Posted by: seanmalstrom | November 30, 2012

What Iwata isn’t saying: profitability is bad

Let’s look at the IGN interview with Iwata:

“I always and strictly tell Nintendo employees never to use the term ‘success’ to describe our own performance,” Iwata said in e-mail correspondence with IGN. “If we call a result of any of our efforts a ‘success’… we might apply it as the standard for success for future projects as well, and we could wind up not trying to do better than that or not making something which is very different in nature.”

Iwata has made Nintendo adopt an innovation ideology. This is extremely bad news. Success, in the real world, is defined by profitability. Sales and innovation don’t matter if you go out of business. Sony probably doesn’t think its stock being rated as junk doesn’t matter because they believe they are so ‘innovative’.

“[Nintendo] aims to create something better than what is already available in the world,” Iwata said. “We believe this can happen by creating something unprecedented. Since Game & Watch and NES, all the Nintendo hardware has been developed consistently under this philosophy.

Here, Iwata is lying. I don’t say that lightly. The Super Nintendo was not designed to do something unprecedented. The very name of the console itself gives it away that the Super Nintendo Entertainment System was a NES on steroids. Look at the Gameboy line, the most successful of Nintendo’s products. It never did anything unprecedented. The competitors to the Gameboys were always ‘better’. And the Gameboy line was just an evolution with Gameboy Color and Gameboy Advance (which assumes an advanced Gameboy).

This is Iwata essentially giving someone like me the middle finger. I can’t read it in any other way. He is saying they don’t want to be bothered to emulate what was successful. And yes, there is a definition of ‘success’ which investors believe in.

Iwata is lying because not all Nintendo hardware has been developed with that philosophy. The Gameboy line and SNES represent this.

I am going to quote the IGN idiots here:

This continual quest for perfection through discovery means that these days Nintendo rarely does what is expected, sometimes to the shock and dismay of even its greatest fans.

I am not at all shocked or dismayed by the 3DS and Wii U. I was more shocked by the DS and Wii where Nintendo actually began acting like grown-ups interested in a commercial business instead of vanity pet projects like their never-ending obsession with 3d.

The eras of the Nintendo 64 and GameCube symbolized a Nintendo that innovated in software only, taking incremental and somewhat obvious steps in its hardware.


I can’t stop laughing, reader.


I suppose the destruction of their home console market was ‘innovative’. Their sick, sick developer obsessions with things like 3d Mario and all really cratered their home console business.

Now, the company has pushed its hardware to achieve the same – and what results is rarely what observers know what to do with.

Nintendo is not doing anything new here. We can already connect devices like the iPod Touch to an Apple TV and interact that way.

I just came from the store, and it was stocked full of Wii Us. Wii Us just sitting there. I do suspect the Wii U is selling faster than the Wii only because of greater supply. But the Wii was sold out in the US for three years. Wii U lasted a week. This isn’t good. However, get ready for the PR of Nintendo to start harping how the Wii U is outselling the Wii without mentioning there is more supply at Wii U at launch. Time hasn’t past far enough for us to forget the Wii phenomenon. And the Wii U doesn’t feel like it is performing a similar Wii U phenomenon.

The reaction to Wii’s controller, even its name, echoes what has been said about Wii U in the past year and a half.

This is incorrect. Note how IGN just makes assertions without quoting anyone or using any examples. To the contrary, the Game Industry is far more bullish on the Wii U than they ever were on the Wii. There is far more third party support for the Wii U at launch than the Wii.

“The brand new user interfaces that Nintendo invented often faced skeptical views before a hardware launch, but wound up becoming de facto industry standards,” the executive noted.

But none of that matters. What does it matter if you ‘innovate’ and put in an analog stick if your competitors use it and take over the market? What does it matter if you ‘innovate’ and put in rumble pack and the competitors use it and take over the market? With Nintendo’s abandonment of motion controls to Microsoft (Sony lacks the capital to pursue this course), what did it matter with Nintendo making motion controls if they are just going to abandon them to their competitors?

If the purpose isn’t profit or ‘success’ and just innovation, why sell consoles at all? Why not just sell ‘innovation’ as a research company to Sony and Microsoft? At least this way, Nintendo wouldn’t be absurd.

“It is challenging to communicate attractions “It is challenging to communicate attractions which are hard to understand unless you actually touch and experience them yourself.  This is especially so with Wii U because it has unprecedented entertainment potential.”

There’s nothing new with the Wii U though. How is the Wii U giving us any different experience found on connected devices from smartphones, tablets, or even the DS?

“We have not thought that offering the same features that already exist within other online communities would be the best proposal for very experienced game players,” Iwata told us.

Then why do very experienced game players disagree!?? And why do you think you get to judge what is the best proposal? Isn’t that the consumer’s job? Isn’t the gamer, not the developer, who is king? What happened to the Iwata who gave the 2005 ‘Heart of the Gamer’ speech? Apparently, Iwata doesn’t like gamer behavior deciding the course of gaming.

Wii U may lack a proper party system for friends, but millions of its owners can connect, interact and share strategies.

It’s like I’ve never logged onto the Internet before and interacted with people or shared strategies online. Thanks Nintendo. This is the first time we’ve ever done this in the year 2012.

Sarcasm aside, we’ve been doing this since the Internet went mainstream. Actually, before the Internet went mainstream. There’s nothing NEW here.

“We will announce the launch”We will announce the launch schedules for new 3D Zelda and Mario games in the future, but this is not the right opportunity for me to indicate when we will make such announcements,” Iwata said.


Apparently, innovation means making more and more 3d Mario games which no one buys the hardware to get. It’s such a good thing we had ‘innovation’ of Mario in 3d Land which has made the 3DS so extremely popular in the West. Oh, wait.

Mario and Zelda aside, Wii U’s future has several high profile games coming from developers external to Nintendo. In the case of Platinum Games’ Wonderful 101 and Bayonetta 2, Nintendo has stepped in to publish these games as system exclusives. In fact, in North America, Nintendo did the same for Ninja Gaiden III: Razor’s Edge. This kind of support is not just important. It’s critical. As Nintendo’s internal teams wade into difficult HD development, learning techniques that many studios have perfected over the past five-to-six years, Wii U will need games from external teams. And Nintendo stepping in for support might be the extra nudge some need to support this innovative system.

“Our first party software alone can’t be enough to appeal to the different tastes of all game fans. The decision of Nintendo that it will publish the two software titles from Platinum Games is one answer to this challenge,”

Yes, because there are CROWDS of people who can’t wait to buy a Wii U to play Ninja Gaiden III: Razor’s Edge and Wonderful 101. Someone told me, “I would never buy a Nintendo console because I hate Mario, Zelda, Metroid, and the rest. But oh boy, it has Ninja Gaiden III and the Wonderful 101. I must buy this console immediately.” These people do not exist.

Iwata noted that his teams will not stop efforts to bring Wii U owners new first and third-party content “regularly” and that Nintendo is “exploring a variety of different ways and possibilities to collaborate with third party publishers and developers.”

Does this mean more games? No!

Look at the wide range of Nintendo costumes in Tekken Tag Tournament 2. See the appearances of Mario and Link in Scribblenauts Unlimited. Or the fact that a team primarily assembled from Namco Bandai developers is working with Masahiro Sakurai on the next Smash Bros. installments.

Oh boy. Nintendo costumes. Appearances of Mario and Link in Scribblenauts. Let me rush out the door RIGHT NOW to get a Wii U!

Does anyone care about this? I didn’t think so.

“The majority of observers had skeptical views toward the potential of the Wii as a game machine. Exactly the same thing could be said about Nintendo DS,” Iwata said.  “These are typical examples of hindsight bias where, only after noticing that these machines had sold beyond their expectations, their memories have been rewritten.”

This cannot be said about me, however.

Reader, note how he didn’t mention the 3DS. Isn’t that telling? The 3DS’s absence in his statement SCREAMS. And while everyone was optimistic about the 3DS, I was one of the few who was pessimistic about it.

“In the end, [success] all depends on what kind of wonderful entertainment opportunities a hardware platform can provide,”

Wait, wait, wait. How do you MEASURE the ‘wonderful entertainment opportunities’? Investors demand to know. I demand to know. Gamers demand to know.

Usually, the measurement is through sales with the assumption the product is profitable. The more sales means the more profit.

What is so scary is that Iwata is not pointing to sales or profit as definitions of success. It is like he knows how badly the Wii U is going to do and is trying to redefine what success means.

But we’re not going to let him.

Definition of success means what is has always meant: profit and install base. Usually, the two go together.

What Iwata is saying is that the ‘success’ depends on creativity of the hardware platform. But that is not what your job is. Your job isn’t to satisfy yourselves, it is to satisfy ME and to satisfy my readers. The purpose of Nintendo hardware is not to entertain Satoru Iwata or Shigeru Miyamoto. The purpose of Nintendo hardware is to entertain Malstrom and people who enjoy games.



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