Editorial: Nintendo Dun Goofed the Keynote, Learns to Use CyberPolice

Michael Pachter is an INDUSTRY leader now?!

Nintendo’s Satoru Iwata failed to endear himself to smartphone developers this week, after comments made during his keynote speech at the Game Developers Conference, to the effect that they are more concerned with volume over value in their games:

We want consumers to appreciate the premium value of software through our platforms. Although Microsoft and Sony are different to us, I believe we all share this idea 100 per cent. We demonstrate a high value of game software. “However, smartphones and social platforms are not at all like ours. These platforms have no motivation to maintain a high value of game software. For them, content is just created by someone else.

Quantity is how they profit. The value of game software does not matter to them.

Our industry has certainly expanded but it also gives me concern. It is difficult to gain true hit status. With such competition even being noticed is extremely difficult.

The majority of people here are creating games for social and mobile. I fear our business is dividing, and that threatens the employment for those of us who make games for a living.

Game development is drowning.

Brian Reynolds: BAAAWWWWWWWWW!

I happen to agree with the guy 100%, the quality standards of app approval are far too loose (while also turning a blind eye to blatant plagiarism), though the hypocrisy of his words absolutely kills me. Nintendo pioneered the popularity of cheep and nasty shovelware, and now that they are made to reap the whirlwind of their own devising they raise their imploring hands to the sky and cry FOWL!

Well isn’t that just bloody typical?

Nintendo nurtured the shovelware industry though its infancy, yet they still ran their Wii platform under a game console business model, hindering casual gaming’s full banal potential. Now that Apple have arrived on the scene, and opened their sluice gates wide to the rivers of shit which couldn’t even negotiate Nintendo’s emaciated approval process, Nintendo finally find themselves with a competitor capable of selling a cheaper and nastier product in greater volume to bigger profits. In short Nintendo are being under-classed, and find their market segment melting away.

The 200 to 300 million people who play games on Facebook ARE wrong.

Unsurprisingly gaming INDUSTRY ‘leaders‘ (read: Michael ‘soothsayer’ Pachter + Facebook app developers) were scathing of Iwata’s words:

Leaders in the gaming industry reacted negatively today to controversial comments made by Nintendo’s President Satoru Iwata at the Game Developers Conference this morning.

“Long-term, Nintendo is doomed,” said Michael Pachter, equity research analyst of Wedbush Securities. “He’s under full frontal assault by Apple.”

“He may be right, but then the 200 to 300 million people who play games on Facebook are wrong,” said Jeff Brown, the VP of corporate communication for Electronic Arts  ”Social gaming as a whole aggregates into a business that is undeniably big money.”

Brian Reynolds said while Zynga has made huge gains since last year, it still hasn’t been fully recognized for its work.

“What we’ve done has permeated everywhere, but we don’t have the recognition from the old guard. The young guys — they get it, but the forces of the industry are living in the past. The longer it takes them to realize that, the more it will cost them to buy your way back in.”

SONY: Looking to their long-term security in the INDUSTRY

A while back I attempted to pour cold water on Sony’s strategy of putting out an uber-balled multicore PSP2, please allow me the opportunity to eat humble pie, that was a statement made in full ignorance. Sony’s planning is impeccable given the market situation. While releasing a portable HD console may be sub-optimal in historical terms, it is an area of the market that smartphone development isn’t really able to touch yet. Sure the Unreal Engine running on a retina display looks absolutely stunning in Infinite Blade, yet I strongly doubt that we will see anything approaching the complexity of HD console games running on the hardware any time soon.

Sony has staked for itself the high-end segment of the portable market. Moreover, Sony’s forays into integrating PSN with the Android market will likely provide the PSP2 a new lease on life even if Smartphone development is able to catch up with the system’s capabilities over the next several years. Hell, the system is even made of overpowered smartphone parts, so a broad range of cheap downloadable software should be all but assured.

The 3DS by contrast is underpowered when compared to most of the current smartphone hardware, while competing for the same market. Characteristic of their online myopia, Nintendo have failed to integrate the 3DS in any way with the smartphone market, opting instead to stick with their mediocre DSIware platform. In fact the only useful application Nintendo appear to have found for the Internet is for keeping an invasive log of gamers 3DS activities which Nintendo may access at will, and use as the basis for remotely bricking your system.The only asset Nintendo actually have in their corner is the 3D gimmick, which appears to make every second gamer sick …

Any portable system is at an automatic disadvantage in competing with iOS and Android, given the Swiss Army Knife nature of the devices. Smartphone owners will almost always automatically have their smartphone with them, and so have to ask themselves each time before they go out whether they can be bothered carrying an additional game system on top of that. I can speak for myself in saying that my iPod Touch is the only device that I have ever used as a de jure portable gaming system, while my PSP and DS get used as mobile home consoles.

In light of this Sony have looked to the future and carved for themselves a niche of console games on the go + Smartphone content (potentially), while intransigent Nintendo look to tackle Apple head-on, a battle they cannot hope to win with $40+ games and lacklustre online content delivery.

Nintendo learns how to use the Internet

The 3DS could very easily turn out to be another Game Cube: a system only purchased in order to play Nintendo’s first party titles. Nintendo have some market advantage in the consumer confidence given the rolling success of their previous handheld consoles, and also the fact that they are going to market a good ten months before the PSP2 is to début, yet they currently give the appearance of putting on a high-wire act over a yawning abyss.

Meanwhile, the game media pundits are beginning to loose interest in this thoroughly ordinary system.

7 Comments

  1. Moenki
    Posted 2011.03.08 at 19:39 | Permalink

    Wow… This is the most accurate and insightful piece on the current state of the game industry I’ve read. For a second there, I had flashes of Sega in the late 90’s when the Dreamcast was their last desperate grasp at relevancy (because the Saturn was so well received). Will Nintendo be the next major console company to switch to only developing games? It’s currently what they do best. Hell, if even Atari is still a company, then Nintendo can survive, one way or another.

  2. Lusipurr
    Posted 2011.03.09 at 01:38 | Permalink

    I think we are overlooking the way in which Nintendo is making money hand-over-fist on the sales of their hardware and software.

    They may be a stagnant pool for anything but first-party development, but damn if it isn’t a very PROFIT!able pool all the same, and that is all they need to keep on truckin’.

    The question is: will there come a point when people realise that there is a better way? If so, will this lead to a large-scale change of consumer behaviour? In short, will people abandon the Nintendo systems entirely, in favour of some other alternative (be it Microsoft, Sony, or PC/iOS/Apple device)?

    I think it may happen, but that day remains a ways off, and consequently Nintendo is set to control a large portion of the market, and to command a significant portion of the industry’s attention as a result.

  3. SiliconNooB
    Posted 2011.03.09 at 01:40 | Permalink

    Nintendo are in a very strong financial position at the moment. The 3DS would have to dramatically fail, as would their next home console, in order to see them squeezed out of the hardware game (though both Lusipurr and myself would love to see this happen!).

    The biggest threat this realistically poses for Nintendo is that they will loose their ascendency within the portable market. They loose marketshare to Apple on an annual basis, it is almost inevitable that Apple will overtake Nintendo at some point. But Nintendo also risks loosing some marketshare to the PSP2 if they compete for the same casual gamers as iOS, while leaving Sony to corner the high end portable game segment.

    Then again Nintendo’s name and consumer base could make the 3DS a roaring success, only time will tell …

  4. SiliconNooB
    Posted 2011.03.09 at 01:44 | Permalink

    Also o_O at the speed at which Apple has eaten away a huge chunk of Nintendo’s slice of the pie!!

  5. Lusipurr
    Posted 2011.03.09 at 22:00 | Permalink

    The Nintendo Wii and the Apple iOS devices are similar in strange ways–they are the sort of things which appeal to ‘mainstream’ audiences, who seem more interested in the advertising presentation than in anything real which may lie behind them.

    Which isn’t to say the either company makes things which are good (or not)–the point is that they both have a very slick, targetted marketting campaign, and they tend to aim towards the same kind of people.

  6. Moenki
    Posted 2011.03.10 at 00:29 | Permalink

    Surely we’ll never forget the dead-end that was the Virtual Boy (or that it was featured in the same issue of Nintendo Power as Chrono Trigger..!), and tastes aside, it failed. It was also the last time a system came with a safety warning. Averting your eyes every 15 minutes doesn’t work well with hardcore gamers, and already most of us seem to want to wait it out on the 3DS.

    Nintendo was unfuckwithable in the mid 90’s video game market, and they weren’t betting on anything with the VB. Now I don’t know what kind of financial future situation they’re in, but we are in a period of rapid change, so their irrelevancy as a major-console-company might be cemented by a flop at this point. Could they really produce something that competes with Sony, Microsoft, and Apple technology in the next phase, and bring it into people’s houses no less? Hypothetical question.

    Gaming in the future might be on HD touchscreens with motion sensors, but we’ve seen so many different forms of gaming come and go (remember arcades?!) it’s difficult to predict where it will go. I agree with Iwata’s criticism of social/mobile games. They’re as interesting as Monopoly and they’re meant for moms.

    On a side note, has anyone been playing Hyperdimension Neptunia? Hypothetical question. But at least we’d know who wins the console wars! Really, NIS America, conserve your resources and avoid things like this.

  7. SiliconNooB
    Posted 2011.03.10 at 00:54 | Permalink

    Most of my gaming systems have had Health warnings in their instruction pamphlets, my DS even has a warning at the start-up screen.