Things are not going well for Nintendo these days. There are two articles worth reading on the topic:
The 3DS is facing some stiff competition from iOS and Android games, and the cracks are beginning to show in the once impenetrable barriers that Nintendo had surrounding their precious handheld market. While I do not understand how iOS games and Android games can truly compete with triple-A titles (especially first-party ones), that is only a small part of what I want to talk about.
3DS sales and Nintendo’s new course of action
So, 3DS sales have slumped. Big time. It launched on February 26 of this year in Japan, and launched between March 25 through to March 31st in Europe, North America, and Australia. Worldwide sales have fallen 10% short of what Nintendo expected in the first month or so, and given Nintendo’s recent roaring success from the Wii and their modest expectations by comparison for the 3DS, this is a staggering failure. Sales have also dropped, like a rock, in the past few months.
In response to this, Nintendo has cut the price of the 3DS from $250 (US) to $170 (US). This is a price drop of about 30%. Normally, you wouldn’t even see a console or handheld go on sale for that much, let alone have its regular price slashed by that much within less than half of a year from its release date. A similar desperate cut was made on a Nintendo system in the past…and you can probably guess which one. At a price of $170, any units of the 3DS sold will no longer be making Nintendo any profit (which made this a decision that Iwata had to justify heavily at a recent shareholders meeting).
Coupled with floundering handheld sales is the fact that numerous 3rd party titles have been cancelled before ever seeing the light of day. Nintendo came to the table with an ambitious system and a diverse network of supporting developers, but there are few that remain. People are abandoning the 3DS ship too quickly to count, but Nintendo seems to have hope. In addition to slashing the price of the console, they are also shifting their focus to online distribution of games, and are giving early adopters of the system (who haven’t sold it already) 20 free games from their online service. On something like XBox Live Arcade, this would be a phenomenal deal. However, when they only have ports of old NES and Game Boy games to download, even that offer of 20 free games seems bittersweet.
But these aren’t the only actions that Nintendo has taken, which brings me to my next point…
The Big Cut
The most surprising cut that Nintendo made recently was not the 30% cut to the price of the 3DS, but the 50% cut that Satoru Iwata – President of Nintendo – has taken to his salary. Iwata has a yearly salary of $2 million (less than an American CEO would have in an equivalent position), and he is going to be halving that as Nintendo tries to pick up the pieces. Furthermore, other executives and directors (perhaps like Shigeru Miyamoto, who gets $1.5 million a year) will be receiving a 30% pay cut, and various project leads will be taking 20% pay cuts.
This course of action - while entirely sensible - completely blows me away. I cannot imagine anyone I know or even anyone I have ever met being willing to take a 50% pay cut for a mistake that they made in their job. While I am sure Iwata won’t be finding only lint in his pockets any time soon, this course of action merely underscores the amount of trouble that Nintendo seems to be in as a result of the 3DS.
Super Mario Meet Angry Birds
Earlier, I mentioned that I cannot comprehend how iOS and Android games can compete with existing portable consoles, and I stand by that. With the exception of what I would describe as a few killer apps like Angry Birds, Plants vs. Zombies, and other high quality mobile games, there is not a large number of mobile software that I would describe as being outstanding. Even games like Angry Birds only manage to attract my attention for a short while. They serve as mere diversionary tactics. If I am in a long car ride or on a bus, I occasionally pull out my phone to play Angry Birds, or Rocket Bunnies, but usually I just play a card game.
To be honest, I get the sense that a lot of people are more likely to have free downloadable creations of card games on their phone versus having triple-A quality titles that requires them to sit and play for hours on end. I haven’t seen a good RPG for an Android phone yet. All strategy games that I’ve seen are terrible when compared to one that I had on a Palm Pilot ages ago (I’m pretty sure I played this game with Binks and Danger on many long bus rides for school trips). All the games that I have found for my Android phone - while entertaining - are like the flash games that I used to play to kill time on Newgrounds while I was waiting for other, more important games to download. These aren’t the kinds of offerings that make me want to sit down for a while and enjoy a full-fledged gaming experience.
So, why are these diversionary games beating out quality made triple-A titles? I can understand them being just as appealing as the lesser handheld titles from the DS family library, but can you honestly tell me that there is a game on an Android or iOS device more enjoyable than Mario Kart DS (or Mario Kart 7, coming soon for the 3DS)? It is a practice in gaming I don’t understand. When Minecraft inevitably comes to Android devices, all bets are off. That is a well-crafted game that allows you to be creative, and it is just brilliant. But I have not sat for more than 20 minutes at a time playing Angry Birds, and I just don’t understand the appeal of these micro-games. As I’m sure many people have said, they only cost about $1 because they only provide about $1 worth of entertainment.
Nintendo Has Got Issues
Having said everything in the above section, I still feel that Nintendo has some serious issues with the way they have been treating their customers. During the success of the Wii, Nintendo stopped working hard to appease gamers with quality releases and lapses into a state of apathy. Donkey Kong Country Returns was the last triple-A first party title from Nintendo on this system, and it came out in November of last year. They are not slated to have any other triple-A title until Legend of Zelda: Skyward Sword releases this holiday season (allegedly). So…apparently it is okay to have a full year between quality titles from first party developers? This is ludicrous. By comparison, on the XBox 360, there are quality first and third party titles released all the time. They come out so frequently that an amazing game like Mass Effect 2 drops down to a $20 price point shortly after release just to stay competitive. Nintendo games like Super Smash Bros. Brawl (which came out during my second year of university, I believe) still cost full price if you find them new.
Something about Nintendo’s strategy here is completely out of whack, and I don’t understand where all of the money coming in is going. Perhaps into researching absurd new console creations like the 3DS and the Wii U. They need to realize that the software is - at least - as important as the hardware. Instead, they are trying to recreate this new and exciting arcade-like experiences at home when - in reality - no one really cares about that anymore. The people that grew up frequenting arcades are not the people who are still playing video games anymore, and their children do not appreciate the nostalgia that companies are aiming for with their Wiimotes, Motion wands, and all this nonsense.
Nintendo has such a wealth of creativity at its disposal and has so many fabulous first-party titles. Why can’t it consistently be creating good software on a hardware platform that other companies don’t need second teams to develop for? I mean…the PS3 already requires a slightly different development regiment because of its hardware components, but it is still mostly compatible. The Wii and 3DS are just so far removed that developers literally need to hire a duplicate staff just to make games available on that system, and it isn’t cost effective to do that.
Nintendo, don’t be different with your hardware. Be different with your software. That’s what has inspired us always. The SNES didn’t beat the Genesis because it had gimmicky nonsense. It had amazing creative games that made practical use of advanced hardware.
Lessons For The West
One final thing I wanted to not briefly is the reaction of Nintendo executives. They took a pay cut for a decision that was made at their level that cost their company millions and millions of dollars. What a novel idea? Yet, in America (where executives working the same jobs would be paid more), the companies receive a buy-out and the executives continue on their merry way as if nothing has happened. As much as I may think the 3DS (and the Wii U) may be stupid ideas for Nintendo, I cannot help but admire their executives willingness to take responsibility for their actions. It is an admirable trait when people who make decisions with such a wide-sweeping impact are willing to be held accountable for their actions.