Nintendo isn’t doomed yet

Everyone is aflame with commentary about Nintendo’s recent dismal projections of Wii U sales. I won’t go into details – if you’re reading this, you probably already know that the company expects several million fewer Wii Us (that is one weird-looking plural) sold through the end of this fiscal year. 3DS projections were also lowered slightly.

The Wii U has not been a success, but why has it struggled? I tackled this question a while back, largely discounting the specs issue while giving some credence to the possibility that marketing was at fault. My hunch, though, was that the 3DS – the world’s most successful dedicated console – was cannibalizing the Wii U. Nintendo’s portable has all of the company’s important IPs represented, better third-party support, and a lower price. Basically, a 3DS provides the comprehensive Nintendo fix, and the Wii U brings nothing else to the table for Nintendo’s audience except HD graphics and a sadly underutilized controller that permits asymmetric gameplay.

The Game Pad: A sad tale
The name “Wii U” is awful, and Nintendo itself has done little to show off or exploit the unique capabilities of its own system. The Game Pad has been orphaned, and its issues are indicative of the console’s problems as a whole.

The best software tailored to the Game Pad includes the third-party The Wonderful 101, ZombiU, Deus Ex: Human Revolution, and Assassin’s Creed 3/4. In some cases, these games have gone to great lengths to show off the possibilities of a touch screen controller – The Wonderful 101 lets you draw patterns and navigate entire indoor sequences with just the Game Pad, for example. But the Game Pad has also shown great ability to trivialize painful gameplay mechanics, such as map navigation and inventory management. This is why I mentioned ZombiU (in addition to its terrific Game Pad vs Pro Controller multiplayer) and AC3/4 – the Game Pad is a natural way to get clutter off the TV and into the controller.

This is why I think arguments such as “Nintendo makes bad hardware” miss the point. The hardware is plenty capable, but its strengths aren’t in demand by demographics such as hardcore gamers (for whom online services and graphical capabilities are more important) or casuals (who do not care about hardware at all). Part of the issue is probably mobile devices, as the typical fallback argument goes – billions are being channeled into ripoffs such as Clash of Clans and Candy Crush Saga. And the XB1 and PS4 have given the hardcore exactly what they want in the form of sophisticated online gameplay and x86 processors, so Nintendo gets squeezed in a way. Nintendo has tried to cater to both markets while not having completely what either of them wants.

Game Over? Not yet
But I don’t think all is doom and gloom just yet. Nintendo’s financial position is solid, giving it the cash and time to figure out what’s next. And I think the company can turn this challenge into an advantage, if it looks at things right. Here’s what I mean: The disruption from tablets and smartphones is important but at what point do these endpoints stop being mobile devices and just become, well, devices? Many of them have processors clocked at > 2 GHz, with displays to shame any HDTV or PC, not to mention faster data connections than many PCs or consoles. I think Nintendo should look at the 3DS/Wii U with a similar attitude – the 3DS is already basically a mobile GameCube,  and that’s only the case because the company ridiculously lowballed its specs. With more devotion to power, it could have been more than a mobile Wii – i.e., a mobile Wii U. What if the company just merged its consoles into one line?

Doing so would solve the cannibalization problem I highlighted. At the same time, making something that can give gamers a Nintendo fix on the go and in the home – maybe it support HDMI, along with an updated, smarter StreetPass – would fit right in with the underrated transition of mobile hardware into do-everything-hardware that is just as good on the bus or in the lobby as it is in the conference room or at the desk. Of course, the challenge would still be carving out a niche independent from the Swiss Army Knife functionality of Android/iOS devices.

Rising to the challenge
But Nintendo has shown a great knack for innovation – and I don’t use that word lightly as a synonym for “new VC-funded photo app.” They’ve innovated for the past 30 years, and many of those innovations have failed, from the Virtual Boy to the Famicom Disk System to the Wii U – failing spectacularly is often a sign of real innovation, innovation for which many consumers aren’t ready. Others have succeeded – the N64’s joystick controller, motion sensors on the Wii, dual-screen on the DS. And that’s not even mentioning StreetPass, which as a real-time, proximity-based social network was years out ahead of the “Internet of Things” or iBeacon.

Moreover, Nintendo usually has its pulse on the future, but its insularity often means that it arrives at jarring conclusions, some of which it can’t explain or market to would-be customers. At other times, the sheer novelty of their creations sells itself, as was the case with Wii Sports. Still, I think that a company that has already dabbled in something as cool as StreetPass and two-screen gameplay can find some niche in the Increasing Complex Hyper-Connected World (TM) or whatever “the world” is being called now. There are more gaming endpoints available than ever before, but as they are iterated with better specs they’ll probably merge with the functionality and form factor many of our existing devices and stop being a discrete category. Rather than despair at this likely state of affairs, Nintendo should take heart and create something that bridges gaming needs on-the-go and in the home.

3 things Nintendo could do to get started
In the meantime, I think there are a lot of areas Nintendo could work on to lay the groundwork for its future. My wish list:

  • Stop tying downloads to hardware
  • Create a comprehensive account system, while keeping online services free (one of the Wii U’s underrated advantages over its competitors
  • Continue ignoring PSN/Xbox Live – imitating competitors won’t help Nintendo get rolling again, no more than Mac OS licensing helped Apple keep up with PCs in the 1990s

Nintendo isn’t destined for failure, no more than Microsoft was after the first-gen Xbox struggled mightily to get traction. But they’ll need to do a lot of things smarter in the short and long terms.

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