In the 7th Generation, Iwata said the mission objective of Nintendo was to grow the gaming market. Iwata went so far to say that it was irrelevant to ‘beat’ Sony and Microsoft in a declining market. The result of this mission objective was the DS and Wii which substantially grew the gaming market. The PSP, Xbox, and PlayStation 3 did not suffer because of the DS and Wii. They prospered regardless.
What is interesting about the mission statement of growing the gaming market is that it is identical to the First, Second, and Third generations of game consoles. Obviously, the first generation had to be nothing but growth since no market existed. One of the reasons why the NES performed so well was because it was focused on growing the gaming market (it was the first game console in Japan). When the NES came to the United States, it still had the growth mentality unlike the zombies of Atari clones who only knew to try to ‘capture’ an existing market. Before anyone knew it, the NES had entered a third of people’s households.
But in the Eighth Generation, Nintendo decided to no longer pursue the Blue Ocean pursuits. You no longer hear Nintendo talk about ‘growing the market’. You hear instead how Nintendo is offering the experience Sony is and that Sony customers should buy Nintendo instead. This is Red Ocean mentality. How much Nintendo paid for the Monster Hunter franchise is still unknown, but it must be substantial.
But nearly after a year of the 3DS, we find the gaming market is in decline in places like Japan.
Japanese sales of console hardware and software declined by 8 per cent in 2011, Andriasang reports.
A Famitsu report, based on data from Enterbrain, put total revenue for the period beginning December 27 2010 and ending December 25 2011 at ¥454.3 billion.
Hardware sales were up 2.4 per cent to ¥179.7 billion, largely due to the launches of the 3DS and PlayStation Vita. However, software sales fell by 13.7 per cent to ¥274.6 billion.
Andriasang says the software decline is due to a year where a Pokemon or Monster Hunter game was not released. This sounds like people excusing the market decline because a Dragon Quest or Final Fantasy wasn’t released. If a market’s health revolves around one or two games, then the market clearly is not healthy.
When the Seventh Generation began, you saw Nintendo show elderly people, women, and untraditional gamers becoming gamers. You don’t see that anymore.
There is also a far more desperate tone in Nintendo’s PR releases. Everyone knows about the DS and Wii success, so Nintendo PR is saying, “3DS is selling faster than either!” Yet, this is making no real impact out there. Certainly, the 3DS is not dying like it was when it launched. But it isn’t becoming a social phenomenon like the DS and Wii were. The Nintendo PR (which Nintendo fans swallow just as brazenly as Microsoft or Sony fans swallow their companies’ PR) doesn’t mention why the DS had a slow start or that the Wii sold to households while 3DS sells to individuals (and Wii was sold out in the United States for three years). Wii also didn’t have a price cut until years after it launched. 3DS also sold for a loss at one point.
Here is a prediction that will come true. When the 3DS revision comes out, Nintendo will make PR declarations of overall 3DS sales but will not list the number of 3DS customers. With the revision, there will be multiple 3DS systems sold to a person. While the Wii did have a revision later on (removal of the Gamecube backwards compatibility), no Wii owner bought the new version. What I’m trying to point out is that Wii sales are more indicative of actual customers than Nintendo’s handhelds are. Don’t expect Nintendo to report numbers of gamers anymore.
But let us look at the Big Picture. Is the gaming market growing or not? It is not. What I’m seeing is Nintendo trying to fortify their market position and remove Sony from the handheld market. The big issue that had the 3DS ‘dying’ at the beginning was alienating children and parents with the 3d aspects and the high price. There is no indication that the 3DS is selling outside the core Nintendo market of children.
But Nintendo is not naive enough to make a console with no growth plan. The actual growth plan for the 3DS was to bring 3d output to the masses. In 2006, Iwata revealed to investors that Yamauchi wanted Nintendo to get involved in the movie business. In the 3DS Iwata Asks, it was revealed that Yamauchi was a fan of 3d and liked things that ‘popped out’. When the 3DS was originally launched, it was positioned as a general entertainment device for everything 3d. Being able to watch movies in 3d was highlighted.
We know how this went. The market clearly rejected the 3d output direction. No one wanted to buy a 3DS to watch ‘movies in 3d’. The only reason why anyone would buy a 3DS would be the games. And what are these games? They were N64 remakes (Ocarina of Time 3d) as well as a Mario platformer and a Mario Kart. I don’t see how anyone could consider this to be a healthy performance. It would be like Microsoft saying the Xbox is selling ‘awesome’ even though it was only selling Halo.
I don’t see any reason for third parties to invest in the 3DS. Nintendo is trying their hardest to create as much of a hardware base as possible in order to sell the 3DS to third parties. Why would Nintendo care if their own titles are pushing the system forward?
The answer is because 3DS has only one more year of prime time Nintendo software development before everything switches over to the Wii U. The Nintendo pattern is to use the first couple of years to push hardware penetration of the handheld, allow third parties to take over (with releasing an Aonuma Zelda or a Kirby game here and there), while switching focus to the Wii U. After a couple of years of the Wii U, then focus switches to the next handheld. This is the Nintendo Way. It is why the handheld and console releases are perfectly staggered.
I think the clarifying context surrounding the Eighth Generation of Nintendo is that Nintendo is trying to choose which way it wants the market to grow. In the Seventh Generation, the market did grow but it grew in ways Nintendo did not like (into motion control games like Wii Sports and 2d Mario with Super Mario Brothers 5 and NOT into 3d Mario or Aonuma Zelda). There is stated evidence that Nintendo assumed gamers who got hooked on Wii Sports or 2d Mario would graduate to Nintendo’s Gamecube-esque type games. Instead, the Wii Sports and 2d Mario gamers resisted and demanded more games like those instead. This is not what Nintendo wanted. Remember that the entire Game Industry hated games like Wii Sports or 2d Mario, so it should not be a surprise that Nintendo, themselves, hated making them.
So in this Eighth Generation, Nintendo wanted the market to grow the way it wanted it to grow: into 3d output. But the market has a habit of doing what it wants and not what big companies want it to do. Sony wanted the market to buy the PlayStation 3 for Blu-Ray. That certainly didn’t happen. And Microsoft wanted the market to buy the Xbox 360 for HD-DVD. That most certainly didn’t happen!
The point I am stressing is that the market and its customers (i.e. you, the happy reader) define the future and the direction of gaming. Miyamoto does not. Iwata does not. Fils-Aime does not. You do. I do. The market is in control of gaming. The market is the actual ‘god’.
If the gaming market is in decline, it shows the 3DS is not being a success to gaming.
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