Malstrom’s Articles News

Email: My appreciation and my curiosity

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Hello, Sean.

I’m an avid reader of your site for almost three years and hold a fascination for your perspective on gaming and the gaming business. I am also impressed by your early ability to look through the fancies and foibles of people gamers only know are beginning to no longer treat as holy cows – games journalists and developers. Your praise, analysis and criticism of Nintendo and its decisions is always relevant to me and my hobby.

To a certain degree your interesting work on the business of games made the field look interesting, deep and unpredictable enough for me to consider studying the field, and I am now in the first year of a Bachelor in Business and Economics. Perhaps I would have made that decision without coming in contact with your writings, but I wish to thank you nonetheless for making the field interesting in my eyes.

That wraps up what I’ve been wanting to tell you for a while.

Next, I turn to this little rumor, which you’ve probably already been mailed about/heard about. Perhaps the only intelligent thing would have been to dismiss this “leak” on instinct and not add to the buzz, but apparently some specs for the Wii’s successor have been posted at this URL. The site in question was the first to offer the correct specs for the Wii before Nintendo unveiled them themselves, and it also was the site that specified that the DSi LL would be released soon. Perhaps I am just wasting your time and mine, but here I go.

http://www.maxconsole.net/?mode=news&newsid=37744

If you don’t want to “reward” the site with a click, this is a rundown;
– The Wii2 system will feature a Blu-Ray drive with a secondary aim of stopping piracy.
(This almost made me stop reading, I must admit. The people Nintendo have recruited into games don’t have more than a layman’s awareness of piracy and would not engage in it anyway, no? Maybe this Blu-Ray drive would be incapable of playing movies, like the Wii’s DVD drive? I can’t see Nintendo believing people would pay extra for a games console with “extra uses”. Nintendo has said that it’s recognizing the prevalence of HD tech in homes, but wouldn’t a BR drive be too expensive to incorporate?)
– 1080P and lower resolutions will be supported, for blu-ray movies and games.
– The release date is scheduled for third quarter of 2010.
(A four-year life cycle? “That best be a jest”, I thought to myself. Then I considered how generations could be more “fluid” or at least less clear-cut now and in the future. This would let Nintendo do the “That Zelda you have been waiting for is better on our next console” thing all over again – but I don’t think they would be willing to try that again.)
– The release will be worldwide and on the same day for all countries.
(I have no idea whether this comports with the Nintendo we are seeing today)
– A scheme will be available in which it is possible to trade in the original Wii for a cheaper price on the new Wii 2.
(This would probably be necessary to prevent confusion, jadedness or suspicion for customers. Personally, this system would be the only thing that would make me consider upgrading. But I would not be lured by the promise of “Wii Zelda but with better graphics if you get it for the new console”. I can’t see Nintendo trying that anyway.)
-Moreover, Nintendo wants to make a worlwide annoucement, only one month before release date. Huge publicity and Viral Marketing will be utilized to create the Buzz.
(Some kind of Blitz? Again, my grasp of the business and the current state of gaming and Nintendo’s place in it is just too weak.)


I wouldn’t be surprised if you were capable of seeing this rumor to be completely unbelievable and worthless because of your better awareness of the current market situation for Nintendo, but if the rumor isn’t completely worthess your thoughts would be interesting to hear. Again, sorry to take up your time if this “leak” was just an attention-grabbing stunt I’ve been caught up in.

Best regards and wishes of good health

For all we know, this emailer could be the next Iwata or Yamauchi. Just please do not come out of business school and be one of those zombies populating the “Game Industry” today! “Let’s raise prices even more, hur hur hur!”

About this stupid “rumor”. Of course, it isn’t happening. For those who want solid proof just look at the Vitality Sensor. If there were new hardware coming, Nintendo would save something like the Vitality Sensor for it.

For years, we have watched the brightest of the “game industry”, our saintly “analysts” who are so smart that we dare not question them, who are so wise that we should genuflect when they pass by, who are so funny that we must laugh at their lamest jokes, that they refrain deliberately talking about “Blue Ocean” and disruption and, instead, keep making up rumors about Wii HD.

These guys are not that stupid. If someone like me, or Microsoft, or Sony, or other people can clearly connect the dots of Nintendo’s strategy, then so can they. I think it is more important to realize that they are not speaking as individuals but as a machine, as that beastly “Game Industry” machine.

What I realize now, that I did not realize in my more optimistic times of years ago, was that there is more hatred for disruption than love for it. Again, incumbents hate disruption.

You might laugh and giggle over this, “Tee hee, they DO hate disruption! He he he!” But take off the funny charms for a moment. This ungodly Pavlovian Wheel, this machine, this “Game Industry”, has made certain people very wealthy. And they will do whatever it takes to keep the Pavlovian Wheel in place, spinning merrily away to separate gamers’ money for mediocrity. Or, to put in another way, they don’t care that dedicated servers are eliminated from Modern Warfare 2. If you take a big picture view of this as well as the top box model or PS3 costing $600 and such, you can see that they are pushing to squeeze as much revenue and as much control as they possibly can. Now that the top box dream is dead, it is replaced with the cloud dream. That, too, will die of course and something else will replace it.

Just because someone has money does not mean they have character. This is why you ask a young child what character they will be when they grow up, not what job they will have. Integrity is in short supply.

The Wii doesn’t just have to battle disinterest, it has to battle the entire “Game Industry”. All the hostility you feel towards the little white machine is not your imagination. It is there and clear as a bell. I, myself, would feel guilty and quit if I was working at an organization that was so clearly agenda orientated. But many in the “Industry” do not have such reservations.

More than anything, the “Game Industry” wants Nintendo to stop what it is doing with disruption. It very much wants Nintendo to put out a Wii HD. It isn’t just because it would be easier to port third party games. It is because, unlike any other generation of game consoles, Wii represents an actual threat to the “Game Industry” in a structural way. All these “Wii 2 rumors” are nothing more than attempts at sabotage. Either the people saying them are playing this angle or they are being “useful idiot” sock puppets by people who want the disruption stopped.

Now, you might say, “Malstrom, that sounds extreme.” It may perhaps. But just look at things. How can so many Wii games be totally ignored? How can WiiWare almost entirely be ignored by game media while Xbox Live and PSN games are not? How can the Wii always be failing when it was constantly sold out? Why is Nintendo always said to “love money” but Microsoft and Sony never are?

Remember when the Conduit came out? Whatever the quality of the game, the game received an absurd amount of attention which is odd since the Wii is generally always ignored. If the Conduit was very successful, it would rip other FPS games, a bread and butter item of the “Industry Machine”, right at its knees in a disruptive way. There is too much money riding on this.

New Super Mario Brothers Wii is a very illustrative example. No game should evoke hostility such as NSMB Wii (with the exception that the game won’t meet the quality of its predecessors). Instead, we are witnessing many people go out of their way to trash it. Why? Some have called it a “casual game” which apparently is not a ‘real game’. Why is this game meeting hostility when something like Galaxy wasn’t? Well, Galaxy wasn’t going against the current of the Industry Machine. Also note how many people are trying to paint NSMB Wii as “copying” Little Big Planet or is just a port of the DS game.

People are not this stupid. It is intentional.

Whether Nintendo knew it or not, with disruption, the Wii has declared war on the “Game Industry”. They will never, ever, like the Wii unless it stops being disruptive and joins the “Industry Machine” in the typical “HD” machine way. On message boards, viral messengers strategically ask, “What can Nintendo do to solve its third party problems?”(somehow, DS is magically excluded from such a question) instead of asking the obvious: “Why does the Game Industry keep trying to control and ignore its customers?” Situations like the removal of dedicated servers from Modern Warfare 2 didn’t “just happen”. It happened because they thought they could get away with it. Even those who you thought carried your interests as a gamer, such as Tycho from PennyArcade, advise you to just “put out” anyway and enjoy it (how bizarre that this was practically a rape analogy). It isn’t hurting his money streams so why should he care?

This generation is not going they way they wanted. Sony was supposed to be on top with fierce competition from Microsoft. Nintendo was supposed to be third party by now. The game developers were supposed to be ‘unionized’ or on the path of being so not unlike Hollywood personnel. The gamers were all supposed to be downloading DLC and on various new revenue streams as well as episodic content. Blu-Ray was supposed to have replaced DVDs by now and be a source of the PS3 surge. Yet, none of it happened.

The lack of talk of disruption is intentional. The suits aren’t this stupid. Microsoft clearly knows about disruption. In fact, they began trying to mimic the talk of disruption in 2006 prior to the Wii’s release. Microsoft, king of the computer software industry, is well aware of disruption.

The “rumors” such as Wii 2 being right around the corner, complete with HD and Blu-Ray, are sabotage. Either the analyst is being a “useful idiot” and is being played by someone, or it is intentionally done.

Note how there is no interest at all in the new consumers that Nintendo is bringing in. All we have heard for years was that nothing Nintendo did mattered since Sony or Microsoft would come out with a “better” motion controller.

Remember the events that occurred when “Natal” was introduced at E3 2009? How did all these journalists, in and out of the “Game Industry”, as well as all these mysterious message forum dwellers who suddenly appeared when Natal did and talked in overwhelming flowing praise for it do all of this at the same time?

“You and your conspiracy theories, Malstrom, hahaha” will undoubtedly be said. But I am pointing to events that have already occurred. What I am saying is that the Wii has to overcome not just disinterest of non-gamers but a hostile “Game Industry” as well. The “Game Industry” does not want disruption. They want the Wii stopped. They want Nintendo to put out Wii 2 and abandon its disruptive ways. The “Game Industry” does not see the Wii as another console, casual or otherwise. They see the Wii as a threat. Nintendo is the only game company that has the power to truly creatively destroy the industry.

In private, there is much admiration and even awe of Nintendo and its games. In public, there is scathing hatred.

Let me put this another way. In the early 90s, there was a book on Nintendo called “How Nintendo took over the world” by David Sheff. Though it was a very sensational account, Sheff became a great admirer of Nintendo and its employees. The book was about how Nintendo planned on taking over the world by the NES becoming a top box to control everything digitally from the living room. This is pretty silly, and Nintendo has a tough time keeping sales momentum up for its hardware let alone try to take over the world. However, other people read this book and saw themselves doing it.

A young Kutaragi saw his daughter playing with the Famicom when the PlayStation idea came to him: of a computer in the living room to control entertainment. If anyone thinks Microsoft and their Xbox Live is anything but control, I have a bridge to sell to you. Now that the top box dream has exploded, now the new top box is going to be “The Cloud”. They think the Internet will destroy used games, destroy all piracy, destroy all rentals, and give them absolute and total control of all gaming. This, too, will go up in smoke.

What we have is not really a “Game Industry” but a Pavlovian Wheel. Hype is made like a bell to Pavlov’s dog to get the little gamers to scurry to the store and buy the game (day one, you don’t want to miss out!). The games, themselves, are little Pavlovian software devices complete with “achievement points” and “unlockables”, i.e. little dog biscuits for Pavlov’s dog.

There is no intention to create new consumers, to create quality, or to compete with quality. The reviews are artificial. Games like Grand Theft Auto 4 (which is now only $20, the same price as Brain Age) were to get *perfect scores* as arranged. I don’t know about you, but I am tired of being manipulated. I am tired of being lied to. I am tired of companies whose only focus is to squeeze as much revenue out. I want them out of my gaming.

Look at the chaos that disruption has wrought! And this is just the video game industry, a small little microcosm. If so much hostility can be brought against a disruptor, imagine how it is for other disruptors in other industries.

Remember the Great Disruption? It was coined by a disruption author, Scott Anthony, to describe how all the old incumbent industries are being attacked and have the floor removed from under them by disruptors. Disruption is no longer contained in the computer industry. It is now everywhere.

If you were an incumbent, how would you react?

The Canal Industry tried to pass legislation and do all they can to stop railroads. Railroads tried to pass legislation and do all they can to stop cars and planes. I imagine the telegram industry tried its best to stop the rise of telephones.

It cannot be a coincidence that all the businesses that have been “bailed out” have been disrupted industries. It cannot be a coincidence that the Internet is frequently more attacked while newspapers are being “bailed out”.

The economic bullets whizzing over our heads is a desperate struggle against the forces of Creative Destruction. Wall Street has been disrupted. Yet, they are the biggest beneficiaries of bail outs. American cars, another disrupted industry, has been bailed out (even nationalized). The trillions and trillions of dollars printed is not because politicians are stupid. They know what they are doing. People were getting too wealthy, becoming too independent. Too many people were becoming financially free. And when people are financially free, one has no leverage over them. It is not a coincidence that American children are educated to only be employees, i.e. to work for someone else.

So far, they have been messing with disrupted industries, industries people don’t really care about. They have not yet touched disruptors. I don’t think they know the difference between disruptors and disrupted. They do know about creative destruction, though. They are reacting to a loss of control and appear even desperate about it.

Consider the computer industry. The computer industry was the hive mind of disruption. Any dirty politician, no matter who, that touched it would face an uprising. Everyone wanted the computer industry to disrupt other industries and of society. People celebrated the rise of email over old mail, for an example. But the computer industry is no longer the biggest disruptor. Not by a longshot.

What is the biggest disrupted industry on the planet? Clayton Christensen is an expert on this industry. It isn’t computers. Do you care to wager a guess, reader?

The biggest disrupting industry in the world is the American health care system. It comprises one fifth of the national economy. With baby boomers getting older, it can only grow. Christensen has even written a book on it.

The big companies, i.e. the incumbents, do not like this. But it being a disruptive industry, as opposed to being disrupted as the American car business or newspaper business or Wall Street, explains why the issue  is a radioactive issue toward politicians to all pundits’ dismay.

In “Seeing What’s Next”, Christensen talks about the Wheel of Disruption. He is talking about disruption on a macroeconomic scale. He defines why Japan rose in economic blossoming but then declined. This disruptive wheel is still spinning in America (I frankly don’t think it has stopped since the Pilgrims landed) and is the cause of much of the noise you are hearing in the “outside”.

Clayton Christensen, of course, came out against the health care legislation and even called it “appalling”. He went even so far to say that he’d prefer Congress do nothing than what they are doing now. So that should sum that up.

But there is intense hostility toward disruption, otherwise known as Creative Destruction. The powers that be don’t like it.

Listen to Greenspan:

Comments on the video say, “Greenspan must not fully understand creative destruction. How can he say this?” No, folks. He clearly understands it. Replace the word “Globalism” with “Great Disruption” in there (since that is what Globalism is), and you can tell these people do not like it. The powers that be, of any age, of any era, do not like creative destruction because they are always on the wrong side of it. Better for them to destroy the currency than allow losing their power.

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