What is Nintendo?

I have been thinking that there is hardly an article in this. The answer is just so simple and straightforward. Nintendo is an entertainment company. In fact on one of my trips to Japan I brought back a pack of Nintendo playing cards (which they have made since 1889) as a present for Jim Darling precisely to make this point.

Over their history Nintendo have always entertained even, as it once did, owning a chain of love hotels! Hiroshi Yamauchi had his back to the wall many times as he struggled to find products that would work. But he always innovated and he always sought to entertain. Then he had the luck and skill to employ two bright innovators Gunpei Yokoi and Shigeru Miyamoto who, like Yamauchi, knew how to entertain. The rest is legend.

So Nintendo are not interested in creating global media standards (as Sony are), though interestingly they did for the Gamecube, but that was just as an anti piracy tactic. They are also not interested in creating a near monopoly software platform (as Microsoft are).  In fact the technicalities of the box are unimportant to them as long as it is cheap to make and allows them to entertain.

The Nintendo philosophy is very pure. They don’t want big film licenses because it is their job to come up with innovative IP, so they don’t need anyone elses. This attitude extends to allowing external publishers onto their platform. They will let them if they must, but it is not a cornerstone of their strategy (as it is at Sony and Microsoft). Nintendo know that they will make the best games for their own platforms themselves so they hardly need the external publishers.

Also Nintendo do not subscribe to the razors and razorblade philosophy, they make a profit on everything that goes out of the door. Subsidising hardware sales with future software revenue is not a road they want to go down, their corporate culture has seen enough hard times to know to avoid this folly. So their hardware is very simple, just enough to do the job. The Wii is just a slightly upgraded and repackaged Gamecube, yet it sells in the UK for the same price as the vastly more sophisticated 360.

What is a huge and important part of Nintendo culture is innovation. They have always done this and they always will. They realise that innovation piques the human intellect and allows them to develop a constant stream of new entertainment ideas. I am a great fan of this. The controller on the Wii is a creation of genius as are the two screens of the DS and they contrast very sharply with the offerings of Sony and Microsoft which are very much “me too”.

As a great part of Nintendo’s heritage is toys they have largely made computer games for children. So a big swathe of the hardcore gaming fanboys looked down on them. What passed most people by was Nintendo’s announcement a few years ago that they were going to expand their audience to encompass everyone. This really should have worried the competition because they meant it and now we can see the results. The DS is the dominant handheld worldwide and Nintendo cannot make enough of the Wii to keep up with demand. They look set to ship more units than their competitors in this cycle. Not only that, Nintendo know how to make money, they have to because they can’t cross subsidise from different divisions. They are now making outrageous amounts of it and they will make even more as the cycle grows to it’s peak.

In the future you have to wonder if the Nintendo philosophy of just entertaining can survive against the drive for global power at Microsoft and Sony. Certainly their ability to generate so much profit will give them a lot of protection.

So now you have my little summaries for all three of the current platform holders, Sony, Microsoft and Nintendo. They have very different corporate cultures and very different objectives. What do you think? Please comment, it adds so much.

6 comments ↓

#1 Evan on 09.03.07 at 3:15 pm

I admire Nintendo’s business success — it is good for the industry to have a company that shows how profitable gaming can be. Much of Nintendo’s success can likely be attributed to their focus on younger and casual gamers that have not recently been the focus of Microsoft and Sony. Of course, while Nintendo has certainly been innovative in their market niche, they have not done much lately for more experienced gamers, most of whom find Nintendo games simply boring.

It will be fascinating to see how things shake out in the longer term. The good news is that Nintendo seems to be bringing new gamers onboard. Once these gamers gain experience, it will be interesting to see if they stick with Nintendo or move on to a more powerful console.

#2 Bruce on 09.03.07 at 4:08 pm

Thanks for the input Evan.
Do you not feel that in the longer term third parties will develop just about everything for the Wii? It is selling in such massive that even the Nintendo agnostic are being forced to sit up and take notice.

#3 Evan on 09.03.07 at 5:47 pm

Bruce, I sure hope that third parties begin developing games for the Wii which more experienced gamers can embrace. I think that would be a smart (and profitable) business move. It may also require a new type of Wii controller, but that would be simple enough.

The raw power of the 360 and PS3 is seductive, but the Wii has plenty of power to move any genre to a new level if the game developers are creative enough. It really is about immersion, not graphics. Heck, even the creative potential of the previous generation of consoles was dramatically underutilized.

The area that most interests me with the more powerful consoles is the AI potential. AI, used creatively to strengthen story development, could be a breakthrough game design element. I would not buy an expensive console for graphics, but I might buy one if developers were tapping the AI power with innovative games.

#4 Peaceful Pony on 09.06.07 at 10:23 am

Remember those years in the late 90′s when Nintendo’s console biz was seemingly in jeopardy? Well, Nintendo was (and still is) getting filthy rich from their multi-billion dollar Pokemon franchise. Much that money coming from well outside of their video game biz.

In reality, everything that they’ve done since has paled in comparison. And, without a doubt, Nintendo is in R&D for their next blockbuster franchise.

Innovative console hardware? Meh. :)

#5 MNTwinsFanID on 09.07.07 at 11:07 am

I have to give you some applause for finally stating the facts that many gamers seem to have a hard time wrapping their head around. From the moment I saw the controller unveiled at TGS 2005, I could see just how much the Wii was going to re-energize the video game world as a whole. I saw my dad, who was l33t at tetris and Super Mario Bros. back in the day (he beat that game before I did!), but hasn’t played a game since the NES, all of a sudden getting up and swinging a golf club while playing Mario Golf, Tiger Woods, et al. I saw my self blasting away at Ridley in Metroid, or Wily in Mega Man, and my sister-who really doesn’t like games at all, possibly being able to play DDR in 3 dimensions (of course, you could never convince her DDR is a real video game). And really, isn’t that the point? I have a co-worker who has a Wii, PS3, and 360, and all he seems to focus on is how “real” an experience it looked. When I ask him if he had fun, he tells me he can’t really remember. Isn’t that kind of like the movies. Take Star Wars I (I liked it, but this is just for arguments sake). Many will tell you the effects were outstanding, but they really don’t remember much of the movie-and that’s because after time, you will start to tune it out if there is no substance. Now take a movie like Clerks. Kevin Smith spent about $30,000 to make that movie. And yet many, many people remember much about that movie because it’s funny and memorable. In short it’s entertaining.

Now, as far as innovation goes, most of the innovative strides taken by the gaming industry are directly attributable to Nintendo. Some we immediate smashes. Others were outright flops. Others took a long time to realize the potential, but they did indeed make it. Lets make the list:

1. The D-pad. Many of today’s gamers take for granted this still included, but under-utilized, control input. But those of us who are a little bit older will remember the first time you picked up the NES controller, and saw those Huge Atari Digital Joysticks with the base you either had to hold with your other hand, or suction cup to a table, replaced by the simple, elegant crosshair on the left side.
2. REAL Hand Held gaming-The Game Boy was an absolute smash. But it goes back even further than that. The character in SSBM, Mr. Game and Watch, was actually originally found in some late 70′s-early 80′s single game hand-held units. Simple quartz Crystal Images, yes, but they eventually expanded to include the flagship characters, too, after the NES exploded. And I’m here to tell you the Zelda one is pull your hair out hard.
3. The Dance Mat-This is one that took a LONG time to finally hit-but when it did it went supernova. Dance Dance Revolution (or some variant of it), is now an arcade staple, and ever system has at least one version for it. But would the idea have ever been Dreamed up without the Power Pad? I had the power set-and even though I was horrible at it, World Class Track Meet is still one of my favorite NES games. My only hope is when they release WiiFit, the release WCTM on Virtual Console.

4.3-D Gaming and the Analog Controller-Many different developers had tried 3-D with limited success, until the big N released Mario 64 with the N64. After that every home console released featured an analog stick, and Sony even released a new control for the PSX to take advantage. But Nintendo did it first, and there are some who would argue they still do it best.

This is just a small sampling-but make no mistake, the big N is usually right when they change the landscape. Even if everyone else doesn’t know it yet.

#6 Bruce on 09.10.07 at 9:13 am

Interesting article here: http://arstechnica.com/news.ars/post/20070809-report-gamers-largely-clueless-about-next-gen-console-media-capabilities.html
Most people just want to play games. Techno features are for a small audience.

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