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[Slavik81]

It's not totally due to the Wii store, but also the type of average Wii buyer. Those people will always prefer physical copies over something intangible.

Doubtful. The average person is not one who's obsessed over having a collection to show off. They want the product and they want it in a convienent way. Habbits are slow to change, so it will take a long time to bring people around, but it will eventually happen.

Eventually, 'tangible' games will go the way of the 'tangible' encyclopedia.

Spoiler

If a game weighed as much as an encyclopedia set, they'd already have done so.

 

[Chinner]

water is wet

 

[mentalfloss]

water is wet

Pretty much. Nintendo PR threads are shit.

 

[LiK]

so Iwata, when we gonna see the Mother series in the US VC store?

 

[Stumpokapow]

Nintendo certainly has some progress to make in the store-front arena (as does everyone) but even they have a lot of good info for finding games via the Nintendo Channel (not given nearly enough credit)

The Nintendo channel isn't bad, but it's strangely not integrated into the shop channel and the time it takes to boot the Nintendo channel, get to the game you want, click the Shop Channel transfer link, and complete the purchase over there is still quite inconvenient. Also, consider the following use case.

I want to check out World of Goo and Art Style Orbient. I boot the Nintendo channel. I find World of Goo. I like what I see, and the info makes me want to buy the game (I think this is implausible, sure, but I'll grant it to Nintendo). I click the shop transfer link. I buy the game.

... now what? I exit the shop, boot the Nintendo channel again, find Art Style Orbient, and potentially have to boot the shop channel AGAIN? Yiiiikes. On either PSN or XBLA or Steam, I wouldn't have to bounce back and forth and I'd argue that at least as much metadata is available within their shop services as is available in the Nintendo channel.

But, getting back to the assumption I found implausible. The data provided is not particularly robust. It's certainly no substitution for a demo. On XBLA, every game has a demo, most games have at least ten screenshots and a lengthy description paragraph. On Steam, game metacritic scores are listed. Even at Nintendo's data-richest, it's still data-poor compared to other services.

Even things like developer interviews, a great strength of the Nintendo channel, are available on the other services (Xbox 360 through the "Spotlight Channel", but also as panels elsewhere on the dashboard).

They've even done a mass Wii-mail for a World of Goo contest.

Microsoft does spotlight panels for the majority of new releases. Sony has the PSN info banner board. And World of Goo is not the game that needs promotion, it's all the AAA quality but B visibility games like Toki Tori.

They will get better though. The Wii Shop has already had several updates.

Picture this as a race. Nintendo started 1.5/2.5 (VC/WiiWare) years after MS, 1.5/0.5 years after Sony. Content aside (I don't necessarily want to get into a content pissing match, so let's grant that all three services have exactly equal content for all consumers and we're only interested in accessibility and UI), let's say that Nintendo started as a distant third (storage issues, no demos whatsoever, no Nintendo channel, little-no promotion, no credit saving, all other identified problems).

Nintendo is improving, but so are Microsoft and Sony. So it's not just important to improve, it's also important to make up for lost time.

I think, mostly, the issues I've identified aren't things that Nintendo can't fix. Nintendo are obviously competent engineers. I think a lot of it has to do with the fact that just about every major corporation is lost in the woods ideologically and hasn't figured out the new paradigm.

I'm totally willing to give Nintendo credit where credit is due, but since I own every console--and more to the point, if I didn't, I wouldn't make my purchasing choices and then defend practices by the company, I'd make my purchasing choices BASED on practices by the company--it's hard for me to congratulate a company I feel is doing a worse job than both ( / all four--depending on if you include PC services and the App Store) of their competitors.

I think everyone's use case is typically to just download a game. If you're on the fence, search the internet. It takes 30 seconds to check out a preview and then go back to Wiiware and download the game.

Spoken like someone who has to work around the limitations of WiiWare. I don't know anyone with a 360 or PSN that doesn't make use of demos. I don't know anyone with an app store device that doesn't make use of demos/Lite versions.

Wii2 will most likely implement that sort of online architecture - which is why Iwata is saying the mass market isn't ready for it yet.

This is a bad line of reasoning. Nintendo can be utterly victorious in many regards and still be losing in other regards. Arguing that the 360/PS3s failings are in any way connected to XBLA/PSN is silly. The technology is ready and able to do better now. Waiting for Wii2 to implement things represents a failure of corporate culture, not a failure of technology or market readiness.

Apple isn't the best at everything, but they're certainly the best at online music selling. Saying "the mass market isn't ready for it because our customers aren't ready for it" is exactly the sort of thing that record labels said BEFORE iTunes when their proprietary efforts to sell digital stuff didn't work so well.

I think people here are underestimating how many people still have shitty internet speeds with bandwith limits or are not online at all. For those pople downloading games isn't even an option.

Stats show at least 50% of all current gen consoles are online. No one can speak for bandwidth limits, obviously, but it's not like there isn't an addressable market of tens of millions of users here. Similarly to digital music downloads or digital video services; there might be segments of the market that won't/can't migrate, but you'd be hard pressed to argue there aren't huge segments that will/can.

 

[Slavik81]

RE: "Customers won't change their habits that quickly" How long after the rise of mp3 did it take for a widespread shift to digital music culturally and economically?

Sure, games aren't the exact same bag, but I dare say if you're looking for a point of comparison, music doesn't support Iwata's hypothesis.

His hypothesis was basically that Gamestop will still be open in 2012.
Given that HMV is still in buisness, I think his point stands tall.

Specifically, see:

"If people ask such extreme question as, 'Do you think that 20 years from now, customers will still be visiting retail outlets in order to purchase the majority of software in packaged format?', I will then have to answer, 'well, perhaps, the situation will be different.' However, if I am told, 'within a couple of years from today, there will be no retail outlets which will be selling packaged software,' my reaction must be, 'there's got to be something wrong with that assumption because I do not believe people's behaviours can change in such a short time,'" he said.

Why do people want retail to disappear entirely?

IMO Digital Distribution platforms should compliment retail. DD platforms should be for legacy titles that couldn't realistically be kept as a complete library at retail and for small, low budget experimental titles and unlikely sequels (stuff like Dr Mario and World of Goo wouldn't survive at retail really, the death of WOG's retail publisher is proof of this)

When a console's officially supported life has ended, its library should be made avaliable on an archival download service. There's no need to completely cut out retail from new games though!

What's your rational for saying DD should only be for legacy titles? Why not everything?
After all, the cost of putting an Xbox 360 game on XBLM is exactly the same as the cost of putting an Xbox game on XBLM.

Were you opposed to the release of Burnout Paradise on PSN?

Why not let consumers choose between retail and digital distribution?

 

[Stumpokapow]

His hypothesis was basically that Gamestop will still be open in 2012.
Given that HMV is still in buisness, I think his point stands tall.

Specifically, see:

Yes, I read the article, but I think it's pretty meaningless to assume that when he says "customers habits won't change overnight" you should read that only in context of the self-describedly extreme example he offered and not a general belief that the shift will be slow and measured.

And I'm saying that while everyone will still be in business down the line, record stores have taken an absolute beating at least partially because they thought the shift would be slow and measured and it was abrupt and startling.

 

[mentalfloss]

Stump, all I'm saying is that intricately devised online infrastructures are not a mass market yet - which is what Iwata is saying. At least for gaming.. music, I'd consider a different medium and the online demand for it is more advanced considering file size is typically much smaller.

But, yea, the market won't expand much for Nintendo if they all of a sudden reimagine their online infrastructure. There aren't enough people interested in downloading large chunks of digital content to warrant that change just yet. There won't be a serious change in appeal for the next 3 - 5 years.

 

[Stumpokapow]

Stump, all I'm saying is that intricately devised online infrastructures are not a mass market yet - which is what Iwata is saying. At least for gaming.. music, I'd consider a different medium and the online demand for it is more advanced considering file size is typically much smaller.

Most arcade games are smaller than albums, and my point is that saying "they're not ready because the numbers aren't there" is tautological. The mass market "wasn't ready" for music downloads before a service did them wildly successfully. Then a service did, and everyone breathlessly said "oh my god we're blown away that this works, no one could have predicted it"--no one could have predicted it because no one grounded their predictions in anything other than slow linear expansion of current sales.

But, yea, the market won't expand much for Nintendo if they all of a sudden reimagine their online infrastructure. There aren't enough people interested in downloading large chunks of digital content to warrant that change just yet. There won't be a serious change in appeal for the next 3 - 5 years.

Maybe, maybe not. I'd argue that the market is not /quite/ ready for 3+ gigabyte games because of technical restrictions beyond the capabilities of the platform holders to address, but there's absolutely no reason 10-250 megabyte games in the mould of XBLA/WiiWare/PSN titles couldn't be much bigger than they are.

The app store should be evidence enough that mixing up the formula a bit, getting shit-tons of content, pairing it with a device that works, making it easy, and advertising the service with a little muscle will result in a massive revenue source.

In Nintendo's case, they need to reach the XBLA/PSN level of penetration. Then all three services need to work to reach the app store/PC digital distribution level of penetration. And the app store, right now, is running into issues with the next step of the process-segmenting premium and regular content.

There are barriers restricting DD content, but most of them are on the part of the platform holders, not the technological or social infrastructure.

 

[thefro]

Stump, all I'm saying is that intricately devised online infrastructures are not a mass market yet - which is what Iwata is saying. At least for gaming.. music, I'd consider a different medium and the online demand for it is more advanced considering file size is typically much smaller.

Yeah, there's a huge difference between current retail games (GBs) and a album in compressed format (maybe 100 MB).

Obviously there's a market for smaller games but broadband speeds are going to have to get way faster for the casual person to buy a 9 GB game online instead of at retail.

 

[Somnid]

I'd be careful not to think that an arms race of any sort will win out. It has been proven many times that this simply doesn't work unless you are Microsoft and have billions of dollars to burn. I can guarantee that the digital leap will be made rather quickly and that if the way it is working or any natural progression there-of is the winning strategy it would have already worked. This kind of mentality of winning the race is exactly why Microsoft and Sony aren't getting ahead.

 

[Flachmatuch]

Yeah, there's a huge difference between current retail games (GBs) and a album in compressed format (maybe 100 MB).

Obviously there's a market for smaller games but broadband speeds are going to have to get way faster for the casual person to buy a 9 GB game online instead of at retail.

Also, people buy significantly fewer games than albums and their usage patterns differ a lot (like, you don't play while walking or working) and there are loads of other differences why it makes a lot more sense to buy music online than games. Eventually, because of publisher pressure (mainly IPR control, better (for publishers) pricing models and no second-hand market) DD will win but it might not be that fast imo. 20 years, yeah, 2 years or next-gen consoles, not yet. Also, in case of Nintendo, a few of their most successful games are bundled with hardware so they're a bit different from the other companies :-D

And this is just part of the earnings release Q&A session thing (q8).

 

[LiquidMetal14]

I do think they're mindset will change if they ever decide to expand on their Wiiware platform. Or if they put in an HDD in their next platform. Like it or not, DD is a relevant and viable way to play games. I still want the huge games to come out on retail but most of the niche stuff is perfect for DL.

 

[mentalfloss]

Most arcade games are smaller than albums, and my point is that saying "they're not ready because the numbers aren't there" is tautological. The mass market "wasn't ready" for music downloads before a service did them wildly successfully. Then a service did, and everyone breathlessly said "oh my god we're blown away that this works, no one could have predicted it"--no one could have predicted it because no one grounded their predictions in anything other than slow linear expansion of current sales.



Maybe, maybe not. I'd argue that the market is not /quite/ ready for 3+ gigabyte games because of technical restrictions beyond the capabilities of the platform holders to address, but there's absolutely no reason 10-250 megabyte games in the mould of XBLA/WiiWare/PSN titles couldn't be much bigger than they are.

The app store should be evidence enough that mixing up the formula a bit, getting shit-tons of content, pairing it with a device that works, making it easy, and advertising the service with a little muscle will result in a massive revenue source.

In Nintendo's case, they need to reach the XBLA/PSN level of penetration. Then all three services need to work to reach the app store/PC digital distribution level of penetration. And the app store, right now, is running into issues with the next step of the process-segmenting premium and regular content.

There are barriers restricting DD content, but most of them are on the part of the platform holders, not the technological or social infrastructure.

Technology aside, moving away from retail is more profitable for Nintendo if they do it gradually. They control the mass market now and you can probably bet that they will milk this as long as they can. Even with XBLA and PSN, I would argue Nintendo profits as much or more with WiiWare so they won't be making any substantial changes to that infrastructure until they actually need to.

Would Nintendo have 'disrupted' the market if they didn't know ahead of time that Wii would strike them gold? Of course not. They're a business, not a charity. Who knows.. maybe at some point they'll buy out Valve and have Steam Wii.

 

[Kujo]

<3 retail. DD clearance sales are few and far between.

 

[Guled]

DD is the future, anyone who don't think so are delusional. Almost everyone in NA has an Ipod or mp3 equivalent, almost all the kids nowadays spend their time online/watching youtube vids and/or downloading/streaming movies online. The reason consoles don't have a lot of people online is because most people have no reason to, not because they can't. If Steam has over 20 million users with barely any advertisements, I'm sure Nintendo could bring DD to the masses

 

[legend166]

People seem to forget that Nintendo not only has the greatest number of digitally distributed titles of the current console manufacturers but also the fastest growing library. You'd be completely stupid to think they don't take it very seriously.

You know, when I read this thread title, I thought "Iwata's is right, but I doubt Nintendo will pioneer the DD revolution anyway", but this dude has a point.

Also, I don't think the music comparison is valid at all, stump. Especially since this topic is about DD replacing retail, not the rise of small arcade style games.

 

[rpmurphy]

If Nintendo want more people to take their Wii online all they need to do is give away a big name virtual console/Wiiware game for free ...and advertise the hell out of it.

In their position I'd include a code for a free download of Super Mario Bros with every Wii.

Not needed. Consumers are increasingly aware of the Wii's downloadable service, especially classic titles such as SMB. Just looking at this week, even with MM being added, the top downloaded VC game was SMB. I see that as indication that new system buyers are connecting to the shop and buying games from the service. What Nintendo needs to do is to update the shop to be more easily navigable.

 

[LegendofJoe]

You know, when I read this thread title, I thought "Iwata's is right, but I doubt Nintendo will pioneer the DD revolution anyway", but this dude has a point.

MS has a HUGE competitive advantage when it comes to DD. If MS can manage to lower the barriers to entry with their future console offerings they will without doubt be the ones to really bring DD into the mainstream. Whether or not MS is capable of doing this is a hard question to qualify.

 

[fizzelopeguss]

What's the market share of digital music?

 

[Version 3.0]

Nintendo may not be in the best position to talk about online anything, but this is still like pointing out that water is wet. It's an undeniable that physical stores sell more games than virtual stores. And yet, some people seem to think "them's fightin' words!". It's like I've stumbled into a bizarro meeting of the Flat Earth Society where all the members think the Earth is about to be flat.

 

[shongololo]

The big issue for the platform holders, I suspect, isn't DD in itself - it's how do you sell hardware without conventional retail.

 

[BuzzJive]

PLEASE Iwata, put some effort in to WiiWare. Put a must have new Nintendo game on there. Give away some free Wii points with a Wii, like you're doing with the DSi. How about maybe an advertisement that mentions WiiWare or even VC? You know - try some marketing.

Yes Retail will have a competitive edge for some time still, but that doesn't validate the fact that you barely do anything to promote your services.

 

[Ramenman]

Newell : (laughs)

 

[wackojackosnose]

<3 retail. DD clearance sales are few and far between.

Damn straight.

Clearance sales are the only time when I can actually find cheap Nintendo games as they usually hold onto their RRP until their stock clears - which I'm sure will never happen in a digital download economy (barring the odd Steam type sales). Just a few weeks ago Disaster: Day of Crisis, Wario Ware and Wario Shake were all being sold at a 75% discount at ~ £10 each (annoyingly I paid ~£15, £15 and £18 respectively).

Viva la retail! Long live clearance sales!

 

[thefro]

I like how people read the title, ignore the article, and then post about how Nintendo is going to completely ignore any improvements in digital downloads for the next 20 years. :lol

 

[Vinci]

MS has a HUGE competitive advantage when it comes to DD. If MS can manage to lower the barriers to entry with their future console offerings they will without doubt be the ones to really bring DD into the mainstream. Whether or not MS is capable of doing this is a hard question to qualify.

If they can, you're right. I'm just not sure Microsoft has the design sense to really penetrate the mainstream market. They've failed to do so with every retail product they've put out, not including Windows which is a different story.

And the Wii's online system will not be revised this generation in any significant way. The way it's built won't allow for that sort of updating. Wii2 would be the earliest they could redo their online offerings in any major capacity, and they very well might.

 

[camineet]

Coming from Nintendo this means nothing.

This.



However I do agree that digital releases will not replace retail over the next 3-5 years.

10-15 years out, things may change. Maybe future generation consoles such as Xbox4, PS5 and Wii3 will be digital-release only without packaged games, but I have no doubt that the upcoming (in 2.5 to 3.5 years) next-generation Xbox3, WiiHD, PS4 will still have the majority of its major games released as hard physical packaged copies released at retail.

 

[Zachack]

Nintendo may not be in the best position to talk about online anything, but this is still like pointing out that water is wet. It's an undeniable that physical stores sell more games than virtual stores. And yet, some people seem to think "them's fightin' words!". It's like I've stumbled into a bizarro meeting of the Flat Earth Society where all the members think the Earth is about to be flat.

The reason his comments are riling people up is because he's using two outside extremes rather than actually addressing a likely market reality. No one thinks that retail won't exist in mid-2011. Hell, we'll probably still be using the current gen of consoles. But next-gen will see a big rise in full-scale DD, unless publishers (especially Nintendo) want to get pounded when every Wal-Mart is selling used copies from vending machines. That doesn't mean that retail won't still exist (obviously it will), but the dawdling pace at which Nintendo has improved the Wii Store Channel indicates that they don't have a firm grasp on the online marketplace, and the kind of improvements they need are the kind that take a lot of time and effort and releases to gauge customer reaction.

And "well, perhaps, the situation will be different" 20 years from now? 20 years ago we were still playing games off floppy discs and buying cassette tapes. No kidding it "perhaps" will be different.

 

[Somnid]

MS has a HUGE competitive advantage when it comes to DD. If MS can manage to lower the barriers to entry with their future console offerings they will without doubt be the ones to really bring DD into the mainstream. Whether or not MS is capable of doing this is a hard question to qualify.

That's the fault in thinking that people seem to not understand. It's not about the barrier of entry or an arms race to see who has the best interface, it's explaining to people why they should even care.

 

[Kintaro]

DD is the future, anyone who don't think so are delusional. Almost everyone in NA has an Ipod or mp3 equivalent, almost all the kids nowadays spend their time online/watching youtube vids and/or downloading/streaming movies online. The reason consoles don't have a lot of people online is because most people have no reason to, not because they can't. If Steam has over 20 million users with barely any advertisements, I'm sure Nintendo could bring DD to the masses

DD is part of the future. Retail is not going anywhere. People are not going to want to sit on their ass all day long, People like and will always like to go out and shop for their goods and services. Both will co-exist.

 

[Nuclear Muffin]

What's your rational for saying DD should only be for legacy titles? Why not everything?
After all, the cost of putting an Xbox 360 game on XBLM is exactly the same as the cost of putting an Xbox game on XBLM.

Were you opposed to the release of Burnout Paradise on PSN?

Why not let consumers choose between retail and digital distribution?

Because the main reason why these DD services came to consoles was to allow small developers to make small games that would not have to compete directly against the giants at retail. By bringing these retail games to the DD services, the little guy is being ousted again, with nowhere to go.

I think it's best to leave retail games to retail and have the DD services housing the types of experiences that could not realistically be sold at retail.

 

[Vinci]

DD is part of the future. Retail is not going anywhere. People are not going to want to sit on their ass all day long, People like and will always like to go out and shop for their goods and services. Both will co-exist.

I agree with this -

Because the main reason why these DD services came to consoles was to allow small developers to make small games that would not have to compete directly against the giants at retail. By bringing these retail games to the DD services, the little guy is being ousted again, with nowhere to go.

I think it's best to leave retail games to retail and have the DD services housing the types of experiences that could not realistically be sold at retail.

- and this.

Of course the latter proposal of keeping retail games and DD services separate isn't realistic and won't happen. Major publishers aren't going to sit on their asses if there's a valid revenue stream for them online. Which there will be. Steam proves that all by itself.

 

[shongololo]

Viva la retail! Long live clearance sales!

Come the revolution, comrade, I suspect DD prices will drop for the most part. They're currently quite high in order that they don't upset retail. Burnout Paradise, for example, is cheaper at retail than as a download (in the UK at least). If the iTunes App store is anything to go by DD has the potential to be stupidly cheap.

 

[Foil]

Also, I don't think the music comparison is valid at all, stump. Especially since this topic is about DD replacing retail, not the rise of small arcade style games.

That's because music comparsions are flawed. A $1 song compared to a $60 game. People have a harder time paying $60 for something they only own some loose digital rights to. With music you're buying an MP3 which can be played all over the place on many different devices. With games you're paying a lot more for something that can only be played on one platform that may or may not have a long future.

DD is the future, anyone who don't think so are delusional. Almost everyone in NA has an Ipod or mp3 equivalent, almost all the kids nowadays spend their time online/watching youtube vids and/or downloading/streaming movies online. The reason consoles don't have a lot of people online is because most people have no reason to, not because they can't. If Steam has over 20 million users with barely any advertisements, I'm sure Nintendo could bring DD to the masses

Eventually it will happen, yes, but it's a lot longer off than some of you think. The PC gaming comparison is laughable at best, it's a very different market. Next-Gen you could have day and date retail/digtal releases for all games and I'd bet everything that retail would still stomp the digital sku. Mass storage pricing, bandwidth caps, online speeds, online availability, pricing, backwards and future compatibility, retailers, and drm rights are all still major issues that people need to solve before DD can even think of taking over.

DD will become standard in time, but as of right now there are too many problems holding it back in the console space. At most I'd say the next round of platforms will have games show up digitally alongside the retail sku's. The good thing about DD will be not having to deal with a loud disc drive and not having to drive around trying to track down a copy of an old game you want. It's always available and not for stupid ebay prices on rare stuff. Though the lack of decent price drops and sales for DD is another major complaint from people.

The handheld market will probably be the first to jump over to digital only, it's going to take some time before the consoles follow suit.