Kikizo

Adam's Blog on Work & the World

About

Nintendo screwed? PlayStation past it? Apple unstoppable? Gaming in 2011 is one helluva show

The videogames industry is uncertain at the best of times, reacting to the ebb and flow of changing gamer tastes, economic circumstances and expiring consumer trends. 

Traditional console cycles last around five years, yet the only new console announced at this year’s E3 was Nintendo’s Wii U, a machine that seems to be jack of all trades, master of we don’t know what. 

Judging by Nintendo’s E3 2011 showing, the realization that they had dropped the ball somewhere along the line came later than they probably would have liked.  The keynote left many wondering exactly what Wii U was; was it a successor to the Wii?  Was it new controller?  Was it a new portable device?  The focus at the show was squarely on the new tablet controller, with the actual “console” taking a backseat.  Of course we now know that it is indeed Nintendo’s next home console proper.  It’s HD, it has plenty of notable third-party developer support, it has an improved online infrastructure and it’s technologically comparable to… uh… the Xbox 360. 

Some have dismissed Nintendo’s console strategy as that of a company that had gotten way too comfortable dictating the experience to end users.  It certainly didn’t go to the lengths that Sony and Microsoft went to in cultivating software support, and Wii’s often painful online infrastructure has barely improved since launch, a stark contrast to Xbox Live.  Nintendo seemingly hasn’t really cared about third-party support, or western gamers’ demand for a fully functional and comprehensive online portal.  Maybe that will change with Wii U, maybe it won’t – only time will tell. 

“With the western economy in tatters, more and more people are looking at what they “need” as opposed to what they “want”.  Most people see a mobile phone as a “need” and a portable games console as a “want”.”

To get a clearer picture of what’s currently going on at Nintendo, we need to look at the 3DS.  Launched in March this year, it has recently seen its price slashed by approximately $80 in the US and an even more incredible £70 in the UK.  Such a significant price drop within six months of release, especially for Nintendo hardware, is virtually unheard of, causing many to question the company’s mobile gaming strategy.  One of the biggest criticisms levelled at Nintendo has been the 3DS’s software line-up.  While there is undoubtedly some killer looking titles in development (Super Mario 3DS Land and Resident Evil Revelations spring to mind) the ‘launch window’ games were pretty lacklustre – the highlight of the sorry bunch being an overhauled N64 classic.

As a system, there’s nothing inherently wrong with the 3DS and with the right software it has every chance of succeeding in the marketplace.  The problem for many however has been the price, which I suspect many were expected to swallow due to the perceived current popularity of “3D”.  When Christmas arrives and stronger titles like Mario Kart 7 and Super Mario 3DS Land are on store shelves, I suspect the machine to fly off shelves, especially at a much more attractive price point. 

Is Nintendo likely to see the same kind of success with Wii U and 3DS that it saw with the Wii and DS?  No, probably not, but it should be able to keep its head above water long enough to adapt to the changing landscape.  What we do know is that Nintendo is becoming increasingly concerned about non-traditional competition.

On the flip side, Sony’s PlayStation 3 is going from strength to strength and slowly stepping out of the shadow cast by Microsoft’s console.  It has become the lead platform for many multi-platform games and as developers adapt and tweak their engines to better take advantage of Cell, more and more impressive games are starting to emerge; Uncharted 3 is testament to that.  So Sony can hold its own in the home console hardware race, but what about the mobile space?  PSP was relatively successful, but likely didn’t perform as well as they had liked and so far their “PlayStation powered” Xperia line of phone handsets haven’t exactly made waves. 

Sony has always been quick to meet consumer demand head on and has addressed many of the perceived shortcomings of the PSP.  The successor - Vita, has twin analogue sticks, TWO touch sensitive surfaces, a gyroscope and accelerometer, a larger OLED screen and a faster flash-based game medium.  What more could you ask for?  The machine looks to be incredibly powerful, displayed by the demos of Uncharted: Golden Abyss, Monster Hunter Portable 3 and Epic’s Unreal Engine 3.0 based ‘Citadel’ demo.  With an already stronger looking software line up than Nintendo’s 3DS, will Vita see the kind of success that Sony no doubt hoped they would achieved with the original PSP?

“The chances of seeing a Mario game running on an iPhone or iPad are extremely slim, especially in the short term, as Wii and DS allowed Nintendo to put aside a $14 billion “war chest”.”

The problem, and do doubt concern for both Sony and Nintendo, particularly in the mobile space, is the rapid rise in tablet and smartphone gaming.  What Nokia failed to do with their N-Gage platform, Apple and to a lesser extent Google have succeeded at.  Apple’s App Store is the fastest growing digital distribution platform in the world.  As of June 6th 2011, Apple had sold more than 200 million iOS devices worldwide, far and away more than the 146 million DS units sold by Nintendo to date. 

What’s even more impressive is that the App Store arrived with the third iPhone revision in mid-2009, and so the 50,000+ games available for download have been released in just over 2 years.  Now many of those games are terrible and overly simplistic, and many more are just skinned versions of other games, but there’s no denying the popularity of titles like Angry Birds and Cut The Rope. Furthermore, some of the more recently released titles on iPhone 4 and iPad 2 arguably challenge Vita’s technological supremacy.

Apple has a number of things in its favour.  Most notably, annual increases in hardware power, but also the low price point of many of the platforms apps.  Most games are priced between $1 and $7.99, with the odd exception costing more.  While the majority of these games are marketed towards the more casual gamer, there have been an increasing number of hardcore game successes. 

Chair Entertainment’s Infinity Blade and id Software’s Rage, Firemint’s Real Racing games and Gameloft’s entire catalogue show that smartphones and tablets are becoming a force to be reckoned with in the mobile space.  Short development times and costs along with a huge install base make iOS, and by extension Android development hugely appealing.  That’s not to say that dedicated handheld consoles have no place in the current market, but they certainly have less room to exist in than they have in previous years.

With the western economy in tatters, more and more people are looking at what they “need” as opposed to what they “want”.  Most people see a mobile phone as a “need” and a portable games console as a “want”.  They use their phones every day for a wide variety of purposes, and if it also happens to be capable of playing games, it makes sense that more and more people will use it for that too.  The conundrum here is that since mobile games are generally played while out and about; on the bus, at lunchtime, whatever – what benefit would be gained from having both the smartphone that you “need” as well as a dedicated portable console? 

In an age where people use their phones to tell the time, do math, make notes, take pictures, record video, send and receive emails, browse the web and update their social networking status, how long will it be until the vast majority use it do all of their mobile gaming?

“Right now, Vita and 3DS have markets available to them, but they are markets that are getting smaller all the time.”

Nintendo’s investors are evidently thinking along the same lines.  Bloomberg reports that lower than expected demand for the 3DS resulted in profit forecasts for the current fiscal year being slashed by 82 percent.  With Nintendo stocks currently at a six year low the company’s management will no doubt be hoping that the 3DS’ recent price cut will be enough to gain a more secure footing, because the alternative may be that they have to begin putting out titles for other people’s hardware.  As odd as it would be to see a Mario game running on an iPhone or iPad, I can’t personally say that the prospect doesn’t excite me.  The chances of that happening however are extremely slim, especially in the short term as past success with Wii and DS allowed Nintendo to put aside a $14 billion “war chest”.

Currently the most valuable US company with a market value of $337 billion, Apple is growing at an astonishing rate and as its products reach more and more people the video games industry will continue to change.  Right now, Vita and 3DS have markets available to them, but they are markets that are getting smaller all the time.  While Apple isn’t yet likely to adapt its Apple TV to play games like a traditional home console, it has introduced Air Play mirroring, allowing whatever app or game is being used on an iOS device to be displayed on a television. 

The past couple of years have seen some exciting developments and increased innovation, and stronger competition from direct and indirect rivals can only lead to even more exciting times. 

One thing is for sure: there’s never been a better time to be a gamer.

Read More About... , , , , .