Nintendo has formed a comprehensive new alliance with DeNA that will make every one of the company’s famous IPs available for mobile development.
The bedrock of the deal is a dual stock purchase, with each company buying ¥22 billion ($181 million) of the other’s treasury shares. That’s equivalent to 10 per cent of DeNA’s stock, and 1.24 per cent of Nintendo. The payments will complete on April 2, 2015.
What this will ultimately mean for the consumer is Nintendo IP on mobile, “extending Nintendo’s reach into the vast market of smart device users worldwide.” There will be no ports of existing Nintendo games, according to information released today, but, “all Nintendo IP will be eligible for development and exploration by the alliance.” That includes the “iconic characters” that the company has guarded for so long.
No details on the business model that these games and apps will be released under were offered, though Nintendo may well be reluctant to adopt free-to-play at first. The information provided to the press emphasised the “premium” experiences Nintendo currently offers on platforms like Wii U and 3DS. Admittedly, that could be interpreted in either direction.
However, Nintendo and DeNA are planning an online membership service that will span Nintendo consoles, PC and smart devices. That will launch in the autumn this year.
This marks a significant change in strategy for Nintendo, which has been the subject of reports about plans to take its famous IPs to mobile for at least a year. Indeed, the company has denied the suggestion on several occasions, even as it indicated that it did have plans to make mobile a part of its core strategy in other ways.
Analysts have been offering their reflections on the deal, with the response from most being largely positive.
“Nintendo’s decision to partner with DeNA is a recognition of the importance of the games app audience to the future of its business,” said IHS head of gaming Piers Harding-Rolls. “Not only is there significant revenue to be made directly from smartphone and tablet consumers for Nintendo, app ecosystems are also very important in reaching new customers to make them aware of the Nintendo brand and to drive a new and broader audience to its dedicated console business. Last year IHS data shows that games apps were worth $26 billion in consumer spending globally, with handheld console games worth only 13 per cent of that total at $3.3 billion.
“The Nintendo-DeNA alliance is a good fit and offers up a number of important synergies for two companies that are no longer leaders in their respective segments.
“DeNA remains one of the leading mobile games company’s in Japan and, we believe, shares cultural similarities with Nintendo, especially across its most popular big-brand content. The alliance gives Nintendo access to a large audience in its home market, which remains very important to its overall financial performance. Japanese consumers spend significantly more per capita on mobile games than in any other country and it remains the biggest market for both smartphone and handheld gaming. While the partnership gives Nintendo immediate potential to grow its domestic revenues through this audience, gaining access to DeNA’s mobile expertise is important too to realise this potential.
“This alliance makes commercial sense on many levels – the main challenge will be knitting together the cultures of both companies and aligning the speed of development and iteration that is needed in the mobile space with Nintendo’s more patient and systematic approach to games content production. How the new games are monetised may also provide a challenge considering the general differences in models used in retail for Nintendo and through in-app purchases for DeNA.”
In a livestreamed press conference regarding the DeNA deal, Nintendo’s Satoru Iwata reassured those in attendance that the company was still committed to “dedicated video game systems” as its core business. To do that, he confirmed that the company was working on a new console, codenamed “NX”.
“As proof that Nintendo maintains strong enthusiasm for the dedicated game system business let me confirm that Nintendo is currently developing a dedicated game platform with a brand new concept under the development codename NX,” he said.
“It is too early to elaborate on the details of this project but we hope to share more information with you next year.”
Nintendo is heading back to black, with the company’s financial announcements this week revealing that it’s expecting to post a fairly reasonable profit for the full year. For a company that’s largely been mired in red ink since the end of the glory days of the Wii, that looks like pretty fantastic news; but since I was one of the people who repeatedly pointed out in the past when Nintendo’s quarterly losses were driven by currency fluctuations, not sales failures, it’s only fair that I now point out that quite the reverse is true. The Yen has fallen dramatically against the Dollar and the Euro in recent months, making Nintendo’s overseas assets and sales much more valuable in its end-of-year results – and this time, that’s covering over the fact that the company has missed its hardware sales targets for both the 3DS and the Wii U.
In short, all those “Nintendo back in profit” headlines aren’t really worth anything more than the “Nintendo makes shock loss” headlines were back when the Yen was soaring to all-time highs a few years ago. The company is still facing the same tough times this week that it was last week; the Wii U is still struggling to break 10 million units and the 3DS is seeing a major year-on-year decline in its sales, having faltered significantly after hitting the 50 million installed base mark.
In hardware terms, then, Nintendo deserves all the furrowed brows and concerned looks it’s getting right now. Part of the problem is comparisons with past successes, of course; the Wii shipped over a million units and the DS, an absolute monster of a console, managed over 150 million. In reality, while the Wii U is having a seriously hard time in spite of its almost universally acclaimed 2014 software line-up, the 3DS isn’t doing badly at all; but it can’t escape comparison with its record-breaking older sibling, naturally enough.
Plenty of commentators reckon they know the answer to Nintendo’s woes, and they’ve all got the same answer; the company needs to ditch hardware and start selling its games on other platforms. Pokemon on iOS! Smash Bros on PlayStation! Mario Kart on Xbox! Freed from the limited installed base of Nintendo’s own hardware – and presumably, in the case of handheld titles, freed to experiment with new business models like F2P – the company’s games would reach their full potential, the expensive hardware division could be shut down and everyone at Nintendo could spend the rest of their lives blowing their noses on ¥10,000 notes.
I’m being flippant, yes, but there’s honestly not a lot more depth than that to the remedies so often proposed for Nintendo. I can’t help but find myself deeply unconvinced. For a start, let’s think about “Nintendo’s woes”, and what exactly is meant by the doom and gloom narrative that has surrounded the company in recent years. That the Wii U isn’t selling well is absolutely true; it’s doing better than the Dreamcast did, to pick an ominous example, but unless there’s a major change of pace the console is unlikely ever to exceed the installed base of the GameCube. Indeed, if you treat the Wii as a “black swan” in Nintendo’s home console history, a flare of success that the company never quite figured out how to bottle and repeat, then the Wii U starts to look like a continuation of a slow and steady decline that started with the Nintendo 64 (a little over thirty million consoles sold in total) and continued with the GameCube (a little over twenty million). That the 3DS is struggling to match the pace and momentum of the DS is also absolutely true; it’s captured a big, healthy swathe of the core Nintendo market but hasn’t broken out to the mass market in the way that the DS did with games like Brain Training.
Yet here’s a thing; in spite of the doom and gloom around downward-revised forecasts for hardware, Nintendo was still able to pull out a list of this year’s million-plus selling software that would put any other publisher in the industry to shame. The latest Pokemon games on 3DS have done nearly 10 million units; Super Smash Bros has done 6.2 million on 3DS and 3.4 million on the Wii U. Mario Kart 8 has done almost five million units, on a console that’s yet to sell 10 million. Also selling over a million units in the last nine months of 2014 on 3DS we find Tomodachi Life, Mario Kart 7 (which has topped 11 million units, life to date), Pokemon X and Y (nearly 14 million units to date), New Super Mario Bros 2 (over 9 million), Animal Crossing: New Leaf (nearly 9 million) and Kirby: Triple Deluxe. The Wii U, in addition to Mario Kart 8 and Super Smash Bros, had million-plus sellers in Super Mario 3D World and Nintendo Land.
That’s 12 software titles from a single publisher managing to sell over a million units in the first three quarters of a financial year – a pretty bloody fantastic result that only gets better if you add in the context that Nintendo is also 2014′s highest-rated publisher in terms of critical acclaim. Plus, Nintendo also gets a nice cut of any third-party software sold on its consoles; granted, that probably doesn’t sum up to much on the Wii U, where third-party games generally seem to have bombed, but on the 3DS it means that the company is enjoying a nice chunk of change from the enormous success of Yokai Watch, various versions of which occupied several slots in the Japanese software top ten for 2014, among other successful 3DS third-party games.
Aha, say the advocates of a third-party publisher approach for Nintendo, that’s exactly our point! The company’s software is amazing! It would do so much better if it weren’t restrained by only being released on consoles that aren’t all that popular! Imagine how Nintendo’s home console games would perform on the vastly faster-selling PS4 (and imagine how great they’d look, intones the occasional graphics-obsessive); imagine how something like Tomodachi Life or Super Smash Bros would do if it was opened up to the countless millions of people with iOS or Android phones!
Let’s take those arguments one at a time, because they’re actually very different. Firstly, home consoles – a sector in which there’s no doubt that Nintendo is struggling. The PS4 has got around twice the installed base of the Wii U after only half the time on the market; it’s clear where the momentum and enthusiasm lies. Still, Super Smash Bros and Mario Kart 8 managed to sell several million copies apiece on Wii U; in the case of Mario Kart 8, around half of Wii U owners bought a copy. Bearing in mind that Nintendo makes way more profit per unit from selling software on its own systems than it would from selling it on third-party consoles (where it would, remember, be paying a licensing fee to Sony or Microsoft), here’s the core question; could it sell more copies of Mario Kart 8 on other people’s consoles than it managed on its own?
If you think the answer to that is “yes”, here’s what you’re essentially claiming; that there’s a large pent-up demand among PlayStation owners for Mario Kart games. Is there really? Can you prove that, through means other than dredging up a handful of Reddit posts from anonymous people saying “I’d play Nintendo games if they were 1080p/60fps on my PS4″? To me, that seems like quite a big claim. It’s an especially big claim when you consider the hyper-competitive environment in which Nintendo would be operating on the PS4 (or Xbox One, or both).
Right now, a big Nintendo game launching on a Nintendo console is a major event for owners of that console. I think Nintendo launches would still be a big event on any console, but there’s no doubt that the company would lose focus as a third-party publisher – sure, the new Smash Bros is out, but competing for attention, pocket money and free time against plenty of other software. It’s not that I don’t think Nintendo games could hold their own in a competitive market, I merely don’t wish to underestimate the focus that Nintendo acquires by having a devoted console all of their own underneath the TVs of millions of consumers – even if its not quite the number of millions they’d like.
How about the other side of the argument, then – the mobile games aspect? Nintendo’s position in handheld consoles may not be what it used to be, but the 3DS has roundly trounced the PlayStation Vita in sales terms. Sure, iPhones and high-end Android devices have much bigger installed bases (Apple shifted around 75 million iPhones in the last quarter, while the lifetime sales of the 3DS are only just over 50 million), but that comparison isn’t necessarily a very useful one. All 50 million 3DS owners bought an expensive device solely to play games, and the lifetime spend on game software of each 3DS owner runs into hundreds of dollars. The “average revenue per user” calculation for Pokemon on the 3DS is easy; everyone paid substantial money for the game up front.
By comparison, lots and lots of iOS and Android users never play games at all, and many of those who play games never pay for them. That’s fine; that’s the very basis of the F2P model, and games using that model effectively can still make plenty of money while continuing to entertain a large number (perhaps even a majority) of players who pay nothing. Still, the claim that moving to smartphones is a “no-brainer” for Nintendo is a pretty huge one, taken in this context. The market for premium, expensive software on smartphones is very limited and deeply undermined by F2P; the move to F2P for Nintendo titles would be creatively difficult for many games, and even for ones that are a relatively natural fit (such as Pokemon), it would be an enormous commercial risk. There’s a chance Nintendo could get it right and end up with a Puzzle & Dragons sized hit on its hands (which is what it would take to exceed the half a billion dollars or so the company makes from each iteration of Pokemon on 3DS); there’s also an enormous risk that the company could get it wrong, attracting criticism and controversy around poor decisions or misjudged sales techniques, and badly damage the precious Pokemon brand itself.
In short, while I’m constantly aware that the market seems to be changing faster than Nintendo is prepared to keep up with, I’m not convinced that any of the company’s critics actually have a better plan right now than Satoru Iwata’s “stay the course” approach. If you believe that PlayStation fans will flock to buy Nintendo software on their console, you may think differently; if you think that the risk and reward profile of the global iOS market is a better bet than the 50-odd million people who have locked themselves in to Nintendo’s 3DS platform and shown a willingness to pay high software prices there, then similarly, you’ll probably think differently. Certainly, there’s some merit to the idea that Nintendo ought to be willing to disrupt its own business in order to avoid being disrupted by others – yet there’s a difference between self-disruption and just hurling yourself headlong into disaster in the name of “not standing still”.
There’s a great deal that needs to be fixed at Nintendo; its marketing and branding remains a bit of a disaster, its relationships with third-party studios and publishers are deeply questionable and its entire approach to online services is incoherent at best. Yet this most fundamental question, “should Nintendo stay in the hardware business”, remains a hell of a lot tougher than the company’s critics seem to believe. For now, beleaguered though he may seem, Iwata still seems to be articulating the most convincing vision for the future of the industry’s most iconic company.
The veteran tech pioneer, which long ago lost the mantle of the world’s most inventive company, is making a bold play to regain that title in the face of stiff competition from Google Inc and Apple Inc.
Virtual or enhanced reality is the next frontier in computing interaction, with Facebook Inc focusing on its Oculus virtual reality headset and Google working on its Glass project.
Microsoft said its wire-free Microsoft HoloLens device will be available around the same time as Windows 10 this autumn. Industry analysts were broadly excited at the prospect, but skeptical that it could produce a working model at a mass-market price that soon.
“That was kind of a ‘Oh wow!’ moment,” said Mike Silver, an analyst at Gartner who tried out the prototype on Wednesday. “You would expect to see a relatively high-priced model this year or next year, then maybe it’ll take another couple of years to bring it down to a more affordable level.”
Microsoft does not have a stellar record of bringing ground-breaking technology to life. Its Kinect motion-sensing game device caused an initial stir but never gripped the popular imagination.
The company showed off a crude test version of the visor – essentially jerry-rigged wires and cameras pulled over the head – to reporters and industry analysts at a gathering at its headquarters near Seattle.
It did not allow any photographs or video of the experience, but put some images on its website.
Dailymotion Games will put the firm into a market that so far includes Twitch, a streamer that has cemented its place as a gaming add-on and a coveted option on the Xbox One and PlayStation 4 consoles.
The Dailymotion information does not dwell on Twitch, which has been a feature of many a gushing press release from console makers such as Sony, but it does say that the live streaming gaming platform has some decent credentials.
For example, the promotional information says that the platform is backed with “industry leading video and live streaming technology”.
The firm also reminds us that it has some history here, and has been e-gaming for some time.
“Since 2011, with the first Dailymotion Cup on Starcraft, Dailymotion has accompanied e-sport growth on the internet,” said Martin Rogard, Dailymotion’s chief operating officer.
“Dailymotion Games is entirely dedicated to e-sports fans and streamers who come together every evening to form an amazingly talented and gregarious community.
“Over the coming months, we will significantly increase our investment in the e-sports domain to ensure worldwide recognition of all our talented content producers.”
Dailymotion said that live streamers will be able to monetise their content, which Microsoft recently confirmed is fine for its users, and that streamers could run their own “controlled video advertisement” and any number of social tools including search and real-time communications. Android and iOS apps are available.
The service is currently in beta. Dailymotion said that it serves some 180 million game videos a month.
“We have been building our team on assumptions of faster growth than have materialized. As a result, we announced today that we plan to simplify our organization … we also need to consider possible employee reductions,” Chief Executive Mikael Hed said in a statement.
According to Rovio, the Angry Birds game, in which players use a slingshot to attack pigs who steal birds’ eggs, is the No. 1 paid mobile application of all time.
Rovio has expanded the brand into an animated TV series and merchandising of toys and clothing, but at the same time it has struggled to retain players, resulting to its earnings halving last year.
In August, the company named Pekka Rantala, a former Nokia executive, as its next CEO.
Nintendo’s Shigeru Miyamoto doesn’t want to make games for “passive” people; the attitude that games ought to be to be a roller-coaster ride, to entertain without challenge, is, to his mind, “pathetic”. That was the message from the legendary game designer in an E3 interview with Edge magazine, published in this month’s edition; it’s been presented by other news outlets as a sign of a Nintendo U-turn, moving away from the casual market it sought with the Wii and the DS in favour of re-engaging core gamers.
That’s exactly the sort of message that most of the games media wants to hear, of course. The media, after all, speaks exclusively to core gamers; casual players generally don’t bother with specialist media. “Nintendo has seen the error of its ways and realised that the only people worth making games for are you, my dear brethren!” is a crowd-pleaser of a message; but it’s also a pretty big leap to make from the comments Miyamoto actually made.
First, the context. Edge had just challenged Miyamoto over the fact that his prototype games at E3 were all somewhat difficult to play. They used the Wii U GamePad in new ways which it took a while to get accustomed to; the question implied in the text of Edge’s interview isn’t about casual games at all, but about the difficulty level of the prototypes. Miyamoto’s response does make clear a mental distinction between different types of game consumer and a preference for those who enjoy some challenge in their entertainment, but to extrapolate that into a U-turn in Nintendo’s development priorities is an overreach.
In fact, Miyamoto’s comments – equating passivity with “the sort of people who, for example, might want to watch a movie. They might want to go to Disneyland. Their attitude is ‘OK, I am the customer; you are supposed to entertain me’” – are punching in a number of directions at once. Certainly, he’s frustrated by people who play games without ever really engaging with them as a challenge; I doubt he’s a fan of free-to-play systems that allow you to pay money to bypass challenges. Equally, though, those comments are an attack on some approaches to AAA game design; barren technological wonders which serve as little more than on-rails galleries for artwork and pale narrative. Miyamoto isn’t saying “casuals have ruined the market”; far from it. He’s saying that there are consumers who demand spoon-fed entertainment at all points of the spectrum from core to casual, and that he doesn’t want to make games for any of them. (It’s also worth noting that he’s not really blowing his top over this; “pathetic” doesn’t carry the same kind of stinging indictment in Japanese that it does in translation.)
Later in the Edge interview, Miyamoto veers back to similar territory when he talks about the proliferation of mainstream game-capable platforms like iOS and Android devices. While adamant that Nintendo needs to continue to make hardware as well as software, he’s delighted that these new platforms exist, because they provide an “on-ramp” for consumers who haven’t engaged with games before. Nintendo previously saw itself holding a responsibility to try to open up new demographics for the games industry; now it seems that we’ve reached a tipping point, technologically and culturally, where that’s happening by itself.
Edge speculates that this means Miyamoto (and hence Nintendo) believes that the window has shut on making games for entry-level gamers. Titles like Brain Training, which opened up the DS to a huge audience of people who had rarely if ever played games before, may now be pointless; the consumers they ought to target are all playing games on their phones and tablets, so there isn’t an addressable market remaining there for dedicated hardware and more expensive (non-F2P) games. This is fair analysis, and indeed, it probably features in Nintendo’s thinking; let iOS serve as the entry level for new gamers and then hope that those who enjoy the experience will ultimately upgrade to the superior offerings available on a dedicated console.
At the same time, though, Nintendo itself has a conception of “casual” and “core” that probably isn’t shared by the majority of sites reporting Miyamoto’s comments. Miyamoto talks not about themes but about enjoyment of challenge as the distinction between the two groups. To him, a supposedly “adult” game full of blood and ripe language could be utterly casual if it spoon-feeds players with dull, linear gameplay. Meanwhile, a brightly coloured Mushroom Kingdom epic could qualify as “core” if it challenges players in the right way. Consequently, Nintendo’s family-friendly IP and the broad appeal of its themes is entirely compatible with a focus on “core games”, to Miyamoto’s mind. What he’s talking about changing is something at the root of design, not the thematic wallpaper of the company’s games; he wants to challenge people, not to force Nintendo’s artists to remove all the primary colours from their Photoshop palettes.
Viewed in this light, Miyamoto’s comments are an earnest and down-to-earth appraisal of Nintendo’s present situation; still recovering from the heady days of the Wii and figuring out how much of that flash-in-the-pan market is really sustainable, but knuckling down to the challenge of entertaining and delighting (and of course, selling to) those within the audience who really enjoyed games rather than latching onto the platform as a fad. Contrary to the more excitable reportage on his comments, Miyamoto is promising no major changes to Nintendo’s approach; rather, he’s re-committing himself and the company to the same course of action which delivered games like Mario Kart 8, a title firmly within the family-friendly Nintendo tradition and absolutely celebratory of challenge and good design.
“Core gamer” is a phrase that’s picked up a strong whiff of soi-disant elitism and exclusion over the past few years; the phrase “as a core gamer…” in a forum post or comment thread is this odd little corner of society’s equivalent of “I’m not a racist, but…”, indicating a post that’s probably going to brim with self-important awfulness. The bête noire of the core gamer is the “casual”, and just as any move by a game creator or publisher to cater to “casuals” is despised and derided, any prodigal son who declares their abandonment of the casual market and return to the core is greeted with an I-told-you-so roar of delight. This is a thin sliver of the market overall, of course, but a noisy one; as such, it’s worth reiterating that what Miyamoto absolutely did not say is that Nintendo is resetting its course to please these people. Nintendo, for many years to come, will still be a company defined by games that are broadly appealing, generally family-friendly and enormously accessible. Under Miyamoto’s watchful eye, they’ll also be challenging and engaging; but anyone taking his comments on “passivity” as near-confirmation that we’ll see Grand Theft Mario down the line is utterly misreading the situation.
“Most of the developers behind apps that are found to violate our policies have good intentions and agree to make the necessary changes when notified,” said Todd Brix, general manager for the Windows Store, in a blog post yesterday. “Others have been less receptive, causing us to remove more than 1,500 apps as part of this review so far.”
The Windows Store is the official source of Windows 8′s (and 8.1′s) “Modern,” née “Metro” apps, the touch-based programs designed for tablets and touch-enabled notebooks.
Earlier this year, Brix’s team changed Windows Store apps’ certification — the process under which apps are admitted to the market — to require newly-submitted programs be clearly named, properly categorized and appropriately identified with an icon. Those modifications were made, said Brix, to “better ensure that apps are named and described in a way that doesn’t misrepresent their purpose.”
The same requirements have now been extended to apps already in the store.
The timing of Brix’s blog and Microsoft’s efforts to cleanse the Windows Store was no coincidence: More than a week ago, How-To Geek described its probe of the store in a piece titled ”The Windows Store is a Cesspool of Scams — Why Doesn’t Microsoft Care?”
In the story, How-To Geek pointed out worthless apps, some as expensive as $8.99, that did little more than point users to links for downloading Apple’s iTunes (free), Mozilla’s Firefox (also free) and VideoLAN’s VLC Player (yes, free). The publication also found fake — and paid — versions of Adobe’s Flash Player, Google’s Picasa, King’s Candy Crush Saga and Mojang’s Minecraft.
How-To Geek blamed Microsoft for the scam-app pollution. “Here’s one of the most shocking parts of this. People from Microsoft are actually examining each of these scammy apps, checking their content, and approving them,” the site said, pointing out pertinent parts of Microsoft’s certification process.
The apps How-To Geek fingered have been removed from the Windows Store, presumably as part the 1,500 Brix claimed had been bounced out.
How-To Geek’s story was widely cited by other websites, blogs and publications last week, reigniting charges that the Windows Store was packed with junk.
A quick look at MetroStore Scanner, which tracks each day’s new and updated apps, showed that Brix and his team have their work cut out for them. On Tuesday, according to MetroStore Scanner, 12 copies of the free KMPlayer, a media player owned by a Korean TV streaming company, were published to the Windows Store. However, the dozen KMPlayer copies — all using the transparently copycat name of “KM* 5.1 Player” but each with a different icon — were priced at either $0.99 or $1.99.
The real KMPlayer is currently at version 3.9.
MetroStore Scanner’s tally of the number of apps in the Windows Store was approximately 172,000 as of late Wednesday, meaning that the apps removed so far represented less than 1% of the total in the e-mart.
Amazon.com Inc has acquired live-streaming gamingnetwork Twitch Interactive for about $970 million in cash, reflecting Chief Executive Officer Jeff Bezos’ vision to transform Amazon into an Internet destination beyond its roots in retail operations.
The deal, jointly announced by the two companies, is the largest deal in Amazon’s 20-year history and will help the U.S. e-commerce company vie with Apple Inc and Google Inc in the fast-growing world of online gaming, which accounts for more than 75 percent of all mobile app sales.
The acquisition involves some retention agreements that push the deal over $1 billion, a source close to the deal told Reuters.
“Twitch will further push Amazon into the gaming community while also helping it with video and advertising,” Macquarie Research analyst Ben Schachter said in a note.
Twitch’s format, which lets viewers message players and each other during live play, is garnering interest as one of the fastest-growing segments of digital video streaming, which in turn is attracting more and more advertising dollars.
The deal, expected to close in the second half of the year, is an unusual step for Amazon, which tends to build from within or make smaller acquisitions. Tech rival Google was earlier in talks to buy Twitch, which launched slightly more than three years ago, one person briefed on the deal said.
Neither Amazon nor Twitch would discuss how the deal came together or comment on Google’s interest.
In an interview, Twitch Chief Executive Officer Emmett Shear said the startup contacted Amazon because its deep pockets and ad sales expertise would allow the startup to pursue its strategic objectives more quickly.
“The reason why we reached out to Amazon, the reason I thought working for Amazon, having Twitch being a part of Amazon, would be a great idea for us (because) they would give us the resources to pursue these things that we honestly already want to pursue and they’d let us do it faster,” Shear said.
A new survey commissioned by IHS in partnership with Gamer Network has shown that E3 gave a huge boost to the number of people interested in buying a Wii U, with purchasing intent growing by 50 per cent over the course of the event.
Around one thousand core gamers were surveyed on various purchase intentions before and after the LA show, revealing that, whilst Nintendo’s platform started out with the lowest number of people looking at buying it, it saw the biggest benefit from the show’s exposure. 20 per cent of respondents now intend to buy the machine, equal to those who are looking at an Xbox One, which saw a seven per cent increase in popularity.
Sony’s PS4, a clear leader going in to E3, lost ground to its competitors, sinking below 30 per cent of respondents.
In terms of anticipated games, consumers are champing at the bit for 2015′s third-party releases, with Warner’s Arkham Knight leading the charge with an incredible 60 per cent of those surveyed intending to buy the game for at least one platform. Gamers are slightly less excited for 2014′s titles, but Activision’s Destiny is the narrow leader for this year, edging out AC: Unity and GTA V with just under 50 per cent. Both Battlefield Hardline and CoD: Advanced Warfare are lagging behind slightly.
As might be expected, purchasing intent is higher amongst first-party exclusives for current platform owners. On PS4, Uncharted 4 was the most popular game both before and after E3 with 76 per cent of PS4 owners expected to buy it. On Xbox One, it’s Halo which pays the piper, garnering support from 77 per cent of One owners. Over on the Wii U and amazing 89 per cent of owners expect to buy the new Zelda game when it’s released. None of these platform-exclusive heavy hitters will land until 2015 at the earliest, which IHS predicts will increase pre-Christmas reliance on multi-platform games for Microsoft, Sony and, to a lesser extent, Nintendo.
“Although there are other exclusive titles coming in 2014 or already available,” the report reads, “none hold the influence that these leading titles have in terms of selling console hardware, with the exception of Mario Kart 8 for Wii U. As a result, the success of console sales this holiday shopping season will depend more heavily on the total value and content proposition including exclusive content offered by multi-platform games rather than a single, very influential system-selling exclusive. This factor will impact the marketing strategies of the platform holders as we move into 2014′s main shopping season.”
The 3DS stumbled at launch, enduring sluggish sales until Nintendo instituted a drastic price cut on the hardware. While Moffitt noted the impact of the price cut, he said a pair of first-party releases was another key driver in reversing the handheld’s fortunes.
“We had the price cut in August , and then we had Mario Kart 7, Super Mario 3D Land, which really drove sales that first holiday, and on 3DS we haven’t looked back,” Moffitt said. “So we’ve had momentum ever since that first holiday and we’ve got now 260 some games in the library and some of the best, most highest rated, most highest quality content we’ve ever had on that platform. Everything we launched seems to do above forecast and surprises us on the positive side.”
The situation with the Wii U is similar, Moffitt said, adding that the console is about to reach a very similar tipping point.
“As I look at what we have coming this holiday, now with Mario Kart and Super Smash Bros, plus the innovation of Amiibo, I think we are right at that tipping point where we have a lot of great content that is about to be released for that platform that’s going to tempt gamers into buying the system,” Moffitt said. “From the comments I’m reading online, and following gamers’ comments, I think there are a lot of people that are going to have a hard time resisting buying a Wii U once Smash Bros comes out. I think that’s going to be a major hardware driver for us. So that’s the narrative we hope that plays out and that I think we are starting to see play out.”
One avenue that Nintendo won’t be pursuing to spike Wii U sales is an unbundling of the GamePad, Xbox One Kinect-style. Both companies pitched the peripherals as essential components of their visions, but when Xbox One sales lagged, Microsoft found the demands of potential customers more convincing than their original plans. While Moffitt said Nintendo is still working to create gameplay experiences that demonstrate the true benefits of the Wii U GamePad, he said removing it from the hardware bundle is not in consideration.
“We think GamePad is the only innovation that’s come in this new generation of consoles. So we have the only real point of difference. Certainly graphics are faster, graphics are better. This is not a real innovation for gamers. We are fully committed to leveraging the GamePad, to keeping it bundled with the system.”
As for the problem of third-party support for Wii U, Moffitt namechecked the continued efforts of partners like Sega, Warner Bros. Interactive Entertainment, and Activision. While some big companies who have dropped the system, Moffitt understood why that would have happened and acknowledged it was Nintendo’s problem to fix.
“It’s all about driving the install base and so that’s our work to do, right? We need to get to a critical mass where it makes financial sense for them,” he said.
Moffitt added that third-party games don’t all come from the big AAA publishers. He touted the company’s efforts in lowering the barriers to entry for indie developers looking to publish on Nintendo platforms.
“We talked to a lot of them before launching the Wii U and we addressed some of the issues that really were holding some of them back from developing realistic content on our platform,” Moffitt said. “At least for the indie community, we’ve become a lot easier to do business with and we’re seeing a steady flow of content now.”
However, those efforts were largely invisible at E3. Where Microsoft and Sony devoted sections of their booths to indie developers working on Xbox One and PlayStation 4 respectively, there was no such equivalent in Nintendo’s booth.
“With any show, you have choices to make,” Moffitt said. “Every time I go down to our booth floor and see how many people are waiting to play Super Smash Bros, when I look outside at the Best Buys… Last night we had four hours of game play on Super Smash Bros. and we had 1,000 people in line. We had to turn people away. So it’s a tough choice for us as a platform holder. We don’t have enough game stations down there on Smash Bros. We try to feature as much content as we can in the limited space that we have. Right now we just have a lot of demand for Super Smash Bros. We could have used 10 more game stations on that game alone. Choices have to be made.”
Finally, Moffitt weighed in on the VR trend. While Nintendo has a distant history in the field with the Virtual Boy headset, Moffitt suggested Nintendo was taking a wait-and-see approach toward returning to it
“What I’d say is it’s appealing technology,” Moffitt said. “It’s interesting. We’re going to follow it closely to see where it goes. It’s got a lot of advantages. It’s got one disadvantage relative to what we know is often very fun for gamers, which is playing games socially in a living room. This is a very single player solitary gaming experience. Not all of our games are fun to play with multiple people in a living room in front of a game console but it doesn’t lend itself to that kind of an experience as well as what Wii U does now. That would be a disadvantage of going in that direction. Could it be a nice addition to our hardware platform? Sure.”
Mickey Mouse outfit Walt Disney expects global retail sales from its 10-month-old Infinity video game to reach $1 billion.
Disney launched Infinity in August to help turn around its interactive gaming unit, which lost $1.4 billion from fiscal year 2008 to 2013. In an overhaul in March, the division laid off about one-quarter of the workforce, cut the number of games it develops and focused its advertising more on the fast-changing mobile market.
A month ago, Disney reported global retail sales of $550 million for Infinity. Sales of the game helped the interactive unit post a $14 million profit for the quarter that ended in March. Jimmy Pitaro, president of the company’s interactive unit said that Infinity will be a billion-dollar franchise. It is expected to do even better when the game’s next version, “Disney Infinity 2.0: Marvel Super Heroes” is launched. Infinity lets users play with characters from Disney and Pixar films such as Anna and Elsa from “Frozen,” Captain Jack Sparrow from “Pirates of the Caribbean” and Lightning McQueen from “Cars.” The 2.0 version that will be launched in the fall brings in Marvel heroes such as Captain America, Iron Man and Spider-Man.
Still Infinity has not done as well as its rival Activision Blizzard “Skylanders” franchise which has made $2 billion in revenue.
Philips is looking to get Nintendo’s Wii U games consoles banned in the US.
Philips has patents in its sights and it said that those patents belong to it and are being used without permission.
The firm has filed a complaint for patent infringement with the US District Court for the District of Delaware, and that has been published on Scribd.
The complaint accuses Nintendo of infringing two Philips patents, and Philips said that they are used in the Wii console and its peripherals. It is pushing for a US sales ban.
The patent numbers at issue end in 379 and 231. Philips claims that it alerted Nintendo to its infringing use of 379 as early as 2011. It registered patent 231 last year and the patent covers interactive device pointing, which is rather a key element of the Wii experience.
Philips is asking for a ban on Wii U sales in the US and monetary damages. The impact on Nintendo could be significant if a sales ban in put in place. So far we have not been able to get a response from the company.
The Philips complaint identifies a long list of infringing hardware. “The infringing interactive virtual modeling products of Nintendo include but are not limited to motion-controlled gaming consoles and motion-detecting devices such as the Wii video gaming systems and related software and accessories including, for example, the Wii console, Wii Remote Plus Controller, Wii Remote Controller, Wii Nunchuk Controller, Wii MotionPlus, Wii Balance Board, Wii U console, Wii U GamePad, and Wii Mini,” it says. “The infringement by Nintendo has been deliberate and willful.”
Philips has requested a jury trial.
With Amazon’s Fire TV device the first out the door, the second wave of microconsoles has just kicked off. Amazon’s device will be joined in reasonably short order by one from Google, with an app-capable update of the Apple TV device also likely in the works. Who else will join the party is unclear; Sony’s Vita TV, quietly soft-launched in Japan last year, remains a potentially fascinating contender if it had the right messaging and services behind it, but for now it’s out of the race. One thing seems certain, though; at least this time we’re actually going to have a party.
“Second wave”, you see, rather implies the existence of a first wave of microconsoles, but last time out the party was disappointing, to say the least. In fact, if you missed the first wave, don’t feel too bad; you’re in good company. Despite enthusiasm, Kickstarter dollars and lofty predictions, the first wave of microconsole devices tanked. Ouya, Gamestick and their ilk just turned out to be something few people actually wanted or needed. Somewhat dodgy controllers and weak selections of a sub-set of Android’s game library merely compounded the basic problem – they weren’t sufficiently cheap or appealing compared to the consoles reaching their end-of-life and armed with a vast back catalogue of excellent, cheap AAA software.
“The second wave microconsoles will enjoy all the advantages their predecessors did not. They’ll be backed by significant money, marketing and development effort, and will have a major presence at retail”
That was always the reality which deflated the most puffed-up “microconsoles will kill consoles” argument; the last wave of microconsoles sucked compared to consoles, not just for the core AAA gamer but for just about everyone else as well. Their hardware was poor, their controllers uncomfortable, their software libraries anaemic and their much-vaunted cost savings resulting from mobile game pricing rather than console game pricing tended to ignore the actual behaviour of non-core console gamers – who rarely buy day-one software and as a result get remarkably good value for money from their console gaming experiences. Comparing mobile game pricing or F2P models to $60 console games is a pretty dishonest exercise if you know perfectly well that most of the consumers you’re targeting wouldn’t dream of spending $60 on a console game, and never have to.
Why is the second wave of microconsoles going to be different? Three words: Amazon, Google, Apple. Perhaps Sony; perhaps even Samsung or Microsoft, if the wind blows the right direction for those firms (a Samsung microconsole, sold separately and also bundled into the firm’s TVs, as Sony will probably do with Vita TV in future Bravia televisions, would make particular sense). Every major player in the tech industry has a keen interest in controlling the channel through which media is consumed in the living room. Just as Sony and Microsoft originally entered the games business with a “trojan horse” strategy for controlling living rooms, Amazon and Google now recognise games as being a useful way to pursue the same objective. Thus, unlike the plucky but poorly conceived efforts of the small companies who launched the first wave of microconsoles, the second wave is backed by the most powerful tech giants in the world, whose titanic struggle with each other for control of the means of media distribution means their devices will have enormous backing.
To that end, Amazon has created its own game studios, focusing their efforts on the elusive mid-range between casual mobile games and core console games. Other microconsole vendors may take a different approach, creating schemes to appeal to third-party developers rather than building in-house studios (Apple, at least, is almost guaranteed to go down this path; Google could yet surprise us by pursuing in-house development for key exclusive titles). Either way, the investment in software will come. The second wave of microconsoles will not be “boxes that let you play phone games on your TV”; at least not entirely. Rather, they will enjoy dedicated software support from companies who understand that a hit exclusive game would be a powerful way to drive installed base and usage.
Moreover, this wave of microconsoles will enjoy significant retail support. Fire TV’s edge is obvious; Amazon is the world’s largest and most successful online retailer, and it will give Fire TV prime billing on its various sites. The power of being promoted strongly by Amazon is not to be underestimated. Kindle Fire devices may still be eclipsed by the astonishing strength of the iPad in the tablet market, but they’re effectively the only non-iPad devices in the running, in sales terms, largely because Amazon has thrown its weight as a retailer behind them. Apple, meanwhile, is no laggard at retail, operating a network of the world’s most profitable stores to sell its own goods, while Google, although the runt of the litter in this regard, has done a solid job of balancing direct sales of its Nexus handsets with carrier and retail sales, work which it could bring to bear effectively on a microconsole offering.
In short, the second wave microconsoles will enjoy all the advantages their predecessors did not. They’ll be backed by significant money, marketing and development effort, and will have a major presence at retail. Moreover, they’ll be “trojan horse” devices in more ways than one, since their primary purpose will be as media devices, streaming content from Amazon, Google Play, iTunes, Hulu, Netflix and so on, while also serving as solid gaming devices in their own right. Here, then, is the convergence that microconsole advocates (and the rather less credible advocates of Smart TV) have been predicting all along; a tiny box that will stream all your media off the network and also build in enough gaming capability to satisfy the mainstream of consumers. Between the microconsole under the TV and the phone in your pocket, that’s gaming all sewn up, they reckon; just as a smartphone camera is good enough for almost everyone, leaving digital SLRs and their ilk to the devoted hobbyist, the professional and the poseur, a microconsole and a smartphone will be more than enough gaming for almost everyone, leaving dedicated consoles and gaming PCs to a commercially irrelevant hardcore fringe.
There are, I think, two problems with that assessment. The first is the notion that the “hardcore fringe” who will use dedicated gaming hardware is small enough to be commercially irrelevant; I’ve pointed out before that the strong growth of a new casual gaming market does not have to come at the cost of growth in the core market, and may even support it by providing a new stream of interested consumers. This is not a zero-sum game, and will not be a zero-sum game until we reach a point where there are no more non-gaming consumers out there to introduce to our medium. Microconsoles might do very well and still cause not the slightest headache to PlayStation, Xbox or Steam.
The second problem with the assessment is a problem with the microconsoles themselves – a problem which the Fire TV suffers from very seriously, and which will likely be replicated by subsequent devices. The problem is control.
Games are an interactive experience. Having a box which can run graphically intensive games is only one side of the equation – it is, arguably, the less important side of the equation. The other side is the controller, the device through which the player interacts with the game world. The most powerful graphics hardware in the world would be meaningless without some enjoyable, comfortable, well-designed method of interaction for players; and out of the box, Fire TV doesn’t have that.
Sure, you can control games (some of them, anyway) with the default remote control, but that’s going to be a terrible experience. I’m reminded of terribly earnest people ten years ago trying to convince me that you could have fun controlling complex games on pre-smartphone phones, or on TV remote controls linked up to cable boxes; valiant efforts ultimately doomed not only by a non-existent business ecosystem but by a terrible, terrible user experience. Smartphones heralded a gaming revolution not just because of the App Store ecosystem, but because it turned out that a sensitive multi-touch screen isn’t a bad way of controlling quite a lot of games. It still doesn’t work for many types of game; a lot of traditional game genres are designed around control mechanisms that simply can’t be shoehorned onto a smartphone. By and large, though, developers have come to grips with the possibilities and limitations of the touchscreen as a controller, and are making some solid, fun experiences with it.
With Fire TV, and I expect with whatever offering Google and Apple end up making, the controller is an afterthought – both figuratively and literally. You have to buy it separately, which keeps down the cost of the basic box but makes it highly unlikely that the average purchaser will be able to have a good game experience on the device. The controller itself doesn’t look great, which doesn’t help much, but simply being bundled with the box would make a bold statement about Fire TV’s gaming ambitions. As it is, this is not a gaming device. It’s a device that can play games if you buy an add-on; the notion that a box is a “gaming device” just because its internal chips can process game software, even if it doesn’t have the external hardware required to adequately control the experience, is the kind of notion only held by people who don’t play or understand games.
This is the Achilles’ Heel of the second generation of microconsoles. They offer a great deal – the backing of the tech giants, potentially huge investment and enormous retail presence. They could, with the right wind in their sales, help to bring “sofa gaming” to the same immense, casual audience that presently enjoys “pocket gaming”. Yet the giant unsolved question remains; how will these games be controlled? A Fire TV owner, a potential casual gamer, who tries to play a game using his remote control and finds the experience frustrating and unpleasant won’t go off and buy a controller to make things better; he’ll shrug and return to the Hulu app, dismissing the Games panel of the device as being a pointless irrelevance.
The answer doesn’t have to be “bundle a joypad”. Perhaps it’ll be “tether to a smartphone”, a decision which would demand a whole new approach to interaction design (which would be rather exciting, actually). Perhaps a simple Wiimote style wand could double as a remote control and a great motion controller or pointer. Perhaps (though I acknowledge this as deeply unlikely) a motion sensor like a “Kinect Lite” could be the solution. Many compelling approaches exist which deserve to be tried out; but one thing is absolutely certain. While the second generation of microconsoles are going to do very well in sales terms, they will primarily be bought as media streaming boxes – and will never be an important games platform until the question of control gets a good answer.
With Fire TV, Amazon has launched its first box to deliver games to the living room. The $99 Android-based hardware features a quad-core processor, a dedicated GPU and a separate gaming controller for $40. Moreover, Amazon will bring exclusive games to the Fire TV through its first-party team at Amazon Game Studios.
Similar to other microconsoles, the games on the digital store will be either free or quite cheap to purchase, which Amazon hopes will make it attractive to the masses. Amazon has an army of resources and while other microconsoles have failed to become mainstream, it would be foolish to doubt Amazon’s potential. Should dedicated console makers like Sony or Microsoft be concerned? The majority of the analysts GamesIndustry International spoke to didn’t think so.
Wedbush Securities’ Michael Pachter called the announcement a “nonevent,” saying Amazon “will not be a player.” DFC Intelligence’s David Cole agrees.
“Short term they don’t have a reason to be concerned but long term it could be an issue. The main focus of the box is streaming video. The issue is video is 1) a much bigger application than games and 2) much easier to do. It is clear games are at best currently a distant after thought for Amazon in terms of the Amazon box. The type of games they are looking at are more in the realm of tablet/mobile/casual products, which are really no substitute for what the dedicated consoles provide,” he said.
“So I think right now it is a rounding error in the game industry but that could change if Amazon decides it wants to make a big investment in the space. However, the reality is you really have to very directly target gamers and Amazon right now is only half-heartedly doing that.”
Indeed, hardcore gamers won’t be passing up the PlayStation 4 or Xbox One for an Amazon Fire TV anytime soon, said independent analyst Billy Pidgeon: “Hardcore games enthusiasts won’t be satisfied by this or any other inexpensive television-connected device. Still, Microsoft, Sony and Nintendo are increasingly competing for individual and family entertainment time with interactive entertainment, video and audio available in the home on multiple devices, including smartphones and tablets as well as multimedia boxes that connect to television sets.”
Pidgeon conceded that “as more devices can offer games and media, consoles’ appeal for the mass market (an important factor in mid-to-end cycle console adoption) is in steep decline.” He added that if anyone should be worried now, it should be Apple and Google.
“Apple and Google have been the main contenders for online media transactions, but Amazon has the motivation, the focus and the distribution to move Fire TV quickly into lead position. Apple has competition issues with media providers and Google is behind in online retail and user experience. Amazon’s entry into connected TV could energize the competition and speed household penetration,” he said.
Asif Khan, CFO of Virtue LLC, wasn’t wowed by the Fire TV announcement either. Even with exclusive games – and now Amazon has hired some heavy hitters in Clint Hocking and Kim Swift – he’s not convinced that Amazon can disrupt the console market.
“We knew that Amazon was going to enter the games industry, but I am not sure who is going to feel compelled to buy it with a controller that costs 40 percent of the device. The success of the device as a gaming alternative will likely depend on the software that Amazon’s gaming studio can create, but we have seen with Nintendo’s Wii U flop that first-party content is not enough to get consumers to buy a device,” Khan noted.
“There is chance that Fire TV can make some waves if Amazon’s partners continue to bring games to the device, but in my opinion this product will achieve limited success,” he continued. “It feels like all of Apple’s competitors have now shown their cards in anticipation of the upcoming Apple TV refresh. We have seen Xbox One, Chromecast, and now Fire TV. None of these products have wowed consumers and ushered in a new age of how we interact with TVs. This announcement by Amazon today just has me even more interested in what Apple is going to announce this year. Clearly the set top box market has a lot of players and Amazon has a chance to contribute something to that increasingly crowded space. With that being said, I do not think the Fire TV is a game changer for video game consoles. It is a set top box that also plays games, with the potential of asymmetric gameplay.”
If the analysts seem overly negative, perhaps they are forgetting about Amazon’s web services. The back-end technology could make a difference, said IDC research manager Lewis Ward, who believes Amazon is “absolutely” a contender in the console space.
“Anybody in high tech or in content that sees Amazon jump into their bread and butter market and isn’t concerned about what Amazon might be able to do should have their head examined,” he commented. “Let’s put it this way: Fire TV is by far the most viable microconsole platform out there. Couple that with Amazon’s back-end streaming, storage, and game-hosting platforms and developer tools and you’ve got a serious threat to casual home-based console gaming in particular, at least in North America and pockets of Europe in the next few years.”
The Japanese company showed off its SmartEyeglass prototype at the Wearables DevCon conference just outside San Francisco, where it was trying to drum up interest among developers, who will need to build applications for the device.
Like Google Glass, SmartEyeglass displays information instantly in front of a users eyes. Unlike Glass, which has a small prism display, Sony’s prototype looks more like a normal pair of eyeglasses and shows information in green over a pair of see-through lenses.
In a video to show off its capabilities, users walk into an airport and get sent directions to the check-in desk which pop up on their glasses. Other potential uses include displaying the latest score and players’ names while watching a football game, sending and receiving texts and being notified of a missed call.
The glasses have a binocular-type display that makes the text look further away, which makes it more comfortable to read. They also have an embedded camera and a microphone and sensors similar to those in a smartphone, including an accelerometer, gyroscope and compass.
The device is still a prototype and not as advanced as Google Glass. It’s operated via a separate, wired controller with a touchpad that has navigation, power and camera buttons. And the glasses currently work in conjunction with an Android phone. The applications for the glasses run on the phone, and interact with the phone over Bluetooth or Wi-Fi.
Sony said it’s working on a software developer kit for the product, based on the same framework as its SmartWatch 2. But there was no word yet when the SDK or the prototype itself will be available.