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Nintendo: Marching to the Beat of its Own Drum Since 1889

Nintendo: Marching to the Beat of its Own Drum Since 1889

Jul 10, 2013

We all noticed a long time ago that Nintendo marches to the beat of its own drum.  It’s a policy that, on the whole, hasn’t gone badly for the elder statesman of video game consoles.  Long before Xbox and Playstation were blips on the horizon there was Nintendo.  It has endured while the likes of Atari, SNK and its major nemesis Sega have seen their consoles become a thing of the past.  So why is Nintendo’s name now greeted with such negativity and, in many cases, amusement?

Nintendo likes to do things differently.

At a business level, it is understandable.  Nintendo is different from Microsoft and Sony.  For Nintendo, gaming is all it has.  For Sony and Microsoft gaming is just one part of the whole.  But despite being the only company focussed purely on gaming, Nintendo has always seemed to lag behind in technology.  The Wii U has been its first tentative steps into HD graphics, something that the Xbox 360 and Playstation 3 have had built in for seven years.  Likewise Nintendo still doesn’t seemed to have worked out online play yet.

Instead Nintendo has tried to innovate to stay ahead of the competition.  And with the first Wii it achieved something quite remarkable.  Here was a console that, technologically speaking, was light years behind its competitors.  And yet here was a console that achieved the unthinkable; it took gaming out of the bedrooms of boys and young men everywhere, and took it into the family living room.  The Wii’s innovative use of movement control instead of joysticks and buttons meant that suddenly the whole family were playing.

And it definitely paid off in sales.  Up to March this year, the original Wii had sold nearly 100 million units.  This made it Nintendo’s biggest selling non-handheld console.  More importantly it outsold both the Xbox 360 and the Playstation 3.  Nintendo’s shares, down as low as the 70s and 80s in 2004 were boosted to over 400 in the year following the console’s release.  They wouldn’t fall below 200 again until June 2009.

It wasn’t just the Wii that was doing well.  Nintendo has always done well in the handheld market and the 2004 Nintendo DS was no exception, making sales of over 150 million up to March this year.  These figures make it the second highest selling console ever and began the upward trend in Nintendo’s share price leading to the highs of the Wii.  Nintendo’s next innovation, the 3D version of the DS, was a slow starter despite some ground-breaking technology.  But sales have picked up and now it has sold 31 million units as of March.  Today the current third best-selling game on Amazon.co.uk is Animal Crossing: New Leaf for the 3DS.

In 2012 Nintendo tried the same trick again, this time with the Wii U.  It was very similar to its namesake, but with the addition of a hybrid tablet/touchpad controller.  This allowed a user to play the Wii U games on the controller itself, without needing to use the television.  This time, however, Microsoft and Sony weren’t going to be left behind as they were with movement control, so they immediately jumped on the bandwagon with Xbox Smartglass and Playstation Vita integration.  Nintendo had its own problems, with the console suffering from slow update speeds and poor battery life in the new controller.

Where Nintendo mainly stuttered was the lack of games released for the console from the start.  A new Mario was always on the cards, but where were there other exclusive brands?  The Zeldas, the Metroids, the Donkey Kongs?  Similarly new IPs failed to materialise, other than the averagely received Zombie U (which failed to turn a profit and will not get a sequel).  It seems that Nintendo had rushed out their new console, probably in order to avoid going up against the new Xbox and Playstations that were on the horizon.  More popular games such as Lego City: Undercover arrived, but nothing exclusive that was seen as a system seller.  It seemed Nintendo had not learned from the release of the 3DS, where poor initial sales were blamed on the lack of games at launch.

Sales were exceptionally poor.  In fact in Nintendo’s financial year ending March 2013, the Wii U was outsold by its predecessor, the Wii.  While the newer console was only available for the final five months of that period, it still must have been damaging to have been outsold by a five year old console.  The share price, which had remained fairly consistently 100-110 from 2011Q2-Q4 had already been fluctuating in the lead up to the console’s release.  Since the release the share price dipped again, dropping as low as the 60s in February this year.

Further problems compounded things.  Firstly Rayman Legends, originally slated as a Wii U exclusive, was announced for other consoles.  Next gaming giant EA announced that they were not currently developing any games for the Wii U.  While there was an emphasis on the “currently” and making sure to stress the announcement doesn’t mean they never will, with development cycles being measured in years it still implied a long wait for any EA titles on the Wii U.

Fast forward to E3 and Nintendo once again proved it doesn’t play by the rules and chose not to have a presentation there, instead choosing to do one of its own “Nintendo Direct” brand presentations the same week.  In typical Nintendo fashion the livestream was beset by technical problems, but at least it had games to announce.  They also had a stand at E3 to allow for some hands-on play but for many these games were just new versions of the same games Nintendo had been making since the NES.

The major downside was that most of these games were not slated for release until 2014, while the Wii U’s marquee exclusive in the lead-up to Christmas this year is The Legend of Zelda: The Wind Waker – a game first released on the Gamecube over ten years ago.  Nintendo have seen their share price increase since the announcement, reaching the 90s for the first time since December last year.  Although this might have something to do with the strong sales of Animal Crossing: New Leaf and the imminent arrival of other highly anticipated handheld games such as Pokemon X & Y.

There is a perception that while Nintendo innovates regularly in its hardware, it does not do so with its games.  This isn’t strictly true.  Nintendo often innovates with its games, but doesn’t like to take the risk of not having a recognisable brand attached to them.  The end result is games like Super Mario Galaxy.  Acclaimed by critics and fans alike, it was nothing like any Mario game that came before it.  On its own it is a revolutionary game.  But Nintendo wanted the Mario name to support the game, as it was afraid it would not stand on its own.

The end result is that to some Super Mario Galaxy is “just another Mario game” and there is a perception that Nintendo cannot create compelling new characters.  It is perhaps telling that when putting together the new game in the successful Smash Bros. series, which features all of Nintendo’s most enduring characters, the only new ones Nintendo could come up with were Mega Man (who hasn’t featured in a non-handheld game for ten years) and the personal trainer from Wii Fitness.  It creates an interesting catch-22 for the company.  Does it try something new, or does it stamp one of their recognisable brands that have been reliably selling games for over 20 years on it?  It’s a system that works for Call of Duty and Halo after all.

And make no mistake, Mario might have been doing most of the same things since 1981 but those games still sell.  And it is ironic that while Playstation and Xbox compete for the best line-up of exclusive titles, Nintendo arguably has the strongest batch.  With a reduction in price (something Nintendo has steadfastly refused to do so far), Wii U might win over gamers as a cheap second console just as the first Wii did.  But with both Xbox and Playstation making attempting to make inroads into the non-gamer crowd that made the first Wii so successful, Nintendo face a battle to repeat the monumental sales of their previous console.  The test for Nintendo is convincing the casual market that the cheaper option is worthwhile and that the Wii U is a significant enough upgrade from the Wii.

Whatever the fate of the Wii U, we can all rest assured that none of us can second guess Nintendo and as long as it exists in some form it will continue to do things their way.  Whether that is because it is oblivious to everyone else or chooses to ignore it is another guessing game.

Share data from yahoo.co.uk
Sales data from nintento.co.jp and wikipedia
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