On Wednesday, Nintendo’s president Satoru Iwata declared his intentions to help the company post a billion dollar in profit by March of 2014. Which would be, if all goes well, a stark contrast to the previous two years of posting consecutive losses. Kotaku has pointed out that the Japanese media has already started speculating that if his goals are not met, Iwata will step down.
Nintendo, if its not clear by now, is in deep shit. In this year alone, it’s already operating at a nine month loss of $64 million dollars. The company has also cut sales expectations by 27% for the Wii U and 17% for the 3DS.
Long time fans will no doubt will disappointed and frustrated by this news.
And yet, no one should be surprised.
Nintendo started digging this hole for itself six years ago. In 2009, when Wii sales started plummeting in the absence of quality third and first person titles, the company should have acted. Iwata said as much: ” I think the current decline in hardware sales is due to the fact that there aren’t many big titles (at the moment).” The next year, sales continued to fall.
Figuring they should cut their losses and start from scratch, the company unveiled a successor to the Wii in early 2011: an underpowered “next-generation” console with a sub-HD tablet controller, no online strategy, no content strategy, and no strategy for luring game developers back to their side.
Iwata believes that Nintendo’s problems lie with lackluster releases and two separate divisions for consoles and handheld production.
Nintendo’s biggest problem is Iwata and the leadership at Nintendo being criminally out of touch with the market.
Consider this: With the Wii U, Nintendo’s heads finally conceded to the impact tablets have had on gaming. Their solution, however, was not to lure low-cost apps to their handheld platform, but rather awkwardly sticking a tablet screen on a controller.
A gimmick, one neither consumers nor developers seem to care about.
Or how about three years ago, when the consumer electronics industry was attempting to peddle 3D-televisions onto the public, Nintendo responded with the handheld device marquees by a glasses-less 3D experience.
Another gimmick, one that completely disrupted their ultra-profitable DS platform by simultaneously dating its predecessor and scaring off developers.
At no point have Iwata and company stood back and truly evaluated the rapid changes occurring in the video game market.
For instance, much of the Xbox 360’s current success lies not with gaming, but with media distribution. By Microsoft’s own admission the Xbox 360 is now used more as a video consumption platform than a video game console. Sony’s Playstation 3 is enjoying a similar transition, both as a Blu-Ray player and as the most popular method of watching Netflix. Both consoles also offer fairly stocked online libraries of current films and TV shows.
Nintendo never bothered positioning itself as a gaming hub, not unless you count their standard-definition Netflix app – which, for the longest time, could only be accessed through a mail-ordered DVD.
Last month, Nintendo released Nintendo TVii for the Wii U. It’s a one-stop app which turns the Wii U controller into a glorified universal remote, albeit with the ability to access apps for Amazon Instant and Hulu Plus. Netflix and TiVo won’t be supported until later in 2013. And, at present, there are no plans to support HBO Go, Flixter, Crackle, ePix, Fox, ABC, CBS, NBC, YouTube, Vimeo, ESPN, Xfinity, Comcast, Rogers OnDemand, Vudu, NFL Sunday Ticket, NBA Game Time, NHL Center Ice, MLB.tv, UFC… well, you get my point.
It’s a decidedly low-fi approach for an industry investing in 100% on-demand cloud streaming. Six years ago, Nintendo TVii would have been cool.
Earlier this month, Iwata revealed surprised over user demand for the Wii U’s deluxe package. As it turns out, Nintendo’s thought process was that consumers would be happiest with a console that included 8 gigs of internal storage, over the deluxe package’s 32 GB. “It was the first time Nintendo released two models of the game console at the same time,” Iwata told Reuters, “and I believe there was a challenge with balancing this.”
Would anyone be surprised that a consumer would choose to pay $50 dollars more for four times the storage? Both Sony and Microsoft offer consoles with 250 GB of storage (or higher) for similar prices.
In fact, did you know that Nintendo still doesn’t support unified gamer accounts across systems? Meaning, if your handheld is stolen, Nintendo will actually request a fucking police report before they release your content back to you.
Finally, in a sad attempt to stir up excitement for the Wii U, Nintendo made some questionable announcements last week; namely the promise of two Zelda titles (one being an HD remake of 2002’s Windwaker) and a handful of Mario titles. And yet, timelines for release, or any media (for that matter) weren’t present. Effectively, Nintendo announced future announcements of projects they’re thinking about. Better start saving up now, kids.
Ladies and gentleman, we’re staring at a husk – The dried outer shell of a company once considered the ambassador to video gaming.
Rather than promising to rally developer support, bring Nintendo’s online services in line with its competitors, increase app support for the Wii U, or create a content strategy, Iwata will simply hedge his bets on a new entry in a 17-year-old franchise. And with this, he expects to turn a profit of a billion dollars next year.
If I was Satoru Iwata, I’d start polishing my sword.