Editorial: Nintendo’s Self-Destructive Greed

What the fuck happened to you, Miyamoto?

Nintendo’s Donkey Kong was a staple of arcades for many years.

Nintendo’s presence in North America was virtually non-existent at the beginning of 1980, when the Shigeru Miyamoto-designed Radar Scope (his first game for the company), which had been a success in Japan, flopped. In fact, so many of these Radar Scope arcade cabinets remained unsold in North America that Nintendo president Hiroshi Yamauchi re-thought their strategy, and Miyamoto was given the task of designing a new game for the unsold hardware, which was to be refitted as a ‘new’ game. The result was the now-legendary Donkey Kong, released in 1981, which became a big hit in the arcades and brought visibility to the Nintendo name in our country. Though Nintendo’s first home video game console (the Family Computer or Famicom) would arrive in Japan just two years later in 1983, it would be a few years until Nintendo would enter the North American console market. This story is again one of business savvy and market analysis, right down to the name chosen for their N.A. version of the Family Computer. This was eventually to be known as the Nintendo Entertainment System, a name cleverly contrived to make the game console more palatable to video game-shy toy buyers at major retailers.

Beyond stressing that it was an “entertainment system” and not a video game console (this was referred to instead as the “control deck”), Nintendo further emphasised their position as a “toy” product with NES (aside from the R.O.B. decoy accessory) by adopting a child-friendly game approval process which continues to this day with widely-documented censorship of Japanese game localizations. Yes, even this “kid-friendly” positioning decision was made to make the console more palatable to North American retailers, most of which had sworn off video game systems entirely after the market crash of 1983. If it could be called a “toy”, the content cleaned up to neo-puritanical standards, and the true nature of the product obfuscated by changing the logical names of the console, controllers, and game cartridges, then Nintendo could penetrate the North American market and take control. It worked. By the end of the 1980s Nintendo enjoyed a dominant position that was only briefly tested in the 16-bit era by Sega. But Nintendo failed to change with the industry, and their arrogance cost them dearly by the launch of Nintendo 64, which sold poorly in Japan and was completely overshadowed by Sony’s new PlayStation console (and Sega Saturn for a time) in the latter half of the 1990s.

I'm sure 1-2-Switch will be remembered as fondly as these games someday...

The Super Nintendo era was truly special. Too bad quality does not sell as well as a mom-friendly gimmick.

What went wrong with Nintendo in the 1990s, and how did they relinquish their stranglehold on the video game console market to completely? The answer begins with the development of their next-generation game console, which was to follow the Super Famicom (Super NES). Nintendo, likely fearing both a lack of control and susceptibility to piracy that moving to a disc-based game format entailed, made the decision to stick to cartridges for their upcoming 64-bit console. “Project Reality”, as the system was known during development, would lose considerable market share, and at least one important game developer in Squaresoft, to Sony’s disc-based PlayStation. The Nintendo 64 might have been a “64-bit” game console, but the 32-bit PlayStation offered much greater storage capacity for games from its CD-ROM disc format, and provided high-fidelity audio and full motion video capability as well. Nintendo would see its total dominance of the video game market erode to just single-digit market share by the end of the 1990s, and it would be up to their first disc-based console to change all of that. But, as well we know, GameCube was not the savior that Nintendo hoped for, owing in part to their decision to again shun convention and adopt a mini-DVD format to curb potential piracy of their games, as full-sized disc media and disc recording drives (also known as “burners”) were readily available in the consumer PC market. The limitation in space did not help Nintendo secure interest from game developers content to release games for the PlayStation 2, and Sony’s second-generation console annihilated the GameCube. It would take a new gimmick to recapture some of the lost market share, and here Nintendo found some short-lived success.

The Nintendo Wii, when it arrived in North America late in 2006, ushered in a new era for Nintendo, and one that demonstrated the company’s interest in financial success over the quality of gameplay that was the hallmark of the Super NES era. Nintendo approached the development of the Wii the same way they had approached the introduction of Famicom to the North American market, and it was all about marketability. This time, however, it was not just a name change and emphasis of the “toy” aspects of the “entertainment system” Nintendo could provide, but an entirely marketing-driven approach from the outset of the Wii’s hardware development phase. A revealing article from BusinessWeek, now removed from the internet and retrieved using the Internet Archive, paints a very accurate picture of the Nintendo we now know. Nintendo had given up on competing with Sony on specifications alone, choosing to downplay hardware capability and make their next system even more family – and “mom” – friendly. As Miyamoto himself stated in the article:

“It was 2003. We got game designers and engineers together to discuss the future of video games. We talked about what specs and features a console should have. But we knew we would get nowhere if we didn’t get moms’ approval. So we thought about what might convince moms to buy this for their kids. When that happened, we talked about basic concepts and goals, not about the technical specifications of the console. This was the Wii’s first major step.”

Don't worry. He only has Nintendo's best interest at heart.

Reggie Fils-Aime is a tool. A tool of greedy Nintendo, that is.

This “major step” in specifically targeting middle-aged women for their next console worked incredibly well – with middle-aged women, at least – and the Wii sold out everywhere (largely due to its paltry production numbers) in the first year. It goes without saying the the Wii, and Nintendo’s plan, was a huge success, but like most fads it faded away. When it game time to release another game system the company turned to its work on a handheld/living room hybrid concept (covered much more extensively in this prior editorial) that was eventually released as the Wii U. The Wii U, unlike the Wii, was not commercially successful and languished for years before it was finally pulled from store shelves before the 2016 holiday season to make way for the Nintendo Switch launch. However, this launch would not occur until March of 2017, leaving Nintendo without a game console of any kind to sell during the Christmas holiday of 2016. This seems like suicide, but Nintendo no doubt justified the decision internally. If the Wii U had simply received a steep price cut (say, $199?) its solid library of games and very good Virtual Console support could have carried it through to the Switch launch. But Nintendo had a better idea, and now we have the Switch after months of making customers wait for a console – any console – to purchase. And demand (by scalpers, primarily) has been high enough to keep the system off of most store shelves to this point, though interest is rapidly dwindling and the system is looking more and more like a dead product after just a few short months given its pathetic software support (and where is the promised Virtual Console?). Nintendo has now announced a subscription-based online service that has been delayed until 2018, and we will see how the Switch console fares over a long, dry summer without any exclusives worth buying.

The Nintendo that built up its empire in the 1980s has failed to maintain it as times have changed, but this is not due to any particular change within the company or even a new approach. When conventional systems and games were enough to make their numbers, we received the NES and Super NES, and when the competition surpassed them Nintendo turned to gimmicks and even more pointed targeting of parents. Nintendo still feels that game consoles are mere “toys”, and they have only themselves to blame for the inevitable failure of yet another game console. But since when has chasing money resulted in anything sustainable?

5 Comments

  1. Lusipurr
    Posted 2017.06.02 at 12:47 | Permalink

    Here it is. The editorial which boils down our frustration with Nintendo over the past decade into a single article on the internet.

  2. Korusi
    Posted 2017.06.02 at 13:16 | Permalink

    This prompted me to read the history of the Dreamcast and Sega’s walk from Console markets. I see a lot of parallels between the two companies that were supposed to fight it out like Coke and Pepsi for all time. (or so we thought in the early 90s.)

    The only thing that I recall has kept Nintendo truly afloat has been the mobile market. This console is obviously a hybrid of the two ideas. Why then do they still support the 3DS? They have said in the past that the 3ds will not be replaced with the Switch… So what confidence do we have in this product if the company isn’t even willing to throw in all their chips on it?

    So with that said the real question is; what’s the next gimmick? Nintentube? What’s that? We don’t make games anymore we make movies!

  3. Clinton
    Posted 2017.06.02 at 16:12 | Permalink

    I suspect that Nintendo continues making so called unique consoles because they feel that people will not pay attention to them if they make a “regular” console like Sony and microsoft. They think they have to do things differently to continue making money, when in actuality they are only thinking on a short term basis and not the long run. If they were to put out a console as strong as Sony or blaze the trail and be the first one out with a console stronger than the PS4 and xbone, I think they would be able to eventually kick Microsoft out of the console market. Microsoft does not have enough exclusives to survive that kind of push from Nintendo. Sony and Nintendo both have way more in house properties than Microsoft. So imagine a Mario game or Zelda game that looks like the Witcher 3 graphically, that would cement Nintendo back in as a powerhouse and the company to look for when making games. They have to start thinking long term again, no more short term, no more quick buck. There are too many youtubers that will do reviews and expose them if they continue on this path, they will eventually become Sega.

  4. S.T.
    Posted 2017.06.02 at 21:14 | Permalink

    So from now on, whenever someone asks me why I won’t buy another Nintendo console, I will be linking them to this article.

  5. SiliconNooB
    Posted 2017.06.04 at 06:29 | Permalink

    If Nintendo wishes to manufacture cheap consoles, then they need to be priced cheaply too. I think that Nintendo absolutely can get away with cheaper hardware, but not when it’s priced much more expensively than vastly superior platforms.