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Iwata: Lack of innovation to blame for slowing software sales

Piracy not the key problem for ailing Wii and DS software market claims Nintendo president

Speaking in an investor Q&A session last month, Nintendo president Satoru Iwata has said that low sales of DS software could not be blamed entirely on the problem of piracy, instead citing lack of innovation as a central cause.

Answering a question about the company's revised financial forecast, which featured a reduced sales projection for DS and Wii hardware, the president pointed out that games like Art Academy had bucked the trend of poor penetration in some of the markets hardest hit by piracy.

Iwata singled out Spain as a market where DS games had a particularly hard time penetrating the sales chart, partly because of the difficulty in applying rigorous anti-piracy laws. However, he also made clear that DS games had always struggled to make a retail impact in the territory, and that games which managed to break into the public awareness could succeed nonetheless.

"Nintendo DS software could not make it to the hit software sales chart in the country for sometime," Iwata told investors.

"However, when we launched the Nintendo DS software Art Academy in Europe this summer, which shows you how to draw pictures, it was ranked number one on the software sales chart covering all the videogame platforms in Spain. If one software can attract many people and can become a social topic, that software can sell regardless of piracy."

Whilst Nintendo are obviously keen to deal with the piracy issue on DS and Wii, Iwata sees a lack of innovation in the games available as a bigger problem.

"Of course, as a responsibility of the platform holder, we will tackle piracy. For example, when we launch new hardware, such as Nintendo 3DS, it is a good opportunity to beef up the countermeasures, and we are actually working on that now.

"On the other hand, I do not think we should attribute bad software sales solely to piracy. Even with piracy, as long as we can create products which can attract attention from many consumers and which can greatly entertain them, that software can make it to the number one position of the hit software sales chart. "

Iwata also claimed that it is this lack of variety which is causing a downturn in software sales across the industry.

"For your information, the slower sales pace of games is not confined to Nintendo, but is now an issue the whole videogame market is facing. I understand that it is because consumers are having a hard time finding something new among the proposals videogame producers are making today. "

Nintendo has targeted the sale of four million 3DS units by the end of the fiscal year in March, 2011.

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Latest comments (11)

Stephen McCarthy Studying Games Technology, Kingston University11 years ago
most of the game i saw of on the ds was just badly made kid games over here ((usa has some good ds games))
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Greg Wilcox Creator, Destroy All Fanboys! 11 years ago
Maybe slowed sales are ALSO because a lot of new "casual" users don't buy as many games as "core" players. that and the current recession has put too many people out of work that would be normally be buying some of these games (rent and food come before entertainment in some homes, folks).

You don't see the games industry addressing this current financial crisis all that much in the media unless it's another studio shutting down with layoffs.

What needs to happen is a general "Yes, we KNOW the economy stinks" followed by a few price drops and incentives for those with enough funds to spend on non AAA titles to go out and buy when they can.

Sure, the bigger budgeted, well-advertised titles will sell (some even without the huge spending that goes into them), but I say give smaller titles a push, either as bundles on some shopping channel, direct through a publisher's online shop or some other means where potential buyers without a lot of cash can get what they want without breaking their banks...
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Mbuso Radebe Producer, Electronic Arts11 years ago
@ Greg - I agree. I think the economy and casual users are also contributing factors to declining sales, but I think Iwata has an even greater point. It seems as if most game publishers have "streamlined" their portfolios so that they allocate the lion's share of their funds to fewer blockbuster (read as: FPS) titles. Few are willing to take a chance on something new an innovative because of its associated risk. Irony of the matter is that the risky titles are necessary in order to fuel the industries next wave of blockbuster genres.
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Show all comments (11)
There are lots of reasons - but one, is used games and game prices. Something like the last 5-10 retail titles I have purchased, have averaged $10AU each. I have also picked up pretty good DS titles for just $5 - almost all of which are 2nd-hand.

At these prices, why would I bother picking up any new games for $50/$60?

Its even got to the point where full, AAA retail titles are cheaper than both DSi & WiiWare titles!
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James Verity11 years ago
piracy was always an excuse... about time some people admitted their titles were not worth the disks they were duplicated on...

Edited 1 times. Last edit by James Verity on 11th October 2010 11:06pm

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Haven Tso Web-based Game Reviewer 11 years ago
As I pointed out many time it is the cloning of one successful game into 6 million games that caused the demise of software on DS and Wii. The issue with that is those are not essential games that you will keep on buying and play? How many Wii Fit games and their clones can you buy?

The issue with software is always the momentum and pricing. Some games that are crap are overpriced (some of them were even "AAA" titles e.g. Final Fantasy XIII") so the market readjusts itself to get the goods moving (FF XIII is a perpetual discount item in most Sydney stores now since July - and it was launched in March). The situation is worse on DS and Wii with all the clones.

I think the example of Art Academy is great because it is an interesting software and I do hear people talking about it and buying it. Scribblenaut is another good example. So were the all time favorites on DS such as Brain Training, Nintendogs, Rhythm Heaven, Professor Layton, and cult classics like Another Code, Phoenix Wright and Electroplankton.

I resent the fact that some developers and publishers churned out shovelware to try to make a quick buck and if they don't sell blame it on piracy, second hand market or the platform holder.
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Tony Johns11 years ago
I think that too many DS upgrades in a short time are the problem and as well as that some people are perhaps waiting for the new 3DS.

You can blame almost everything under the sun for slow sales, but in all honesty I believe that if you are going to aim for the casual market, they will only be interested for so long until they get bored and all you have left are the hard core that supports you though thick and thin.

And that is a natural part of the videogame market when something becomes popular around 80% of people will be interested in only for a short time until 20% of people who brought the product will perhaps love it to be hard core about it but most will just move on to the next big thing that happens to pop up.
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Jamie Watson Studying Bachelor of Games & Interactive Entertainment, Queensland University of Technology11 years ago
FINALLY! someone has figured out that some games just suck and that piracy isnt the only if only more developers are listening to this.....ACTIVION,WHERE ARE YOU?

Edited 1 times. Last edit by Jamie Watson on 12th October 2010 2:08am

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Yiannis Koumoutzelis Founder & Creative Director, Neriad Games11 years ago

Bad copies of other successful games and development of mediocre low budget titles\ports based on statistical expectations and with the excuse that DS\wii is low end tech wise would obviously lead to that point. It's not nintendo, nor DS\Wii to blame. You can see the same pattern on iPhone.

There are many good core games on DS, unfortunately those who are meant to buy them, revert to piracy.
The casual gamers on the other hand are easily bored and ofc they are not stupid not to recognise that a game like brain training won't be much different than brain training. :) So why buy it? How many identical cross dressing titles can people possibly buy?

However, Animal Crossing on DS still sells ;) What does that tell us?
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Jim Webb Executive Editor/Community Director, E-mpire Ltd. Co.11 years ago
The attach ratio for the Wii vs the HD consoles will surprise many of you. The X360 is nearing 9 while the Wii and PS3 are almost tied around 7. This tells me the software purchase rates of Wii owners is not the problem.

For DS, it has an attach rate of ~4 to the PSP's ~3. But the nature of portable consoles has always had much lower attach ratios than home consoles.

Since the sales rate of Wii and DS titles are not below expected values of a successful home and portable console, Iwata must be touching on the actual problems. 1 part piracy, 1 part over saturation of poor quality titles and 1 part failure of 3rd parties to grasp the market early.
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Alex Loffstadt Community Manager, Outso Ltd11 years ago
Some really good points being made.

Wii + DS caught the industry flat footed. If you look at the majority of the content out there, most of the stuff that makes the best use of the movement or touch based UI comes from in house at Nintendo.

I remember the build up to the release of the Wii, and just how much laughter there was around the little white box with the silly name. Then it started selling and to people who don't generally buy games and suddenly everyone is rushing to catch up.

Lack of innovation in games isn't isolated to the Wii and DS. Like TV, music, movies, almost any entertainment medium there will always be a glut of the derivative. IMO the way games typically get funded doesn't help this trend.

Edited 1 times. Last edit by Alex Loffstadt on 12th October 2010 4:15pm

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