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Nintendo's DSi Strategy

Japan's Kenji Ono dissects the company's plans for the handheld, and how it plays into Nintendo's overall vision for the future

Tokyo-based Kenji Ono is a well respected videogames journalist in Japan, and has written for a number of publications on the subject in his native country.

In the first in a new series of articles looking at arguably the most influential country for games historically, Ono-san here looks at Nintendo's release of the DSi, and how it plays into a wider strategy than just Brain Training games.

The Nintendo DSi - a new model of its successful DS handheld console - was released in Japan on November 1 and in the build-up to the US and European launches taking place in 2009 it's very likely that Nintendo will start to promote a non-game strategy.

Now, when the company says "non-game strategy", the movie delivery service on the Xbox 360 and PlayStation 3 platforms could partly be what it means. But the non-game strategy which I want to talk about here is the Nintendo's attempt to define daily life from the viewpoint of entertainment once more.

By that I mean a software grouping that's not Mario and Zelda, but Brain Training and Wii Fit, and there's a strategy that's cemented into that particular purpose.

The basic changes made to the DSi, according to the official press release, are the additions to the original console of a digital camera, digital music player functionality and an SD card slot. On the flipside the unit lost the Game Boy Advance compatibility, but the screen size was upsized by 17 per cent while the body of the machine is 12 per cent thinner.

All interesting changes, certainly, but arguably the most interesting points are the two new services the console will be able to access - DSiWare and Nintendo Zone - and the possibilities that they bring.

DSiWare is the download delivery service of the software, and while it looks like WiiWare, there's a different point to it - the practical applications, which were integral to Nintendo's plans from the very beginning.

To begin with the internet browser will be delivered for free, and other various pieces of software - from games to tools - will follow in the near future. A clock, a calculator, a route map of the subway - all of which use Nintendo characters - are on the cards. Consumers will be able to save them to memory and use them any time, with customisation options in 'My DS'.

Now, a genre that's attracted a huge amount of attention in the games industry in the past couple of years is 'educational' software. A massive amount has been released, beginning with Brain Training in Japan, and it's a genre that's contributed a great deal to the spread of the DS - not to mention the expansion into a new class of gamers. However, a gold rush and excessive issue of product has ensued and now the bubble's collapsed, with sales of these kinds of games having decreased sharply since the peak last year.

If you compare the sales results in Japan between 2006 and 2007, there was an overall software decrease from 50 million units to 40 million, while DS sales fell from 9 million to 6 million.

But on the other hand, the number of titles released in that period increased from 272 to 458, and the shipments per title more than halved from 180,000 to just 87,000. For education titles in particular, many weren't able to make a profit, and continuation of the business became difficult.

But now it's DSiWare which could spell the saviour for that problem, with companies able to offer software at low prices without taking risks on overstocks. Not only that, but there's potential for non-game developers to enter the space, while for consumers not having to change cartridges for games makes then easier to play in even short commuter journeys.

To illustrate this point Nintendo is planning on releasing a DSiWare edition of Brain Training which will come in two versions - an arts package and a science package, which they're putting together now. Ultimately, as Nintendo has found, in order to expand the gaming population, diversifying game applications is necessary.

Another interesting move is the Nintendo Zone Wi-Fi connection hotspots that the company will operate in Japan with McDonald's, set to debut in the Kantu store in the Chubu area. A different information service will be offered in every area, with the delivery of demo versions of games as well as other software.

It will also be possible to play online games via the Zones, and I'm expecting a lot of children and young gamers to take advantage of this, and enjoy playing their handheld game consoles in public areas like McDonald's.

Nintendo has experimented with the information distribution service that it's used the DS for in the past. In the Shigure-den museum in Kyoto, famous for its traditional Japanese printed playing cards and Hyakunin-isshu short poems, DS consoles and exclusive software are rented to customers who can then listen to a guided tour about the cards - as well as playing games using the DS and a big monitor on the floor.

And when children went to watch the latest Pokemon movie last July, Nintendo delivered Diamond and Pearl owners an exclusive character - Darkurai - as they sat in movie theatres around Japan.

Such trials of Nintendo Zones may well spread to other areas, such as stations and convenience stores, while restaurants may be the next step. Additionally Nintendo has begun work on user-generated content development in games - for example, Super Smash Bros Brawl (exchanging game stages), Wii Music (exchanging music movies), and so on. It may well develop new play styles along the lines of alternate reality games (ARG), which connect the real world with virtual spaces.

Nintendo is spending a huge amount of money in research and development - around JPY 40 billion (USD 420 million / EUR 324 million) in 2008, making a number of significant hires in the creativity and engineering sectors.

The costs of the operating system development increased remarkably for the existing generation consoles, and it's been said that the completeness of the OS is a key tenet for the next-gen battle. At the same time, there are some who think that Nintendo has also spent a lot of time developing the playing environment - such as Nintendo Zones. Nintendo hasn't announced an ARG is in development, but I personally believe that it's likely the company is doing the research and development to give that genre visibility - because it will bring consumers something new.

Satoru Iwata, Nintendo's president, talked about the strategy of 'My DS' in the Nintendo Autumn Conference held at the beginning of October. He said then that he wanted to spread the DSi to everybody, in every home.

The increase in the gaming population is the strategy that Nintendo has wrestled with in Wii and DS until now. Its mythology is in defining daily life from the viewpoints of both entertainment and enriching daily life. This strategy is continuing with the Wii - it's now possible to get TV listings or order prints of digital photos using a connected Wii in Japan. Nintendo will push this strategy more in the DSi, as well. It's a sign that the Japanese market is mature, and the consumers now are looking more for the unexpected in games - even the core gamers aren't always looking for the Mario and Zelda games now.

Ultimately, DSiWare is a diversification of applications, and the Nintendo Zones are a measure for expanding its entertainment districts - be sure that it's a strategy the company will continue to follow, even into future hardware generations.

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