Yet Another Obituary for Nintendo
Every three or four years — coincidentally about 12 months out from the next console game upgrade cycle — it’s time to pronounce Nintendo dead. Well, it’s that time of year again, folks. The last six months were big trouble for the Japanese gamemaker:
Japanese gaming giant Nintendo revealed on Thursday that it lost $925 million over the six months ending in September due to a sharp drop off of game and console sales, even as healthy sales of Apple’s iPhone and iPad continue to establish iOS as an alternative gaming platform.
The company had previously warned in July that it would lose money during the first half of its fiscal year, but Thursday’s results were even worse than it had expected. Net sales for the period were 215.7 billion yen ($2.84 billion), down from 363.2 billion yen ($4.78 billion) in 2010. Net income fell to a loss of 70 billion yen ($925.4 million), much worse than the 35 billion yen loss Nintendo had originally forecast.
“Weaker than expected” sales of Nintendo DS and 3DS software and yen appreciation were cited as the main reasons for the variance.
What’s to blame for such bad numbers? Apple’s iOS devices are taking over casual gaming and Nintendo’s Wii and DS units are at end-of-life. Disruptive competition and bored customers is a deadly combination.
Previously, Nintendo had always found a way back — most spectacularly with the Wii. PS2 and XBOX nearly killed Nintendo a few years ago. So the company just didn’t have the resources to mount a high-tech competitor to the XBOX 360 and the PS3. Instead, Nintendo forged a different path: An easy-to-use, low-tech console. Best of all, the Wii was cheap enough to make that Nintendo made money on each one from the very first sale. Microsoft and Sony sell their consoles, at least initially, at a loss. They make it up on game sales and, eventually, lower manufacturing costs.
So what trick does Nintendo have up its sleeve for next year? It’s called Wii U. Rhymes, I think, with p-yew. It’s a console with cheap-looking iPad knockoffs for controllers. It has a touch screen! And lots of buttons! Two circle pads! A thumb pad! And a stylus!
Really? A stylus?
Everything that Wii was — simple, intuitive — Wii U looks to be something else. Do XBOX and PS3 controllers scare you, with their size and all those buttons? Wii U controllers are bigger and more buttony. Which screen do you look at — the one in your hands or the one on the wall? Why the hell do I need a stylus?
I just don’t get it. That controller is such a huge slab of a thing, my first reaction was, “My God, it’s full of stars.”
Now, maybe I’m wrong. I didn’t “get” the Wii when Nintendo first showed it off. Then I saw how anyone could just wave the motion-controller around and start playing games, and it clicked. The Wii U seems to have none of that charm. The U looks like a desperate Hail Mary pass. Maybe it will work, but…
I’m not saying Nintendo is done, but I am browsing forks.
I thought you had to be a socialist progressive in order to talk about Video Games, and that nobody else has time for such things.
Though, I realize you’re talking about it more as a tech-analyst. Nintendo misfires every now and then, and will always manage to stay afloat as long as they keep riding their Pokemon franchise into the ground. As soon as they put out a full, legitimate 3DS effort in the mainline version of the Franchise, that alone will move millions of units worldwide and almost singlehandedly keep the company afloat.
It’s a console with cheap-looking iPad knockoffs for controllers. It has a touch screen! And lots of buttons! Two circle pads! A thumb pad! And a stylus!
Buttons and circle pads and the like are good.
The iOS model sucks for a whole lot of sorts of games (eg, anything involving inputs that aren’t ideal for touch, or where covering the damned screen with your hand is bad) – and I read that complaint as basically “it’s a lot more complex than iOS”.
True. But that’s good, here. (I also don’t think it’s reasonable to call the controllers “iPad knockoffs”.)
Now, I agree, it could flop – but it also addresses issues with the Wii, like the difficulty of playing games that aren’t best addressed by “move the wand around”. Nintendo knows better than I do how many “classic controllers” it’s sold – and I suspect the number is significant enough that they thought it worthwhile to build in the functionality.
I believe the stylus is optional but occasionally useful; all data I have says it’s a touchscreen in general, so no stylus will necessarily be needed. A stylus is useful for detailed input – see Scribblenauts. And of course, people with a DS/DSi are used to a stylus and if they do “marketplace”-style downloadble DS/DSi content, a stylus makes for maximum similarity.
Likewise, the screen could be useful or stupid on a by-game basis. Word is it can simply replicate the main screen, meaning you could essentially use it as a wireless-tethered portable. Which has its possibilities… (See PSP linkage to the PS3 and DS/DSi usage as a Wii controller.) Or as secondary “information” screen, as the DS second screen has been used for.
Could suck. Could rock. All depends on per-game implementation.
(Full disclosure: I own all three current console platforms, a PSP, a DSi, and do a lot of PC gaming. So I got no platform bigotry, and wide experience.
Also, what Kitsune said, but not just Pokemon. Zelda and Mario alone justify buying it, for a whole lot of people, myself included.)
The new Zelda’s coming out next month. That always brings a shot of life to Nintendo’s bottomline.
The 3DS’s problems are mostly related to a weak lineup that the launched with. That’s about to change, with the sales of Zelda: Ocarina of Time and the new Mario 3DS, Mario Kart, Luigi’s Mansion 2, Resident Evil, and Kid Icarus games that are upcoming. That’s not even a partial list of 3DS games that are coming out, and the overall list is impressive. This is it’s real “launch”. I expect to see sales of the 3DS pick up this fall- especially since the iOS game format is nice, but it’s not really capable of being on the level of Nintendo or Sony’s handhelds. While I’m at it: never, ever, count Nintendo out of the handheld market. Ever.
The Wii U probably represents alot of Nintendo’s losses, at least from an R&D standpoint. Time will tell if it works, but my gut feeling is that it will, and alot of games will still be “standard style” for controllers. Plus, I think the system will be current gen, and be up to the graphical standards of the 360 and the PS3. It’s also not like the controller’s really “new”. The DreamCast tried it before, but this feels more like a true application of that template. Nintendo thinks outside of the box better than anyone in peripheral design and intuitive concepts. They made Game Boy work- all the way through to the DS, and the 3DS is an interesting concept that just needs a game library. The Wii is an excellent design- and really, there wasn’t much of a need to go to the 360 and the PS3 for their early years. In fact, Sony’s still paying for that, and will be, for years to come.
Let’s also not forget what the Sendai Earthquake/Tsunami meant for Japan, and Nintendo’s overall market in Japan, which still makes up alot of their profit margin (unlike, say, the 360).
And, as others have mentioned, Zelda: Skyward Sword will be one of the hottest titles selling this fall, and might bump Wii sales in general.
Here’s something to think about http://penny-arcade.com/comic/2011/08/01
Remember that not all markets are the same.
Nintendo could be selling a lot more games for their old portable systems if they would target the people who actually use them. Kids to young to have cell phones.
Sure, Nintendo’s demise has been called wrong several times, but the boy who cried wolf was right the last time.