In the latest instalment of his Game On column, Mark Butler argues that Nintendo’s current struggles are a direct result of their own naive corporate complacency – but they are far from the first gaming giant to be undone in such fashion.
Nintendo has traditionally been the game industry’s true titan – a cherished and reliable figurehead, and the home of its most recognisable icons. But it would be fair to say that the Japanese giant has endured a miserable start to 2014.
Profits have tumbled amid growing financial concerns, while the failure of the company’s new flagship console, the Wii U, has been all but confirmed.
Sales forecasts for the fiscal year have been slashed drastically from 9 million to just 2.8 million, and it’s been revealed that a mere 5.8 million Wii Us were shipped in the console’s first year on sale. By way of comparison, the PlayStation 4 shifted more than 4 million units in its first month of release alone.
Nintendo president Satoru Iwata has now, somewhat admirably, announced that he will take a 50 per cent wage cut in light of financial concerns. But the damage has already been done.
Such is the lack of confidence in the company’s current platform that publishing giant EA is rumoured to have abandoned the Wii U altogether, with many third-party gaming big-wigs apparently reluctant to commit to the struggling device. Ubisoft’s U-turn on Rayman Legends’ exclusivity was just the beginning, it seems.
The fall from grace
Not that long ago, however, Nintendo were sitting pretty. Their obscenely popular handheld, the DS, had established itself as the biggest-selling gaming device of all time; shifting a jaw-dropping 150 million units. On the home console front, the original Wii had also been a huge hit – likewise topping the 100 million mark, and initiating something of an audience revolution.
The Wii saw a veritable avalanche of so-called ‘casual gamers’ embracing the console, thanks in part to the fun novelty of motion control, not to mention the attractive price-point, accessible array of colourful titles and emphasis on sociable, interactive fun. Soon everyone from toddlers to families to nursing home residents were on board – with a huge number of people who’d never even thought of gaming picking up the controller to have a go.
So what went wrong for Nintendo? And how the hell did they squander such a strong market position?
The simple truth is that they were complacent, and naive, to an astonishing degree. They assumed that their casual audience – or at least a considerable chunk of it – would follow them onto the Wii U without question. So much so, in fact, that their entire marketing strategy was jaw-droppingly under-baked.
Such little effort was made to advertise the Wii U to Joe Public that a Eurogamer investigation into the sales debacle last year learned from a senior retail boss that: “the challenge, to some extent, is getting across that the Wii U is a totally new console and not just a touch-screen addition to the existing Wii”.
In other words, many casual gamers and existing Wii customers hadn’t even realised that the Wii U was an entirely new console. It just hadn’t registered on their radar. And even if it had, the steeper price tag screamed ‘serious technological kit’ far more than ‘fun impulse buy’.
Instead of courting the very audience that had become their backbone, Nintendo instead assumed they were there to stay come what may – and set about focusing on trying to win the hardcore back. This strategy has proven disastrous.
Same old, same old
A lack of system-selling exclusives, together with the tactic of early-releasing a platform that seemed suspiciously like it might not be a true next generation console, have played their part in this. Many gamers and game-makers alike held back to wait and see what rivals Sony and Microsoft would come up with – and apparently preferred what they had to offer.
On the software front, it’s certainly arguable that Nintendo’s in-house team haven’t worked hard enough to expand their stable of must-haves. There’s been a notable reliance on the same old IPs, with popular favourites Mario and Zelda wheeled out like elderly war heroes to court the masses.
There’s no doubt that Super Mario 3D World is a brilliant title. But many gamers want something new, fresh and exciting to tantalise their appetites. Just look at the palpable excitement for Titanfall and Destiny.
Wii U’s pool of games just doesn’t cut the mustard. As a case-in-point, just two of my 20 most anticipated games of the year are headed for the console.
However, this really isn’t the first time that a powerful gaming corporation has been undone by baffling complacency. History repeats itself – and we’ve been here before.
Lessons from history
Sony were the dominant force in console gaming prior to the release of PS3 – and then they ballsed up the launch. Not content with giving Microsoft a considerable head-start in the race, they also set a notorious higher launch price – and acted with apparent arrogance and indifference when concerns were raised. Bizarrely, many of the higher-ups at the company appeared to think that they were untouchable, and that their fanbase would stick by them no matter what.
It was a PR disaster to be sure, and one that set them back a long way at the start of the last generation, before they gradually learned from those mistakes, drew themselves back to level pegging and seemingly bridged the previous and new generations on something of a high.
Microsoft unfortunately, seemed to only make those same mistakes at last year’s infamous Xbox One reveal. They had been more than holding their own against Sony, but the Xbox One launch was a total, unmitigated disaster, as they wrongly assumed that gamers would happily swallow always-online, an aggravating emphasis on TV and social media, and compulsory Kinect with an inflated price tag, among other indignities.
The end result is that they have now well-and-truly begun this current console race on the back foot, with many previous fans turning away – or at least holding fire – from a company that seemed to take their custom for granted.
Then there’s perhaps the most dramatic example of all. SEGA went from being a console colossus at the start of the ’90s to a shadow of its former self a decade later: partly due to underestimating the threat posed by then plucky upstarts Sony, and partly due to the disastrous strategy of pumping out a near-constant procession of new hardware and add-ons – and expecting its fanbase to lap all of them up eagerly.
There’s a sobering lesson here that all gaming giants would do well to heed in future.
You’re never too big to fail. Pride comes before a fall. And when things go wrong, they can go very wrong indeed. Complacency is the pitfall that can bring down even the most famous and enduring of institutions – and woe betide the company that forgets that.
Do you agree?
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