Nintendo has issued a detailed and far-reaching response to the pervasive concerns about its future as a business.
In a meeting with investors, Nintendo president Satoru Iwata outlined the company’s strategy in both the short-term and as far ahead as 2016. From changing the fortunes of the Wii U to evolving the way we think about game consoles as a concept, Nintendo displayed striking candour in its attempt to allay the criticisms it has received since it drastically reduced its sales forecasts earlier this month.
However, Iwata was clear about one thing from the outset: regardless of what followed, there are certain aspects of Nintendo’s business that will not change, namely the frequently proposed idea that it should take its IP stable to new platforms.
“Dedicated video game platforms which integrate hardware and software will remain our core business,” he said. “Naturally, we are moving ahead with research and development efforts for future hardware as we have done before, and we are not planning to give up our own hardware systems and shift our axis toward other platforms.
“Dedicated video game platforms which integrate hardware and software will remain our core business… We are not planning to give up our own hardware systems and shift our axis toward other platforms”
“From a medium- to long-term standpoint…we don’t believe that following trends will lead to a positive outcome for Nintendo as an entertainment company. Instead, we should continue to make our best efforts to seek a blue ocean with no rivals and create a new market with innovative offerings.”
Here are the key points from Iwata’s presentation
The Wii U is Nintendo’s top priority
It is no secret that Nintendo has struggled to repeat the success of the Wii with the Wii U, but Iwata reassured investors that it has no intention of abandoning its ailing console. The possibility of a further reduction in price was ruled out immediately, with Iwata instead emphasising the company’s ongoing failure to adequately demonstrate the value of the GamePad controller, and to distinguish the console from its hugely popular predecessor.
“By looking at the current sales situation, I am aware that this is due to our lack of effort,” he said. “Our top priority task this year is to offer software titles that are made possible because of the GamePad… We have managed to offer several of such software titles for occasions when many people gather in one place to play, but we have not been able to offer a decisive software title that enriches the user’s gameplay experience when playing alone with the GamePad. This will be one of the top priorities of Mr. Miyamoto’s software development department this year.”
Iwata offered a strong first-step by setting an official May release date for the release of Mario Kart 8, but he also indicated that Nintendo’s development teams would focus on the GamePad’s near-field communication (NFC) function – the same basic technology as that used in lucrative franchises like Skylanders and Disney Infinity. Iwata promised more details of its plans for NFC at E3 in June.
The end of “device-based relationships”
While many have cited the Wii U as evidence of Nintendo’s failure to respond to the changes in the games industry since the launch of the Wii, Iwata stated that the company has already laid the foundations for a fundamental shift in the way it thinks about its products.
Before now, Nintendo had “device-based relationships” with its customers. This was mitigated somewhat by the strength of its software IP, but fundamentally the link with any given consumer followed the lifecycle of each piece of hardware. “We became disconnected with our consumers with the launch of each new device as we could only form device-based relationships,” he said.
However, the Wii U saw the introduction of “Nintendo Network IDs,” an attempt to create “account-based” customer relationships that could continue across different hardware platforms and generations. In the future, Iwata said, “connecting with our consumers through NNIDs will precisely be our new definition of a Nintendo platform.”
With this in mind, Iwata was able to put an end to the speculation around Nintendo’s strategy for smartphones and tablets. He made it quite clear that Nintendo has no plans to release its games on smart devices, but it does intend to use them as a way to communicate and build relationships with new audiences. Iwata offered few details of how the company intends to accomplish that goal, but he indicated that it would include a mobile app that leveraged Nintendo’s existing IP to raise awareness of its hardware and software.
“I have not given any restrictions to the development team, even not ruling out the possibility of making games or using our game characters. However, if you report that we will release Mario on smart devices, it would be a completely misleading statement. It is our intention to release some application on smart devices this year that is capable of attracting consumer attention and communicating the value of our entertainment offerings.”
Flexible pricing for existing and emerging markets
The existence of NNIDs and account-based relationships will also give Nintendo the ability to alter the way its products are sold. Iwata highlighted the company’s role in establishing the model of selling a console for several hundred dollars and individual games for fifty or sixty dollars, but Nintendo now recognises that this model is no longer viable in the long-term.
The first aspect of this that Nintendo intends to challenge is the fixed price-point of software. Iwata suggested a system where the price of a games could be tailored to individual customers based on their NNIDs: someone who purchased five games in a year might pay less and less for each one, for example, or there might be incentives tied to recommending a game to a friend.
“If we can achieve such a sales mechanism, we can expect to increase the number of players per title, and the players will play our games with more friends. This can help maintain the high usage ratio of a platform… Nintendo aims to work on this brand-new sales mechanism in the medium term, but we would like to start experimenting with Wii U at an early stage.”
“While we will continue to devote our energy to dedicated video game platforms, our first step into a new business area is the theme of ‘Health’”
This flexibility will also extend to emerging markets for gaming across the world. Nintendo is a globally recognised brand, but Iwata conceded that the price of its products has put them beyond the reach of people in certain countries. While Iwata didn’t mention any specific regions, he is likely referring to countries like Brazil and India, where the interest in gaming has increased in concert with the disposable income available to the population.
“To leverage Nintendo’s strength as an integrated hardware-software business, we will not rule out the idea of offering our own hardware for new markets. But for dramatic expansion of the consumer base there, we require a product family of hardware and software with an entirely different price structure from that of the developed markets.
“We aim to connect with consumers who do not own Nintendo’s video game systems yet, which will play an important role in cultivating new markets. Once we can establish such a connection with consumers in these nations, we will be able to use smart devices to share our information as well as important content distribution infrastructure. We plan to take significant steps toward such a new market approach in the year 2015.
Going beyond games
There may be no chance of playing Super Mario World on an iPad anytime soon, Iwata did state Nintendo’s interest in making money from its IP outside of first-party video games. Nintendo has always been very cautious of damaging its iconic characters through excessive merchandising and licensing, but one need only look at Rovio’s Angry Birds to see how much profitable such deals can be. Indeed, Iwata attributed the strength of Nintendo’s IP stable to that very reluctance, but, he said, “we are going to change our policy going forward.”
“To be more precise, we will actively expand our character licensing business, including proactively finding appropriate partners. In fact, we have been actively selling character merchandise for about a year in the U.S. Also, we will be flexible about forming licensing relationships in areas we did not license in the past, such as digital fields, provided we are not in direct competition and we can form win-win relationships.
“By moving forward with such activities globally, we aim to increase consumer exposure to Nintendo characters by making them appear in places other than on video game platforms.”
Nintendo’s new business idea: Health
Iwata closed the presentation with Nintendo’s planned entry into an entirely new area of business, one that will provide the “blue ocean” the company so desperately needs.
“While we will continue to devote our energy to dedicated video game platforms, what I see as our first step into a new business area in our endeavour to improve [quality of life] is the theme of “Health.” Of course, defining a new entertainment business that seeks to improve [quality of life] creates various possibilities for the future such as “learning” and “lifestyle,” but it is our intention to take “health” as our first step.”
Again, exact details of what this focus on health will entail were not provided, but Iwata described the concept as “an integrated hardware-software platform business” that will use the company’s experience making products like Wii Fit, Brain Age and the Touch Generations series as a springboard for a more pervasive and persistent initiative.
“We will be able to provide feedback to our consumers on a continual basis, and our approach will be to redefine the notion of health-consciousness, and eventually increase the fit population… I feel that not only can this [quality of life]-improving platform utilise our know-how and experience about video game platforms, but also we can expect it to interact with games and create a synergistic effect.
“While we feel that this is going to take two to three years after its launch, we expect the [quality of life]-improving platform to provide us with new themes which we can then turn into games that operate on our future video game platforms, too. Once we have established such a cycle, we will see continuous positive interactions between the two platforms that enable us to make unique propositions.”
Iwata promised to announce more details this year, and confirmed that the new business will officially launch during the fiscal year ending March 2016.
Nintendo blew it. That much is clear, and even Satoru Iwata doesn’t debate it – Nintendo blew it. The financials could be much worse, but the unit sales? Way, way below targets, and in the case of Wii U, way below sustainability. Nintendo blew it! Shout it from the rooftops, if you can find space on a rooftop next to all the people who are already shouting it, with altogether too much peculiar jubilance in their snide, told-you-so voices.
Nintendo blew it. Blew what, though? That’s a tougher question. The company’s year has been a lot more complex than anyone is giving it credit for. In 2013, Nintendo was proud owner of the best-selling console in every major territory worldwide, and launched an enviable range of first-party software titles that sold over a million copies each – more than any other publisher out there. The company retained its crown as the biggest platform holder and the biggest software publisher in the business.
Yet, Nintendo blew it, because it also had a platform that utterly under-performed even the most conservative of estimates – a console that, on its current trajectory, is set to undershoot the low bar set by the GameCube and become the firm’s worst performing home console ever. Moreover, Nintendo blew it in a subtle but crucially important way – with startling incompetence for a company of its size, the firm predicted sales figures for both the 3DS and the Wii U which were absolutely ludicrous and then failed to revise them as the year carried on, meaning that even the solidly performing 3DS has undershot its targets, while the Wii U looks even worse than it ought to (which is pretty bad to begin with).
“Nintendo’s stock didn’t tumble too badly after it revised its guidance, largely since nobody with a clue actually thought the firm was going to hit its targets anyway”
This latter aspect has made the coverage of Nintendo’s situation even more negative than it would already have been (and there are plenty of people waiting to pile onto the company at the slightest provocation), since it covers up the success of the 3DS and its software line-up – seriously, 3DS has had an amazing year for software and is now set up with a library that effectively secures the console’s future – in a heavy smearing of corporate incompetence. It has also, understandably, deeply annoyed shareholders, because they rely on companies making accurate predictions to figure out whether or not to pick up stock in a firm. That said, Nintendo’s stock didn’t tumble too badly after it revised its guidance, largely since nobody with a clue actually thought the firm was going to hit its targets anyway. Incidentally, the company’s stock price is about 50% higher today than it was 12 months ago, in line with the rise in the Nikkei 225 index – which means that Japanese investors, at least, are rating the company as broadly neutral rather than actually negative.
Still, Nintendo blew it, and that means lots of people are making angry noises. Iwata must go, say some; Nintendo must exit hardware, say others; time for Mario on smartphones, say still others. The owners of all of those voices are going to be disappointed – not least, I believe, because very few of them actually understand Nintendo as a company or the Japanese corporate environment in which it operates. They don’t understand that activist shareholders don’t mean a tuppenny damn to a company whose shares are largely held by a combination of the founding family, the senior staff and (more significantly still) the complex web of interrelated share- and debt-holdings that connects Nintendo with Japanese banks and other corporations, none of whom have the slightest concern in being “activist” except in the most extreme of circumstances. An earnings miss? Pah! Japanese corporations routinely missed annual earnings every year for decades after the Asian Financial Crisis of the early 1990s, but shareholder pressure to change top management never materialised then, and it won’t materialise now. Iwata is secure until he does something sufficiently wrong to have a taint of scandal around it, and that’s deeply unlikely to happen.
Exiting hardware? Absolutely no chance. Nintendo’s primary view of itself is as a toy company and its core business model is selling hardware (generally profitably) and then selling software that runs on that hardware (extremely profitably). The synergy between the company’s hardware side and its software side is legendary, as is the extent to which each Nintendo platform is designed with the requirements of planned first-party software in mind. For that reason alone, it’s likely that the Wii U will eventually have a clutch of startlingly excellent games, matching last year’s critically acclaimed Super Mario 3D World in quality – although whether that will actually do anything to resuscitate sales is another question entirely. The point is that this approach isn’t going to change; the inertia behind Nintendo as a hardware company is immense, and moreover, despite this year’s earnings miss, it’s largely working. Nintendo is, pretty much every year, the largest and most successful game software company in the world. Would it retain that crown on someone else’s hardware? If you rush to answer “yes!” to that question, either your crystal ball gazing skills are excellent or you haven’t thought about it hard enough; I don’t think there is a good answer to that question right now, and I know Nintendo will be eyeing Sega’s post-hardware decline and thinking about its own potential fortunes as one-among-many on a smartphone app store. Right now, Nintendo has around 40 million 3DS owners who are keenly anticipating future first-party releases from the company – keenly enough that they start to agitate and make noise if there’s ever a gap in the release schedule. Would that be true on iOS, or Android, or even on a competitor’s console platform?
“one of the company’s failings, in some regards, is that it still doesn’t really have a global outlook, with Nintendo of America and Nintendo Europe being rather stunted”
How about a limited engagement with smartphones, then, even if they wouldn’t make the leap entirely? That’s plausible. Nintendo’s primary point of reference for its product decisions is Japan – one of the company’s failings, in some regards, is that it still doesn’t really have a global outlook, with Nintendo of America and (even more so) Nintendo Europe being rather stunted local offshoots whose actual contribution to the firm’s planning and success is pretty obviously minimal. In Japan, smartphone games are a huge sector, and interestingly, there’s seemingly more of a market for premium-priced games than there is in the west, where free-to-play is increasingly the only show in town (although premium-priced games are carving out an interesting niche there too). There is, I believe, some potential for Nintendo to start putting Virtual Console titles on smartphones, perhaps initially through a tie-up with one of Japan’s carriers. However, I’d expect this roll-out to be slow and careful, with Nintendo incredibly mindful of the possibility of damaging its core brands by launching Mario or Zelda games tainted by emulation problems or crap touchscreen controls. Still – it could happen, and is by far the most likely of the “demands” being made of the firm to actually be met in some limited form.
If Iwata isn’t going to go (he’s not), Nintendo isn’t going to exit hardware (they’re not) and the company’s future isn’t on smartphones (it’s not, although some cautious toes in that water may be seen in time), then what is Nintendo’s reaction to its present situation going to be?
I’ve stated this before, but it bears repeating – Nintendo has incredibly, insanely deep pockets. The firm has set aside a vast war chest over the course of its successful years, and it can easily ride out even the complete failure of a console platform, supporting that platform sufficiently to satisfy consumers while quietly working on a replacement. That’s what Satoru Iwata told me Nintendo would do if the Wii failed completely – they’d make something else and try that instead – and I see no reason why that logic would have changed. If anything, the firm’s financial position is even stronger now than it was then.
What will Nintendo make? There’s a lot of speculation around that, but most of it is evolutionary. A faster, more powerful DS / 3DS style handheld. A Nintendo tablet, capable of handheld gaming and being hooked up to a TV. A full-spec next-gen console built to rival the PS4. All of these are options for the company – the tablet computer one is even an interesting one, combining as it does the handheld market (which Nintendo always dominates) with the home console market (where it’s hit and miss). However, they all miss the crucial ingredient which Nintendo actually requires to bring itself back to success – surprise.
“Nintendo needs the element of surprise. It surprised the hell out of everyone with the DS, it surprised everyone with the Wii”
Nintendo needs the element of surprise. It surprised the hell out of everyone with the DS, a daft, stupid idea for a handheld console that everyone expected to be trounced by the much more comprehensible PSP. It surprised everyone with the Wii, a weird, tiny, underpowered system with a controller that looked nothing like we expected – so odd that it led me to rather bluntly ask Iwata what he planned to do if everyone hated it and the system flopped, hence his comment above. The DS is the best-selling console in history (or at least, tied for that honour with the PS2); the Wii trounced the Xbox 360 and PS3 in the last generation of hardware. Nintendo does exceptionally well when it surprises people. It creates a clear gap between itself and the competition and makes “the Nintendo Difference” into more than just a silly slogan. Even those who own a more “mainstream” console end up wanting a Nintendo one too, because it’s so interesting and different, while those from outside the core gamer market find themselves intrigued by the very peculiarity and curiosity of the devices and their software.
3DS and Wii U fail the surprise test. They’re practically indistinguishable from their predecessors, both in appearance and in branding. 3DS suffered terribly from being mistaken for a new version of the original DS hardware; the Wii U, I suspect, is doing even worse, with many consumers not realising that it’s a new console entirely and not a new controller for the Wii. There’s been a disastrous failure of communication, branding and marketing, which has compounded the more basic error – assuming that the success of the Wii meant people wanted more of that kind of thing. Nintendo’s strength is providing people will surprises, things that look daft to begin with and then turn out to be precisely what we always wanted and never realised. If it’s to successfully come back from its present mess, it needs to do so by surprising us, not by following along the dull path analysts would now demand of it.
That, I earnestly hope, is what the company is working hard on in Kyoto right now. I don’t want Nintendo to abandon the Wii U, and I don’t think that will happen. The installed base is small, but big enough to be worth caring about, and the console still has the makings of a profitable platform, albeit a niche one. However, alongside continued support for the Wii U (and hopefully, a drastic change in marketing and branding), Nintendo is hopefully also working on something else; something more important and simply more Nintendo; its next big surprise.
Nintendo reportedly is looking to mobile devices to save its struggling business, after it admitted last week that the Wii U isn’t selling.
On Thursday, Nintendo slashed its Wii U sales forecast, acknowledging that despite previously expecting to shift nine million units between April 2013 and March this year, it now expects sales of just 2.8 million. Nintendo’s 3DS console isn’t selling well either, leading the firm to admit that it expects to post a $240m annual loss.
These clearly are signs that Nintendo is losing its appeal in the gaming market, and although there are still many dedicated Wii U gamers out there, the firm is struggling to compete against the Sony Playstation 4 (PS4) and Microsoft Xbox One games consoles.
It seems that Nintendo is starting to realize this too, and it admitted over the weekend that it might look to mobiles and tablets to save the future of the company, following rumors that the firm may be planning its own Android tablet for educational use.
Although the company had previous said that you’re unlikely to ever see Mario Kart running on an iPhone, Nintendo president Satoru Itawa hinted that the firm’s stance on mobile devices has changed, with the company exploring the possibility of bringing its titles to smartphones and tablets.
“We are thinking about a new business structure. Given the expansion of smart devices, we are naturally studying how smart devices can be used to grow the game-player business,” Itawa said.
“The way people use their time, their lifestyles, who they are have changed. If we stay in one place, we will become outdated.”
However, Itawa admitted, “It’s not as simple as enabling Mario to move on a smartphone,” hinting that the firm will develop dedicated games for mobile devices, rather than porting those it already has.
While Westerners are shunning Nintendo as if it were a rabid dog, the console maker is hoping to make in roads into China.
China just announced that it was allowing consoles made by western companies to exist in the country for the first time in 14 years. The move could pave the way for Nintendo, Sony and Microsoft to enter the world’s third-largest video game market in terms of revenue. But it is Nintendo, which is much cheaper, which could be the winner.
The most popular video games in China are often free to play with gamers only paying for add-ons such as weapons or extra lives.
Price may also be a problem for console makers looking to expand in China. More than 70 percent of Chinese gamers earn less than $660 a month. Nintendo, being cheaper, might do better.
With the Xbox One and PS4 fighting over the core gaming crowd this holiday season, Nintendo is targeting its Wii U marketing elsewhere. In an interview with Seattle NBC affiliate King-5, Nintendo of America president Reggie Fils-Aime said the system is enjoying strong holiday momentum, thanks in part to a renewed and refocused marketing push.
“The marketing has tremendously ramped up,” Fils-Aime said. “And really where it comes down to is being crystal clear in who’s your target. For us, this holiday with the Wii U, the target is parents and their kids. So if you’re watching primetime family entertainment, you’re seeing our marketing. If you’re a parent watching morning or daytime media, you’re seeing our content.”
Fils-Aime declined to give specifics about Nintendo’s marketing spend, but did expound on the company’s overall strategy.
“More than just the dollars, we’re putting our product where the consumer can see it, touch it, and feel it,” Fils-Aime said. “We’re in over 20 malls across the country. We’re creating an opportunity for consumers to see the product, because that, for Nintendo, is where the ‘wow’ happens. It’s not when you talk about specs or technology.”
Fils-Aime also addressed continued calls for Nintendo to begin making games for smartphones and tablets. While he stressed a corporate philosophy that Nintendo games are best played on Nintendo devices, Fils-Aime said the company has been doing “experimentation” on mobile platforms. However, he cautioned that experimentation is “largely going to be much more marketing activity oriented,” and designed to push users to experiences on the 3DS or Wii U rather than serve as stand-alone experiences in themselves.
“What drives us is creating fantastic experiences for consumers that in the end we’re able to monetize as a for-profit company,” Fils-Aime said. “The issue is that if you have games out there on all of these smart devices for very small amounts of money, it’s very difficult to monetize. And if you look at all of these companies who are trying to do it, there aren’t many that are doing it long-term, profitably.”
Almost eighty percent of IT professionals are still running Windows XP on at least one device, a Spiceworks report has revealed, raising security concerns as Microsoft counts down to the end of extended support for the obsolescent PC operating system (OS).
In a report entitled ‘Getting Over Your XP’, Spiceworks revealed that 76 percent of IT professionals haven’t upgraded all of their devices from Windows XP to a later version of Windows yet, and nearly half admitted that they will leave the 2002 OS on at least one device past its end of support, which due in less than four months on 8 April, 2014.
Microsoft warned organisations to upgrade their systems in April 2012 when it announced the two year countdown to the end of support for Windows XP and Microsoft Office 2003, saying that “the technology environment has shifted” and that those leaving the migration to the last minute might find it difficult to accomplish in time.
In April, software specialist 1E marked the one year countdown to the end of Windows XP support by reporting that less than a quarter of UK companies had completed the migration of their PC estate to a newer version of Windows, with 40 percent still “in the process of upgrading”.
Those that don’t upgrade can expect to be faced with the threat of increasing security concerns, as Windows XP continues to be one of the most targeted operating systems by malware and hacking exploits.
Perhaps tellingly, Spiceworks’ report also said that those IT managers who are still running Windows XP aren’t keen on upgrading to the latest version of Microsoft’s OS, Windows 8, but instead plan to upgrade “at least some” of their systems to Windows 7. According to the report, only seven percent of IT professionals plan to upgrade to Windows 8 or Windows 8.1.
Those still running Windows XP are starting to notice that the software is actually slowing down. This defies a rule which says that software, running on machines that work, should keep running at the same speed that it did when it was born.
According to Ars Technica the old operating system is working considerably worse than when it was released in 2001. It is especially slow if you are still using Internet Explorer 6 or 7. The culprit is the svchost.exe, which is chewing up the entire processor. Sometimes it can take an hour for a machine to return to normal.
Redmond thinks that the problem is Windows Update. Machines using Windows Update retrieve patch information from Microsoft’s servers. That patch information contains information about each patch: what software it applies to and what knowledge base article it relates to, and, critically, what historic patch or patches the current patch supersedes. Since Windows patches are cumulative a fresh install of Windows XP, does not need to install all of the dozens of Internet Explorer 6 patches sequentially; you can generally just install the latest patch, and it will include all the historic fixes because it supersedes the historic patches that introduced those fixes.
But the Windows Update client components used an algorithm with exponential scaling when processing these lists. So while a new machine, that processing is almost instantaneous. On an elderly machine it is very slow.
Microsoft thought that it had this problem fixed in November when it culled the supersedence lists. It tried again in December but that didn’t seem to help either. It is probably better to scrap XP anyway.
It is starting to look like the Wii is destined to go the way of the Dodo.
Estimated sales figures seem to indicate that 222,700 Wii U consoles were sold in the United States in November and 4.3 million Wii U consoles worldwide to date. This is not to be sneezed at, but given that Nintendo wanted to sell Nine million Wii Us worldwide during its 2014 fiscal year that is disappointing.
Nintendo flogged 160,000 systems in the first quarter and 300,000 units in the second quarter. Added to this new 222,000, this means Nintendo would need to sell an additional 8.3 million Wii Us before the end of March in order to reach its goal, or between 2.0-2.1 million consoles per month in December, January, February and March.
Analysts have already predicted that Nintendo “will likely miss” its profit goals for Wii U. Nintendo is trying to talk up the figures saying that sales of Wii U hardware increased by more than 340 percent over sales in October. Meanwhile sales of Microsoft’s and Sony’s new consoles are going through the roof.
Wedbush Securities analyst Michael Pachter spoke at the Game Monetization USA Summit in San Francisco, and once again made some bold predictions about the future of the game industry. He pulled no punches as he evaluated the current state of affairs in the business, and he had some hard advice for a number of companies.
Pachter noted that more people are playing games on more devices than ever before, but he doesn’t think the console market will be growing. “I don’t think you’re ever going to see 500 million consoles out there,” Pachter said. For lifetime sales, Pachter expects the Wii U will ultimately sell 30 million “or fewer” units, the PS4 will sell 100 to 120 million units, and the Xbox One will sell 90 to 110 million units.
“The reason Sony beats Microsoft is solely the price,” Pachter noted. “Microsoft loses the next generation unless they cut price. If Microsoft drops its price to $399, I expect the sales to be equal to the PS4.”
The lifetime sales Pachter predicts compare to current sales of the PS3 and the Xbox 360 at about 80 million units apiece, but it’s far below some estimates of hundreds of millions of next-gen consoles. “I don’t know where they get those numbers,” Pachter said. He feels that at several hundred dollars, with games costing $60 or more, consoles are just too pricey to ever sell hundreds of millions of units.
The Wii U’s performance so far Pachter characterized as “underwhelming,” but noted it’s possible “but unlikely” that exciting new titles will reinvigorate growth. He believes that Nintendo is missing a huge opportunity to bring new gamers into their brands: Nintendo should put old GameBoy Advance content on phones and tablets for free, and charge $3 to $5 for more recent titles from the DS. Pachter feels this would generate enormous revenue for Nintendo and bring millions of new fans into their brands, and give them a strong way to sell newer titles on the 3DS and Wii U that use those brands.
“I don’t know why Iwata is still employed,” Pachter said, given that he refuses to take advantage of this opportunity while the handheld market continues to shrink and the Wii U has failed so far to catch on in a big way.
Pachter is more positive on the PlayStation 4 – “Sony thrives, Nintendo doesn’t” – saying it’s impressive as a game playing device. “The graphics are phenomenal, and the huge RAM makes future innovation likely,” Pachter pointed out. He noted that the multimedia features remain unclear, but the CPU power of the PS4 allows the potential for huge improvement in the future. As for the Xbox One, Pachter noted it’s impressive as a multimedia device, and the added features of Kinect and Skype give it additional value. “We’re sticking with our prediction of a built-in TV tuner” for the Xbox One, Pachter said, which would simplify the ability of the Xbox One to control your television viewing.
“The next generation of consoles is probably the last,” Pachter said. “We expect frequent model updates instead of new consoles.” Moreover, there’s going to be renewed interest in the PC, he predicted. “I think the PC is going to make a comeback, the PC will be the hub of all this stuff,” he stated. He feels Smart TVs are a dumb idea, noting that you don’t have a smart monitor connected to your computer. He envisions there will be a number of screens around the home, perhaps controlled by a tablet, being driven by a supercomputer in your pocket that we call a smartphone.
The two companies didn’t offer many details, only saying that users will be able to see Twitter messages on the homescreens of selected Android-based smartphones sometime next year. The collaboration will initially cover Germany, the Netherlands, Romania, Greece and Croatia, the operator said in a statement.
For Twitter the partnership is about increasing its user base, while Deutsche Telekom wants to add value to its devices and remain relevant as subscribers choose to communicate using means other than text messages and phone calls, according to Paolo Pescatore, director at market research company CCS Insight.
As of mid-November there were 230 million Twitter users globally, and 76 percent accessed the service on a mobile device, according to Twitter.
Twitter isn’t the first social networking vendor to work directly with operators and handset makers. Facebook has been the most aggressive, but has struggled to make an impact with smartphones featuring physical Facebook buttons; the most prominent phone integration with Facebook, the HTC First, was not a success.
Pescatore doubts that Twitter will succeed where Facebook struggled. Most users will likely just continue to use existing apps, he said.
Last month, Twitter updated its mobile apps for both Android and Apple’s iOS devices to give users better search tools.
The company also expanded options for marketers, allowing them to choose what smartphone models and OS versions they want to target with advertising.
Deutsche Telekom didn’t comment on plans for working with Twitter on operating systems other than Android.
The Wii U gets a new system update from Nintendo. While details are a bit vague on what all the new system updates actually does, Nintendo says it “improves overall system stability” and also includes minor adjustments “to enhance the user experience”.
The update comes ahead of a planned Nintendo update for the 3DS that is scheduled to arrive next month. The 3DS update will bring the Miiverse to the 3DS as well as adds the ability to combine eShop balances on both the 3DS and Wii U systems. In addition it will add Network IDs to the 3DS to access the eShop. Apparently 3DS owners will not have to take advantage of using a NNID to combine their eShop purchases and will still be allowed to download software from the eShop without a NNID.
Rumors suggest that another system update for the Wii U is just around the corner, but will likely not arrive till early next year, unless Nintendo has a reason to release it sooner. On the software front, the Wii U is still struggling, but the recent sales boost has helped, but Nintendo needs strong sales for the Wii U this holiday season in order to help get published and developers re-engaged in developing for the console. Whispers suggest that Nintendo expects supplies of the Wii U to be plentiful this holiday season and does not foresee shortages like what has plagued the Wii consoles of the past. The problem is however that the lack of software will likely keep many buyers away.
The Google-owned phone maker has launched Project Ara to create a free, open and standardized platform to let people pick and choose the components they want in their phones, Motorola said in a blog post this week.
The goal is to create a standard endoskeleton, or frame, that can hold different modules, like extra-powerful processors, additional batteries or memory chips for storing more music, all based on the customer’s preferences.
“Our goal is to drive a more thoughtful, expressive, and open relationship between users, developers, and their phones. To give you the power to decide what your phone does, how it looks, where and what it’s made of, how much it costs, and how long you’ll keep it,” Motorola said.
Motorola’s vision of do-it-yourself smartphones builds on parent company Google’s success with its widely used Android smartphone platform, which it offers for free and allows manufacturers to customize. Android also gives people more leeway to tweak the features on their smartphones than Apple’s iOS platform offers to iPhone users.
Motorola said it has been working on Project Ara for over a year and that it recently teamed up with Phonebloks, an open source project that has also been working on creating modular smartphone components that can be easily replaced.
The announcement of Ara follows Motorola’s launch earlier this year of the Moto X smartphone, which lets customers choose the colors of the front and back panels and buttons.
On its website, Phonebloks envisions an online store letting consumers read reviews of smartphone components, shop for new and used parts, and order custom-designed handsets.
Project Ara is also a bit of a throwback to the 1980s and 1990s, when many technology-handy consumers assembled their own desktop PCs using hard drives, power supplies, CPUs and other custom-picked components.
That became less common when laptops, which are more difficult to customize, became widely used, but computer components are still made at standard sizes that can be slotted into most PCs.
Motorola said it will work on the project openly and create experimental modules. It plans to invite developers and recruit “Ara scouts” to help research and shape the project.
“Browsers on tablets were just blown-up mobile browsers, they didn’t feel right and not as they should be on the iPad,” said Huib Kleinhout, the head of Opera’s Coast project.
On Monday, Opera released Coast as a free download on Apple’s U.S. App Store, and said the browser would quickly launch in other markets.
Coast strips out virtually all the “chrome” normally seen in a browser — the elements surrounding the page display, like an address bar, back and forward buttons and menus — and relies exclusively on gestures, primarily swipes, to navigate forward and backward. Pages are represented by small square tiles and sites can be bookmarked by dragging and dropping those tiles.
“Mobile browsers involve too many steps,” contended Kleinhout. “Coast is much more optimized for tablets. It’s everything you expect from touch.”
But Kleinhout repeatedly steered the conversation away from the under-the-hood technology used by Coast, saying that what powered the browser was unimportant. “Opera and Coast are still closely related, so [the different engines] are not a problem,” he argued. “They’re just different implementations of Web standards. Coast is not about the technology but about the user experience.”
Kleinhout, who has a background in both engineering and user experience (UX) design, started working on Coast over a year-and-a-half ago as a personal project. Eventually, Coast morphed into an Opera-backed skunkworks initiative that involved a team of about 15 developers.
Coast is for the iPad and iPad Mini only, although Kleinhout said that it could “potentially” be offered at a later date for the smaller-screen iPhone.
Bethesda’s Pete Hines had some choice words regarding Nintendo’s third-party strategy, suggesting that the time for getting better software support for the Wii U may have already passed.
In an interview with Game Trailers’ Bonus Round, Bethesda’s vice president of PR and marketing underlined the company’s commitment to making its games available on every platform – as long as those platforms don’t require compromise on the original vision.
As far as Bethesda’s games are concerned, that has led to their absence on Nintendo hardware despite their huge popularity. And Hines intimated that the situation is representative of Nintendo’s approach to third-party developers as a whole.
“The time for convincing publishers and developers to support Wii U has long past. The box is out,” Hine said, while sitting on a panel that also included Borderlands 2 lead writer Anthony Burch.
Hines pointed to Sony and Microsoft’s diligent and long-running efforts to communicate with third parties during the hardware design process as a better strategy for most developers.
“It’s not that every time we met with them we got all the answers we wanted, but they involved us very early on, and talking to folks like Bethesda and Gearbox, they say ‘here’s what we’re doing, here’s what we’re planning, here’s how we think it’s going to work’ to hear what we thought – from our tech guys and from an experience standpoint.
“You have to spend an unbelievable amount of time upfront doing that. If you’re just going, ‘we’re going to make a box and this is how it works and you should make games for it.’ Well, no. No is my answer. I’m going to focus on other ones that better support what it is we’re trying to do.”
This adds colour to comments Hines made in an earlier interview, where he stated that the Wii U was, “not on [Bethesda's] radar.” Nintendo is now attempting to address the Wii U’s less than admirable position by cutting $50 off its price.
YouTube is adding new video-playing functions to its mobile app on iOS and Android devices. Some of the tools are geared towards giving users more control over how they stream video to their television sets using Chromecast, Google’s new video streaming device.
The changes were officially rolled out on Tuesday, Google-owned YouTube announced in a blog post. A smaller rollout among just a small percentage of users on Android took place on Monday, a YouTube spokesman said.
Chief among the changes is a new tool letting users swipe to move a video to the bottom of the device’s screen and reduce its size so they can search for other content while the video still plays. The idea behind the feature is to bring more potential videos to users as they explore within the app, even if the smaller video doesn’t command their full attention.
“You can watch a video about making the perfect fried chicken while searching for homemade salted caramel sauce recipes,” said YouTube software engineers Matias Cudich and Waldemar Baraldi.
The new version of the app includes several other enhancements to change how it displays video and interacts with other devices like Chromecast. The YouTube app already has a “Cast” button to let users send videos from their smartphone or tablet to their TV through Chromecast, Google TV or PlayStation 3 console. With the updated app, there is a preview screen users will see when the app is connected to their TV.
With the preview, users will see a thumbnail of the video on their smartphone or tablet, allowing them to play it on their TV or add it to the queue, without changing the video that is already playing.
Google unveiled its $35 Chromecast device last month, as a cheaper alternative to competitive devices such as the Apple TV set-top box. Chromecast plugs into a television’s HDMI port to let various types of video and music content be pushed to the television from users’ smartphones, tablets or desktop computers.
The new version of the YouTube app also lets users search and browse channels for playlists. Previously, users couldn’t search or watch playlists within the YouTube mobile app, a spokesman said.
Finally, the updated app features a cleaner, simpler look that will be seen in other apps from Google, YouTube said.