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Nintendo must find the Second Way

Nintendo must find the Second Way

Fri 22 Aug 2014 7:00am GMT / 3:00am EDT / 12:00am PDT

Nintendo's strength is its own titles - what it really needs is a return to the second-party approach of old

Along with publishing some rather good games, Ubisoft has quietly been developing another important role over the past few years. Thanks to the outspoken nature of CEO Yves Guillemot and the company's careful balancing of enthusiasm for new technologies and platforms with a decent degree of financial and management conservatism, Ubisoft has become a bellwether for the publishing industry. Perhaps a difference between French and American business culture plays a role, perhaps not; either way, where other firms equivocate and fall back on meaningless corporate double-speak, Ubisoft and its executives have developed a reputation for speaking openly and giving us an insight into what the publishing industry at large is actually thinking.

When Guillemot pronounces, then, that his company is no longer going to launch "mature" titles on Wii U - Watch_Dogs will be their last such effort, following the disappointing performance of Assassin's Creed on the platform - you can safely bet that it's not acting in isolation. What Ubisoft says in the open is almost certainly precisely the strategy being pursued by other publishers as well; they're just more likely to try and veil it with empty platitudes about what a great partner Nintendo is and how important it is to the industry, effusive corporate praise which, once picked apart, actually carries no commitment of substance to the Wii U platform.

"If mature cross-platform titles aren't selling on the Wii U, which they are not, then publishers should feel no obligation to continue to develop them for that platform"

Nor should any such commitment be forthcoming. If mature cross-platform titles aren't selling on the Wii U, which they are not, then publishers should feel no obligation to continue to develop them for that platform. If this were a two-horse race between rival platform holders, some publishers might be tempted to continue support for the lagging console just in order to keep the front-runner on its toes, but with three strong companies competing, that branch of thought no longer produces fruit. Wii U is on its own, in this regard. Just as Ubisoft will continue to publish Just Dance titles and their ilk on the platform, where they do very well, other publishers will also find casual or kids' games in their line-ups which suit the Wii U - but support for "mature" or "core" games will disappear in short order. I wouldn't expect to see many multi-platform core titles on Wii U from 2015 onwards.

This will cause wailing and gnashing of teeth, because wailing and gnashing of teeth is essentially what the games media and the fanboy frenzy is set up to provide. The death knell! The final nail in the coffin! Vultures circle overhead! Once the core-game supply for Wii U completely dries up and other publishers admit to pursuing exactly the same policy as Ubisoft, headline writers will fall over themselves to drag out death-related imagery that would make a teenage goth poet blush. We know this, because it has happened before. Every Nintendo console since the SNES, in fact, has seen its third-party support fall off a cliff at some point in its life cycle. On each occasion, Nintendo's failure to woo third-parties has been presented as a sign of inevitable doom.

Let's lay it out, then; Nintendo's home console platforms are terrible for third parties. They've been that way for twenty years and they're not going to stop being that way any time soon. Honestly, it wouldn't matter a tuppenny damn if Nintendo unveiled a PS4-beating HD console tomorrow; the business model, the branding and the market for Nintendo consoles is simply poison to the cross-platform "mature" mega-hit franchises like Call of Duty, GTA or Assassin's Creed.

"Core gamers buy a Nintendo console as a second device because they want access to Nintendo exclusive titles, primarily first-party games"

Purchasers of Nintendo home consoles fall broadly into two categories. You've got core gamers who buy a Nintendo console alongside another gaming device - either a Sony or Microsoft console, or a PC; and you've got "casual" gamers, including the family and child segments, who buy a Nintendo device because they trust the brand. Neither of those groups is actually all that keen to buy the latest Call of Duty on a Nintendo platform. Core gamers buy a Nintendo console as a second device because they want access to Nintendo exclusive titles, primarily first-party games, but migrate back to their "primary" console to play mature cross-platform titles. Casual gamers don't want to play mature cross-platform titles anyway. In both cases, they bought a Nintendo device to play Nintendo exclusives.

That's exactly how Nintendo likes it. Nintendo consoles maintain pretty strong tie ratios - even the Wii, supposedly the dust-gatherer of the last generation, had a healthy software tie ratio - and the lion's share of the games sold are Nintendo first-party games. It's not that Nintendo "accidentally" builds consoles like the Wii and Wii U which are underpowered and "weird" compared with the other consoles of their era, then wrings its hands and wonders why third-parties aren't launching loads of cross-platform games. Nintendo does this deliberately, building consoles that are custom-made to play Nintendo first-party games and which don't risk being overrun by Call of Duty and its ilk and thus damaging or polluting the brand image which the company has carefully constructed over the past few decades. For Nintendo, the fact that Assassin's Creed doesn't sell too well on Wii U is a feature, not a bug, because it means that the company's own first-party titles remain solidly in the spotlight and the brand image of the console remains Nintendo's to control.

Of course, that approach begins to look a little less wise when the console in question fails to sell very well, leaving Nintendo's first-party titles with only a limited audience to address - which is exactly what's happened with the Wii U. Yet the solution isn't to throw in the towel and simply copy what Sony does - an enterprise in which Nintendo would almost certainly be doomed to fail. Nintendo needs to find a solution to its current woes which actually suits Nintendo; something which leverages all the things the company is good at and rescues its market position without simply becoming a clone of its rivals or, worse, just another software publisher jostling for attention on the App Store.

"Nintendo needs to find a solution to its current woes which actually suits Nintendo; something which leverages all the things the company is good at"

The solution, perhaps unsurprisingly for a company with such a long history, may lie in the past. Nintendo doesn't need or want a swathe of third-party multi-platform manshooters on the Wii U, and that's absolutely fine. It does, however, need more breadth if not more depth in the Wii U's software catalogue. The first-party games on the system are excellent, but it needs more of them, addressing more niches; maintaining Nintendo's excellent quality standards while also exploring more genres, more aesthetics and more audiences.

Once upon a time, Nintendo used to do almost exactly that. It operated "second-party" studios within and outside Japan, most famously Britain's Rare, which were independent but nestled under the wing of the platform holder, given access to Nintendo's expertise, assets and finance in return for accepting creative guidance from Kyoto and publishing exclusively on Nintendo platforms. It also built relationships with publishers, mostly in Japan, which guaranteed exclusive titles to Nintendo systems on similar terms.

"Bayonetta 2, which no other publisher or platform holder would fund, is a compelling Nintendo exclusive now"

Some legacies of the second-party system remain. Bayonetta 2, which no other publisher or platform holder would fund, is a compelling Nintendo exclusive now; Hyrule Warriors, released in Japan last week, is a cross-publisher collaboration of a sort which the company should pursue more regularly. Yet these are mere echoes of a system which once guaranteed a strong flow of exclusive, high-quality titles to Nintendo platforms - titles which were different from the offerings on rival platforms, but compelling enough to ensure that gamers felt that they really, really needed a Nintendo console under the TV as well.

A resurrection and reinvigoration of second-party would make enormous sense for Nintendo today. It would look quite different to the system of the past in some regards; indie developers would have to form a big part of it, for example, although one could argue that Sony has already stolen a march on Nintendo in this regard with its policy of working closely with selected indie developers on PS4 and Vita. The scope would have to be as big as it once was if not bigger, though; studios around the globe, not just in Japan, with oversight from Kyoto but also enjoying the trust required both to build excellent new IP and to experiment with old properties. Rebuilding this system would require opening the Nintendo warchest, of course; and it would take time and patience, although both of those are qualities Nintendo has never lacked for. It would, however, do more that just giving Wii U a shot in the arm; it would set Nintendo up with a supply of IP and games that would sustain its platforms for generations to come.

21 Comments

Christian Keichel
Journalist

674 922 1.4
Every Nintendo console since the SNES, in fact, has seen its third-party support fall off a cliff at some point in its life cycle.
This is a list of N64 games that you can sort by date, if you look for games released in the year 2000, you will see, that about 60 3rd party games for the N64 were released in this year. Support quickly dwindles in 2001 (10 3rd party titles) and comes to an end in 2002 (1 3rd party title), but as the successor of the N64 was released in 2001, I find it hardly surprising and wouldn't say 3rd party support of the N64 was falling "off a cliff at some point in its life cycle", because 2001 was clearly at the end of the life cycle.
Sure, the PSX had more games released in these years, but then in general more games were released for the PSX, then for the N64, point is 3rd party support for the N64 was relatively stable and high profile till the end.
This list of Super NES games shows hundreds of games released by 3rd parties in the years 1993-1996, so I wouldn't speak of lacking 3rd party support here either.
That's exactly how Nintendo likes it. Nintendo consoles maintain pretty strong tie ratios - even the Wii, supposedly the dust-gatherer of the last generation, had a healthy software tie ratio - and the lion's share of the games sold are Nintendo first-party games.
It only can be one way or the other. The console only be "dust gatherer of the last generation" or have a "healthy tie ratio". Thanks to Nintendo we exactly know the tie ratio - in contrast to the 360 and PS3, were we only have estimates and no official figures, it was healthy, so the "dust gatherer" argument isn't valid to anyone willing to look at the numbers.
Hyrule Warriors, released in Japan last week, is a cross-publisher collaboration of a sort which the company should pursue more regularly. Yet these are mere echoes of a system which once guaranteed a strong flow of exclusive, high-quality titles to Nintendo platforms - titles which were different from the offerings on rival platforms, but compelling enough to ensure that gamers felt that they really, really needed a Nintendo console under the TV as well.
Lego City Undercover, Devil's Third, Dragon Quest X, Fatal Frame V, Shin Megami Tensei x Fire Emblem, Sonic Boom, Sonic Lost World, Taiko no Tatsujin, Tank! Tank! Tank! or The Wonderful 101 are all Wii U exclusives not done by Nintendo (or made in a collaboration between Nintendo and a 3rd party developer).

Edited 3 times. Last edit by Christian Keichel on 22nd August 2014 9:13am

Posted:28 days ago

#1

Neil Young
Programmer

296 372 1.3
Doesn't need to be exclusives - just nurturing the right third party content could help; I suspect nintendo would do quite well out of offering to fund and publish a wiiu (maybe 3ds?) version of minecraft, for example.

Posted:28 days ago

#2

Christian Keichel
Journalist

674 922 1.4
I suspect nintendo would do quite well out of offering to fund and publish a wiiu (maybe 3ds?) version of minecraft, for example.
I understand the idea, but I think that would backfire on them.
Imagine Nintendo would in fact fund the port of the most successful independent game of all time, a game made by somebody who obviously isn't in any financial need for funds and a game, that most probable would sell very well and make profit for this funded developer. What kind of signal would this send to every other developer, who is really in need for funding to port his game to a Nintendo platform? I think it would mean, that every other developer would ask for funding too. And if Nintendo isn't willing to fund every game (because that's obviously impossible), the signal would be, that they are willing to give money to Mojang, who is clearly not in need of money, but aren't willing to give money to smaller developers.
Additionally, if Notch would be interested to put his game on a Nintendo platform, he already would have ported it. It's his game, he decides what he should do with it.

Posted:28 days ago

#3

Neil Young
Programmer

296 372 1.3
Platform holders have funded conversions to their hardware before, so that's not setting a new precedent - and minecraft is such an outlier I doubt anyone would assume what treatment that gets would automatically apply elsewhere.

As for Peason's opinion on the subject, we don't need to guess - he's tweeted on the subject:

"I agree a Wii U version would make sense, btw. The only reason for no current plans is we've got too much work already. I <3 Nintendo."

Posted:28 days ago

#4

Christian Keichel
Journalist

674 922 1.4
Thanks for the info, didn't knew this tweet. But doesn't this tweet say, funding wouldn't help and that's more a matter of human ressources. I don't knoiw who did the other ports of Minecraft. Were they done inhouse by Mojang or have they outsourced the ports?

I agree with you that Minecraft is an outlier, but just because it is, I think it would set a new (bad) precedent for many people, it's the one game, that doesn't require any funding. But that's only how I see it, maybe that wouldn't be the general perception.

Edited 1 times. Last edit by Christian Keichel on 22nd August 2014 12:02pm

Posted:28 days ago

#5

Neil Young
Programmer

296 372 1.3
Mojang developer the PC and mobile version, 4j develop the console versions.

Posted:28 days ago

#6

Christian Keichel
Journalist

674 922 1.4
Thanks for the info, outsourcing is in fact a matter of financial ressources.

Posted:28 days ago

#7

Klaus Preisinger
Freelance Writing

1,094 1,048 1.0
Is this the same Rob Fahey who wrote the article "Microsoft's chequebook warfare is bound to fail", or has he since then been replaced by a superior robot model?

Posted:28 days ago

#8

matthew bennion
Web Development

31 33 1.1
Yeah because Rare really worked out well for Nintendo they got a few good titles out of them and then Microsoft waved some money in their faces and they were gone...

Edited 1 times. Last edit by matthew bennion on 22nd August 2014 4:40pm

Posted:28 days ago

#9

Nick Parker
Consultant

282 150 0.5
In the Western World, Nintendo is family, kids and Nintendo fan boys; it's the Disney of the industry. It always has been since my days during the SNES launch in 1992. There have always been competitive brands which have more edge or even irreverence - Sega, PlayStation, Xbox which most teen and adult male gamers prefer to be seen to be playing and who enjoy the more appropriate (core?) gaming experience on them. Even Wii was attracted by the same family demographic but in droves due to its original UI and associated games. The breadth of available gaming experience on Nintendo consoles has never been as wide as on PS (but for a few exceptions like N64 GoldenEye) and the player demographics never as deep to desire a wider catalogue - a chicken and egg challenge.

Edited 2 times. Last edit by Nick Parker on 22nd August 2014 6:09pm

Posted:28 days ago

#10

Jim Webb
Executive Editor/Community Director

2,266 2,404 1.1
@Matthew Bennion:

Nintendo actually sold all shares back to Rare (they owned 51%) and then MS bought up all 100%. MS could never have purchased a controlling share in Rare if Nintendo had not sold back their shares first. MS money waving was completely irrelevant until after Nintendo sold their portion.

Posted:28 days ago

#11

Christian Keichel
Journalist

674 922 1.4
Nintendo actually sold all shares back to Rare (they owned 51%) and then MS bought up all 100%.
Nintendo only owned 49% of Rare's shares, the rest was owned by Chris and Tim Stampers, when they decided to sell their shares to MS, it wouldn't have made much sense for Nintendo to keep their 49% of Rare, as Microsoft would have become the owner of the majority of shares.

Posted:28 days ago

#12

Jim Webb
Executive Editor/Community Director

2,266 2,404 1.1
I may have had the 51/49 split backwards.

Posted:28 days ago

#13

Christopher Ingram
Editor-at-Large

52 45 0.9
If Nintendo hasn't already found its "Second Way" before now, then the Wii U will struggle along until the next console release. It's pretty much as simple as that.

Posted:28 days ago

#14

Nick Wofford
Hobbyist

180 190 1.1
It's off-topic, but Nintendo selling Rare was one of the greatest business decisions of all time. They waited until the juice was gone from the orange, and then they puffed up the peel and sold it as fresh fruit to the new kid on the block. Brilliant.

As for the topic, it's common sense to me. Nintendo is unique in that they aren't fighting the same battle that Sony/MS are. Sony/MS are trying to convince consumers that their systems have great experiences. Unfortunately for Nintendo, they're trying to convince consumers that they won't miss out on great experiences. It's a subtle shift in tone, but a powerful one.

And Nintendo absolutely needs the developer support. They simply cannot churn out an acceptable number of games per year to keep people happy. And before anyone tries, posting a list is entirely irrelevant. I can post a list of great Ouya games that looks pretty long in an online textbox too, but it's not selling any Ouya's. Nintendo may have a list of well-reviewed games on their system, but they aren't selling it. So quality clearly isn't the issue. It's quantity.

Posted:27 days ago

#15

Steve Peterson
West Coast Editor

108 73 0.7
Nintendo's got two problems here. One is lack of compelling software, or perhaps it's just that the rate of software releases from Nintendo has been slowed. The other problem is that the Wii U is still pretty pricey, especially if there aren't all that many titles right now that motivate people to buy it. The situation will get better as more titles come out, but Nintendo's been very slow with key titles (many getting pushed back repeatedly).

Posted:27 days ago

#16

Yiannis Koumoutzelis
Founder & Creative Director

362 207 0.6
Buy Capcom, Buy SEGA, problem solved.

Posted:26 days ago

#17

Jeff Kleist
Writer, Marketing, Licensing

326 184 0.6
That would destroy both Capcom and Sega. Buy Sonic, Buy Meganan is the productive parts for Nintendo. Not that Sega would ever sell him

Posted:26 days ago

#18

Paul Jace
Merchandiser

925 1,381 1.5
Considering that Capcom doesn't even release many of their major games on Nintendo consoles(Street Fighter IV, Street Fighter Vs. Tekken, Remember Me, Resident Evil 5/6, Lost Planet, Dead Rising other than the offshoot, etc) I'd say that this has zero chances of happening. Capcom still shows alot of love to the 3DS but thats because that system actually still sells well, especially in comparison to the Vita.

As for Sega, I could see that as an interesting fit. But because it would deprive Sony and Microsoft console owners it wouldn't really be a good idea imo. However, from what I hear Sonic games sell much better on Nintendo platforms so you never know.

Posted:25 days ago

#19

Alfonso Sexto
Lead Tester

807 637 0.8
For Nintendo, the fact that Assassin's Creed doesn't sell too well on Wii U is a feature, not a bug,
Hearing the regular declarations of Reggie Fils-Aime regarding the WiiU, you would believe that the low sales of the console itself are also considered a feature... along with all the people they are firing in Frankfurt's offices.

I don't see this going the right way, honestly...

Posted:25 days ago

#20
If Nintendo actually had to buy outright 3rd party publishers like Capcom and Sega could they not also release those games on other consoles after giving them a 6 months or year exclusive.

Would that greatly harm sales on the big two? It would definitely act as an incentive for people to buy their consoles.

Posted:24 days ago

#21

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