Peter Suciu

Nintendo Gaming Like It’s 1989
November 1, 2007

It’s been a very good year for the House of Mario, and few of us could have expected to see the resurgence of Nintendo. Last year at this time, it seemed the latest round in the seemingly never-ending video game wars would be fought almost solely by Microsoft and Sony. Nintendo was already dubbed an “also ran,” and there was speculation on whether the company should “pull a Sega” and exit the hardware business.  

The thinking was that Nintendo was once again introducing an underpowered system that couldn’t deliver the “next-generation” game experience. The two powerhouse players had focused on gaming systems that delivered better graphics, faster processors and more memory.

The Microsoft Xbox 360 — which actually arrived almost two years ago in North America — was part of the Redmond giant’s plan to bring video games to the high-definition era, and Sony seemed committed to a similar goal with its PlayStation3. This system included built-in Blu-ray Disc playback along with HDMI-connectivity and the promise of full 1080p HD support.

The Nintendo Wii, on the other hand, was a system that supports 480p graphics. An early preview of many of the games at the 2006 Electronic Entertainment Expo had some comparing the graphics with that of the under-performing Nintendo GameCube. In fairness, the graphical capabilities of the Wii are about on par with the GameCube. So how is it that Nintendo displaced Sony as the leader in the video game console software market in the third quarter of this year? Credit innovation.

Thinking outside the game box.

Research firm iSuppli. reported this week that Nintendo has earned the high score — at least in terms of sales, by taking the lead in the video game console software market. While one reason is simply that Nintendo has more titles coming out than Sony, and this quarter has seen a flood of new titles for the Wii, but also the Nintendo DS handheld gaming system.

Thus worldwide revenue from software sales for Nintendo amounted to $1.2 billion in the third quarter, surpassing Sony’s $1 billion (which includes software revenue for the PS3, PS2 and PSP systems), but more than doubling the $611 million that Nintendo earned in the same quarter in 2006. Clearly, the Wii is a hit, and the numbers aren’t likely to slip in the fourth quarter.

Nintendo is poised to ship up to 200 more titles for its systems (including titles for the GameBoy Advance), but more importantly the holiday season will see the arrival of the Wii Fit, a new controller interface that turns the game machine into a quasi-fitness system. While using the Wii Balance Board, players (if you can call this play) can perform yoga, push-ups, aerobics and various stretches.

It is this type of continued innovation that could likely keep Nintendo on top as well. Instead of trying to compete for the hardcore game audience, Nintendo has instead focused on the mass appeal with simple and familiar games. It is worth noting that even the bundled game, Wii Sports, was aimed at players who might not play traditional video games — even that certain plumber who has become synonymous with Nintendo was curiously absent last fall.

And while some naysayers have suggested that the Wii is a novelty, not everyone is so convinced. Speaking to The Guardian last week, Sims creator Will Wright said, “The only next-gen system I’ve seen is the Wii — the PS3 and the Xbox 360 feel like better versions of the last, but pretty much the same game with incremental improvement. But the Wii feels like a major jump.”

Because of its unique controller and game play, the Wii was truly unlike any other game system, and the company rolled out a number of titles that appealed to casual gamers as well as the hardcore players. So while Microsoft may have scored big with Halo 3 in September, Nintendo still came out on top for the third quarter. It even countered with its own trilogy, concluding Metroid Prime 3 — a shooter in the same ilk as Halo.

And, of course, the price point for the Nintendo Wii no doubt has something to do with its success. If Nintendo failed anywhere, it was in not getting more systems out to retail. The company is still grappling with supply-chain issues a year after launch, but demand remains high. And while Sony has recently lowered the price for the PS3, the Wii has seen no price reduction this year.

But it still comes down to games. The trick for Nintendo is to continue to deliver quality, as too many lackluster titles can turn off fans. The current issue of Electronic Gaming Monthly has even dared to ask the question: “Why are there so many bad third-party Wii titles?” This topic has become a heated debate online.

So what a difference a year makes. Last year the buzz was that Nintendo might be forced to exit the hardware arena, and now this year the talk is that Sony is finished. With billions of dollars at stake, we’re just likely to see these companies play on. And Nintendo has proven that with each new level, you recharge your power bar and you can get another life.

Posted by Peter Suciu on November 1, 2007 | Comments (5)