Chittagong
Gold Member
I have written previously some prediction pieces about Nintendo's strategy (prior to Wii and for next gen Wii), as well as Sony's (before PS3). Some of the predictions have been better than others, obviously.
As we are now entering Nintendo's next upgrade cycle (first handheld, followed by home console), I thought it'd be interesting to write a follow-up piece, because until today nobody had almost any idea on Nintendo's strategy for the upcoming generations - they have not publicly spoken about their strategy this time, unlike with the Wii and DS, probably in fear of competition. This should be interesting to the three people who enjoy reading these types of things.
I believe that many people will interpret the "3D screen innovation" as similar revolutionary new feature as motion controls. My interpretation is different. The games unveiled don't look designed with 3D in mind and it will only provide initial "wow" and a sales point, but is hard to market. Looking at the game lineup, it looks obvious that Nintendo was planning a "Super generation" all along, then saw a prototype parallax barrier display and decided to throw it in for a brilliant marketing story. This might have happened in the timeframe of a year, while games have been underway for longer. All of the marketing is very hardcore oriented, compared to the Wii launch, for example.
So, to take a look at how the world looks after today's unveiling we better start on looking where Nintendo is coming from.
NINTENDO'S PREVIOUS GENERATION STRATEGY
- Basic assumption was that gaming had gotten too complex and technology too expensive
- Core gamer market was becoming saturated
- Nintendo wanted to move into a "blue ocean", an uncontested space
- Nintendo wanted to create consoles that "mom's could enjoy"
- This lead to the creation of the DS touch screen interface, Wii controller, GameCube chipset reuse (size, power consumption, price) and many other things
- Moving differently compared competition proved a breakthrough strategy
SELECT QUOTES
STRATEGIC INSIGHTS FOR THE NEXT GENERATION
Blue ocean is becoming red ocean
- As always happens, competition moved into the previously contested "casual space"
- With massive investment and copycat marketing, making noise about casual is becoming futile
- Competitive offerings are competent, but late in the contest
- Nintendo still practically owns the casual market and this is unlikely to change
Red ocean of core gamers is becoming the new blue ocean
- Ironically, as everybody moves to cater the casual market, core gamers are seeing less exiting announcements
Core games are the defendable niche against Apple
- Apple can create easily an ecosystem for casual games
- This means touch + motion controls are becoming even more contested
- On portables, having proper game controls becomes a differentiator Apple can't match
Prolonged cycles of Sony and MS create opportunity for offcycle leapfrog
- As Microsoft and Sony launch Kinect and Move and Go, their next generation is even further away, leaving core gamers without new, exciting technology
- Nintendo can exceed Xbox 360/PS3 and PSP graphics with a mass market pricepoint
- This means that effectively Nintendo can offer an affordable console with the most cutting edge technology for the next 2-3 years
- While technically such technology is hardly cutting edge, it's better than anything in the market
Disruptive UI/control innovations come only once in 10 years
- Developing a truly paradigm shifting UI happens only once in 10 years due to the time it takes to experiment, concept, iterate, test and develop games
- See: soft key UI, touch UI in phones
- Market needs time to diffuse the innovations before new ones
Hibernating franchises are Nintendo's cash in the bank, in addition to cash
- Over the Wii and DS generation, Nintendo has released major franchise games extremely sparingly compared to N64 and GC generation
- Nintendo has been practically sitting on tons of franchises - Star Fox, F-Zero, Pikmin, Mario Party
- These franchises give Nintendo the opportunity to capture the core gamer market again
THE SUPER GENERATION
A "super generation" is essentially a "refinement generation", where the basic experience stays nearly identical but graphics and game catalog expands significantly. E.g. NES -> Super NES, PS -> PS2, N64 -> GameCube
MY INTERPRETATION OF NINTENDO'S STRATEGY FOR 3DS AND WII2
1. Focus on capturing underserved "core gamer" demographic
2. Release next console and handheld offcycle, earlier than competition, in order to ride mature technology that is still most impressive on market (e.g 3D display is now mature, tested on GC era, processor is mature but powerful)
3. Let current control innovations diffuse to the market, use DS/Wii controls iterated and perfected
4. Focus on visual "wow" and "online wow" lost in the current generation to surpass PlayStation and Xbox brands for the next 2-3 years
5. Bank on reviving loved franchises that will resonate with core gamers
6. Core gamer pricepoints can be slightly higher than casual pricepoints, but not Sony high
GENERATION CYCLES
Home Console
NES - Super NES - N64 - GameCube - Wii - Wii2 - Wii3
1985 - 1991 - 1996 - 2001 - 2006 - 2012 - 2018
Revolution - Evolution - Revolution - Evolution - Revolution
Control Pad - Graphics - 3D + Analog - Graphics - Motion control - Graphics - ???
Portable
GAME BOY - GBC - GBA - DS - 3DS - 4DS
1989 - 1998 - 2001 - 2004 - 2010 - 2016
Revolution - Evolution - Evolution - Revolution - Evolution - Revolution
Swappable games - Colour - Graphics - Touch/dual screen - graphics + 3D - ???
ROADMAP SPECULATION
Wii2
- Evolution console (Super generation)
- Tons of core gamer franchises in HD
- As detailed earlier
- 2012
Wii3
- Revolutionary console (Revolution generation)
- ???
- 2018
3DS]
- Evolutionary handheld (Super generation)
- Tons of core gamer franchises in 3D
- 2010/2011
4DS
- Revolutionary handheld (Revolution generation)
- ???
- 2016
EDIT 24 June 2010 - Iwata's latest comments about 3DS basically confirm this core gamer focus theory
As we are now entering Nintendo's next upgrade cycle (first handheld, followed by home console), I thought it'd be interesting to write a follow-up piece, because until today nobody had almost any idea on Nintendo's strategy for the upcoming generations - they have not publicly spoken about their strategy this time, unlike with the Wii and DS, probably in fear of competition. This should be interesting to the three people who enjoy reading these types of things.
I believe that many people will interpret the "3D screen innovation" as similar revolutionary new feature as motion controls. My interpretation is different. The games unveiled don't look designed with 3D in mind and it will only provide initial "wow" and a sales point, but is hard to market. Looking at the game lineup, it looks obvious that Nintendo was planning a "Super generation" all along, then saw a prototype parallax barrier display and decided to throw it in for a brilliant marketing story. This might have happened in the timeframe of a year, while games have been underway for longer. All of the marketing is very hardcore oriented, compared to the Wii launch, for example.
So, to take a look at how the world looks after today's unveiling we better start on looking where Nintendo is coming from.
NINTENDO'S PREVIOUS GENERATION STRATEGY
- Basic assumption was that gaming had gotten too complex and technology too expensive
- Core gamer market was becoming saturated
- Nintendo wanted to move into a "blue ocean", an uncontested space
- Nintendo wanted to create consoles that "mom's could enjoy"
- This lead to the creation of the DS touch screen interface, Wii controller, GameCube chipset reuse (size, power consumption, price) and many other things
- Moving differently compared competition proved a breakthrough strategy
SELECT QUOTES
Satoru Iwata said:Discussing what kind of hardware can do more than the Ds was the starting point
Satoru Iwata said:[It will have] highly detailed graphics, and it will be necessary to have a sensor with the ability to read the movements of people playing.
Shigeru Miyamoto said:It was similar than to when we made the GBA originally. Everyone was surprised when they saw Yoshi appear on the GBA screen. When Mario appeared for the first time on the 3DS screen it was the same type of surprise. This has a lot to do with the fact that hardware manufacturers technology is advanced
STRATEGIC INSIGHTS FOR THE NEXT GENERATION
Blue ocean is becoming red ocean
- As always happens, competition moved into the previously contested "casual space"
- With massive investment and copycat marketing, making noise about casual is becoming futile
- Competitive offerings are competent, but late in the contest
- Nintendo still practically owns the casual market and this is unlikely to change
Red ocean of core gamers is becoming the new blue ocean
- Ironically, as everybody moves to cater the casual market, core gamers are seeing less exiting announcements
Core games are the defendable niche against Apple
- Apple can create easily an ecosystem for casual games
- This means touch + motion controls are becoming even more contested
- On portables, having proper game controls becomes a differentiator Apple can't match
Prolonged cycles of Sony and MS create opportunity for offcycle leapfrog
- As Microsoft and Sony launch Kinect and Move and Go, their next generation is even further away, leaving core gamers without new, exciting technology
- Nintendo can exceed Xbox 360/PS3 and PSP graphics with a mass market pricepoint
- This means that effectively Nintendo can offer an affordable console with the most cutting edge technology for the next 2-3 years
- While technically such technology is hardly cutting edge, it's better than anything in the market
Disruptive UI/control innovations come only once in 10 years
- Developing a truly paradigm shifting UI happens only once in 10 years due to the time it takes to experiment, concept, iterate, test and develop games
- See: soft key UI, touch UI in phones
- Market needs time to diffuse the innovations before new ones
Hibernating franchises are Nintendo's cash in the bank, in addition to cash
- Over the Wii and DS generation, Nintendo has released major franchise games extremely sparingly compared to N64 and GC generation
- Nintendo has been practically sitting on tons of franchises - Star Fox, F-Zero, Pikmin, Mario Party
- These franchises give Nintendo the opportunity to capture the core gamer market again
THE SUPER GENERATION
A "super generation" is essentially a "refinement generation", where the basic experience stays nearly identical but graphics and game catalog expands significantly. E.g. NES -> Super NES, PS -> PS2, N64 -> GameCube
MY INTERPRETATION OF NINTENDO'S STRATEGY FOR 3DS AND WII2
1. Focus on capturing underserved "core gamer" demographic
2. Release next console and handheld offcycle, earlier than competition, in order to ride mature technology that is still most impressive on market (e.g 3D display is now mature, tested on GC era, processor is mature but powerful)
3. Let current control innovations diffuse to the market, use DS/Wii controls iterated and perfected
4. Focus on visual "wow" and "online wow" lost in the current generation to surpass PlayStation and Xbox brands for the next 2-3 years
5. Bank on reviving loved franchises that will resonate with core gamers
6. Core gamer pricepoints can be slightly higher than casual pricepoints, but not Sony high
GENERATION CYCLES
Home Console
NES - Super NES - N64 - GameCube - Wii - Wii2 - Wii3
1985 - 1991 - 1996 - 2001 - 2006 - 2012 - 2018
Revolution - Evolution - Revolution - Evolution - Revolution
Control Pad - Graphics - 3D + Analog - Graphics - Motion control - Graphics - ???
Portable
GAME BOY - GBC - GBA - DS - 3DS - 4DS
1989 - 1998 - 2001 - 2004 - 2010 - 2016
Revolution - Evolution - Evolution - Revolution - Evolution - Revolution
Swappable games - Colour - Graphics - Touch/dual screen - graphics + 3D - ???
ROADMAP SPECULATION
Wii2
- Evolution console (Super generation)
- Tons of core gamer franchises in HD
- As detailed earlier
- 2012
Wii3
- Revolutionary console (Revolution generation)
- ???
- 2018
3DS]
- Evolutionary handheld (Super generation)
- Tons of core gamer franchises in 3D
- 2010/2011
4DS
- Revolutionary handheld (Revolution generation)
- ???
- 2016
EDIT 24 June 2010 - Iwata's latest comments about 3DS basically confirm this core gamer focus theory
http://www.gamespot.com/news/6266844.html said:In the Nikkei interview, Iwata went on to suggest that the current DS and its software only caters to those who do not play games, something that he hoped to rectify with the 3DS in terms of advances in graphics and gameplay. Recognizing this shift in focus from first-party to third-party development, Iwata told Nikkei that Nintendo went to great lengths to incorporate software developers' requests when making the 3DS, and called on these developers to make games for the new system.
"These partnerships are good for both Nintendo and the software developers," Iwata said.