[State of Play] Nintendo Plays Their Own Way

Welcome to State of Play, an editorial column from Pixelated Geek. In State of Play, we’ll be dealing with major issues in the gaming community, and we’ll be reaching out to our community for feedback and interaction. Our goal with State of Play is to create a respectful, professional, and insightful dialogue within a group of serious interested parties. Games are serious business, not just the largest moving part of the entertainment economy, but a form of expression where emotionally impactful stories are told throughout communities that grow and bond, and they’re an important educational tool. We take games seriously here, and the goal of this article is to seriously analyze the serious business of gaming.

The interactive entertainment industry is a particularly sensitive, complex, competitive and trend-driven market, as has been evidenced by the last six months of brutal back-and-forth jabs between console giants Sony and Microsoft. The hype-machine is the army of the console war, forty-second trailers stuffed to bursting with sound bites and dub-step and carefully-edited ‘game-play’ the infantry. The war is waged in every corner of print and electronic media, from the dingiest of basements to the grandest halls in the greatest of convention centers, and on almost every available scrap of space on the internet. The biggest moments of the year in interactive entertainment are those brief hours of biggest conferences when the biggest of companies announce what we get to be excited about next year.

It’s all so unendingly corporate, it’s all such a ordered, structured machine and once you start seeing through the layers of clever packaging down to the core product it’s all so very tiring. The console wars, the endless fanboy-dom, the intensity of argument and attack and the vehemence with which the sides declare their undying hatred of the competition has always seemed small and strange and pathetic to me, especially in an industry that’s about . . . games.

Game: noun \ˈgām\ 1.(1) : activity engaged in for diversion or amusement.

You will have likely noted my tendency to refer to the industry as a whole as the ‘interactive entertainment industry.’ This is due in largest part to the fact that it is the most accurate way to the refer to the industry as a whole. It encompasses the spectrum of entertainment that can be interacted with, it allows space for play within its fold in a way that ‘Gaming Industry’ doesn’t. Dear Esther isn’t a traditional video-game, but it easily and comfortably fits within the the concept of interactiveentertainment. It also allows the industry to create a more mature image for itself in the media.

It also has the side-effect of distancing the industry from what it is at its core, from where it has come.

Nintendo is arguably the reason that the ‘interactive-entertainment industry’ exists in its current, multi-million-dollar, largest-entertainment-industry-in-the-world status. Nintendo was a gaming company before computers existed.

I can already hear the slides being drawn back by rabid gaming historians: no, Nintendo wasn’t the first and yes they got their start manufacturing and distributing other companies consoles. But Nintendo was the first to get it completely right. If you ask a layman to name any gaming console, they will say Nintendo. If you ask a person to name the first gaming console, they will likely named the NES.

Nintendo’s pedigree is not in question. Their dominance of the early market is equally inarguable and they are the only early dominant force to emerge from the dust of the seminal years largely unaltered. But it cannot be fairly or accurately stated to say that Nintendo’s future is an unquestionably rosy one. Kyoto’s giant has always played their own way, and that has always been to their credit. They have cultivated the most devotedly loyal fan-base and done so through a combination of careful evolution and singular purpose. But it’s very difficult to look at the last two years of Nintendo’s catalog, and unfortunately even less credulously the next few, with any justifiable confidence.

Nintendo isn’t in real trouble – not yet, in any case. They are a very wealthy, capable multi-national company with the sort of name recognition that most can only dream of. But there’s absolutely no question that unless certain major concerns are addressed, and quickly, real trouble could be just around the corner.

The 2DS

Nintendo’s most recent bit of questionable decision making is the 2DS. Looking every bit the April Fool’s Joke, the 2DS is a cheaper, smaller, and less portable variant of the wildly popular 3DS … sans the 3D. It’s top-heavy axe-head shape makes for an odd grip, and the lack of hinge between the screens renders the system all but completely unportable. So the 2DS is, in short, a smaller, nontransportable 3DS without the 3D.

And yet for all that, it’s an oddly compelling piece of hardware – if you don’t happen to care about portability or 3D functionality. It’s certainly a budget friendly option, at $50 – $70 cheaper than its DS siblings and the 3D-feature of the system has never proven itself anything more than a gimmick. So the principle issue is then one of portability vs. durability – and given that 1) the vast percentage of catastrophic damage issues involve the hinge of the DS system line and 2) the amount of public concern about the effect of prolonged exposure to 3D technology on the eyes of young children – the 2DS has several arguable advantages – but it still looks like one helluva practical joke.

The Wii U’s Unfortunate Price Point

Based on differing sources the Wii U’s internal components cost between $130-$151.50. The overhead costs – research and development, shipping and marketing for instance – are less easily identified, but based on statements made directly by senior Nintendo officials, the Wii U has never been an independently profitable item.

While that’s not in-and-of itself unusual – consoles often launch at a loss and depend on accessories or first-party software to make up the slack – it is unusual for Nintendo to operate with that philosophy. Nintendo has frequently focused on user experience over graphical fidelity – delivering less horsepower but at a lower, more consumer friendly price-point, and that has often paid off. The Wii U would have been a continuation of this philosophy but for the expense of the tablet controller. As a consequence, Nintendo has delivered a console with barely more horsepower than its competitors of the previous generation, and at a price point that is both at a loss to Nintendo and insufficiently low to be attractive to consumers. This situation was bad enough against the PlayStation 3 and Xbox 360 at their current price-points, but the addition of the PS4 at $399 and the inevitable price-drop that both of the current generation titles will see shortly after their successors release will put the Wii U under even more pressure.

Earlier this year, Nintendo cancelled the 8GB basic system and shifted the price point of the Deluxe Wii U down from $349.99 to $299.99, obviously a pro-active maneuver to better position the Wii U against its competitors. The real question here is whether the shift is significant enough to make any sort of difference in the retail ecosystem. At 299.99 it sits directly equal from the higher-end 360 and PS3 bundles, and just $100 shy of the PS4 launch bundle. With the limited library, mediocre-at-best online, unfortunately short line-up list for 2013-2014, and the complete lack of publishing support from EA – $299.99 is an awfully hard sell.

The Third-Party Publisher Pickle

Speaking of, the Wii U has had a particularly rough year – after early hopes and promises that this would be the generation in which Nintendo would break their third-party publisher curse. But after a decent early showing with favorites like Batman: Arkham City and Mass Effect 3, the promise of deep third-party support evaporated almost completely. EA, in an unprecedented maneuver, clarified that they ‘have no titles in development for the Wii U,’ a gently phrased withdrawal of support by an entire publishing house. The loss of any publisher is a major blow to any console, but EA is a special kind of big franchise beast. The FIFA franchise is highest selling title in the world. The Madden NFL franchise is a perennial top 5 highest grossing title, and the Sims series has achieved a level of brand-recognition and a fan-base broader and more varied than any other in gaming. The loss of one of any one these franchises would be brutal but the loss of all – not to mention the rest of EA’s stable – is simply devastating.

It’s not all doom-and-gloom, however, though the good news is brief and shallow. Ubisoft – quite intelligently in my estimation – seems quite dedicated to supporting every dog in the fight. Assassin’s Creed IV: Black Flag, Splinter Cell: Blacklist, the casual juggernaut that is the Just Dance franchise, the Rayman titles, and the upcoming Watch_Dogs are Ubisoft’s big hitters for Q4, and are completely represented on the Wii U. Square Enix and WB, both publishers with a little less market share and a lot of ambition are chasing after market share with heavy hitters like Batman: Arkham Origins, Scribblenauts and Deus Ex: Human Revolution – Director’s Cut. So while third-party relations aren’t a complete disaster, they could be miles better. The Wii U has been in the market for roughly a year and still has less than 30 significant retail titles – a far cry from the overwhelming load of shovel-ware that plagued the Wii, but there’s a fine-line between controlling the quality of the library and smothering it entirely.

Nintendo has always countered the relative lack of third-party support with phenomenal first party quality, and the Wii U is no different – the best reviewed and highest-grossing titles on the Wii U are universally straight from the Nintendo publishing house. But  New Super Luigi U and The Legend of Zelda: Windwaker HD are both nearly faultless, and Pikmin 3 is an absolute blast, they represent 3 superlative works in a paltry library of 10 first-party titles released or projected for release by Nintendo in the 2013 business year. It hardly needs to be stated that without adequate third-party support, Nintendo must pick up the slack and 10 releases in a year simply won’t cut it, no matter their quality or popularity.
There is, as always with a company engendering such deep loyalty and with such entrenched roots, a certain futility in second-guessing their actions and policies. The Wii U is far from a successful system as it stands, but console generations are a long, long thing, and if we learned anything from the Wii, it’s that Nintendo is very adept at turning a perceivable failure into success.

The Tiny Titan

And while it’s certainly easy to look at the Wii U’s first year in a negative light, there’s a great deal of room for the argument that it simply doesn’t matter. Nintendo can wade their way through several lackluster years, because of the single strongest market buoy in the history of the industry – the DS. Nintendo effectively created the handheld market, and they have never failed to own it. Despite technically superior competition from as far back as the GameGear to as recently as the Vita and iTouch line, Nintendo has always dominated the handheld market, and recent history shows no evidence of change. It’s reached the point where it’s news when one  of Nintendo’s handhelds doesn’t top the sales chart.

It’s not just a matter of whether or not Nintendo is winning. It’s the degree to which they’re winning. This is a level of dominance akin to the North Carolina’s piedmont’s dominance over college basketball, to the English empire’s dominance over … well, over most of the world in the 1800’s, to Google’s dominance over the internet. Nintendo owns the handheld market in a way few things own anything.

The DS is the second best selling console in the history of interactive entertainment, surpassed only by the venerable PS2, and only by a paltry 1 million and a bit of change (a 2 million margin with respect to the PS2’s 155 Million in comparison to the DS 153.98 million). The 3DS sits neatly in 12th place, and of the eleven that precede it, only two are in the same generation (the PS3 and XBOX 360). Nintendo is without question the wave-maker and trend-setter in the hand-held market.

The Quiet Victory

I distinctly remember a lot of people explaining to me who ‘won the last console generation.’ I remember keeping my mouth shut, to a significant degree. There is no question that the average gamer has a strong opinion about the last generation. And oftentimes, that opinion revolves around the last two years of the PS3, or the aggressive strategy of the 360s early years. The average gamer is a gamer, first and last. The average gamer has not looked at the numbers.

The Wii is clearly, above and beyond, one of the most successful consoles in the industry. The Wii sold something nigh unto 100.90 million units, in comparison to the XBOX 360’s 82.9 Million and the PlayStation 3’s 80 Million. It didn’t just outsell the competition. It outsold the competition to the tune of AT LEAST 17 MILLION.

Wrapping your head around the number 100.90 Million is just absolutely … impossible. Wrapping your head around the deficit between the Wii and it’s closest competitor means somehow finding a way to make the  18 million make sense, which I suppose is a less monolithic challenge, but not by much.

That said, the Wii U is patently and clearly the least successful console of this generation, and without some serious modification of statement doesn’t look to have much in the way of reversing this trend. The Nintendo faithful are already on-board, and those of us that already have it are greatly pleased by it’s Netflix and Hulu functionality, but until we get a Zelda, a Mario Kart, a Smash Bros., it is doubtful that the console will pick up in any serious or relevant manner.