Why Nintendo should stay in the console business

Although described as 'irrelevant' by Naughty dog founder Jason Rubin, Nintendo's hardware is a vital part of the industry, Ryan argues...

“Nintendo once ruled games. No more.” So read an arrestingly gloomy 2003 article published in Time Magazine, which described Nintendo GameCube’s performance as “an unmitigated disaster”.

“Nintendo has suffered such a string of bad news over the past few months,” the piece read, “and posted such disappointing financial results over the past few quarters that many investors, analysts and industry watchers are wondering whether the onetime industry giant can hit restart – or at least pause – in an increasingly competitive videogame industry.”

It was a gloomy portrait indeed, printed as it was just two weeks before Christmas. Nintendo was, journalist Jim Frederick argued, on a slide that had begun in the 1990s, outgunned technologically by its rivals Sony and Microsoft, and forced to fall back on Zelda and Mario sequels when new properties like Pikmin failed to sell in significant enough numbers.

The solution to this decline, industry experts argued, was to get out of the hardware business entirely, just as Sega did following the discontinuation of its Dreamcast in 2002, and focus solely on the production of games. “By doing this,” the Time article went on, “Nintendo’s growth might become limited, but the company could become a profitable boutique videogame brand that caters to children, newcomers and enthusiasts.”

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What a strange coincidence, then, that Nintendo should find itself in such a similar situation a decade later. The Wii U has so far struggled to make the impact expected of it, with sales forecasts missed and even the recent appearance of Super Mario 3D World apparently failing to improve its fortunes – at the time of writing, the game had only managed to reach number 14 in the UK charts.

The venerable Mario, it seems, has been utterly upstaged by the glittering launch of the Xbox One and PlayStation 4 – once again, Nintendo is outshone by two technically superior next-generation consoles.  

In the wake of this news, Naughty Dog founder and former THQ boss Jason Rubin suggested in an interview with GameTrailers that “Nintendo is irrelevant as a hardware manufacturer in the console business.” Although noting that “They’re a national treasure,” Rubin also added, “It is a crime that we do not play those games on the systems that we have.”

It’s a familiar argument, then, and one that appears to hold water: lots of people would love to play the latest Mario game, so why should they spend their hard-earned money on a struggling console to do so? Wouldn’t it be better for everyone if the next Zelda was a multi-platform release? That way, Nintendo could be sure of more sales across the board, while consumers wouldn’t have to choose between buying an entire new system or miss out on a game altogether.

If Nintendo were to follow Sega into the software business, however, it would be turning its back on a 30-year tradition of creating both games and consoles in tandem. Not all of Nintendo’s ideas have struck gold, and some have been downright odd – few would argue that the Virtual Boy was its finest hour, for example – but every so often, it comes up with something that is truly different and unexpected.

One year after that damning Time Magazine article was published, Nintendo launched the DS, a handheld console which went on to sell 153m units over its lifetime. The DS was a success not because it was technologically powerful, but because it was different; its dual screens and stylus offered the flexibility for a range of unique games, from first-party titles like Phantom Hourglass and Bowser’s Inside Story to underrated third-party games like Okamiden.

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Go back further, and look at how beautifully games like Mario 64 or Ocarina Of Time used the N64’s controller. Look how perfectly suited Tetris was to the Game Boy’s screen, or how much fun Duck Hunt was to play with the clack-clack trigger of the NES Zapper.

When the Wii came out in 2006, it was very much in the same tradition as those devices: software tailor-made for Nintendo’s own hardware. At the time, you couldn’t play a game like Wii Sports anywhere else. Super Mario Galaxy was wonderful to play with the Wii’s nunchuk and remote set-up.

The Wii U has singularly failed to replicate the sales of its predecessor, but once again, Nintendo has created an unusual piece of hardware with games tailored to suit it. Glimmers of the system’s barely-tapped potential can be seen in the delightful mini-game collection Nintendo Land, which uses the Game Pad’s touch screen to charming effect, while Pikmin 3 feels so at home on the system that it’s difficult to imagine it handling so effortlessly on any other machine.

By ditching its handhelds and consoles, Nintendo would be leaving behind a key part of its heritage. And in many respects, Nintendo has never been in the hardware business in the same way as Microsoft and Sony in any case; even a decade ago, Nintendo boss Satoru Iwata argued that his company wasn’t attempting to win a technological arms race with its rivals, and that’s always been true. 

Before Nintendo got into the videogame business, it was, among other things, a toy company – and it arguably still is. Its products are neither purchased nor aimed at those interested in the latest cutting-edge gadget, and while Nintendo’s rivals – and some industry analysts – see this is as a weakness, it is in many ways a strength. Instead of emulating its competition, Nintendo strives to differentiate itself.

The earlier portion of that GameTrailers discussion touched on the relevance of publishers in the modern games market, and also which console, between Sony and Microsoft, was most likely to succeed during the current generation. Interestingly, Jason Rubin predicted that, “deep in the future”, Sony and Microsoft might themselves leave the hardware-making business.

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“It’s quite possible that Xbox Live will outlive a Microsoft console,” Rubin said. “We’re talking deep future. And that PlayStation Network will outlive any specific piece of hardware, and will be relevant in gaming for decades. The centre of the gaming world will be these software infrastructures.”

Another member of the discussion, industry veteran Seamus Blackley, agreed, arguing that we’re getting closer and closer to a cross-platform future which “transcends” rival pieces of hardware.

“I’m going to do business with whichever entity has the games I want to play,” Blackley added. “It becomes, in the next five years, a ubiquitous business pressure on all of these guys to make sure that, if they have a piece of content that is popular, it’s going to play  on the devices the consumer has.”

If this proves to be the case, and Sony and Microsoft eventually become a service provider for some nameless box sitting beneath our televisions, then this, we’d argue, is all the more reason for Nintendo to remain in the hardware business itself – Nintendo’s never been about supplying a service, but about supplying discrete dollops of entertainment that are as tactile as they are colourful.

Whether it realises it or not, the games industry needs a company like Nintendo, which not only has its own attitude to hardware and software that is different from any other firm, but also has the financial independence to be able stick to its principles when the going grows difficult.

The Wii U isn’t enjoying the support that Nintendo had hoped, and with the Xbox One and PlayStation 4 now taking off, it’ll have to fight even harder for wider attention. But even if sales don’t rally in the coming months, this doesn’t mean that its creator doesn’t have another system lined up for the future – one that shakes up and surprises both the public and the industry in the same way that the Wii U and DS did.

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If the past has taught us one thing, it’s that you should never count against Nintendo.

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