Sorry I’m doing it again, but it hit me today and I really think I’m missing something here.
When I say ‘Phase 2’, I mean that we are witnessing how Nintendo development teams are responding to the Wii audience. Before the Wii came out, they had no idea how people would truly use the motion controller. They came up with some ideas such as Wii Sports, Wii Fit, and Wii Music (which apparently Nintendo didn’t know what to do with). The games that are coming out now are developed knowing how the Wii audience behaves. This distinction is why I called it ‘Phase 2’.
I thought Nintendo would focus more on Motion Plus and use it as the central theme at their E3 briefing. Aside from glorious 2d Mario that has been overdue for more than fifteen years, we got sequels to all the Wii hits. This tells me that Nintendo is re-assessing its strategy. These sequels appear, to me, as a stopgap motion. Apparently they were going in a direction and had to stop.
I suspect the fallout from Wii Music had something to do with it. I wonder if the direction Nintendo was going was user-generated content. This might be likely with Miyamoto listening to Will Wright (who keeps blabbing on about user generated content. It is also why Spore became a massive disappointment). Gaming is in the content business. People want to buy professional content, no one wants to play garbage content (which is what most user generated content is).
Interestingly, Cammie Dunaway brought up this very point in the E3 2009 Conference when showing off ‘user generated content DS games’!!!
Before Nintendo decides a direction to go, they tend to test it out first in the market on a small scale. This is why I am keeping very close eye on the ‘quirky’ DS games Nintendo makes. I believe the ‘quirky’ DS games are market tests.
Nintendo’s supposed leaning toward user generated content is speculation on my part. But something stunned Nintendo to re-assess their strategy (as Iwata admitted in an investor conference). Of all the games coming out, including NSMB Wii, none of them are risks. Nintendo would not put out risk-less games unless it was buying time to alter a strategy.
1. The easiest comparison to the Wii that you use a lot yourself is the NES. Wii Sports and Mario, rather.
So when I think of Wii Sports Resort, shouldn’t I think of Mario 3? But those two are much further apart. I talk to random people and they don’t even know about it. That’s why I originally said I get more of a core market vibe from the game.
What’s going on, then? Where’s the Mario 3 if it’s not WSR? Maybe it’s because WSR was hurt a bit from premature showing (pressured by competition)?
When I reference the NES Era, I mean the early part. Miyamoto said that the NES came with two controllers so people could play sports games together. Sports games used to be big on the NES. Since the Sega Genesis, sports game players went to other systems. Wii Sports, as well as the other various sports games and letting third parties go first with Motion Plus, was to get sports players back on the Nintendo system. (Sports players are a major factor in install base. Think of the Madden crowd for example.)
The NES Era began being about everyone. Everyone played the little sports games. Everyone played Mario and Zelda. Everyone played Tetris (in Nintendo Power of the time, there was an awesome Tetris quilt made by a grandmother). But in the middle of the NES Era, people began to be left behind. Games began to become too complicated for the older adults to use. Super Mario Brothers 3 was one of those games (though of the lesser sort). (I do remember everyone playing Dragon Warrior 1 since Nintendo Power was practically giving them away. But the older adults were not playing Dragon Warrior 4 let alone the other ones.)
The latter NES Era began to skyrocket in making games more complex, in making games for gamers and forgetting about the lesser-gamers. The 16-bit Genesis was out, and Nintendo was racing to jump into the red ocean. The beginning SNES games were interesting (who can forget Pilotwings or Super Mario Kart?) but then it became a 16 bit war with loud commercials and how much gore can be stuffed into a game. Even I got fed up at that point.
The answer to your question is that there will be no Super Mario Brothers 3. There will be no desire to leave behind the new customers or to jump into a red ocean and start another Console War.
Nintendo had like 90% of the American market. By abandoning the older adults to go play in the Red Ocean, Nintendo’s marketshare only kept shrinking. It shrunk in the 16-bit generation, 64-bit generation, and then the Gamecube era.
This time, Nintendo does not intend to repeat NES history. They plan on taking the other fork in the road this time. With the Wii’s massive success, competitors such as Microsoft are trying to create a red ocean. Nintendo will take the blue ocean path again.
I think the sequels coming out now are an indication that Nintendo is re-assessing its long term tactics.
2. In those disruption videos you posted, there was talk about how the core is still an important pillar to Nintendo. So my question is about, what is that core after WSR?
I mean, the core that’s supposed to support Nintendo during its next disruption (presumably Vitality Sensor). Is it gonna be the Motion Plus audience? The Galaxy 2/Metroid audience? Those two audiences certainly don’t overlap enough to be considered the same.
I would really appreciate a response, but it’s not the most important thing in the world. So there. Thanks.
With disruption, there are two markets mentioned: the Core Market and the Expanded Market with the Paradigm Shift in between them. The Paradigm Shift, according to Nintendo, is changing progress of gaming from SIGHT to TOUCH. Games that rely on TOUCH are the Expanded Market games such as Wii Fit or Wii Sports. Games that rely on GRAPHICS would be the Core Market games such as Super Mario Galaxy or Metroid.
The entire Wii strategy rests on the premise that the Core Market will, inevitably, shrink and die out. In other words, gaming will die unless Nintendo does something. Nintendo began saying this publicly in much detail in 2005 at the latest. Of course, everyone laughed at Nintendo since everyone assumed, like the housing market or the stock market or the dot com bubble, that video game sales would always go up.
In the videos (the one about the fire), Scott Anthony mentions that the Core Market does not have to be increasing. In fact, the Core Market could be declining. But it must be a managed decline. Nintendo IS going about this with the premise that the Core Market is declining.
In a declining Core Market, the company must shift to the Expanded Market before the Core Market collapses or shrinks to the point where the company becomes unsustainable. What does it look like when a company doesn’t shift to the Expanded Market before the Core Market collapses? Look at the newspaper companies. The problem is not that they didn’t shift their business model to the Internet and begin altering their content, the problem is that they didn’t do it soon enough.
Recessions accelerate the Core Market collapse.
Everyone has been aware of the Japanese sales, but the American sales are getting people to gasp. Those looking at the surface would assume the drop off in Wii sales means ‘those dirty casuals dropped the Wii because they aren’t dedicated gamers… like the Xbox 360 players!’ Wii has lost its initial momentum (which was due to Nintendo not putting out games that progressed motion control. Wii Sports remained the best motion control game until Motion Plus), and sales are coming down to Earth. The console is in far healthier shape then most realize as it has a multitude of options, and content, coming. Consider that Wii Fit outsold the number of Wii systems sold in the month of May in America. This indicates that it is not because ‘casuals’ have stopped spending money.
Think of how vast the PlayStation 1 and 2 install base were along with the N64, Gamecube, and Xbox. They were all sharing the Core Market. We know the Wii’s growth is mainly due to new users. Yet, the PlayStation 3 and Xbox 360 are not capturing those PlayStation 2 users. On their current course, it seems that both the PS3 and Xbox 360 are experiencing more headaches or are heading into them.
The Core Market is rapidly shrinking. It is unclear whether the Core will eventually shrink altogether or else a small minority will persist as a counter-culture element (such as Harley Davidson surviving disruption by being the counter-culture brand). I think it will be the latter.
The new Core Market will be games that rely on touch. We are many years from that point yet. There will be much pain when the games that rely on graphics go out of style. It is unknown how much longer the Core can survive. It could be a year to five years to ten years. But it is inevitably going to die or become a niche.
I wouldn’t worry about Nintendo’s next disruption. That is where all that R&D money is being spent right now. I don’t know if the Vitality Sensor has anything to do with it (it might be a market test). But I do know the clue we have to figuring out Nintendo’s next disruption is to identify and examine the current people who are not being reached with the Wii and those who are not sticking with the console. While Wii was to reach non-consumers, now we have a new type of non-consumer the Wii cannot reach for whatever reason. These new non-customers will be harder to obtain than the ones Wii got. But they will be the major focus of whatever Nintendo does next.
At a GDC speech, before the Wii launched, Iwata said making games for the Expanded Market is like ‘setting foot on an unexplored continent’. I loved that metaphor so much that I wrote my ‘Blue Ocean’ articles around it. The Old World, of Core gaming, sees the initial waves of the Wii and becomes concerned as the water level rises. The New Market, i.e. the New World, becomes the new game industry in the end while the Old World sinks beneath the waves and joins previous continents like the Atari Era.
Developers may cry and moan about making games based on touch… but at least they will still be making games.
I think we are witnessing the end of what will be known as the ‘Classical Era of Gaming’. I use the word ‘classical’ because of the controller that has defined it: the ‘classic’ controller that began with the NES and whose last gasps are with the Xbox 360 and PlayStation 3 (now admitted as fact by Microsoft and Sony’s newly unveiled motion controls).
But I do not think the upcoming decade or two will be a ‘Motion Era of Gaming’ with sustaining innovations stacked on sustaining innovations for motion controllers. I think it will be known as the ‘Disruption Era of Gaming’ because Nintendo has re-made itself to become a Wheel of Disruption. It likes its strategy. It likes that it is the only integrated hardware and software developer on the stage. No matter what its competitors do, Nintendo will keep pulling the rug from underneath them (or at least attempt to). Disruption is Nintendo’s favorite new weapon.
So instead of the next ‘generation’ be defined by motion controls, I think it will be defined by disruption again. Nintendo will attempt to upset the apple cart, and they will either be successful or not. With the generation after that, Nintendo will try to upset the apple cart again. Since Microsoft and Sony are not game companies, Nintendo can just keep re-defining what gaming is and keep them off their toes. A cycle of generation and generation of Nintendo disrupting and Microsoft and Sony counterattacking these disruptions (which is what a Xbox 720: Natal console would be, a co-opt counterattack of Nintendo’s disruption) is what I think the next decade or two will be hence the ‘Disruption Era of Gaming’. This will be replaced once someone finds a way to tackle this business strategy.