maquiladora
Member
Non-wearable health monitoring devices is what they are investing in for the future, not the core gaming audience.
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Nintendo's Q3 Investors' Meeting slides, now in English
- Thread starter Richie
- Start date
Non-wearable health monitoring devices is what they are investing in for the future, not the core gaming audience.
Huge? My Tesco clubcard has been doing that for years.
This is what Club Nintendo should already be, everybody else in any other industry with client member cards is doing it.
LoveCake
Member
From the OP,
Yes it has, everything to do with gaming has changed from the software & how it's sold to the infrastructure, networking, consumers demands everything, & this is what is causing all the problems Nintendo are having, they have not looked at what others are doing & adapted.
Yes it has, everything to do with gaming has changed from the software & how it's sold to the infrastructure, networking, consumers demands everything, & this is what is causing all the problems Nintendo are having, they have not looked at what others are doing & adapted.
family_guy
Member
Well if there was any chance I was going to buy a Wii U, Nintendo just killed it.
Fredrik
Member
Still huge within gaming. I usually buy 40-50 games for each platform and generation, not counting small indie games, and there is no Club Nintendo where I live so I'm very very thankful to finally get something in return.
Fredrik
Member
Why? I've looked at all the slides and imo it's only good news. You get cheaper games the more you buy and it drops the fitness and health stuff and gets focused on games instead. Plus, DS on VC.
And that is exactly my point, there are people who just don't like the gamepad for even a small bit. Add that to the fact that Nintendo currently doesn't even know how to implement it in a good way, some people (read: basically a loooot) get a feeling the gamepad will be forced upon them, even though they know they will not use it (a lot). People like me. I still don't own a Wii U, I've played it a lot with friends, but I still can't used to the gamepad.
So basically SKU without a gamepad would be ideal. Pro Controllers for the old fasioned ones, and the ability to buy the gamepad for a specific price. But now, despite everything, they stubbornly still plan to make the gamepad happen. I really hope it'll work, but just making it an accessory would be a more practical solution in my modest opinion.
The strategy isn't difficult at all, not sure why half of GAF has such a hard time decrypting their clear message.
The QOL line is Nintendo releasing Wii Fit, Brain Age, Cooking Guide, English Training, Face Training, through a new type of platform. In essense, all the touch-generation titles that were so popular with the blue ocean crowd, are going to see commercial release through other means than a traditional console or handheld.
Nintendo isn't spending more resources to make QOL, it is more of a paradigm shift of the development staff who have been constantly making those touch generation products into this new delivery method. Whatever that is.
It is a highly logical thing to attempt. After all, Nintendo had these montrous IPs in Japan (Wii Fit, Brain Age, English Training, etc). Tbey can't just dump the software because Japan refuses to buy the hardware to play it on. A redelivery attempt is absolutely a worthwhile idea.
Sho_Nuff82
Member
It's the same logical fallacy that led to the creation of the Wii U - we were once extremely successful by bucking conventional wisdom, therefore, conventional wisdom is always wrong. It also suggests they aren't interested in filling niches that are being filled by MS/Sony. So if those guys are making FPS, we won't. Sports games? Who needs them? MS is investing heavily in Kinect? Fuck you, motion gaming.
It really is a bizarre way to run an entertainment company. Nintendo wholesale abandonment of genres (JRPGs in the SNES -> N64 transition, FPS in the N64 -> GCN transition, motion gaming in the Wii -> Wii U transition) is a big part of why they see a mass exodus of core consumers after every product. Their handheld line is much more consistent in this regard.
Boy Wander
Member
I guess my point is more that even without the pad, I still think Xbox One would outsell the Wii U, even if Kinect is mandatory. In which case, the gamepad itself isn't necessarily the problem. It's more of a marketing or general perception issue. Hence they need to give people a reason to buy one, hence, in their minds, selling people on the gamepad is the solution.
I wasn't expecting them to announce anything on that anyway.
It's a long term (next-generation) change.
However it will be a hard and long fight to make them to understand.
Whenever they have some kind of monitoring over what's said about them on the internet, or not (but it seems they do have some feedback), I think we should keep repeating ourselves about their need to expand in the west, for the western audience.
Pancakes R Us
Member
Exactly. It's shitty comments and attitudes like this mean I have no faith in Nintendo with it's current management. Have they been oblivious to the changes in the way which games are sold over the last .few years? Clearly not. They're just acting like things haven't changed.
Schnozberry
Member
I think Nintendo is just recognizing that their video games business is part of a declining market. There is a huge push for convergence, and Nintendo has to be forward thinking rather than consistently behind the times. They have to branch out and adapt if they want to survive. If their ideas for wearable devices are clever and unique, and perhaps integrate with technology that people use every day like smartphones and tablets, it could open up new markets for them.
Sure, the reason Japan doesn't care anymore is low Wii U sales. We all saw the gigantic sales of Brain Age on 3DS.
Well the so called core gamer is the one that isnt buying the console so why invest more into trying to get them to buy it. They should go back for the casual crowd.
One of the biggest misstakes with Wii U was trying to enter the same market as MS and Sony and in the process they lost their casual buyers. They cant compete in the same space as MS and Sony.
If you dont like it well then there are two other consoles for you.
One of the biggest misstakes with Wii U was trying to enter the same market as MS and Sony and in the process they lost their casual buyers. They cant compete in the same space as MS and Sony.
If you dont like it well then there are two other consoles for you.
Sho_Nuff82
Member
The market for the casual crowd is currently being dominated by Apple/Google/Samsung/Zygna/Facebook, and is currently being dipped into with increasing frequency by large 3rd parties in the East and West. Good luck chasing that "blue ocean". Nintendo is refusing to acknowledge that their eternal quandary - how do we lower the barrier of entry for new gamers - was addressed 6 years ago by the explosion of multi-touch devices. VR and/or virtual HUDs are the next big step, and they are poorly situated to compete in either field, because they are no longer a tech-relevant company.
You know who almost completely abandoned core gaming and still makes money hand over fist? Epic Games.
Nope. Tomorrow is the last day of January and they haven't announced one by now which means there will not be one.
Doczu
Member
Well, that means they're doomed. Like, totaly doomed.
Well, January is almost over and we've got no announcement so far. So, most likely not.
Since the main Directs tend to be bi-monthly, January wasn't a Direct month anyway, though. The next one should be in February, since we had a Direct last month.
Doczu
Member
Maybe they don't have anything big to show? Like x last year, or something. They propably know they are knee deep in shit and it starts to stink.
That argument doesn't make sense with the type of system Wii U is (underpowered, different architecture, etc.).
You're essentially saying "They designed a horrendous system for the core gamer, failed with the core gamer, and thus can't compete."
It's hard to see that they really tried...or they're horribly incompetent. One of the two.
Poetic.Injustice
Member
Underwhelming strategy announcemets; They pretty much accepted that the Wii U will sell miserably and bank on 'blue ocean market' again next gen.
I doubt the QOL thing will gain any traction in the long run. Don't Wii fit u bomb?
I doubt the QOL thing will gain any traction in the long run. Don't Wii fit u bomb?
I get the feeling that somehow Nintendo thinks their current NNID system IS an adequate account based system and not tied to the hardware. Makes me think they aren't going to change it. It is great though that they finally acknowledge the failings of their branding of the Wii U but I also feel their thoughts on the traditional consumer pay scheme of "$30 or $50" and how it's no longer working is sort of stupid because people are buying $60 games on Sony and Microsoft's systems. Nintendo thinks their model no longer works when really it's just that they lost these sorts of customers to the competition a long time ago. But hey if it means cheaper Nintendo games, then hey that's good for my wallet.
Mato
Member
People tend to forget that Iwata led Nintendo to their most successful period ever. The monetary gains that Nintendo accumulated during that era are still rather intact even though the annual profit and the share price have diminished. When someone says Nintendo should try to take on Sony, MS, Apple and so on, they should think twice. If they do, chances are it will become apparent that they can't compete with them because Nintendo is in reality rather small in terms of market cap. I think Iwata and the whole Nintendo board (despite the mistakes they made with Wii U) are very intelligent and very insightful people.
All that quality of life talk is interesting to me. It's an avenue worth exploring. Also If they ever release a series of educational titles (Pre-k, k, 1st grade and so on) I would buy all of them. I am desperately looking for"edutainment" of extreme high quality to buy to use with my nephew. I use Khan academy to practice my math all the time and if they can offer something that has vastly superior value that is worth spending money on, then they could create a perpetual revenue stream by releasing and regularly patching/updating the titles. But quality would the most important factor to consider.
All that quality of life talk is interesting to me. It's an avenue worth exploring. Also If they ever release a series of educational titles (Pre-k, k, 1st grade and so on) I would buy all of them. I am desperately looking for"edutainment" of extreme high quality to buy to use with my nephew. I use Khan academy to practice my math all the time and if they can offer something that has vastly superior value that is worth spending money on, then they could create a perpetual revenue stream by releasing and regularly patching/updating the titles. But quality would the most important factor to consider.
Sho_Nuff82
Member
In what way can Nintendo address the burgeoning smartphone market without actually releasing a competing product or supporting existing ones?
I have no idea; if I knew, I'd be a millionaire. What I'm suggesting is that this highly competitive, risky market is a better bet than the "hardcore" console market, which is simply not profitable.
Wii Fit App, tracks some data, makes schedules, whatever. It does a lot more if you get WiiFitU as well.
Nintendo eShop app, lets you buy from your phone, easier to get notified for discounts etc.
Mini companion apps that are addictive and make you buy the respective game, exchange progress/items/experience whatever. Maybe helps you work towards a discount for the full game.
Streetpass app, streetpass with your phone, maybe have a mini game like 3DS, but in order to take advantage of all the street passing, you would want to connect it with your 3DS and Wii U.
Edit: Now I saw the "supporting existing ones" line. Would these count as support? I am imagining them to be free though.
Mysterious
Banned
There is always room for another competitor, provided they have a disruptive strategy. Arguably, you could have told Apple that the personal music player market is satisfied. The cellular market is satisfied. Hell in the late 90s/early 00s, the personal computer and business machine segments were satisfied.
I reserve judgement on this new QOL venture until I see exactly what it is.
metalslimer
Member
Well I agree, and I did think Nintendo was in the right during the Wii era, but I disagree that the QOL market is going to be any less competitive. Mabbe it's less risky in that it will cost less than launching a new platform, but if this platform fails they will have taken a nice little chunk of development away from the next Nintendo platforms.
Also the writing is on the wall for the end of Wii U with their vague promises.
I really like this:
I really love the Gamepad so I'm looking forward for more games to use it fully and by as many games as possible. That's why I'm also happy that they clarified the ongoing madness about a Gamepad-less SKU.
As I buy quite a lot of games, I want to see this put in place as soon as possible. Even before freeing up the NNID from the device. I also hope they push the digital sales more.
I'm quite indifferent to the whole QoL thing, but I hope it provides them the financial means to keep producing great games.
Edit: considering the "leaked" educational tablet thing from some months ago, I think Nintendo could really excel in terms of software in this area, the main question remains if they are able to produce the right "hardware" to surprise and make a big impact.
I really love the Gamepad so I'm looking forward for more games to use it fully and by as many games as possible. That's why I'm also happy that they clarified the ongoing madness about a Gamepad-less SKU.
As I buy quite a lot of games, I want to see this put in place as soon as possible. Even before freeing up the NNID from the device. I also hope they push the digital sales more.
I'm quite indifferent to the whole QoL thing, but I hope it provides them the financial means to keep producing great games.
Edit: considering the "leaked" educational tablet thing from some months ago, I think Nintendo could really excel in terms of software in this area, the main question remains if they are able to produce the right "hardware" to surprise and make a big impact.
Spirit Icana
Member
So the plan is to continue to push integrated hardware and software and try to make the Game Pad appealing to people who currently don't care and/or find it simply unappealing or even un-accessible since the scheme is simply an oversized Pro controller with a touch-screen and poor battery life. Doesn't matter too much really. What does matter is the software.
It seems we will have to wait till E3 to see how their Wii U and software strategy will be executed. For now, previously announced titles will be released with high hopes and expectations that Mario Kart and Smash Bros. move hardware.
Interesting. I wonder is this will mean that Nintendo's next gaming platform will also have a touch-screen considering...
Good! They've come out and said it. An account system is coming, but probably won't be up and running until the next generation of Nintendo systems. Wii U will see "experiments" in the mean time.
Very interesting. So they are working on a new "platform." Said platform will remain part of the Nintendo's entertainment business, but seperate from their video game platforms. The theme of "health" is used as an example, but will not be the sole focus of the new platform. With the new platform, Nintendo is developing a new Blue Ocean Strategy. Blue Ocean Strategy is about value innovation (not technological innovation), creating uncontested market space, and making the competition irrelevant.
So in regards to QoL, I think the conversation ought to be about how Nintendo can improve the quality of life, such as health and education, through entertainment, perhaps interactive entertainment, and not things like film, books, or drugs.
Quality of life and health are broad topics and go well beyond fitness and recent releases like Wii Fit U, of which the game is a red ocean product at this point, not a blue ocean product.
This could be interesting. I don't think Nintendo will share their strategy canvas with us, assuming their serious and not just throwing big words out.
Things to keep in mind with QoL and Blue Ocean Strategy:
The Aim is:
Creating uncontested market space
Make the competition irrelevent
Create and capture new demand
Break the value-cost trade-off
Align the whole system of a firm's activities in pursuit of differentiation and low cost.
This stuff is on Pg. 18 in the Blue Ocean Strategy book. Been forever since I last read it. I listed this instead of the "Six Principles of Blue Ocean Strategy" cause I think everybody would find stuff like "Get the strategic sequence right" confusing without explanation and I need a reminder myself.
Anyway, I look forward to hearing more about this later this year.
I think Nintendo is just gonna ride out Wii U and hope for the best. Projections for Wii U in the next fiscal year will probably be low. If it is, I'd still predict lower sales. 3DS is not looking too hot these days either, but Nintendo is hoping it'll keep them running.
Seems to me the plan is to ride this generation out. Forming and executing new strategies don't happen overnight. Next gen, we will see Nintendo unify accounts and stuff.
Stumpokapow
listen to the mad man
Here's what I got from the meeting last night:
- Nintendo thinks the 3DS is doing fine. They didn't mention it. It's clearly the stronger of their two pieces of hardware, there's no denying that. But I don't think it's correct to assert that it's not a cause for concern. Even with Pokemon's strong results out of the gate, there's been significant overall software erosion in both first-party and third-party categories. I think this is a risk. It's a risk because less licensing revenue from third parties means Nintendo has less money to cover their burn rate or hardware R&D losses. It's also a risk because their own software costs more to make and sells less overall. That's not a trend you want to continue going forward. To me, the Wii U's failure seems relatively minor in comparison to some of the generation-over-generation structural comparisons for the 3DS. I would be worried about that going forward.
- Nintendo thinks there's no real problem with what the Wii U is, but rather with how they've taken advantage of the Wii U. They've cited their failure to communicate the GamePad's value and their failure to deliver must-have software. It does not seem clear that they've acknowledged any possible weakness in the GamePad conceptually. I think their first product to "emphasize the GamePad" being Mario Kart, and their "emphasis" being that the Wii U apparently boots up faster than your TV (which is clearly not true) suggests that there are conceptual weaknesses in the product. It feels like kicking the can down the road a little. They've repeatedly said before that when they do poorly "it's because they didn't release software that consumers valued" and to do well they will "release software that consumers value". This seems like a pretty vague, almost circular definition. The trick is to figure out why consumers did not value the software, and Nintendo doesn't seem as clear about that. I think there are real challenges at the software pricepoint they're at. I think there are also game design challenges, even with some of the amazing games they're releasing.
- I think NFC games are interesting and obviously a genre that's proven lucrative. I have skepticism they're going to materially change the platform for several reasons. The first is that those games are already available on Wii U, but also on every other platform. There's nothing about the Wii U gamepad's NFC reader that can't be accomplished with current implementations. I do think Nintendo can have software success with an NFC game. The other risk is that figurine games require significant retailer buy-in, which I don't think will be a problem in the US, but in countries where the Wii U has already lost retailer stock space I'm not sure they'll be able to find sufficient support for NFC stuff.
- To me, as a briefing, this basically felt like a company saying "We're doing ok. We don't need to make major changes. We're working on stuff for the future, and we've got great stuff coming down the pipeline." It did not feel like a company unveiling a bold new direction for the future in the face of massive investor pressure and worry about the company's continued stability.
- The idea of moving to accounts and a real networked ecosystem is a good thing, no doubt. Everyone supports that. It's a little baffling that it was presented in philosophical terms, as though it was discovered conceptually but still years away from being implemented in reality. The rest of the world moved to device-agnostic content networks a long time ago. iTunes at the turn of the millennium. Gaming in 2006-2008.
- The "we're going to market our stuff on smartphones and then people will buy our hardware" claim makes no sense. Sorry. "We're going to connect with our customers on smartphones and then people will buy our hardware". The difference between marketing and connection is that consumers don't like marketing but do like connection? Anyway... I don't think providing another outlet for consumers to get info and updates is a bad thing. But I also don't think it's going to materially change things. Like, I feel like the problem is that the hypothetical consumer on a subway checking their Nintendo app is actually satisfied with the device they're using and carrying. The games and non-game options they have in the palm of their hand. Right, like I think that's the actual problem with Nintendo's offerings right now and this doesn't resolve that.
- I think their efforts to expand into developing markets will pay massive dividends. Sony has done very well in EMEA markets. BRIC are the great nut every business is trying to crack. I totally support that. And licensing is always good, but mostly the frosting on top of a vibrant product business rather than a business on its own. Still, these are good ideas.
and then...
- Health and Lifestyle products. First, I think diversifying is a good thing for Nintendo. I think having other streams of revenue is a good thing. I think there's a lot of money to be made in health and lifestyle products. But I have pretty significant reservations about what Nintendo is talking about. I don't think releasing another hardware device with another software ecosystem is diversifying. And to be clear, that's 100% what they're talking about here. They're not talking about releasing paper calorie diaries or resistance bands or paint-by-numbers kits. They're clearly talking about something that you carry around with you, even if it's "not wearable".
- So they're either talking about a self-contained device or they're talking about a hardware platform with software. Self-contained devices are dead. Dead dead dead. No one is making them in any product category anymore. The growth market is in devices that communicate with each other. The fitness market is all about smart monitors that communicate with your smart phone and each other and allow you to export and remix data and put it through rich web services. My worry is that if Nintendo enters this market, they won't have a best-of-breed product because they'll basically be re-inventing the wheel. And if they tether stuff to a new piece of hardware, why not just get fitness products that work with the smartphone you already have? I own Personal Trainer: Walking. It's neat. But today I wouldn't buy it because for the same money or less I'd get a better pedometer with more flexible data reporting tethered to devices that are more well suited for recording and analysis. That's my worry.
- Nintendo's approach to fitness stuff historically has been a very eastern "wellness" type approach. Wii Fit emphasizes "balance", rather than fitness. If you try to compare Wii Fit to other fitness games, like EA Sports Active or Zumba or Your Shape or the Kinect Nike Fit game, you'll see the difference immediately. The pedometer and the emphasis on steps and walking is similarly a sort of wellness approach. They released Face Training (Facening), which is based on some sort of Japanese beauty fad where you make funny faces in the mirror and you become more relaxed and beautiful. I can't comment on whether that approach will do well in Japan long-term. But I don't think it will do well in the US or Europe long-term. To the extent that there's a demand for "Wellness" type approaches, I think Yoga is pretty much the only eastern technique that would have much resonance over here. Wii Fit was a blue ocean product for sure--no one had quite synthesized fitness software in that way. But now there are dozens of competitors, and many of those competitors work with leading fitness companies and experts and I think Nintendo would be at a disadvantage today, in 2014.
- I also read a lot about educational products. Learning to draw, books and reading, early childhood education, tactile experiences for both infants and children with disabilities who need sensory stimulation, etc. I do not believe Nintendo would make a best-of-breed product in these categories. There's been a lot of art options emerge over the last few years. One great thing about smartphones and tablets is that developers talk to each other, learn from each other, iterate quickly. A lot of the first-generation best software on tablets has been dethroned by subsequent software. A lot of services build on each other and integrate with each other. Lots of applications support exporting to Dropbox or whatever. It's very handy. For books, there have been a lot of companies doing book sales, and a lot of initiatives in the area of childrens and educational books. I trust Apple and Amazon's abilities to go out and meet with publishers and developers and build systems that encourage content more than I trust Nintendo's. It's difficult for me to see a product niche within the broader lifestyle category that is not already filled with strong competitors who strike me as having a better foundation to compete.
- Where does Nintendo think their casual market went? Okay, so people bought Brain Training and Wii Fit and Nintendogs and Big Brain Academy and Personal Trainer: Cooking and Personal Trainer: Walking and 100 English Books and whatever else Nintendo released. Those were all successful products. But demand in that market segment just evaporated. Where does Nintendo think those people are today? Why did Nintendogs on 3DS tank in comparison? Why did Brain Training tank so badly it can't even get a retail release in a major territory? Why is Wii Fit an also-ran, as we'll see over the coming months? What happened to the demand? This is an important question because the idea of launching all these products and more similar products as part of a new company approach is predicated on understanding why they left and how to get them back. The 3DS costs a little more than the DS did, but not much. So it's not hardware buy-in. I believe it's because those people either are not conceptually interested anymore, or are but have found more satisfying product options elsewhere. So the first question I'd ask about launching new non-game focused products or casual game focused products is--how are we solving the problem that we have in the first place?
- I legitimately believe that Japanese companies who are Japan-focused first but need global sales are going to have an increasingly difficult time penetrating the US market. The Silicon Valley tech culture is incredibly fast-paced, competitive, and enormous. The old ways of developing a business don't stand up to it, and Japan doesn't have a similar area or process for incubating aggressive start-ups (in part due to increased employee retention and less turnover in the employment culture there). I'm not an expert when it comes to Japan, but if I were a Japanese company I'd be either thinking global or thinking a lot more local and giving up on global expansion.
I am very open to Nintendo making products that aren't games. I am very open to Nintendo making products that don't target me. But I am not convinced they understand the challenges they face, and I am not convinced based on the preliminary information they're offering that their secret master plan that they'll reveal later is likely to be a home run. I leave open the possibility that it'll be a single or a double. I am interested both as a consumer and in terms of their ongoing business success, and neither angle is super promising to me right now.
- Nintendo thinks the 3DS is doing fine. They didn't mention it. It's clearly the stronger of their two pieces of hardware, there's no denying that. But I don't think it's correct to assert that it's not a cause for concern. Even with Pokemon's strong results out of the gate, there's been significant overall software erosion in both first-party and third-party categories. I think this is a risk. It's a risk because less licensing revenue from third parties means Nintendo has less money to cover their burn rate or hardware R&D losses. It's also a risk because their own software costs more to make and sells less overall. That's not a trend you want to continue going forward. To me, the Wii U's failure seems relatively minor in comparison to some of the generation-over-generation structural comparisons for the 3DS. I would be worried about that going forward.
- Nintendo thinks there's no real problem with what the Wii U is, but rather with how they've taken advantage of the Wii U. They've cited their failure to communicate the GamePad's value and their failure to deliver must-have software. It does not seem clear that they've acknowledged any possible weakness in the GamePad conceptually. I think their first product to "emphasize the GamePad" being Mario Kart, and their "emphasis" being that the Wii U apparently boots up faster than your TV (which is clearly not true) suggests that there are conceptual weaknesses in the product. It feels like kicking the can down the road a little. They've repeatedly said before that when they do poorly "it's because they didn't release software that consumers valued" and to do well they will "release software that consumers value". This seems like a pretty vague, almost circular definition. The trick is to figure out why consumers did not value the software, and Nintendo doesn't seem as clear about that. I think there are real challenges at the software pricepoint they're at. I think there are also game design challenges, even with some of the amazing games they're releasing.
- I think NFC games are interesting and obviously a genre that's proven lucrative. I have skepticism they're going to materially change the platform for several reasons. The first is that those games are already available on Wii U, but also on every other platform. There's nothing about the Wii U gamepad's NFC reader that can't be accomplished with current implementations. I do think Nintendo can have software success with an NFC game. The other risk is that figurine games require significant retailer buy-in, which I don't think will be a problem in the US, but in countries where the Wii U has already lost retailer stock space I'm not sure they'll be able to find sufficient support for NFC stuff.
- To me, as a briefing, this basically felt like a company saying "We're doing ok. We don't need to make major changes. We're working on stuff for the future, and we've got great stuff coming down the pipeline." It did not feel like a company unveiling a bold new direction for the future in the face of massive investor pressure and worry about the company's continued stability.
- The idea of moving to accounts and a real networked ecosystem is a good thing, no doubt. Everyone supports that. It's a little baffling that it was presented in philosophical terms, as though it was discovered conceptually but still years away from being implemented in reality. The rest of the world moved to device-agnostic content networks a long time ago. iTunes at the turn of the millennium. Gaming in 2006-2008.
- The "we're going to market our stuff on smartphones and then people will buy our hardware" claim makes no sense. Sorry. "We're going to connect with our customers on smartphones and then people will buy our hardware". The difference between marketing and connection is that consumers don't like marketing but do like connection? Anyway... I don't think providing another outlet for consumers to get info and updates is a bad thing. But I also don't think it's going to materially change things. Like, I feel like the problem is that the hypothetical consumer on a subway checking their Nintendo app is actually satisfied with the device they're using and carrying. The games and non-game options they have in the palm of their hand. Right, like I think that's the actual problem with Nintendo's offerings right now and this doesn't resolve that.
- I think their efforts to expand into developing markets will pay massive dividends. Sony has done very well in EMEA markets. BRIC are the great nut every business is trying to crack. I totally support that. And licensing is always good, but mostly the frosting on top of a vibrant product business rather than a business on its own. Still, these are good ideas.
and then...
- Health and Lifestyle products. First, I think diversifying is a good thing for Nintendo. I think having other streams of revenue is a good thing. I think there's a lot of money to be made in health and lifestyle products. But I have pretty significant reservations about what Nintendo is talking about. I don't think releasing another hardware device with another software ecosystem is diversifying. And to be clear, that's 100% what they're talking about here. They're not talking about releasing paper calorie diaries or resistance bands or paint-by-numbers kits. They're clearly talking about something that you carry around with you, even if it's "not wearable".
- So they're either talking about a self-contained device or they're talking about a hardware platform with software. Self-contained devices are dead. Dead dead dead. No one is making them in any product category anymore. The growth market is in devices that communicate with each other. The fitness market is all about smart monitors that communicate with your smart phone and each other and allow you to export and remix data and put it through rich web services. My worry is that if Nintendo enters this market, they won't have a best-of-breed product because they'll basically be re-inventing the wheel. And if they tether stuff to a new piece of hardware, why not just get fitness products that work with the smartphone you already have? I own Personal Trainer: Walking. It's neat. But today I wouldn't buy it because for the same money or less I'd get a better pedometer with more flexible data reporting tethered to devices that are more well suited for recording and analysis. That's my worry.
- Nintendo's approach to fitness stuff historically has been a very eastern "wellness" type approach. Wii Fit emphasizes "balance", rather than fitness. If you try to compare Wii Fit to other fitness games, like EA Sports Active or Zumba or Your Shape or the Kinect Nike Fit game, you'll see the difference immediately. The pedometer and the emphasis on steps and walking is similarly a sort of wellness approach. They released Face Training (Facening), which is based on some sort of Japanese beauty fad where you make funny faces in the mirror and you become more relaxed and beautiful. I can't comment on whether that approach will do well in Japan long-term. But I don't think it will do well in the US or Europe long-term. To the extent that there's a demand for "Wellness" type approaches, I think Yoga is pretty much the only eastern technique that would have much resonance over here. Wii Fit was a blue ocean product for sure--no one had quite synthesized fitness software in that way. But now there are dozens of competitors, and many of those competitors work with leading fitness companies and experts and I think Nintendo would be at a disadvantage today, in 2014.
- I also read a lot about educational products. Learning to draw, books and reading, early childhood education, tactile experiences for both infants and children with disabilities who need sensory stimulation, etc. I do not believe Nintendo would make a best-of-breed product in these categories. There's been a lot of art options emerge over the last few years. One great thing about smartphones and tablets is that developers talk to each other, learn from each other, iterate quickly. A lot of the first-generation best software on tablets has been dethroned by subsequent software. A lot of services build on each other and integrate with each other. Lots of applications support exporting to Dropbox or whatever. It's very handy. For books, there have been a lot of companies doing book sales, and a lot of initiatives in the area of childrens and educational books. I trust Apple and Amazon's abilities to go out and meet with publishers and developers and build systems that encourage content more than I trust Nintendo's. It's difficult for me to see a product niche within the broader lifestyle category that is not already filled with strong competitors who strike me as having a better foundation to compete.
- Where does Nintendo think their casual market went? Okay, so people bought Brain Training and Wii Fit and Nintendogs and Big Brain Academy and Personal Trainer: Cooking and Personal Trainer: Walking and 100 English Books and whatever else Nintendo released. Those were all successful products. But demand in that market segment just evaporated. Where does Nintendo think those people are today? Why did Nintendogs on 3DS tank in comparison? Why did Brain Training tank so badly it can't even get a retail release in a major territory? Why is Wii Fit an also-ran, as we'll see over the coming months? What happened to the demand? This is an important question because the idea of launching all these products and more similar products as part of a new company approach is predicated on understanding why they left and how to get them back. The 3DS costs a little more than the DS did, but not much. So it's not hardware buy-in. I believe it's because those people either are not conceptually interested anymore, or are but have found more satisfying product options elsewhere. So the first question I'd ask about launching new non-game focused products or casual game focused products is--how are we solving the problem that we have in the first place?
- I legitimately believe that Japanese companies who are Japan-focused first but need global sales are going to have an increasingly difficult time penetrating the US market. The Silicon Valley tech culture is incredibly fast-paced, competitive, and enormous. The old ways of developing a business don't stand up to it, and Japan doesn't have a similar area or process for incubating aggressive start-ups (in part due to increased employee retention and less turnover in the employment culture there). I'm not an expert when it comes to Japan, but if I were a Japanese company I'd be either thinking global or thinking a lot more local and giving up on global expansion.
I am very open to Nintendo making products that aren't games. I am very open to Nintendo making products that don't target me. But I am not convinced they understand the challenges they face, and I am not convinced based on the preliminary information they're offering that their secret master plan that they'll reveal later is likely to be a home run. I leave open the possibility that it'll be a single or a double. I am interested both as a consumer and in terms of their ongoing business success, and neither angle is super promising to me right now.
Spieler Eins
Member
Will the Q&A be up too?
Yeah when they have translated it. Takes a few weeks usually.
Spieler Eins
Member
Oh too bad. I was eager to read up on what the ,,hybrid for next hardware'' tweet was really about.
WSJ had a better description of that Q&A. It's not as revelatory as you think.
I bought a Wii U for the game lineup. Here's how my first day with the Gamepad went:
- Playing Injustice: "I can play it only on the gamepad?! No TV even needed?! Even in another room?!"
- Playing Nintendo Land: "It can track my movement around the room?!"
- Pressing the TV button: "It can act as a television remote?!"
Final Boss
Banned
Every Nintendo game ever released should be on the VC, easy money but that makes too much sense to do
The fact Nintendo is making an effort now to use the game pad screen is laughable and sad
The fact Nintendo is making an effort now to use the game pad screen is laughable and sad
metalslimer
Member
Great post, and lays out a lot of interesting questions about last night that I hope Nintendo has the answers to. I just don't believe the market they are trying to get into is a blue ocean and if their really is a market in there that has not been tapped it will probably turn red before Nintendo even launches.
I'm surprised Nintendo appears to have decided to double down on the gamepad rather than deemphasize it. I hope they have some really awesome software lined up, because it seems like it might be a textbook case of throwing good money after bad. Then again, it really is just a continuation of the "we just need to show consumers the value of the gamepad" logic.
The QOL stuff is very strange. They're being really vague about what exactly it is, so it's really tough to draw conclusions. To me it seems like they think they've found a blue ocean which in reality is red. They'll be a late joiner in a competitive market that they have no competitive advantage in. Even if they do have something fresh and innovative in mind, it won't be long before other companies emulate Nintendo's success and innovate on top of it. The Nintendo I know isn't well suited to quick moving, rapidly innovating industries.
I was honestly hoping to hear more about how they'll fix their core business.
The QOL stuff is very strange. They're being really vague about what exactly it is, so it's really tough to draw conclusions. To me it seems like they think they've found a blue ocean which in reality is red. They'll be a late joiner in a competitive market that they have no competitive advantage in. Even if they do have something fresh and innovative in mind, it won't be long before other companies emulate Nintendo's success and innovate on top of it. The Nintendo I know isn't well suited to quick moving, rapidly innovating industries.
I was honestly hoping to hear more about how they'll fix their core business.
Aquamarine
Member
I agree with this. What worried me most about this conference is Nintendo's seeming inability to address fundamental Wii U and 3DS complaints...especially Wii U's considerable failure all throughout 2013.
They deflected concerns with their strategies for FY3/2016 with QOL and unifying platforms / NNID to some degree, but it's FY3/2015 that worries me.
Hari Seldon
Member
Nintendo should offer some type of Xbox Live / PSN deal only you get full free access to all of the VC titles. That would be killer. $60/year for unlimited VC games.