Random_Hajile
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What Nintendo needs to do
In this generation of console wars, GameCube came in third. Game Boy
Advance is obsolete. The initials DS may be short for Definitely
Struggling instead of Dual Screen if Sony launches PlayStation
Portable (PSP) at a reasonable price next year.
Nintendo, the company that re-launched and re-defined the video game
business, has been battered in the console business and looks like it
might be ripe for wreckage in handhelds.
The Situation:
As Microsoft entered the console wars, a lot of people asked, Can
the market support three competitors? The answer seems to be,
Yes, but the guy who comes in last always dies.
In 1986, Atari tried to compete with newcomers Nintendo and Sega. It
didnt work and Atari wisely chose to sit out the 16-bit generation
before committing corporate hari-kari in the form of Jaguar.
In 1989, Sega and NEC started the 16-bit generation with Genesis and
TurboGrafx. Nintendo entered two years later, knocked NEC out of the
way; and the U.S. market never saw another NEC console again.
Sony did the same thing to Sega in the next generation. Sega Saturn
came in third placenot including 3DO and Jaguar. Sega did come back
with Dreamcast, but no company that has come in third has survived the
next generation.
4 In the current market, Nintendo has come in third place.
Could Nintendo follow in the steps of Sega, 3DO, and Atari and go
software only? With its many great franchises, Nintendo would be quite
the hit as a third-party publisher. Only, isnt that what people said
about Sega?
The truth is that the Atari of today bears almost no relationship to the
Atari of the eighties. The Atari of old was cut in half. Both halves
have been sold and resold. The company currently known as Atari is
really a French company called Infogrames.
After a long fight, 3DO ceased to exist. Sega, the company that once
boasted it would supplant Electronic Arts as the number one independent
publisher, never lives up to its potential. Without hardware to
support, former console makers seem to give up their competitive drive.
So is Nintendo going to go the way of Sega and Atari? The short answer
is, No., says John Taylor, managing director and analyst for
Arcadia Investment Corp. Sega made a bunch of missteps. Sega had to
deal with 32X, Sega CD, and a bunch of peripherals that confused
consumers, ate up resources, and distracted management.
Granted, Nintendo has not released anything as notorious 32X, though
Virtual Boy came close. On the other hand, with Game Boy Advance SP
(Nintendo of America plans to discontinue the original GBA) and DS
running side-by-side, the company does have two systems confusing
consumers, eating resources, and distracting management.
And this muddle appropriately happens as Sony prepares to launch PSP.
On the console side, its harder to imagine where Nintendo fits in
now than it was 12 months ago, says Taylor.
When asked, the clerk at a GameStop store in Hawaii said that his store
had sold out of PlayStation 2 and Xbox. We still have GameCubes in
stock.
Asked why he still had GameCubes, he stated that it was fine for a
certain audience. Xbox and PlayStation 2 are better for 15- to
30-year-olds. Most of the people who come here are between 15 and
30.
The clerk said that DS was awesome, but hard to find. We only
get six in per week. He suggested that I reserve a PSP, though he
could not say what the price would be.
Calls to game stores in Washington, New York, and California produce
similar resultsthough the clerks are seldom as friendly.
So this is the situation. Nintendo has been marginalized in the
console business. It will shortly face a most significant challenge its
portable business. Nintendo needs to make some fundamental changes.
The following are steps Nintendo must take to prosper over the next 18
months:
1. Abandon the belle of the ball mentality.
Nintendo needs to abandon its former star of the show mentality
and start acting like a company that knows its in trouble. The good
news is that the Kyoto-giant has greatly improved one of its biggest
weaknessesthird-party relations. The bad news is that Nintendos
console sales are so low that even though they feel welcomed, many
publishers are not sure they want to jump on board with Nintendo.
Nintendo has done a better job of working with third-party
publishers, says Taylor. The third parties arent worried about
the business model so much as they are about the GameCubes market
potential.
In other words, fewer people own GameCube, and those people seem to buy
less software than PlayStation 2 and Xbox owners.
Part of the problem is that Nintendo has abandoned the principles of
service that made it such a force.
Nintendo is notably more harsh than Microsoft or Sony in its handling
of smaller publications and fan sites. Right now, Nintendo needs to
cultivate allies and advocates. In a society filled with opinion
leaders, i.e. the Internet, Nintendo must court influential fans.
Along this same line, Nintendo needs to acknowledge the competition.
Nintendo executives say that DS and PSP were made for different
audiences. The truth is that when customers walk into Wall-Mart or
GameStop with $200, they are going to compare DS and PSP and choose one
over the other.
And these annual shortages whats with that? Nintendo has a
shortage of DS units. Do they think that is chic? They had similar
shortages after the launches of GameCube, N64, and Super NES. You would
learn how to manage inventory by now.
There is no logical reason for Nintendo to waste this window of time
before the launch of PSP. Yet here we are. With PSP supposedly
launching in three months, Nintendo is excitedly telling the press how
they cannot keep up with demand for DS.
Why in the world are GameStop and Electronics Boutique stores, arguably
the most influential chains in gaming, only receiving six DS units per
week? They should be saturated with DS systems.
The Nintendo of old, the one that sold approximately 100 million NESs,
simply tried harder. In the early days, NCL president Hiroshi Yamauchi
personally courted third-party publishers. Nintendo of America
president Minoru Arakawa met with store owners in New York and promised
to buy back unsold merchandise and helped set up a few store displays.
In order to regain market share, Nintendo needs to return to its former
Avis mentality. It needs to try harder.
2. Forget the bottom line.
In 1990, Nintendo and the NES owned 93 percent of the U.S. console
business. In 1994, the hottest year for 16-bit, the Super NES commanded
approximately 48 percent of the U.S. market and ruled in Japan. By the
end of the N64 generation, Nintendo was down to 33 percent of the
American console market. With GameCube, Nintendo is down to
approximately 15 percent.
That is a nearly steady drop of 50 percent from one generation to the
next.
The typical Nintendo response to this is something along the line of
their console business always remaining profitable. Its a good and
persuasive response. Even as Sony strangled Nintendo in all three world
markets in the last year of the original PlayStation, Nintendo managed
to make money with N64 while Sony leaked like a sieve.
The problem is that if Nintendos share of the market keeps getting
smaller, the next generation will not be profitable.
There is another danger, toopeople perceiving Nintendo as a company
that does not care about its customers. Granted, companies are only out
for themselves, but that does not mean they need to come across that
way.
A few years back, Nintendo defined connectivity as meaning,
You buy a $150-console, a $99-portable, a $10-cable, a $49-console
game, and a $29-portable cartridge. That definition of
connectivity sounded awfully self-serving.
3. Know your market and stick to it.
You could argue that Nintendo still has a defendable position with a
certain demographic, says John Taylor. Taylor sees that demographic
as the youth market, but the research does not necessarily agree.
Recent surveys showed that the most desirable games for fourth and
fifth graders were Halo 2 and Grand Theft Auto: San
Andreas. Most 10-year-old boys want whatever games their big
brothers want. What few 10-year-olds want is to look uncool.
Wario games are not perceived as cool.
The Hawaiian GameStop clerk identified PlayStation 2 and Xbox as
systems with games for players ages 15 to 30. He could not come up with
a target market for GameCube, even when pressed. All he would say was,
Most of our customers are between 15 and 30.
As N64 faded and GameCube launched, Nintendo sent out the message that
it was not just for kids. The problem is that none of the adult games
that followed, Conkers Bad Fur Day, Perfect Dark,
Eternal Darkness, and the Resident Evil series, sold well or
drove hardware sales.
Here, the analysts and experts disagree. Some people say that Nintendo
needs to cultivate its position as the manufacturer of family-friendly
video game systems. Nintendo cannot compete with Microsoft and
Sony, said one reporter. Nintendo is like a company.
Others say that Nintendo can indeed change its stripes. Look at
Cadillac, says Taylor. It used to be the car your grandfather
drove in the suburbs. Now, with its change of image, Cadillac is the
high-prestige car for urban drivers.
4. Americanize, Americanize, Americanize
The bottom has dropped out of the Japanese video game market. It
shrank by one-third in 2001 alone. Japan, which bought the least
hardware and the most software in the past, was the most profitable
market in games. Now that the drop has occurred, North American is the
most lucrative market.
Only one Japanese company made it into the U.S. markets top 10 games
of 2003Nintendo. Nintendo had four games in the top 10two of
which were Pokemon.
Cute, Fluffy, and Funny, words that describe so many
of the best Japanese games, just dont appeal the way they used to.
American audiences are into speed, action, violence. Americans like 3D
adventures and first-person shooters. These are not big genres in
Japan. Sports, other than soccer, are huge in the United States.
Sports, other than soccer, do not sell well in Japan.
Nintendo has one shooterMetroid Prime. The company has
abandoned sports.
Nintendo needs to develop a Western-centric development network,
says Taylor, and he is right. The problem is that with the admirable
exception of Retro Studios, Nintendo seems content letting second-party
partners like Rare and Silicon Knights slip away.
5. Keep doing what you do right
As angry and pessimistic as some gamers have become about Nintendo,
other insiders believe that Nintendo is doing many things exactly
right. Nintendo is listening to a good mixture of customers and game
developers, says Richard Doherty, research director of
Envisioneering.
Had Nintendo read the reviewers and bulletin boards, the Pokemon series
might have died two or three years ago. It didnt, and Pokemon
Ruby and Sapphire both made it on to the NPD Groups list
of the top 10 selling games of 2003. Fire Red and Leaf
Green are among the top sellers of 2004.
Many reviewers complained about the cel-shaded look of the new
Zelda game right up until the release of Wind Waker. Then
they proclaimed it. Now Nintendo is effectively breaking the
Zelda franchise into two separate lines with the adult Link
in games with more realistic graphics and the young Link remaining
in cartoon-like cel-shading.
Despite all of the criticisms, Nintendo still manages to do many things
better than any other company in the business.
6. Stop with the mid-course corrections and hold to the basics
What did Sony and Microsoft do that was so brilliant with the launches
of their first console systems? Nothing. But even when things went
wrong, they kept to their game and that made a difference.
Saturn smeared PlayStation during the launch window in Japan. The
following year, N64 out-launched both of them. Sony did not falter.
Ken Kutaragi went right on making alliances, arranging exclusive games,
and building an empire.
Sonys growth was insidious in Japan. First it was behind both
Saturn and N64, then it was behind only N64, then it ruled the market.
For two years after the launch of Xbox, people joked that Xbox should
be called the Halo Delivery System. But Microsoft remained
steady. Microsoft executives arranged exclusive deals with unlikely
partners such as Tecmo and Ubi Soft. Games continued to look better on
Xbox. More recently, Microsoft broke Sonys stranglehold on online
support from EA Sports.
Sony may have sold more hardware in this generation, but Microsoft
ended the generation with the chic factor.
Sony has always said that it pandered to the Playboy crowdnot
meaning Playboy readers, but rather suggesting that sophisticated and
older demographic. Microsoft said it was going after a tech-savvy
crowd. Even when Sony executives publicly berated their counterparts at
Microsoft, both companies stayed the course.
And Nintendo? Nintendo has bounced around. First GameCube was the
safe system for kids, then it grew up and competed with Sony and
Microsoft, only to become a system children and parents could trust.
The same thing has happened with GBA. First GBA SPs clamshell
design was to make it more adult-friendly. Then DS materialized, and
GBA SP turns out to have been a kids system all along.
Nintendo needs to pick a strategy and stick to it; and in no area is
that more important than in handhelds.
7. Either do Revolution right or dont do Revolution at all
In the end, Nintendo is going to need to make a stand. Executives at
both Sony and Microsoft have made comments about Nintendo owning the
handheld market. Now Sony has invaded that space. Microsoft may still
follow.
Nintendo should make its stand with Revolution. To do this, Nintendo
needs to do a lot of things right from the start.
First, its time for Nintendo to discover the Internet. In Kyoto,
just like the rest of the world, people access to the Internet and for
more than a game of Phantasy Star Online. Nintendo executives
admit that not adding DVD capability to GameCube hurt them, its to
make the same admission with the Internet. People may not use Xbox
Live, but they want the option.
Next, its time for Nintendo executives to listen to what their
customers tell them. People like pretty graphics. People want the same
games with better graphics. Nintendo executives say they want
Revolution to be as revolutionary as DS. Fine, but make sure the
graphics are hugely improved.
Not everyone agrees with this. Richard Doherty compliments Nintendo
for not trying to create a super computer in a $300 game box.
This, he says, is what will separate Nintendo from Microsoft and Sony.
But if Microsoft and Sony are successful, that separation may not be
good.
The truth is that if good old Madden NFL looks better and plays
better on PlayStation 3 and NextBox, Maddeneers are going to buy those
systems. And, for the record, Madden NFL 2004 was the best
selling game of 2003.
The best of all worlds would be for Nintendo to join forces with
Microsoft. Nintendo would handle Japan, Microsoft would launch in the
United States. Microsoft would make the box, Nintendo would make the
controller. Software would be shared.
Since that is not going to happen, Nintendo needs to launch on time
with good software and a strong proprietary library. If Microsoft
launches in 2005, Nintendo should launch in 2005 as well. Do not pull a
Dreamcast/3DO and come out too early, but do not allow the competition a
one-year head start. Contrary to what former Nintendo VP Peter Main
said in his final press conference, there is no benefit in coming last
to the party.
Finally Nintendo needs to have enough hardware at launch. Avoid
shortagesreal or trumped upand fill the channel.
Nintendo can still recapture much its former glory, even in this
competitive marketplace. If the Red Socks can break their 50-year
curse, Nintendo can break out. What Nintendo cannot do is continue to
make the same old mistakes and survive.
In this generation of console wars, GameCube came in third. Game Boy
Advance is obsolete. The initials DS may be short for Definitely
Struggling instead of Dual Screen if Sony launches PlayStation
Portable (PSP) at a reasonable price next year.
Nintendo, the company that re-launched and re-defined the video game
business, has been battered in the console business and looks like it
might be ripe for wreckage in handhelds.
The Situation:
As Microsoft entered the console wars, a lot of people asked, Can
the market support three competitors? The answer seems to be,
Yes, but the guy who comes in last always dies.
In 1986, Atari tried to compete with newcomers Nintendo and Sega. It
didnt work and Atari wisely chose to sit out the 16-bit generation
before committing corporate hari-kari in the form of Jaguar.
In 1989, Sega and NEC started the 16-bit generation with Genesis and
TurboGrafx. Nintendo entered two years later, knocked NEC out of the
way; and the U.S. market never saw another NEC console again.
Sony did the same thing to Sega in the next generation. Sega Saturn
came in third placenot including 3DO and Jaguar. Sega did come back
with Dreamcast, but no company that has come in third has survived the
next generation.
4 In the current market, Nintendo has come in third place.
Could Nintendo follow in the steps of Sega, 3DO, and Atari and go
software only? With its many great franchises, Nintendo would be quite
the hit as a third-party publisher. Only, isnt that what people said
about Sega?
The truth is that the Atari of today bears almost no relationship to the
Atari of the eighties. The Atari of old was cut in half. Both halves
have been sold and resold. The company currently known as Atari is
really a French company called Infogrames.
After a long fight, 3DO ceased to exist. Sega, the company that once
boasted it would supplant Electronic Arts as the number one independent
publisher, never lives up to its potential. Without hardware to
support, former console makers seem to give up their competitive drive.
So is Nintendo going to go the way of Sega and Atari? The short answer
is, No., says John Taylor, managing director and analyst for
Arcadia Investment Corp. Sega made a bunch of missteps. Sega had to
deal with 32X, Sega CD, and a bunch of peripherals that confused
consumers, ate up resources, and distracted management.
Granted, Nintendo has not released anything as notorious 32X, though
Virtual Boy came close. On the other hand, with Game Boy Advance SP
(Nintendo of America plans to discontinue the original GBA) and DS
running side-by-side, the company does have two systems confusing
consumers, eating resources, and distracting management.
And this muddle appropriately happens as Sony prepares to launch PSP.
On the console side, its harder to imagine where Nintendo fits in
now than it was 12 months ago, says Taylor.
When asked, the clerk at a GameStop store in Hawaii said that his store
had sold out of PlayStation 2 and Xbox. We still have GameCubes in
stock.
Asked why he still had GameCubes, he stated that it was fine for a
certain audience. Xbox and PlayStation 2 are better for 15- to
30-year-olds. Most of the people who come here are between 15 and
30.
The clerk said that DS was awesome, but hard to find. We only
get six in per week. He suggested that I reserve a PSP, though he
could not say what the price would be.
Calls to game stores in Washington, New York, and California produce
similar resultsthough the clerks are seldom as friendly.
So this is the situation. Nintendo has been marginalized in the
console business. It will shortly face a most significant challenge its
portable business. Nintendo needs to make some fundamental changes.
The following are steps Nintendo must take to prosper over the next 18
months:
1. Abandon the belle of the ball mentality.
Nintendo needs to abandon its former star of the show mentality
and start acting like a company that knows its in trouble. The good
news is that the Kyoto-giant has greatly improved one of its biggest
weaknessesthird-party relations. The bad news is that Nintendos
console sales are so low that even though they feel welcomed, many
publishers are not sure they want to jump on board with Nintendo.
Nintendo has done a better job of working with third-party
publishers, says Taylor. The third parties arent worried about
the business model so much as they are about the GameCubes market
potential.
In other words, fewer people own GameCube, and those people seem to buy
less software than PlayStation 2 and Xbox owners.
Part of the problem is that Nintendo has abandoned the principles of
service that made it such a force.
Nintendo is notably more harsh than Microsoft or Sony in its handling
of smaller publications and fan sites. Right now, Nintendo needs to
cultivate allies and advocates. In a society filled with opinion
leaders, i.e. the Internet, Nintendo must court influential fans.
Along this same line, Nintendo needs to acknowledge the competition.
Nintendo executives say that DS and PSP were made for different
audiences. The truth is that when customers walk into Wall-Mart or
GameStop with $200, they are going to compare DS and PSP and choose one
over the other.
And these annual shortages whats with that? Nintendo has a
shortage of DS units. Do they think that is chic? They had similar
shortages after the launches of GameCube, N64, and Super NES. You would
learn how to manage inventory by now.
There is no logical reason for Nintendo to waste this window of time
before the launch of PSP. Yet here we are. With PSP supposedly
launching in three months, Nintendo is excitedly telling the press how
they cannot keep up with demand for DS.
Why in the world are GameStop and Electronics Boutique stores, arguably
the most influential chains in gaming, only receiving six DS units per
week? They should be saturated with DS systems.
The Nintendo of old, the one that sold approximately 100 million NESs,
simply tried harder. In the early days, NCL president Hiroshi Yamauchi
personally courted third-party publishers. Nintendo of America
president Minoru Arakawa met with store owners in New York and promised
to buy back unsold merchandise and helped set up a few store displays.
In order to regain market share, Nintendo needs to return to its former
Avis mentality. It needs to try harder.
2. Forget the bottom line.
In 1990, Nintendo and the NES owned 93 percent of the U.S. console
business. In 1994, the hottest year for 16-bit, the Super NES commanded
approximately 48 percent of the U.S. market and ruled in Japan. By the
end of the N64 generation, Nintendo was down to 33 percent of the
American console market. With GameCube, Nintendo is down to
approximately 15 percent.
That is a nearly steady drop of 50 percent from one generation to the
next.
The typical Nintendo response to this is something along the line of
their console business always remaining profitable. Its a good and
persuasive response. Even as Sony strangled Nintendo in all three world
markets in the last year of the original PlayStation, Nintendo managed
to make money with N64 while Sony leaked like a sieve.
The problem is that if Nintendos share of the market keeps getting
smaller, the next generation will not be profitable.
There is another danger, toopeople perceiving Nintendo as a company
that does not care about its customers. Granted, companies are only out
for themselves, but that does not mean they need to come across that
way.
A few years back, Nintendo defined connectivity as meaning,
You buy a $150-console, a $99-portable, a $10-cable, a $49-console
game, and a $29-portable cartridge. That definition of
connectivity sounded awfully self-serving.
3. Know your market and stick to it.
You could argue that Nintendo still has a defendable position with a
certain demographic, says John Taylor. Taylor sees that demographic
as the youth market, but the research does not necessarily agree.
Recent surveys showed that the most desirable games for fourth and
fifth graders were Halo 2 and Grand Theft Auto: San
Andreas. Most 10-year-old boys want whatever games their big
brothers want. What few 10-year-olds want is to look uncool.
Wario games are not perceived as cool.
The Hawaiian GameStop clerk identified PlayStation 2 and Xbox as
systems with games for players ages 15 to 30. He could not come up with
a target market for GameCube, even when pressed. All he would say was,
Most of our customers are between 15 and 30.
As N64 faded and GameCube launched, Nintendo sent out the message that
it was not just for kids. The problem is that none of the adult games
that followed, Conkers Bad Fur Day, Perfect Dark,
Eternal Darkness, and the Resident Evil series, sold well or
drove hardware sales.
Here, the analysts and experts disagree. Some people say that Nintendo
needs to cultivate its position as the manufacturer of family-friendly
video game systems. Nintendo cannot compete with Microsoft and
Sony, said one reporter. Nintendo is like a company.
Others say that Nintendo can indeed change its stripes. Look at
Cadillac, says Taylor. It used to be the car your grandfather
drove in the suburbs. Now, with its change of image, Cadillac is the
high-prestige car for urban drivers.
4. Americanize, Americanize, Americanize
The bottom has dropped out of the Japanese video game market. It
shrank by one-third in 2001 alone. Japan, which bought the least
hardware and the most software in the past, was the most profitable
market in games. Now that the drop has occurred, North American is the
most lucrative market.
Only one Japanese company made it into the U.S. markets top 10 games
of 2003Nintendo. Nintendo had four games in the top 10two of
which were Pokemon.
Cute, Fluffy, and Funny, words that describe so many
of the best Japanese games, just dont appeal the way they used to.
American audiences are into speed, action, violence. Americans like 3D
adventures and first-person shooters. These are not big genres in
Japan. Sports, other than soccer, are huge in the United States.
Sports, other than soccer, do not sell well in Japan.
Nintendo has one shooterMetroid Prime. The company has
abandoned sports.
Nintendo needs to develop a Western-centric development network,
says Taylor, and he is right. The problem is that with the admirable
exception of Retro Studios, Nintendo seems content letting second-party
partners like Rare and Silicon Knights slip away.
5. Keep doing what you do right
As angry and pessimistic as some gamers have become about Nintendo,
other insiders believe that Nintendo is doing many things exactly
right. Nintendo is listening to a good mixture of customers and game
developers, says Richard Doherty, research director of
Envisioneering.
Had Nintendo read the reviewers and bulletin boards, the Pokemon series
might have died two or three years ago. It didnt, and Pokemon
Ruby and Sapphire both made it on to the NPD Groups list
of the top 10 selling games of 2003. Fire Red and Leaf
Green are among the top sellers of 2004.
Many reviewers complained about the cel-shaded look of the new
Zelda game right up until the release of Wind Waker. Then
they proclaimed it. Now Nintendo is effectively breaking the
Zelda franchise into two separate lines with the adult Link
in games with more realistic graphics and the young Link remaining
in cartoon-like cel-shading.
Despite all of the criticisms, Nintendo still manages to do many things
better than any other company in the business.
6. Stop with the mid-course corrections and hold to the basics
What did Sony and Microsoft do that was so brilliant with the launches
of their first console systems? Nothing. But even when things went
wrong, they kept to their game and that made a difference.
Saturn smeared PlayStation during the launch window in Japan. The
following year, N64 out-launched both of them. Sony did not falter.
Ken Kutaragi went right on making alliances, arranging exclusive games,
and building an empire.
Sonys growth was insidious in Japan. First it was behind both
Saturn and N64, then it was behind only N64, then it ruled the market.
For two years after the launch of Xbox, people joked that Xbox should
be called the Halo Delivery System. But Microsoft remained
steady. Microsoft executives arranged exclusive deals with unlikely
partners such as Tecmo and Ubi Soft. Games continued to look better on
Xbox. More recently, Microsoft broke Sonys stranglehold on online
support from EA Sports.
Sony may have sold more hardware in this generation, but Microsoft
ended the generation with the chic factor.
Sony has always said that it pandered to the Playboy crowdnot
meaning Playboy readers, but rather suggesting that sophisticated and
older demographic. Microsoft said it was going after a tech-savvy
crowd. Even when Sony executives publicly berated their counterparts at
Microsoft, both companies stayed the course.
And Nintendo? Nintendo has bounced around. First GameCube was the
safe system for kids, then it grew up and competed with Sony and
Microsoft, only to become a system children and parents could trust.
The same thing has happened with GBA. First GBA SPs clamshell
design was to make it more adult-friendly. Then DS materialized, and
GBA SP turns out to have been a kids system all along.
Nintendo needs to pick a strategy and stick to it; and in no area is
that more important than in handhelds.
7. Either do Revolution right or dont do Revolution at all
In the end, Nintendo is going to need to make a stand. Executives at
both Sony and Microsoft have made comments about Nintendo owning the
handheld market. Now Sony has invaded that space. Microsoft may still
follow.
Nintendo should make its stand with Revolution. To do this, Nintendo
needs to do a lot of things right from the start.
First, its time for Nintendo to discover the Internet. In Kyoto,
just like the rest of the world, people access to the Internet and for
more than a game of Phantasy Star Online. Nintendo executives
admit that not adding DVD capability to GameCube hurt them, its to
make the same admission with the Internet. People may not use Xbox
Live, but they want the option.
Next, its time for Nintendo executives to listen to what their
customers tell them. People like pretty graphics. People want the same
games with better graphics. Nintendo executives say they want
Revolution to be as revolutionary as DS. Fine, but make sure the
graphics are hugely improved.
Not everyone agrees with this. Richard Doherty compliments Nintendo
for not trying to create a super computer in a $300 game box.
This, he says, is what will separate Nintendo from Microsoft and Sony.
But if Microsoft and Sony are successful, that separation may not be
good.
The truth is that if good old Madden NFL looks better and plays
better on PlayStation 3 and NextBox, Maddeneers are going to buy those
systems. And, for the record, Madden NFL 2004 was the best
selling game of 2003.
The best of all worlds would be for Nintendo to join forces with
Microsoft. Nintendo would handle Japan, Microsoft would launch in the
United States. Microsoft would make the box, Nintendo would make the
controller. Software would be shared.
Since that is not going to happen, Nintendo needs to launch on time
with good software and a strong proprietary library. If Microsoft
launches in 2005, Nintendo should launch in 2005 as well. Do not pull a
Dreamcast/3DO and come out too early, but do not allow the competition a
one-year head start. Contrary to what former Nintendo VP Peter Main
said in his final press conference, there is no benefit in coming last
to the party.
Finally Nintendo needs to have enough hardware at launch. Avoid
shortagesreal or trumped upand fill the channel.
Nintendo can still recapture much its former glory, even in this
competitive marketplace. If the Red Socks can break their 50-year
curse, Nintendo can break out. What Nintendo cannot do is continue to
make the same old mistakes and survive.
