Wednesday, June 19, 2013

Why Nintendo should NOT step down from hardware

I've read countless comments from gamers over the past several years calling for Nintendo to step down from the hardware business and just go the way of Sega making third party software. This sentiment strikes me as lacking in foresight and consideration of the consequences that this would entail; on top of just plain being a bad business decision in general.

First of all, it should be noted that the Wii won the last generation. Yes, I know this still comes as a shock to some, but in terms of raw console sales, the Wii outsold its other two competitors both in the US and worldwide, currently clocking in at a full 22 million units ahead of the Xbox360 with 99.84 million units sold. What's funny is that in spite of this, I was still seeing comments even before the rough launch of the WiiU calling for Nintendo to drop out of hardware, which makes absolutely no sense considering these statistics. Yeah, sure, let's just quit while we're massively ahead? There's a winning business strategy if I ever saw one.


OK, so there is the consideration that despite the Wii's humongous sales, it could be argued that the system isn't as successful as it is made out to be because for many gamers the console has been collecting dust on their shelves after the initial excitement over the motion controls died down and there was a lack of titles to satisfy the hardcore audience. I get that, and from a consumer standpoint, the success of a console should probably be measured a little differently, but strictly from a business perspective, it's the sales that matter at the end of the day, and there's no question that from this viewpoint the Wii was the clear victor. On top of this, the Wii's hardware and price point allowed Nintendo to turn a profit merely from the sale of the console itself whereas Sony and Microsoft had to sell their consoles at a loss and recoup the damages through software. This generation was a massive victory for Nintendo in that regard, and so it would be completely silly for them to stop at the Wii.

But now we enter the WiiU. The console has certainly had a rocky launch and Nintendo has suffered some financial troubles with the loss of the casual market, third party support, and hardcore gamers as well, but even still, this is a far cry from being in the dire straits that Sega was facing when they launched the Dreamcast. Remember that Sega went through three failed consoles in a row before their ultimate decision to throw in the towel on hardware. When was the last time Nintendo had a failed console? An argument could *maybe* be made for the GameCube, but even despite finishing third place, it sold enough units to hold its own, and it was only a very short margin behind the original Xbox in sales. Other than that, the only real flop they had was the Virtual Boy as far back as 1995; a full 18 years ago, and we're long past that now. Furthermore, can the WiiU even be regarded as a failure yet when it's this early in the game? The Playstation 3 had a more difficult launch than this and was able to pull itself up by its bootstraps. In fact, the WiiU has sold 2.6 million units globally as of March 2013, which in a similar timeframe during the last console era, the PS3 only sold 2.4 million units and the Xbox360 had sold 2 million. Still, this doesn't change the fact that in the markets Nintendo really needs to hit right now, they're in quite a bit of trouble, but nonetheless the situation could be a lot worse than where it actually is.


Now, that's just the business side of things, but there's another aspect to this we should consider too. While it's true that Nintendo's innovations don't always deliver and can sometimes come off as gimmicks, they are the only ones in the business that are actually trying to do something different. Without them, we wouldn't have seen our traditional thumbstick controllers in the first place, as the N64 was the first console to feature them. I applaud Nintendo for continually taking the risks that they do because no one else will. Sony and Microsoft in contrast tend to refine and iterate rather than innovate, and while there's nothing necessarily wrong with that, in the absence of anyone else taking the helm to try something different, all that spells is more stagnation and Call of Duty. It's slightly irritating that many of the same gamers who speak out against repetition and lack of innovation in the market are the same people who then turn around and instantly write innovations off as gimmicks. What were you honestly expecting anyway? You think one day we're going to be playing with our standard thumbstick controllers and then the next we're suddenly into full-on virtual reality? Sorry to say, but I got news for you: that's not how it works. Technology generally progresses in stepping stones, not giant leaps and bounds, and the Wii was just one small step toward that virtual reality future we all desire. At the very least, I find it refreshing that I can sit through a Nintendo presentation and get through minimally 5 or 6 trailers before I see the first gun or sword being swung around. I for one welcome Nintendo to continue to carry the torch for game genres that aren't really being explored in the western markets and offering more variety to the table.

I have my fair share of beefs with Nintendo as well. They really do need to step up their game with a more robust online network, stronger hardware, new IPs, and better third party support. I also don't like what they did with screwing over Let's Play Youtubers by stealing their revenue. Never for a second though do I think they should step out of the hardware business; not while Sony and Microsoft are behaving the way they are now, and not while Nintendo is holding such a strong standing in the market. We need the competition.

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