Nintendo has confirmed that its next-gen console, the Nintendo NX, will launch in March 2017.
Causing many to screw up their Christmas lists, the company told shareholders during its earnings call on Tuesday: “For our dedicated video game platform business, Nintendo is currently developing a gaming platform codenamed ‘NX’ with a brand-new concept. NX will be launched in March 2017 globally.”
Probably also causing some to cancel a trip to Los Angeles, Nintendo said that the NX will not be demonstrated at the upcoming E3 video games conference in June, despite speculation that Sony plans to show off its so-called PlayStation 4.5 console.
Nintendo’s keynote at the games show will focus instead on the next Legend of Zelda game, which will launch simultaneously on the Wii U and Nintendo NX in 2017. Rumour has it that Smash Bros 4, Splatoon and Super Mario Maker are all set to receive an NX makeover too.
A launch is now less than a year away, but we still don’t know much about the Nintendo NX, which Nintendo confirmed this week is just a codename for the incoming console. However, rumour claims that it will arrive as a hybrid between a home console and a mobile games console to sit alongside the New Nintendo 3DS.
Nintendo president and CEO Tatsumi Kimishima reiterated in December last year that the company is “not building the next version of Wii or Wii U” and that the device will be something “unique and different”.
News of the Nintendo NX’s launch date no doubt came as the firm looked to play down the fact that its profits fell 61 per cent year over year. Worked, didn’t it?
The National Football League has selected Twitter as its exclusive global partner for streaming its Thursday night games during the 2016 regular season, both parties announced, a deal that could help the social media site expand its user base.
CBS Corp and Comcast Corp unit NBC, which won the broadcast rights in February, could also gain more viewers via Twitter, TV executives said.
Twitter Inc spokesman Brian Poliakoff declined to disclose the financial terms, or elaborate on how the games would be streamed. But technology news website Re/code, citing people familiar with the bidding process, reported that Twitter paid less than $10 million for the streaming rights.
The deal comes as sports fans are increasingly relying on the Internet to watch video at the expense of traditional cable and satellite connections. Livestreaming the games would give Twitter a new avenue to attract users as it tries to catch up with rival social networks like Facebook Inc, which has over a billion users.
The NFL partnership helps cement Twitter’s position as a destination for live video, said Tom Richardson, president of consulting firm Convergence Sports & Media.
“I don’t think it’s going to cannibalize viewership at all,” CBS Sports Chair Sean McManus said. “I don’t see people turning off their televisions and watching the game on Twitter.”
“The fact that our national commercials are running on the Twitter feed is a big benefit,” he said.
An NBC spokesman declined to comment.
Twitter will livestream 10 games for free to the more than 800 million people who use its service, as well as non-registered users.
Last year, it was loose lips in the supply chain for console manufacture, now it’s seemingly loose lips within Nintendo’s own marketing department, but there’s a common thread to every leak or rumour that spreads about the platform holder these days – they all point to a late 2016 launch for the company’s next console platform, codenamed NX.
The numbers Nintendo was said to be targeting for NX that were floated around from sources at overseas parts suppliers checked out pretty well. Similarly, the more recent marketing leak has lent significant credibility by being on the money regarding the now-announced Pokemon Sun and Moon titles. It’s all still in the realm of rumour – a dedicated faker could have done the maths required to arrive at plausible manufacturing numbers for NX, just as we did when we dissected the claims; someone with knowledge of a soon-to-be-announced Pokemon game could have tacked on fake information about an upcoming console in order to troll gaming forums. It happens.
Besides, in the skeptics’ corner, there are some solid reasons to question the 2016 launch window. For a start, there’s the simple fact that we know nothing about NX. It’s already March, and all we know is a codename and some vague, hand-waving stuff about the console bridging home and handheld paradigms. That’s pretty much it. Assuming a November launch, that would leave Nintendo with a grand total of eight months to unveil, explain, market and promote an entire new console launch – even assuming that they were to start that process tomorrow. It’s not impossible, of course; that eight months would encompass E3, GamesCom, Tokyo Games Show and as many Nintendo Direct shows as the company wanted, so getting the message out there is plausible… But bear in mind that this is also the year in which Nintendo’s mobile gaming partnership with DeNA will bear its first fruit, and while I maintain that the company views that as a support to its console business, not a replacement for it, it’s reasonable to be dubious of the idea that it would willingly completely overshadow the marketing of those games with a blitz of promotion for a new console.
There’s also the simple matter of history to consider. Nintendo has never, as far as I can recall or uncover, announced a console in the same calendar year that it released it. The pattern for its systems’ pre-launch promotion has been fairly consistent since the turn of the millennium; a slow build-up from the reveal of hardware to further details and the introduction of software, with a launch often as much as 18 months after the unveiling. Compressing that into eight months (or seven, or six) might be possible, but it would be totally outside the pattern of what Nintendo has done up until now with its consoles.
On the other hand, Nintendo is in a pretty unique situation right now. It has a new CEO who, although he’s essentially pledged to follow the path Iwata set the company upon, will also have his own way of doing things and his own vision for the firm. It also has an absolute albatross in the form of the Wii U, which has not been saved from commercial disaster even by successful, acclaimed games like Splatoon and Super Mario Maker – and, almost uniquely for the company, it faces giving the Wii U an early bath at the same time that its all-conquering handheld platform, the 3DS (which has done very well despite not matching sales of its predecessor, the DS) is also slowing down significantly. Nintendo does face entering 2016 without a particularly strong handheld or home console platform and only the 3DS’ installed base to keep things ticking over – which might be a significant impetus to speed things up on the introduction of something new.
Let’s think in more details about the factors that would be involved in launching the NX by the end of the year. It would absolutely have benefits; perhaps the most clear one is that it would prevent 2016 being a “wasted” holiday season for Nintendo. The flatlining Wii U and the rapidly slowing 3DS suggest that without the introduction of a new platform this year, holiday 2016 will likely be Nintendo’s worst for many years – arguably not something Kimishima will want on his report card so early in his tenure. A rapid build-up and launch for the NX would give the company a blow-out Christmas, since Nintendo platforms pretty much always do well at launch – and of course, this would also place NX in the window to receive a prettied-up port of the upcoming Zelda title for Wii U at the same time as the Wii U version itself launches, a mirror of the very successful strategy the company used for Twilight Princess across the GameCube and Wii a couple of hardware generations ago. Even if the game isn’t totally exclusive to NX, a Zelda game at launch would be an enormous boon for the new platform and a great way to ensure a solid holiday season.
It’s definitely a short period of time, though, and the window in which Nintendo can announce the console is probably quite limited. It’s highly unlikely that it would wait for E3 to unveil its plans; much as turning up with a brand new console to the show would be a very effective way to “win” E3, it’s probably more sensible to unveil some aspects of the device, at least, in a Nintendo event well ahead of the show. Indeed, if NX details aren’t revealed to some degree either this month or next, I suspect a 2016 launch can be said to be entirely off the cards – although I wouldn’t actually put money on that, since if we’re talking about reducing the pre-launch promotion window from 18 months to 8 or 7 months, why on earth not make it six, or five, or four?
In fact, it might be more instructive to think about that window in terms of how other devices manage it. Consoles are actually quite unusual in having a lengthy, protracted period where everyone is talking about them, everyone is showing off software for them, but nobody can buy them. Compare that to smartphones or tablets, which are generally available to buy within a matter of days or weeks after they’re first unveiled. That short lead time doesn’t seem to stop Apple’s devoted fans from camping out to buy a new iPhone; perhaps a short lead time for a console might actually spur fans to excitement, rather than denying the new system a build-up? If the NX console is really a complex concept that it takes people a while to get their head around, then perhaps that will be problematic – you don’t want to launch a device that hardly anyone actually understands yet – but if it’s merely an interesting twist on the familiar, then perhaps a short, intense few months of promotion is actually a marketing advantage over a year or more of drawn-out arguments regarding the merits of a still-vapourware device.
Whatever Nintendo actually plans for the NX, it will represent a very dramatic choice for the company. A 2016 launch will be an aggressive strategy that overturns its previous approach to console launches and suggests dramatic reforms under Kimishima’s guidance. Pushing its launch out into next year, though, will leave the company facing a bleak holiday season with an ailing, albeit still popular, handheld device and a home console that’s almost totally dead in the water – and even with the prospect of a Zelda swan song on the Wii U, that will be a bitter pill to swallow for Nintendo. The company is, in some regards, painted into a corner – no matter what it does next, it’ll require a very different Nintendo difference.
AT&T Inc announced that it will debut three new ways to stream DIRECTV content on wireless and wired devices from smartphones to PCs, targeted at price-conscious U.S. viewers who shun pricey cable and satellite subscriptions.
The Dallas, Texas-based wireless provider said it expects to launch the three offerings in the fourth quarter of 2016. They can be streamed on apps through any Internet or mobile connection, it added.
The first option DIRECTV Now will offer all content in its current packages, including add-ons, live and on-demand video. DIRECTV Mobile, for smartphone users only, will include premium content and youth-oriented videos created by Otter Media, an AT&T joint venture with an investment group headed by media entrepreneur Peter Chernin. Free, ad-supported DIRECTV Preview will offer content from “AT&T’s AUDIENCE Network,” which has exclusive original videos, in addition to Otter Media offerings.
Prices will be announced at a later date, a company spokesman said.
AT&T acquired DIRECTV for $48.5 billion last year, making it the world’s No. 1 pay-TV operator with 45 million video subscribers, including Mexico and Latin America, at the end of 2015. It is betting big on video to tap new revenue as the U.S. wireless market stagnates.
The online video market is competitive, with players such as Netflix Inc and new entrants like Dish Network Corp and Verizon Communications Inc rushing to service viewers who increasingly consume video online than through pay-TV services.
AT&T’s CEO Randall Stephenson hinted in December that his company was planning content packages that can be viewed on a smaller screen, or to a single screen in a home that’s not set-top box-driven.
AT&T executives have said the company has already acquired mobile streaming rights, by leveraging DirecTV’s relationships and agreements with content providers, for various premium cable channels such as Showtime. It will deploy 40 megahertz of contiguous airwaves to relay content over its network.
“We intend to offer customers a quality pay-TV experience, including top channels, sports and more, with increased value and flexibility of pure online streaming and no need for home installation,” John Stankey, CEO, AT&T Entertainment Group, said in a statement.
Nintendo’s finances took a dip in the company’s third quarter report for FY 2015 – sales stayed relatively stable with just 3.9 per cent shrinkage to 427.7 billion Yen ($3.5bn), but profits dropped by 32 per cent year-on-year to 40.5 billion Yen ($336m).
Although the bottom line failed to excite, plenty of familiar faces performed well for the publisher’s software arm, as well as a few new names. Top seller was Child friendly Wii U shooter Splatoon, shifting over four million units. Super Mario maker wasn’t far behind on 3.34 million, whilst Animal Crossing Happy Home Designer reached 2.93 million. Collectively the 3DS family sold 5.88 million units of hardware and 38.87 million games. The Wii U totalled 3.06 million consoles and 22.62 million pieces of software. 20.50 million Amiibo figures were sold, and approximately 21.50 million Amiibo cards.
Those eagerly awaiting news of either the new NX system or the company’s first smartphone game will be disappointed – neither was mentioned in the company’s forward looking statements. Instead, the publisher focused on relatively known quantities.
“For Nintendo 3DS, we will globally release a special edition hardware pre-installed with Pokémon title(s) from the original Pokémon series on February 27 which marks the 20th year since the original Pokémon series release,2 read the accompanying statement.
“Furthermore, Mario & Sonic at the Rio 2016 Olympic Games and key titles from third-party publishers are scheduled for release. For Wii U, we will strive to maintain the attention level of Splatoon and Super Mario Maker, which are continuing to show steady sales, while introducing new titles such as The Legend of Zelda: Twilight Princess HD. Meanwhile, for Amiibo, we will continue to expand the product lineup in order to maintain momentum. At the same time, we will aim to further expand sales by offering new gaming experiences with the use of Amiibo. In addition, the first application for smart devices, Miitomo, is scheduled for release.”
The company has maintained its full year target of 35 billion Yen in profit.
The Nintendo NX may surpass the Wii U’s lifetime installed base in its first year on shelves. According to a Digi-Times report, Nintendo’s upstream component suppliers are expecting to provide the company with enough hardware to ship 10-12 million units in 2016.
That would mark a rebound after the Wii U, which through September had put up lifetime sales of a little under 11 million. However, Nintendo may be expecting even more from its next platform; in July, Digi-Times reported that the company was planning to ship 20 million Nintendo NX systems globally in 2016.
The report states that Foxconn Electronics will manufacture the NX, with mass production beginning at the end of the first quarter. Foxconn Technology, Macronix, Pixart Imaging, Coxon Precise Industrial, Nishoku Technology, Delta Technology, Lingsen Precision Industries and Jentech are expected to be supplying components for the NX.
Japan’s Nintendo Co announced that it is delaying the much-awaited launch of its videogame service for smartphones by a few months to March 2016, disappointing gaming fans as well as investors who drove its shares down by more than 10 percent.
Under a strategy announced by its previous chief executive, who died of cancer earlier this year, Nintendo had said it would introduce its first smartphone games by the end of 2015. Fans and investors had hoped it would include its best-selling videogame franchise Mario in the first lineup.
Chief Executive Tatsumi Kimishima, a former banker who succeeded Satoru Iwata, said the delay would help Nintendo concentrate on selling its existing consoles and game software during the year-end holiday season.
“The year-end is traditionally our peak season for sales,” told a packed news conference, when asked about the delay. “This way, we’d be able to introduce our new applications after the holiday season is over.”
He avoided commenting on whether Mario would come to smartphones, instead introducing a new social networking service-style application called “Miitomo” which would be available in March.
The news knocked Nintendo’s shares down more than 10 percent in morning trade, erasing earlier gains. DeNA Co, Nintendo’s mobile gaming partner, fell as much as 19 percent.
Kimishima must avoid cannibalizing traditional console sales at the same time as pushing aggressively into the rapidly growing mobile gaming segment. On Wednesday, Nintendo reported a weaker-than-expected operating profit for the July-September quarter on tepid sales of game software.
“This (move into mobile gaming) is a sea change for them and there may be some growing pains like this along the way,” said Gavin Parry, managing director of Hong Kong-based brokerage Parry International Trade.
Former CEO Iwata, credited with broadening the appeal of videogames, died of cancer in July just months after deciding to enter mobile gaming despite years of resisting investor calls for such a move.
Verizon Communications Inc launched a trial version of its new mobile video service on Tuesday, looking to prove that telecom players can compete with mobile ad industry titans Google Inc and Facebook Inc.
Verizon said its service, a mobile app dubbed “go90″, will be offered initially to a select set of its own customers, with advertisements from well-known brands, which it declined to name, but without newly acquired ad technology from AOL, the media company it bought in June for $4.4 billion.
Verizon is targeting young viewers or millennials with about 100 to 200 hours of exclusive content from online video networks such as AwesomenessTV and Machinima, said Brian Angiolet, Verizon’s senior vice president, consumer products. The free service will drive revenue from data usage and targeted advertising.
Verizon’s best chance to prove its advertising potential rests on technology from AOL, which has built tools to deliver targeted Web and mobile ads. That, combined with Verizon’s customer data, should improve targeting, analysts say.
The AOL technology is in the process of being integrated with Verizon’s video service, and targeted advertising tools will be available over time, Angiolet said.
The service will launch officially to all users as soon as later this month, a Verizon spokesman said.
Companies from Netflix Inc to Dish Network Corp already offer Web-based video services through subscriptions, but the No. 1 U.S. wireless company’s ad-supported, short-form video model is unusual.
Go90 pits Verizon against Internet advertising industry heavyweights Google and Facebook, and advertisers will take a “wait and see” approach to determine how many viewers Verizon captures, telecom industry consultant Tim Farrar said.
“Pretty much without exception telecom operators have not been successful as third parties in exploiting the Internet access service, whether it’s video or anything else,” Farrar said. “What percentage of people’s app viewing is going to be over a Verizon app versus YouTube or Facebook…That’s the biggest uncertainty.”
Verizon’s rival AT&T Inc has said it has mobile video services targeting young viewers in the works. Smaller rivals Sprint Corp and T-Mobile US Inc have said they are watching their competitors’ efforts closely.
Studios like Disney, which has made blockbuster films like “Frozen” and Marvel’s “Guardians of the Galaxy,” have been attempting to steer movie fans towards digital purchases as sales of DVDs decline.
Walt Disney Studios added that it would launch the app on video streaming-device maker Roku Inc and Google Inc’s Android TV on Sept. 15, coinciding with the DVD release of “Cinderella.”
The collection in Disney Movies Anywhere can be accessed through its new app for theMicrosoft Xbox 360 and for Amazon’s Fire tablets, Fire TV and Fire TV Stick.
The media company launched Disney Movies Anywhere in February 2014 with Apple Inc’s iTunes, and in November partnered with the Google Play online store and Walmart Stores Inc’s online store Vudu.
The two new additions come on the same day as its early digital release of Marvel’s “Avengers: Age of Ultron.”
The Biel, Switzerland-based company is competing with Apple and other watchmakers in the budding smartwatch market.
“Our product is called Touch Zero One and that gives enough room for Zero Five, Zero Nine,” Nick Hayek was quoted as saying by Switzerland’s Tages-Anzeiger newspaper. “The Touch Zero One is not the end of the progression.”
Hayek told the paper Swatch would launch Touch Zero Two at next year’s Olympic Games in Rio de Janeiro.
The Swiss company’s strategy appears primarily to revolve around including individual tech features in different models rather than going head to head with Apple to create all-in-one smartwatches combining many functions.
On top of its Touch Zero One, which can track the distance the wearer travels and help beach volleyball players measure the power of their hits, Swatch is planning to launch watches with an embedded “near field communication” chip this year.
The last of the console makers is ready to sign up to AMD chips, according to the latest rumor
Some details are now coming to light on Nintendo’s upcoming NX console. The console will be in the shops in a year’s time, but we might know who’s building the NX’s chips.
AMD will manufacture the CPU + GPU combo, giving the outfit total control of the console market. It was pretty much a no brainer. AMD created the APUs found inside the Xbox One and PlayStation 4. Although it is getting increasingly difficult to tell the consoles apart.
AMD’s CEO, Lisa Su, confirmed that the company had a new chip contract. Su said the deal could generate billions, but she did not identify the customer .
It now seems she was referring to the Nintendo deal, which means she is more optimistic about the products’ success than us.
The NX will be based around the Android operating system and should released some time next year. Nintendo is saying nothing about the deal at the moment.
AMD is needs more deals like this if it is going to turn around its dependence on the ever-shrinking PC market. There are only so many consoles that made every year and AMD appears to be inside them all.
For a while now, people had been wondering what the next Wii would be called, with smart money being on the Number 2. However it seems that the new console dubbed the Nintendo NX has a few surprises under the bonnet.
According to Nikkei Nintendo is planning an Android console so that game developers would be able to port their games over with relative ease.
This could also indicate that games developed for the Nintendo NX could extend to other Android-powered devices like smartphones and tablets, play nice with the console.
Games developers have been ignoring the Wii U in droves so this might actually help Nintendo get back into the race.
Android-powered consoles have appeared before but they died horribly in the market place.
There’s something genuinely surreal about sitting down to write an article about region locking in 2015. It feels archaic and almost nostalgic; I might as well be writing something about blowing into cartridge ports to get games to work, or bemoaning the long load times for cassettes. Yet here we are. Years into the era of digital distribution, long after we reached the point where it became technically harder to prevent customers from accessing games from anywhere in the world than it is to permit the same, region locking is back in the news. Thanks, Nintendo.
The focus of this week’s headlines is the Humble Bundle promotion which Nintendo is running for a number of indie titles on 3DS and Wii U. It’s a great deal for some excellent games and is raising money for a solid cause; plus it’s wonderful to see console platform holders engaging with the Humble Bundle approach, which has been so successful at bringing indie games (and other creative works) to wider audiences on the PC. It ought to be a win, win, win for Nintendo, gamers and indie developers alike.
Unfortunately, though, the bundle only works in the Americas; North America and some bits of Central and South America. Customers elsewhere are entirely locked out, a matter which has been a source of deep frustration not only to those customers, but also seemingly to Nintendo’s own staff working on the project. The result is that what ought to have been a straightforward PR win for the company has turned bittersweet; there has been more widespread news coverage of the region locking debacle in the past few days than there has been for the bundle itself.
Although this is a terrible shame for the developers involved – and I sincerely hope that Nintendo can pull its thumb out of its backside and launch an international version of the bundle in short order – no sympathy is due to Nintendo in this situation. It’s a problem entirely of the company’s own making; the firm made a deliberate and conscious decision to embrace region locking even as the internationalisation of digital distribution made that look increasingly ridiculous, and until that stubbornly backwards piece of decision making is reversed, it’s going to continue causing PR problems for the firm, not to mention genuine problems for its most devoted customers.
Remember, after all, that the rest of the gaming world has ditched region locking en masse – Sony gave it up with the PS3, even making it painless to use digital content from different regions by creating multiple accounts on the same console, while Microsoft made region locking optional on Xbox 360 (making a bit of a mess where some publishers enforced it and others didn’t) before ditching it entirely on the Xbox One. At the same time Nintendo, ever the merry contrarians, went the opposite direction, not only maintaining region locking on the Wii and Wii U, but even extending it to the 3DS – in contrast to the company’s prior handheld consoles, which had been region free.
The idiocy of a region locked handheld is staggering; these are systems which are quite simply at their best when you’re traveling, yet lo and behold, Nintendo don’t want you to buy any games if you go on holiday or on a business trip. The excuses trotted out were mealy-mouthed corporate dishonesty from start to finish; it was all about protecting customers, honest, and respecting local customs and laws. Utter tosh. Had those things been a genuine issue, they would have been an issue in the previous decades when Nintendo managed to sell handheld consoles without region locking; they would also have been an issue for Sony and Microsoft when they removed region locking from their systems.
In truth, there’s only one reason for region locking in this day and age – price control – and Nintendo’s calculation must have been that they had more to lose from the possibility, real or imagined, of people buying cheaper 3DS games from countries overseas, than they had to lose from annoying a chunk of their customer base, be they keen gamers who wanted to try out titles unlikely to be released in their regions, expats who want to play games brought from their home countries or parents who find that a game bought in the airport on the way home from holiday results not in a pacified, happy child on the flight but in an angry, upset child with a game that won’t work.
In Nintendo’s defence, Satoru Iwata has recently been musing publicly about dropping region locking from the Nintendo NX, whenever that turns up. That the company is clearly planning to move down that path does rather confirm that it’s been fibbing about its motivations for region locking all along, of course, which might be why Iwata is being cautious in his statements; it’s a shame if such face-saving is the reason for Nintendo failing to keep up with industry moves in this regard, because the company is going to keep being periodically beaten with this stick until the problem is fixed.
Admittedly, there would be problems with removing region locking from its existing consoles – not least that Nintendo’s agreements with publishers probably guarantee the region locking system, so even if it could be patched out of the 3DS and Wii U with a software update, that can’t happen legally due to the contracts it would breach. What Nintendo could and should do, however, is to offer gamers a gesture of good faith on the matter by dropping region locking from all its first-party software from now on – and perhaps emulating Xbox 360 era Microsoft by making it optional for third-party publishers as well. I can envisage no legal barrier to that approach; it would earn the company enormous kudos for responding to its audience and dealing with the problem, and would cost them precisely nothing. There aren’t that many easy PR wins floating around the industry right now; Nintendo should leap on this chance to show itself to be on the customers’ side.
Wheels turn slowly in Kyoto, though, and it’s probably too much to expect the company to react in a startup-like way to the region locking issue. In some ways it’s Nintendo’s strength that it reacts slowly and thoughtfully rather than jumping on every bandwagon, but in recent years, it’s also been a weakness far too many times – and the thoroughly wonderful software that the company has been turning out in the past few years, perhaps the finest line-up it’s produced in decades, has been regularly undermined by bad decisions in marketing and positioning of its platforms, many of which can be traced to a failure to understand where the market is and where it’s moving.
Region locking isn’t the biggest problem. Fixing it would be cheap and easy but would hardly be a panacea for Nintendo’s issues – but it’s a problem that’s symptomatic, emblematic even, of the broader problems Nintendo has with putting its customers first and applying the same care and attention to its corporate aspects which it always applies to its software development. Fix a problem like this in a proactive, rapid way, and we might all start to believe that the company has what it takes to get back on top.
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.