One good thing I am seeing, that I did not see before, are others paying close attention to what Iwata says. Aside from the pre-console launch hype, Iwata’s quotes have been unfortunately ignored in the greater scheme of things.
My real intention was not to apologize but to make clear to the viewers that the company is openly accepting that there are problems in the current situation rather than deny them. We thought we should deliver our message to the people who proactively access our sites to see such a video.
Our Wii customers have kindly purchased our products by expecting new proposals to be made one after another. We must not be sitting back thinking that everything is fine because Wii is the best-selling hardware in the world today, especially when the company has not been able to fully meet their expectations,.
To all of those who thought Nintendo wasn’t making any mistakes, Iwata clearly disagrees. Wii lost its momentum when it stopped putting out software that kept pushing the new interface interaction. When people bought the Wii, Wii Sports was to be the beginning of greater things. It is ridiculous that Wii Sports is still the only major game that has gotten the Wii interface right. Iwata correctly states that many people bought the Wii expecting superior software to come around. There must be some sort of survey data that confirms this which is why Iwata is saying it directly (how could he know their expectations after a mess up otherwise?).
The quote in bold is what I consider the most important thing Iwata said in all his answers.
As for the small mistakes, no mistakes are supposedly allowed at least for home console game machines, but the truth is, the bar has risen higher each year.
There is some truth in this.
You will never see anything like the Wii launch and its after effects probably for another twenty years. A decade from now, you will become an old timer. And you will say to the young ones: “I was there at the dawn of the Shift. It began with Nintendo, you know. The Wii was in such demand, it was sold out everywhere. I could sell a used Wii for more than a new Wii! People would literally drive from city to city just to get a Wii. People would create house parties around the Wii. Some people got so wild playing with the Wii that they threw their controllers through their brand new TV!”
”Shut up, old man!” they will say. “We want to talk about Apple’s new goggle console. OMG the immersion! OMG! OMG!” They won’t believe your Wii stories. To them, the Wii will be some distant relic to them, something like the NES is today. They cannot imagine a console making such a ‘shift’. To this day, no one gives the NES the credit for the shift it made. Consider the fact that pre-NES, the joystick was the game controller. After the NES, well, it wasn’t. Consider that from now on, there will be a generation of kids who has never known video games without motion controls.
Expecting Nintendo to pull off the impact of the Wii launch again is not realistic even for the console that succeeds the Wii. I think we went through a once-in-a-twenty-year event.
People often said that Nintendo and Apple share much in common and I’ve often been asked how I feel about Apple products because I myself have been using Apple products.
Quite recently, media have been reporting that iPhone is a rival to Nintendo DS, but I do not strongly agree mainly because of the difference in the customers. For the customers with whom we have the most strength, it must be rather difficult for Apple to reach, and for the customer base where Apple has the biggest strength, Nintendo products would have a hard time in receiving their appreciations.
I love this. Iwata just blasts the myth of iPhone and DS being competitors. This ‘myth’ is perpetrated not just in the press (who are constantly looking for conflict to have ‘stories’) but crazed Apple fanboys. The iPhone is more of a handheld PC that can also play games. The difference between the iPhone and the DS is like the difference between a Mac and a dedicated game console.
About online sales in general, if people ask such extreme question as, “Do you think that 20 years from now, customers will still be visiting retail outlets in order to purchase the majority of software in packaged format?”, I will then have to answer, “well, perhaps, the situation will be different.” However, if I am told, “within a couple of years from today, there will be no retail outlets which will be selling packaged software,” my reaction must be, “there’s got to be something wrong with that assumption because I do not believe people’s behaviors can change in such a short time.”
Already today, a number of people are aware of and appreciate the convenience of online shopping. Accordingly, Nintendo must be making efforts to provide them with the new mode of shopping. Simultaneously, however, I do not believe the competitive edge that packaged software has today will easily be taken up anytime soon.
Also, I do not imagine that iPhone will dominate the Nintendo DS market at once. My impression as the person who has used iPhone is, it is very attractive but, frankly, I did not feel that it was designed to be appreciated by a wide variety of people like how Nintendo has been designing its products.
Iwata throws cold water on the ‘all-games-going-to-be-digital-distribution-soon!’ cult. One of the reasons why I keep saying the obvious of ‘keeping the customers in mind’ is that everyone says they do but they don’t. What they do is look at the customers they want while ignoring the ones they don’t. In the case of digital distribution, they only look at those who are downloading while ignoring the ones that aren’t. Their excuse to ignore the ones that do not is just to say: “It is a matter of time until they start digital downloading,” which is not an argument, it is an evasion.
This is exactly how the High Definition bandwagon started or, say, Blu-Ray. They look only at the few customers that do while ignoring those that aren’t. It is the year 2009 and people don’t buy a game because it is ‘high definition’. Sales of PlayStation 2 outsell the PlayStation 3 last month which was unthinkable years ago.
One of the things I learned from business leaders is how often they use probability. Most business leaders’ common sense is probability. Iwata is phrasing the question as, is it probable that the consumer relationship to retail will be different in twenty years? Maybe. Will that relationship be drastically changed within twelve months? Obviously, no. It just isn’t probable.
So, the answer to the question of what excites me most is not such simplistic answers, not categories like online business nor video delivery service. I am excited when I find a new opportunity that may increase the frequency at which our products is discussed amongst family members at home or that may encourage the people categorized with a pink color (non-users in the game population compositions graphs used in the presentation) to become blue (active users in the same graphs).
Perhaps, the video game market in the past simply concluded that these people in pink were not our customers, period, and conducted our businesses with the people in blue in mind. However, Nintendo has been thinking about how people in pink and yellow (sleep users in the graphs) might come to appreciate video games by some means even though it would not be easy.
The answer the above quotation is from was very hackneyed and a rambling response. It confirms a notion I’ve had that Nintendo’s desire to expand the types of gamers is only an objective to a larger mission, that it is not the main mission itself. Iwata keeps dancing around the subject.
Consider his answer on what makes him excited: making non-gamers into gamers. Although the format didn’t allow follow-up questions, the follow-up question should be WHY does this make Iwata excited? He doesn’t explain.
If he did explain it, everyone would be shocked. There are enough clues to guess what it is. Consider how Japanese companies like Nintendo plan far, far in advance. Then look at the demographic projections of age groups and sheer population numbers for not just for Japan but for the rest of the Western world. It becomes clear why there is such a high priority to turn ‘old people’ into gamers.
First, we tend to agree with your understanding that the secondhand market is expanding abroad. I have heard a strong sense of concern from management of overseas software publisher over the situation that the number of major retailers who are beginning to place more importance on the used markets is increasing and that Amazon recently started to seriously deal with secondhand products. One of the reasons why more overseas software publishers than in Japan are having greater expectations over download sales must be because of the fear that today’s issues surrounding the used business can grow to be a major problem in the future.
If it were illegal acts like piracies, we could criticize them. But, however hard we may express our concern about the secondhand market, as long as they are not illegal, it does not do us any good. With video games, because people do not see much deterioration in the quality when they purchase as secondhand, it may give publishers a hard time if the used product market grows.
On the other hand, this is one of the changes in the social circumstance, and it is our job as publishers to think of how to cope with the changes. When you ask me how we will cope with this issue specifically, our answer is that Nintendo must continuously craft ideas so that our consumers will feel like owning the purchased products or think about how to motivate the customers to purchase new products instead of used ones.
Iwata says that used games are legal, therefore, it is a waste of time criticizing them. His antidote is to look for ways for consumers to buy new products or hold on to the ones they’ve had. This attitude is far more level headed than Reggie’s.
But I think even Iwata isn’t expressing the full context of used games. Software companies are looking as used games as lost revenue (which is annoying because they are not entitled to this revenue. Even more stupid, the ‘credit’ a gamer gets used for the used game goes right back into the games industry to buy another game). Instead, software companies should look at used games as lost customers. People sell their games to the used game store because they were unhappy with them. If they are unhappy with it, that means they are unwilling to buy that company’s next game. So even if software companies got the revenue from used game sales, what good would it do anyway? They’re still losing customers.
They should define their customers as people who play their game instead of people who buy a disc at the store. I can create all sorts of hype that will sell any disc, even a box full of rocks. But if they focus on making something people will play and keep playing, then they have nothing to fear.
Another potential antidote is a complete overhaul of the game rental business. I remember when I could go to the local store and rent like five NES games for a dollar or two for the weekend. If I wish to rent a game today, it costs around $8, and I am stuck with the game for a week. First of all, I do not need the game for a week to know whether it sucks or is divine. If the game is divine, I will have certainly beaten it within a week. Second, $8 is way too much for renting. It has become far cheaper and convenient for me to just buy the game and sell it used if I don’t like it.
And a word of warning: the PC game industry doesn’t really have ‘used games’ (not like the console games). If ‘used games’ are eliminated in the console business the results will not be higher revenue. The result will be an explosion of piracy at such a rate that gored the PC game industry. Used games people at least are buying and selling the games, not stealing them.
I see used games as a universal plus because it keeps people playing games. It helps keep gamers into gamers. If the used games market was around in a similar scope over twenty five years ago, the Atari crash may have been prevented. People wouldn’t be so stung over buying bad games and the used games were a way to receive some sort of value back from being scammed. Since the Atari Crash, Nintendo, Sega, and others adopted a policy not to throw out too much software out there else it would collapse the market. Sony came in and didn’t care. Endless software was thrown out on the PlayStation, much of it garbage. All that software was responsible for the PlayStation’s rise. I suspect the used games market was a buffer that prevented Sony’s software bonanza to be a repeat of 1983. To those who thought all the shovelware and all would crash the market with Wii, what is stopping it? I think the used games market benefits haven’t been fully explored, or even asked, in the greater scheme to the industry.
You also pointed out that we may be running out of new ideas in developing our products. I think Nintendo must be the only company in the world that, immediately after announcing record sales and profits in all accounts, is criticized for a potential lack of new ideas.
Even Iwata is tired of Nintendo always being ‘doomed’. Although I liked the question asking whether Nintendo lost its talent! Whoever asked that must be thinking back in the past, such as 1987, 1988 or even 1991, 1992 when Nintendo cranked out classic after classic. Now, it is sequel after sequel. Prior to this, Iwata has said that the conveyor belt of making games has greatly increased due to production costs and all. This is all very true. But it doesn’t explain why Nintendo’s Core titles have been so stagnant in customer reception lately.
My view is that Nintendo keeps making sequels to N64 and Gamecube games instead of sequels to NES and SNES games. Mario Kart was in the wilderness until the director of Mario Kart DS said, “We are going to beat the SNES Mario Kart,” and the game was designed to get back to those roots. Mario Kart Wii followed in that vision (Mario Kart Wii is far more difficult to master than Double Dash [and has far more content]). Mario Sunshine and Mario Galaxy met with a collective yawn from the market. New Super Mario Brothers, a 2d Mario made, somewhat, in the fashion of NES and SNES era type gaming, ends up being one of the best selling games ever made trumping even Super Mario Brothers 3’s sales.
So why do sequels made in NES/SNES fashion work better than N64/Gamecube fashion (with the exception of Zelda)? In the past, such as the NES/SNES era, games were based on content meaning ideas and mythos. The arcade era gameplay leaking into the consoles games also didn’t hurt. The N64/Gamecube era type games seem obsessed over ‘innovation’ rather than content. Ooohhh, so Mario has a water pack now? So what? Oooohhh, Mario can float through space. And? Using Miyamoto’s own words from that Nintendo Power interview of when he was developing Super Mario Brothers 3 was that the original Super Mario Brothers was, according to Miyamoto at the time, “an introduction to the Mushroom Kingdom” and Super Mario Brothers 3 was to fully “explore the worlds of the Mushroom Kingdom.” In other words, content, not ‘innovation’ was the drive. Super Mario Brother 3 became immortal not because of ‘innovative gameplay’ (very little innovative in the game at the time aside from ‘flying’ and maps to display stages) but because of the sheer amount of quality content inside the game.
We know Pikmin 3 is going to be shown at E3. This is Miyamoto’s doing. I already know Pikmin 3 will not drive Wii growth because Pikmin 1 and 2 didn’t do much of a job of driving Gamecube growth. Instead of making a sequel to a Gamecube game, why not look more at the SNES and NES? Why not take inspiration from NSMB’s massive sales. If Nintendo puts out a 2d Mario for the Wii, I will guarantee you Wii growth.