Hey Sean,
If these Incredible Third Party Games are the true movers and shakers of the console market, why are the Xbox 360 and PS3 performing so poorly? The Wii has an excuse to perform poorly since its successor, the Wii U, is launching within months. No successor has been shown or announced for the Xbox 360 or PS3. Why aren’t these consoles selling? Why aren’t their games selling?
And if third party games are everything, then why did the Wii outsell them this generation?
I’m not saying this to defend Nintendo, carry their water, or to say third party games aren’t important. But I would like to puncture the balloon of conventional wisdom by applying some critical thinking.
What seems to be important are not third party games or first party games. What is the mover and shaker are good games. Most of these third party games aren’t that good which is why they aren’t making a difference. And when first party games aren’t good, they don’t make a difference sales wise either.
I would like to ask how the discussion became framed around ‘third party games’ instead of ‘quality gaming’ in general (either first or third party)? Gamers don’t give a shit about third party games if they suck. Third party games are not a cornucorpia if the game industry quality is in a decline.
“But… but… what about the PlayStation 1 and 2 that sold millions more than any Nintendo console!”
I’m sure that sounds very clever to you. But it doesn’t work. You cannot compare the sales of a product in one time frame with sales of another product in another time frame without also comparing all the other elements that differ in those time frames.
“Halo sold more than the home version of Pac-Man. Therefore, Halo is more popular than Pac-Man.” This fallacy comes when you just compare product sales without comparing everything else. Pac-Man’s market was smaller in that there was less of a population in the early 1980s as opposed to the early 2000s. There was also no global market (there was a Cold War going on at the time). Pac-Man was a poor port by a console company that crashed soon after. As absurd it is to ask which is more popular of a game everyone has heard of (Pac-Man) to one only Xbox owners and veteran gamers know (Halo), this should reveal why comparing unit sales of two different products in two different time frames, alone, and using a larger unit sales to say one is more of a success shows lazy thinking or, rather, no thinking at all. I could probably get a monkey to arrive at a similar thought process.
Let’s look at the PlayStation 1 and 2. Both came out during record high economic times. There was a global market at this time (i.e. the Berlin Wall had fallen down, there was no Cold War). And since there was a global market, this meant there were additional territories available (many European nations were not easily available markets in the 1980s for example). There was vast population growth in markets like North America compared to the previous decades which means for more sales possible.
Now let’s look at the Wii. In one major market, Japan, their habits switched from primarily buying home consoles to buying portables. While North America had population growth, territories like Japan and many European nations are suffering population decline. While most of the volume of the PlayStation sales came later in its lifetime, Wii’s lifecycle overlapped a change in macro-economic trends. The world economy began to decline. Until around this time, the Wii was outpacing the PlayStation 2 in sales.
A good question to ask is, “Was the PlayStation 2 actually popular?” instead of assuming it is because it sold more than other consoles at the time. The way how that is measured tends to be in household penetration rate. It did not penetrate more household percentage of any significant degree than the NES. In other words, the PlayStation 2 did not grow the market. What was actually growing the market were macro trends such as population growth and a roaring economy allowing more entertainment spending.
This is an important fact to understand as this is why so many people were confused when Nintendo said, in 2006, that they intended to ‘grow the gaming market’. The Wii came out and we know what happened next. All the ‘growth’ the NPD reported for the Seventh Generation becomes stagnation when you remove the DS and Wii out of the picture. The PlayStation 3, Xbox 360 and the PSP were not growing the market. It is why these products are not bucking the macro economic trends despite having ‘all these third party games’.
You mention 2d Mario in a mocking tone, but the issue of game quality is very important. How we’ll define quality in this post is a game that sells the hardware. The entire purpose of first party games is to sell the console. The entire mission of Nintendo games is to sell Nintendo hardware.
When Nintendo console sales declined significantly with the N64 and Gamecube, the conventional wisdom says, “It is because of lack of third party games.” The fact that the Gamecube sold as much as the Xbox did (and the Xbox has those third party games) should already show the cracks in this line of thinking. What if the third party games aren’t the only variable? What about the first party games? Nintendo’s first party game quality has not been the same for all its consoles. Super Mario 64 and Super Mario Sunshine didn’t sell the consoles like Super Mario Brothers and Super Mario World did.
If the Wii had lacking third party support, why did the system sell so much? It was because of the first party games. The quality of Nintendo’s first party games had gone up and the console sold because of it.
One of the reasons why I focus on 2d Mario is because of December 2009. The macro trends were now economic decline. The Wii sales were expected to gradually decline as the belief is that the console’s sales patterns are cyclical (high at first but decline later on in the lifecycle). When New Super Mario Brothers Wii came out, the Wii sold out again. No one could believe it. Analysts tried to ignore it. Nintendo was in denial about it (see Iwata’s answer to an investor question on it months later).
If we look at all 2d Mario games, there is a pattern that they move the hardware. Did the poor performance of the N64 and Gamecube occur because of lack of third party support or more because of lack of quality first party games? When 2d Mario came to DS was exactly when the DS took off in North America (and 2d Mario came out with every other Nintendo handheld but DS launched with Mario 64 DS… which resulted in the DS was outsold for the PSP).
Am I saying that 2d Mario is what it takes to sell a console? No. I am saying quality games are what it takes to sell a console. And much to Nintendo fans’ anger, I keep reiterating that Gamecube-esque games like 3d Mario are not quality games. For whatever reason, 3d Mario does not cause consumers to purchase the hardware to get to it like 2d Mario does. Other first party games that does not cause consumers to purchase the hardware to get it include the Pikmin franchise and Aonuma Zelda.
This was when I discovered Nintendo had an irrational obsession with 3d. If Nintendo was interested in selling game consoles, they would continue making games that sell the hardware. Instead, Nintendo kept pursuing games that weren’t selling the hardware. If Super Mario Galaxy did nothing for moving the hardware, why spend all the resources to make a Super Mario Galaxy 2? And why the 3DS? Nintendo may be interested in 3d, but the general market is not and never will be. You would think Nintendo realized this after the Virtual Boy or the lagging N64 sales but no.
You might be thinking now, “This guy goes on and on. Why should I even listen to any of this?” When the Wii exploded in sales and kept on for years, the confused analysts did not know what to do. They all expected anything but what was occurring. So they all ended up coming to this page. In retrospect, it is amusing but it only occurred because they all drank the Conventional Wisdom Kool-Aid. They never stopped to re-examine their premises. They actually believed the PlayStation 2 was the most popular game console ever made. But if you looked at it as I did (and as Nintendo did as well), you would have seen the PS2 Era as ‘stagnation’ of gaming whose growth was carried by population growth, good economy, and other macro factors.
If third party support is the mover and shaker of everything, then why does Microsoft and Sony limit it? The console with the greatest third party support was the Atari 2600. Anyone could make a game for it even Quaker Oats. Yet, this MASSIVE third party support destroyed Atari and crashed the market.
And you want to tell me that third party support is what sells consoles?
What sells consoles are good games. This is why when Nintendo came in and remade the console market with the NES, they put in place controls and limits to third party companies. These companies sued Nintendo. Atari sued Nintendo. They lost. And thanks to these third party limitations, every console manufactorer has followed its framework. Including Sony. Including Microsoft.
One could make the argument that excellent third party support harmed the Wii. When the Wii showed it was selling extremely strong, many third party companies came on board and made tons of ‘party’ games or ‘Wii Sports’ type knockoffs. These games annoyed the consumers (retailers pulled many of them) and certainly harmed the reputation of the console. So saying ‘excellent third party support is always good’ as a blanket statement isn’t correct.
Here is where I am confused. At E3 2012, there was disappointment from gamers to the third party games showed off at Microsoft and Sony’s conferences. But these same gamers then turn around and complain that these games aren’t coming to Wii U. I scratch my head and wonder, “If you don’t like these games, why would you care if they came to Wii U or not?” If no one likes the latest Tomb Raider game, no one is going to buy the Wii U if Tomb Raider was on it.
And likewise, I am confused with people saying, “Wii U has games like Batman: Arkham City. Who cares?” I scratch my head and wonder if Batman was a bad game. If it was a bad game, then no one would care about it if it was on the console because no one cares about bad games. As I read up on it, I discover people really liked Batman: Arkham City and think it is a really good game. So what is the problem with Wii U having a good game available on it, first party or third party? Good games create positive consumer experiences and sell the game console.
“But the game is old, Malstrom, just like you are!” snorts our friend, the Hardcore Gamer.
Anyone who thinks a game is a month or a few years out is ‘old’ doesn’t know much. It’s common practice for games to be ported to other systems a year or two later. When you look at the NES third party games, you realize that most of them originated on another platform sometimes half a decade earlier. Archon (NES) was released in 1989. The original was released in 1983!
What matters is if the games are quality and not the age. And this is coming from someone who gets excited being able to play Turbographx-16 games on his Wii. Those games are around twenty years old. I never had a Turbographx-16. But now they finally got ported to a console I had. And who knew Sonic the Hedgehog was ported to a Nintendo console. No one ever thought that could happen in 1992.
Twenty years from now, we could see Halo 9 or Gran Turismo on a Nintendo platform after the Smart TVs devour the console-PC hybrid “consoles” (just as the Smart Phones are currently devouring the handheld-PC hybrid “consoles” that Sony makes). As we play Super Mario Brothers 13, we wonder how Nintendo survived while its competitors did not. And it is at that moment we realized the genius of the Wii U.
“The game console must be separated from the TV,” -Shigeru Miyamoto, 2012.
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