Posted by: seanmalstrom | October 10, 2013

Nintendo is excellent at competition

Iwata speaks. Let’s look at what he says.

 Nintendo is not good at competing so we always have to challenge [the status quo] by making something new, rather than competing in an existing market.”

Nintendo has the best track record for competition as a console company than any other in history.

In handhelds, Nintendo has dominated FOREVER surpassing twenty years. This is UNPRECEDENTED in history of any other industry. Many competitors have tried, and they have all failed. All. Have. Failed.

Yet, Iwata says Nintendo cannot compete.

When Donkey Kong became a huge hit in the United States, everyone thought Nintendo couldn’t compete when MGM sued the Japanese company over the rights of King Kong. But MGM had its ass handed to them in the courts.

Yet, Iwata says Nintendo cannot compete.

When Nintendo hardware was introduced to the United States, it erupted into a popular culture phenomenon. Mario was EVERYWHERE. There was even Mario and Zelda cereal and TV shows. No one could compete with Nintendo. Atari tried to turn the US politicians and courts against Nintendo. They failed.

Yet, Iwata says Nintendo cannot compete.

When the Sega Genesis and Super Nintendo were neck to neck in the United States, Nintendo put out Donkey Kong Country, new marketing, and blasted Sega away to victory.

Yet, Iwata says Nintendo cannot compete.

While much is said about the PlayStation 1’s dominance, the truth is that the N64 and PS1 were extremely competitive in the United States. Ultimately, the larger library and consistent releases won it for the PS1. N64 performed well in the US.

Yet, Iwata says Nintendo cannot compete.

The Wii U’s failure mimics that of the Gamecube. The problem with the Gamecube was not that Nintendo was competing, it was the abandonment of game quality with goofy ass titles such as Super Mario Sunshine and Zelda: Wind Waker. If Gamecube’s games were of the similar quality of the N64, it would have performed better.

Yet, Iwata says Nintendo cannot compete.

Game forum mythology says that the Wii was not designed to compete. But the truth was that it always was designed to compete. Nintendo deliberately made sure the Wii was launched at the same exact time the PS3 was. This was confirmed by an interview with Miyamoto. Using disruptive innovation instead of sustaining innovation is still competing. Blue Ocean is still competing. It is just competing with a different tactic.

Yet, Iwata says Nintendo cannot compete.

But let us look at the opposite: can Microsoft and Sony compete? Microsoft’s first Xbox sold as much as the Gamecube (and lost billions while the Gamecube was actually profitable). Is that what you call competition? Or is the Xbox 360 that cannot sell in non-English countries, lost billions, and came up in third place considered ‘competition’? Or what about the Xbox One which is already seen as a laughing stock?

Look at Sony. Sony has made five game consoles. Three of them were unable to compete (PlayStation 3, PSP, and Vita). The PS1 and PS2’s success can be argued to be more on the competition’s mistakes than on the correct things Sony did. There was nothing special about the PS1 and PS2 except their enormous game libraries which came largely from being a parasite of PC gaming. With PC gaming drained empty, Sony loses its biggest advantage (unless an indie game breaks big).

When you actually look at the history of gaming’s business, you find that Iwata’s statement of ‘Nintendo is not good at competition’ to be laughed out of town. Nintendo is sooo bad at competition that it always dominates the handheld market. Nintendo is soooo bad at competition that it kicked Sony and Microsoft’s asses (and took their names) during the 7th Generation.

So what is Iwata really saying? There are two things.

The first is that Nintendo is unwilling to compete in a way that removes profit. Sony and Microsoft do not make much, if any, money from their game consoles. They must use other parts of their giant corporation to ‘bail out’ the non-profitable consoles. Nintendo has no other big businesses than gaming. Nintendo must make a profit.

The second is that when Iwata became president, what we feared would occur when a game developer became president happened. We feared that an El Presidente game developer would say, “Forget the commercial concerns! Follow your creativity!” Ever since Iwata became president, Nintendo quality has become crap. The Gamecube games were absolutely terrible and this reality is reflected in their sales. Nintendo game directors became motivated by their ‘tingles’ than actual market reality. Hell, there is even a new character by the name of ‘Tingle’ that everyone in the real market despises. Note that the Wii games that were phenomenons were the ones when Nintendo developers weren’t allowed to rely on their ‘tingles’. There was no ‘creativity’ in Wii Sports, only incredible engineering. There was no ‘creativity’ in Wii Fit, only incredible engineering. Even Mario Kart Wii, focused on the engineering aspects of being an online game, and NSMB Wii, focused on the engineering aspects of four player simultaneous play,  When Nintendo developers stopped making games based on their ‘tingles’, the games take off. The Wii took off. But when Nintendo focuses on their tingles for game development, we get crap like Metroid: Other M.

“How can you say this, Malstrom? How do you get that from what Iwata says?”

“Will America accept cute monsters?” Iwata asked, referring to the initial warnings the company received on bringing Pokemon to the US. “No, they said. Some people even recommended to make Pikachu more muscular.

“If we followed their advice Pokemon would never have been the success that it was. Brain Training software (Brain Age) became a hit in Japan, and I proposed that we sell it globally. And even as I said that as the president, no one listened.”

The first Brain Training game went on to sell more than 17 million copies, with more than half sold in Europe.

This is Iwata giving us the middle finger and saying, “Japanese culture is AMAZING and future forward! It is you in the West that are followers… followers of us! And what is Japanese culture today? It is our developers following their tingles instead of market reality.”

Iwata’s examples make no sense. Pokemon was a failure in the West with adults. Brain Age sold well because it lacked Japanese culture in it. The only graphics in Brain Age was a polygonal head! In the past, Nintendo games sold well throughout the age spectrum. Everyone played Super Mario Brothers and Legend of Zelda. Everyone played Wii Sports and Wii Fit. But when Nintendo embraces its ‘tingles’, its creativity, we get garbage like Wind Waker, 3d Mario, and Emo Samus Aran which only children play if they play it at all. The truth about Japan is that it is a nation in decline where most diapers are sold to adults, the young men there don’t copulate with the young women there and are known as grass eaters, and there is an energy crisis there resulting in Japan radiating itself. Cultural strength tends to follow civilizational strength. How can Iwata express the superiority of Japanese culture when most Japanese people would rather embrace Korean culture? Why is it that for Japanese companies to survive, they have to adapt to Western styles more?

If Nintendo wishes to get ‘Nintendo like profits’ again, two things need to be done:

1) Iwata needs to abandon this ‘Japanese Culture Pride’ march he has the company on. People buy games for the games, not for the ‘culture’. He might get the winning game console in Japan such as the 3DS, but this is irrelevant as Japan is a market in continued decline as the population declines.

2) Iwata needs to enforce discipline on Nintendo software developers so they stop designing games around their ‘tingles’. If the hardware designers have to develop around reality and ignore their ‘tingles’, then so should the software designers. Nintendo’s best quality games came when the software developers were denied their ‘tingles’ and made games they didn’t want to make (e.g. Super Mario Brothers 3, Super Mario World, Wii Sports, Wii Fit, Zelda: Link to the Past, Super Metroid, etc).


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