N's problems is that it's becoming too difficult for them to keep their consoles cheap and yet continue to sell at a profit.

Re:Erm, the 3DS

[icebike]

Well the 3DS and 2DS are new enough that their sales figures probably aren't included in the quarter being reported, but their development costs probably are included.

Grandkids got these for Christmas, and I was amazed at how quickly they had found all the cool features of these gaming devices. Soon the gaming was secondary to all the other things they do. They are making movies on them, recording sound, distorting images, and putting snapshots of their friends into the games as characters.

Game play is but one aspect of these devices. You can pass some games and game tools to there players as you pass them on the street, (creepy) and if you visit some place those other friends have been (McDonalds for instance). Very Amazing little devices.

These are totally new devices with quite a bit more included besides simple game play.

Re:Erm, the 3DS

[ArbitraryName]

Not nearly as strong as anticipated.

Re:Erm, the 3DS

[cheesybagel]

Any smartphone has a WiFi connection these days. If you have a WiFi network you can do LAN multiplayer easily.

Re:Erm, the 3DS

[icebike]

But the smartphone is a miserable gaming platform.

Re:Erm, the 3DS

[Cimexus]

Cost definitely had something to do with it, but as one of the few people who used to have a Game Gear when I was in primary school (all my friends had Game Boys), the number one thing that sucked about the GG was the battery life. Because it had a backlit, colour screen, it only lasted an hour or two on batteries, whereas the GB would last all day.

Not only that, the GG required six AA batteries and these were damn expensive at the rate you went through them. You could use rechargeables but they lasted even less time than non-rechargeable batteries. I recall spending most of my time playing the GG plugged into AC power.

Re:Erm, the 3DS

[N0Man74]

I was dismissive of the Wii-U at first. I thought it was a bone-headed move.

The truth is, a year later I looked at the system again. I looked at the games that have come out, and there were a lot of interesting games!

I decided to buy one last month, and gimmick or not, it is a seriously fun console. I much prefer to play my Wii U than my friend's PS4. It's not even just the 1st party titles either.

I feel like Wii U is a disaster not because it isn't a fun game system with fun games, but because of cynical, close-minded, jaded gamers who think they are too cool to play on a console that they believe is a kiddie console.

I still have my doubts about whether the extra tablet/screen was necessary, but it has added a lot to some games.

Wii U problem is not underpowered.

[voss]

Its overpriced. Nintendos market is for those who want a cheap and cheerful video game system for the kids
not the people who want to pay $60 a game. If they had released something like an updated wii with a regular controller
for $100 less it would have sold like crazy. Basically their target market wanted an updated WII not the montrosity that
was the wii U.

Re:Wii U problem is not underpowered.

[Nemyst]

It's not just that. They made this rather unique hardware but don't seem to know what to do with it. Asymmetrical play and remote play are all nice and well, but they're not system sellers and they're not the primary use of the console. The Wii could be played alone, in a group, with newbies or advanced users. The WiiU's touch pad needs a certain learning period, it's heavy and cumbersome, and all of that for what? Usually to show a map. It's the new waggle, except with even less interaction.

Nintendo chased the fickle casual market, thinking that they'd behave like their previous market (the more hardcore Nintendo veterans) and would follow their brand wherever they went. They didn't.

Re:Wii U problem is not underpowered.

[aaronjp]

Customers wanted and expected what they had in the old Wii with 1280p HD and a boost in processing power and got the Wii U.

Nintendo totally ignored the social aspect they created with the Wii. They went from a system where it was cheap enough to buy 4 controllers; so 4 people could play at a time to a system where it's just too expensive to have multiple players. Potential customers look at the Wii U as if it's essentially an expensive one player system, and just decide to keep playing the old Wii. In other words, they made a system that no one was asking for and even worse no one wanted in the Wii U.

IMO, if Nintendo wants to recover make a Wii HD.

Re:Wii U problem is not underpowered.

[ekimd]

Mod parent up. This is exactly why I haven't bought a Wii U. I just want a Wii HD.

Re:Wii U problem is not underpowered.

[phantomfive]

Some people really like the Wii U. Gabe at PA says, the Wii U version is a gift from God. In fact it’s so good that I will probably buy every multiplatform game for the Wii U from now on

My guess is most people just don't know what's in the Wii U, why it's worth buying. At least, for myself I wouldn't know why anyone would buy it if Gabe hadn't written about it.

Re:Wii U problem is not underpowered.

[tipo159]

My two kids asked for a Wii U, so that is what I got them. I don't know what games they are playing, but I see them and the neighborhood kids playing multiplayer games on it all of the time.

My youngest kid had a DSi and wanted a 3DS XL. Now the older one wants to replace his DSi as well.

They occasionally take my iOS devices (I have a gaggle for testing apps), but they usually prefer to play with their Nintendo devices.

Just another data point.

Re:Wii U problem is not underpowered.

[Agent0013]

I don't really understand these two complaints. The Wii U lets you use the original Wiimote controllers for almost every game that has come out for it. So not only can you buy 4 cheap controllers, you probably already have them if you had a Wii before. And in addition to that, it boots into the original Wii so it is just a Wii HD, if that is what you want.

Better Development Tools

[Suiggy]

Seriously Nintendo, upgrade your compilers! We're sick and tired of CodeWarrior.

Minecraft on iPads

[Neo-Rio-101]

Where I once saw kids play Mario on a Nintendo DS, today I see kids play Minecraft of iPads.

Apple crushed Nintendo by creating iOS devices and opening up it's platform to indie devs for a minimal fee. If I wanted to start coding for Nintendo.... how would I do it, and how much would I have to pay in licensing? I have no idea, and I wouldn't know where to look.
It would seem easier to go for the tablet ecosystem that most people have and is more easily accessible. I think not only did Apple destroy the Nintendo casual market with iOS devices, but also through leeching potential developers.

Also, if I were Nintendo, I would be grovelling to get Mojang to port Minecraft over (Mojang says that they're "too busy"). So far..... nothing... and it's so stupid as to why not because the game is really something Nintendo should have been able to create, and it's a perfect fit for the system. It's just a shame too that with all Nintendo's game dev talent, this something as much fun hasn't eventuated from them, and it's been Mario after Zelda after Donkey Kong.

Nintendo is also locked itself out of the hardcore market for this gen too. So unless they want to make a Super-Duper Nintendo like in the 16-bit war days and compete again, they're going to lose gamers there.

All Nintendo has left is good game devs and some great IP.... and perhaps more trust with parents than the Apple kids-ingame-payments-debarcle has done to Apple's platform.

Market is Apple/Google's, but N has an advantage

[tepples]

Nintendos market is for those who want a cheap and cheerful video game system for the kids not the people who want to pay $60 a game.

Nintendo's problem is that this isn't Nintendo's market anymore; it has become the App Store and Google Play market. The big advantage of a 2DS/3DS over an iPod touch or iPad mini is that iPod touch and iPad mini ship with only the positional control (a multitouch screen), not directional or discrete trigger controls (the Circle Pad, Control Pad, and buttons). And not everyone wants to buy a $40 Bluetooth controller that clamps onto a tablet just to play a $10 or cheaper game.

Re:Personally?

[narcc]

I don't think this is what you want.

How I'd turn Nintendo around

[TheloniousToady]

odnetniN.

my ideas

[Cyberglich]

Short term #1 slash the price of the WII-U down to $149 with a AAA pack-in game. #2 Launch a monthly sub service as a sort of virtual Netflix/game fly You get X game credits depending on price of sub running from 5.99 to 29.99 a month. The credits can be used to rent games from everything that can get licences form and emulate nes all the way to current WII-U titles. nes games being low # creidts and WII-U games being so many that a user needs to be on one of the higher tier plans to get even one. Once you "Rent" the game its your till you release it that unlocks the credits to be used again with say a 1 week min timeframe to keep people from constant cycling and to make the higher tiers worth wild. Nintendo pays the publishers a % of the sub fees depending on how many rentals are active at a time. Nintendo will louse money on hardware but will make it up in sub fees in theory and people will buy disks of WII-U games the want to keep long term (or just buy like current e-store works) Long Term Accelerate work on the next gen. aim for a 4-5 years for now for the next Home console. Work with EA, and other game devs to make a machine they want to work on. The next Xbox PS are 6-7 years away most likely So in 4-5 years would be a great time to keep a jump on the cycle. Aim for 60+FPS and 4k. 4k is showing promise now we already are looking at sub 1 grand 4k tvs now in 4-5 years they should be generally adorable and will make 720p/1080 Xboxone and PS4 look like dog food by then.

Re:Sega is Nintendo's future

[DigiShaman]

Disagree. There are far too many permutations of phones out there. Also, they've branded themselves as family entertainment. They still need a console platform for the TV as the family room is the venue of choice. AppleTV is such a platform. Question is, can the licensing cost to Apple more than make up for not having to develop and manufacture a console of their own?

Marketing

[Xacid]

Marketing is where they failed horribly with the Wii U. I wasn't even entirely clear on if the Wii U was a brand new system or some new add-on up until recently. The idea of *why* anyone needs this in their home is being entirely ignored it seems. I love the Nintendo brand and I'd hate to see them go the way of Sega. However....that time seems to be quickly approaching.

This is probably a dumb idea, but it is a thought

[GoodNewsJimDotCom]

Phones/Tablets right now don't have a standardized controller. I know it is a stretch for Nintendo to make a classic controller like XBox or PS has, but if they did make controllers for tablets/phones, they could then make a series of games for Android/iOS. Then phones would have a standardized controller for other people to develop on too.

Most Nintendo game IP doesn't need expensive hardware to run, so cell phone/tablets is fine to go to. Phones/tablets can even be plugged into televisions to work like a console. The only thing missing is a standard controller. I haven't got a Nintendo since the SNES mostly because I find the controllers strange. Stop treating the game hardware like a toy in itself, go standard hardware minimum requirements and make your games good.

Now not everyone will be carrying a phone/controller around outside, but for the home, it is doable. If you work on manufacturing, you can get your controllers cheap. Then you're just selling people games.

Hybrid Mashup Games are the Answer

[wbr1]

Dr. Mario Vs. Proctologist Simulator 2013
It's a winner no matter which way you look up it.

Re:Market is Apple/Google's, but N has an advantag

[Pranadevil2k]

I would argue that Nintendo's problem isn't that its market has moved to mobile, the problem they face is that the market they want and need (console gamers) has moved on without them. I can't think of a single third-party developed game on a Nintendo console that excited me since Capcom put a bunch of Resident Evil games out on the GameCube. Nintendo itself owns a nice catalog of IP but you can only make so many Mario and Zelda games before the golden goose stops laying eggs. They need other developers making new titles, and good ones. They need a 'killer app.' People stopped buying Nintendo consoles for Mario after the GameCube and quit buying them for Zelda after the Wii. Nobody has bought an N console for a third-party game since the '64. Frankly, the last one I owned was a Super and now I play the remakes of the great games of that console on Sony and Microsoft systems, or emulate the originals on my PC or mobile. Nintendo is not Sony or Microsoft; their problems will not go away eventually by propping up their game division losses with profits in other sectors. They need good games or they are done in a few quarters of bad losses.

Bad marketing.

[aussersterne]

Didn't even realize that Wii U was substantively different from Wii. In fact, based on this story and the context here, still can't tell.

What would have been wrong with "Wii 2" which offers a much clearer indication that it's a next generation console? (If, in fact, it is a next generation console.)

First thing that comes to my mind with "Wii U" is that it's the educational version of the Wii.

Re:Personally?

[buchner.johannes]

I would first crowdsource ideas over the internet to find the leaders of the future, those who can think outside the box. Then I would invest a million dollars into this bananaquackmoo, he seems to have smart ideas.

Sega's mistake

[Anonymous Coward]

Sega's mistake was not having good hardware, it was having too much hardware. They were told that the Genesis was great, a few years later it was the Sega CD, then almost immediately after that was 32X, then almost immediately it was the Dreamcast. Customers who liked Sega had the original Genesis (not talking Master SYstem), but then two quick updates then a new console. Frankly, Sega broke the bank on the DreamCast by asking their customers to buy too much too fast. Too much hardware. That is a good reason for the Big N to stick with the U for a while, develop it, make it cheaper than the PS4 and the XBox One, still get 1080p @ 60fps, release some exclusives, wait several years in order not to burnout their core client base like Sega did. They can't bail on the U for financial reasons and for the games already in the pipe, and they can't make a U2 because it will burn current customers. Once Mario Kart, Zelda, Smash Bro, etc come out, it will be comfortable again... you doubters and haters

Re:Market is Apple/Google's, but N has an advantag

[SocietyoftheFist]

I like playing on my big screen with my kids, our handheld devices don't facilitate family interaction. Nintendo effed up.

Re: It's not the 3DS, but the change of a generati

[Cinder6]

I think you overestimate how quickly consoles sell. You point to the 4.2 million and 3 million figures as evidence of declining console sales, and yet, the PS4 and Xbone had the best launches in the history of the industry.

Kids are tablet crack-addicts now

[TrollstonButterbeans]

And schools are feeding this full-force, many schools are moving away from computers to iPads in the USA (Lucky Apple and schools, because it isn't moving to tablets but specifically iPads).

Nintendo always had games very well targeted to children.

The current crop of kiddies see tablets as part of their identity and there isn't any reversing this for Nintendo. It is over for Nintendo.

The XBox is a different story because it is a "serious" casual gaming machine and not being devoured by such a market change. [But will probably succumb to a future market change, in 3 years or less smartphones will happen to have full-fledged game console capabilities, many efforts underway even 2-3 years back heading that direction particular with Android.]

In the end, only one device can win and it was always destined to be the smart phone due to portability --- laptop/desktop sales are falling very quickly which is a bit disturbing (Tablets +69%, computers 14% drop in units sold).

Re:Start on Windows or tablets

[hibiki_r]

Apparently Nintendo has been opening up to indies quite a bit: For instance, the requirement for an actual commercial address is gone. However, you'd have to be mad to make the WiiU your main platform, if just because as an indie, you will not get enough exposure to warrant the gamble. That's why everyone and their mother tries to develop for PC: If you get on Steam, you will get plenty of visibility.

Re:Market is Apple/Google's, but N has an advantag

[dgatwood]

I'd go one step farther, and say that what's killing Nintendo is their tight-fisted control over their platform. If Nintendo made it easier and cheaper to develop for their platform, as opposed to (reportedly) charging thousands of dollars for an SDK under NDA, they'd be in much better shape right now.

All those potential developers who they've turned down over the years have moved on to develop games for iOS and Android, and are now Nintendo's competition. It's what I've been saying for years—the strength of a platform is entirely dependent on the size and vigor of its third-party developer community. If you don't have that, you don't have anything.

When everything else fails.

[Z00L00K]

The answer is adult content.

Re:I think Nintendo is toast

[lister king of smeg]

Once Xbox came to be, they filled the void once occupied by Nintendo. There isn't room for a 3rd player in the home console field - or at least I don't think Nintendo could even make a dent versus Xbox and Playstation.

OK but if I wanted to save Nintendo.. (hang on, I have to look up what a WiiU is - omg it looks like total shit)

I'd go back to the roots. Create games reminiscent of what worked in the 80s and early 90s, but with a little more flashiness and multiplayer. Not everybody wants 3D (personally I was over it after I played super mario 64)

Nah there has always been a tri force, if you will, of consoles;

Atari Sega Nintendo
Nintendo Sega Playstation
Nintendo Playstation Xbox

Unfortunately for Nintendo being the lowest profiting of the three and having no other markets to support them unlike Microsoft and Sony and having mobile gaming from android and ios, smart tvs and apple and google tv boxes as competition as well as from the me Steam box, Nintendo looks like it is about to lose its place of dominance.

We can see that the former consoles manufactures have shrunk to but a former shell of what they used to be Atari is facing bankruptcy, Sega turns out the occasional game for the other three consoles and farms out sonic the hedgehog to pay the bills. Nintendo does not want to turn into Sega and most definitely does not want to become atari. So as I see it they have to option at this point

Sell out or Buy out.

They could sell them selves to apple google amazon or microsoft for the ip and maybe they will keep the devs and writters, or they could merge with or buy out valve and support pc gaming.

As I said in another post higher up

A Microsoft buyout would bad but at least the game might someday see a official pc port.
A merger with Valve could be interesting to see and shake everything up for the gaming industry, as long as they kept the game development team separate have Nintendo focus on family gaming and peripherals and Valve on PC and hardcore gaming and co operate together on consoles.
A Google buyout would be great for mobile and give Google TV some teeth in the gaming market and could quiet possible see a release nintindo apps for other platforms such as windows 8 and iOS like they have for other core customer facing services
Then there is the Apple buyout where hardware would probably cost more and merge with apple tv and iP(a||o)d for console and mobile gaming respectively, the have similar styling but other than that I don't see it being a great match for costumers & fans especially.
If they have to sell or merge I would hope for either google or valve buy/merge.

Re:Dump the Japanimation

[trytoguess]

You mean do more besides the whole "Japanimation" thing correct? Unless you seriously meant they should just ignore their core demographic in Japan...

Er, Pokemon?

[HalAtWork]

Zelda, Metroid, Kirby, Excite Truck, Mario, Kid Icarus, Dr. Luigi, etc are not Japan-themed, and the only series that looks like anime is Fire Emblem and Pokemon, but the market seems to love those, especially Pokemon, and it has an actual anime attached to it! I think your theory is more than a little off.

Re:Market is Apple/Google's, but N has an advantag

[thoughtlover]

The Secret Developers talk about how difficult it was developing a title for the Wii U.

Re:Nintendo is the last company that understands c

[RaceProUK]

requiring an internet connection, thus ruling out putting it in the living room with the TV

If only there was some way devices could communicate wirelessly. It could be given a cool-sounding name like Redfang or Wiffy.