Nintendo Shoots Itself In the Right Foot To Save The Left Foot

I love E3 wrap-ups and reading those report cards for the video gaming industry, which are a bit more entertaining than the year-end report cards my kids receive at just about the same time. I have learned to stay out of the initial barrage of opinion articles - not just to avoid the wrath of the video game fanboy, which is about as capable to hold a reasonable discussion as the Intel/AMD fanboy of 2001, but also to digest the amount of information that was dished out.

Caution: Yes, this will be a pretty harsh opinion piece and you are welcome to comment, but please read the entire article, before you start yelling.

I have to admit that I initially missed the Nintendo keynote and was a bit late to the party figuring what this Wii U really is. The advantage, of course, was that I was playing the role of the average consumer who sees a product without the PR and marketing bubbles during a flashy press presentation. At first sight, my initial reaction was: What were they thinking? They must be kidding.Nintendo, Seriously?

Of course, I knew I was wrong since the press reaction was overwhelmingly positive and I was certain that I just had not enough information to understand what the Wii U is about. So I waited a few days and chatted with colleagues who attended E3 and discussed the console and the additional information Nintendo provided to analysts (which was not very much, by the way.)

It turns out that your first impression is often spot on and my initial reaction was not really off track. In fact, it appears that Nintendo is taking a huge bet that could easily backfire and quite likely reverse Nintendo's pre-2010 fortunes.

Alienating your customers

There is absolutely no way around it. The Wii U controller is a slap in the face of the existing Wii user base. Period.

Apparently, Nintendo has been infected by the tablet fever and is now running a pretty high temperature. Someone get some Ibuprofen, please. This new controller-slash-tablet-slash-mobile-game-console is everything the current controller is not. You need two hands to hold it. It's somewhat clumsy. Small children are unlikely to be able to comfortably hold it and use the controls. Older people, especially the retirement home population Nintendo was so proud of, will not like this thing. And, I guess, this thing will be ridiculously expensive. I'll guess $299 or $349 for the base Wii U (including one tablet-controller) plus about $99 or $149 for each additional controller (apparently, two tablets are supported by each base Wii U unit). Of course, there is a reason why Nintendo would alienate its customers. There are plenty of Wii customers that turned out to be an accident for Nintendo.

The fact is that a retirement home population is unlikely to crave new cutting-edge games. It may sound cruel, but there is no value to someone who is just happy with playing Wii Bowling. What Nintendo really wants is the hardcore gamer who buys lots of games and soemone who functions as a grassroots evangelist for the console. It's pretty simple: Hardcore gamers attract game developers and more game content attracts more customers, which ensures the success of a platform.

The Wii currently does not have lots of third-party game content and Nintendo is clearly jealous of the content that is available for the Xbox 360 and the PS3. The Wii U (Notice the meaning of U? This new console is apparently not just about "we", but much more about "you" as an individual.) will attempt to get a slice of the lucrative hardcore gamer base, while sacrificing the cheapskates. Ditching an unprofitable user base isn't a bad thing from a business perspective. In this case, Nintendo is essentially dropping a user base that is stubborn and simply resists to buy enough games in the hope that it can get a portion of Sony's and Microsoft's gamers, which Nintendo so badly neglected.

20/0 vision

Taking out that unprofitable user base, of course, somewhat requires a good knowledge of the gaming market. At least as far as I am concerned, Nintendo missed what I was looking for and they missed what the stock market expected, what virtually all market analysts I talked to expected and what plenty of enthusiastic video game journalists hoped for. Seriously, Nintendo: Not everything has to be a tablet these days. If you really wanted a video game tablet, couldn’t you have released a new DS with the usual array of sensors and game streaming capability? Do we really have to have these additional tablets laying around in our family rooms?

Sure, there may be gamers who love the idea of a controller with a big LCD screen, but there is no denying that this won't be as transparent to use as today's Wii controller. Forgive my direct doubt, but there was absolutely nothing that Nintendo was able to show that could convince me that this is really a breakthrough in gaming as the Wii controller was. Some game developers I talked to said that they had really no idea how to take advantage of this tablet. Sure, they said, they can support it, but they have no clue what's inside the Wii U and therefore can't say anything how Wii U games will be more intuitive than Wii, Xbox 360 and PS3 games. Simply imagining that we will be wiggling a tablet in front of us to control a game is not a very appealing proposition to me. I am not a big fan of Kinect, but if I had to make a choice between the Wii U or the Kinect, I'd take the Kinect ten times over a clumsy tablet.

So, if Nintendo takes out its existing customer base, it better makes sure that its value proposition is absolutely stunning so it can wow the enthusiast gamer. The Wii U is not this breakthrough device and Nintendo completely misses the mark. There is a good chance that Nintendo will lose its mainstream gamers to the Kinect, which provides a natural upgrade path from the Wii (even the PS3 Move is a better upgrade from the Wii than the Wii U is) and there is an even better chance that Nintendo will not attract many PS3 and Xbox 360 gamers - especially if it doesn't have the content: As far as I can tell, there isn't a single game developer that is convinced that the Wii U can succeed. Heck, they don't even understand what Nintendo is aiming for.

Quite frankly, this early announcement of the Wii U and the revelation that Nintendo will abandon the Wii controller model and move to higher-resolution games has left Wii sales as well as Wii game sales in limbo. There is little value in buying a Wii right now - no one right in there mind will invest money into a Wii, if they are planning on buying more video games in the future: they will either switch to a competing platform or wait for the Wii U. You can look at the Wii U from several different angles, but the announcement wasn't an especially smart move and the market strategy is questionable at best.

Wolfgang Gruener is Director, digital strategy and content experience at American Eagle, where he specializes in strategic data analysis, user behavior models and information architecture (IA), as well as content strategy and governance. He was also Managing Editor of the website TG Daily and contributor to sites including Tom's Guide and Tom's Hardware.

  • pooflinger1
    If this is the route that Nintendo wants to take, then they are going to have to really get serious. Hardcore gamers will not settle for 480p. They will not settle for cartoony characters with floating balls for hands/feet. The Wii abandoned them when it was originally launched. They have alot of ground to cover before they can start taking chunks out of Sony/Microsoft. At those pricepoints, unless they have a HUGE plethora of games, Sony/Microsoft are still much more attractive platforms.
  • kashifme21
    Heres hoping one console maker bites the dust, 1 down 2 to go.
  • buzznut
    I do think the wii U moniker is very telling. They're basically saying to their fan base, "Look we don't care about social gaming anymore. We don't care if you've had parties at your house with everyone joining in. We just want a tablet to put you back on your couch."
  • Amen. That thing is fugly. There is no way it can compete with a console that sits in it's place to be played. It looks like a portable gaming unit that has to have a mother unit to be played. I mean where are we looking here? At the fancy huge display in my hands or at my tv or both? And I'm not sure how many people are actually buying into this tablet craze. I believe it is a fad that will soon die off because who really wants another device to carry around which finds its place somewhere between a smart phone and a laptop. I use my phone to make calls, I use my laptop to do work. I would use an iPad as a... I wouldn't use an iPad.
  • Nintendo made sure to get a couple of things right.

    1) Making sure that the console wouldn't be left out of the 3rd party mix

    2) Securing support from the biggest of the big boy software developers ie; EA, Ubisoft, THQ and Activision. You get them, you get it all. They'll be fine.
  • Actually they are not alienating the wii controller user base at all. The new console will still utilize the wiimote and nunchuk and will be backwards compatible. I assume the extent to which the previous controllers and accessories (Zapper, Classic Controller) will be on a game to game basis. Overall, I'm looking forward to the Wii U. My only complaint is that they did not include the lastest hardware, just hardware newer than that of the 360 and PS3.
  • kingnoobe
    Even if this flops doesn't mean nintendo is gonna bite the dust.. He wouldn't be the first time they had something flop, just to come back with something even better then the rest.

    Though I personally think if they were going for the hardcore crowd, and trying to get more devs on board.. They should've kept it simple, and just went with better hardware then their competitors have. They also might've got a lot more dev's on board with that.
  • cknobman
    Actually I thought you were quite nice in the way you chose your words.

    Personally I feel the Wii U is a POS. With no online ecosystem to back up their console there is very little they can do to win too many PS3 or Xbox 360 users anyways.

    Also if your going to go after "hardcore" gamers and try and get some PS3 and Xbox 360 users its a pretty stupid move to use a 4 year old graphics chip (yes when the Wii U is release in 2012 the r700 architecture will be approximately 4 years old) that does not even support the latest version of direct x.

    Sorry Nintendo unless some major changes take place the Wii U will be even a bigger failure than the 3DS is shaping up to be.
  • Humans think
    I am not sure that it will end up in failure, but most probably it will. Personal screen + big screen designs have no apparent benefit except board and magic card games or strategy planners. That's the only scenario i would prefer to use it. Otherwise the sheer volume of that controller plus the possible damages u can inflict on them is not a good idea. Another possible design would be to use this tablet/controller as a hub or universal remote for many devices and services, but Nintendo doesn't have a good track in interoperability either.

    On the other hand Nintendo had failed before (not very recently though), and usually the comebacks have been strong. Let's hope it survives this bump and comes up with a groundbreaking idea once more.
  • You should keep in mind that the new Wii U still supports the old controllers. For me, the only thing that would maybe get me to buy a Wii U is the graphics update. (I actually love some of the old casual Wii games...) The new controller isn't really the main reason why i would buy it.
    What i don't really understand about Nintendos E3 announcements is why they are holding back info on the hardware specs. If you want to get developpers on board now (so you have something to show when the release day comes), why not put the word out there that you have a console that is up there with PS3 and XBox360, maybe even slightly better and still mostly compatible hardware wise with at least one of them.
    As a developper, that would be the news i'd expect to hear, to see that it does not need a lot of work to release games that are developped for PS3 and 360 now on the new platform and that you just need to invest some extra time to use the possibilities of that new tablet controller somehow.