So you're Nintendo. You've been sitting atop the handheld mountain for like 20 years. During that time you've seen challengers come and go—Atari (Lynx), NEC (TurboExpress), Sega (Game Gear), SNK (Neo Geo Pocket Color), Bandai (Wonderswan) and finally Sony (PlayStation Portable). All of these devices possessed features and technology that surpassed anything Nintendo offered, but Nintendo still outsold them and did so with a single, very simple philosophy: release cheap, existing technology with a long battery life, at a low price. It worked so well that with every new competitor, Nintendo would fall back on that practice.
It was only with the Nintendo DS that Nintendo would (successfully) stray from this philosophy and incorporate something technologically innovative in the form of a dual-screen setup in addition to the implementation of touchscreen controls. In hindsight, it wasn't that big a deal given how relatively low-tech by today's standards, but it was actually a big risk. If you think back you may remember the jokes about cross-eyed young gamers and the mockups of a handheld—usually a Game Boy Advance SP—featuring about 10 screens jutting out of its sides at all angles. It marked an end to Nintendo's practice of simply fitting more and more powerful chips into a small formfactor with better TFT and LCD screens. With the success of the DS, Nintendo has moved in more unconventional directions and took more chances to separate itself from the pack.
Nintendo obviously wasn't just doing that out of the goodness of its heart. One could argue that the DS was born from the realization that it could literally no longer afford to go that route. After the Game Boy Advance SP everyone, including Nintendo, was expecting Nintendo 64 and GameCube innards to be shrunken down and crammed into a handheld and released. Faced with rising R&D costs and competition from manufacturers with much deeper pockets, this road only led to diminishing returns. Think of the Nintendo DS as Nintendo's abrupt left turn.
Sony, as you would expects did not share that sentiment. It went down that precise road—we got a beautiful widescreen display, a "large" optical storage medium and processing power that was reported to rival that of the PlayStation 2. It was what gamers, Sony fanboys and developers had been asking for for years. With Nintendo dominating that space, many felt that the handheld market was strictly the terrain of younger gamers small, simple games compared to what consoles offered. The PlayStation Portable (PSP) was supposed to bring adult games (and adults) back to handhelds. During the buildup to its launch and immediately after that, Sony seemed to have been on the right track.
The PSP was all anyone talked about. People I knew, especially women, wondered why I was "playing" with a DS—like I was playing with a toy—when Sony has a sexy, movie-playing, music-playing, game player already on sale. Then Nintendo dropped Nintendogs and Brain Age. All the talk about the PSP sort of stopped and we all know what happened with the race between Sony's PSP and Nintendo's DS.
While the PSP was not the DS-killer many thought it would be that didn't mean Nintendo's handheld was impervious to attack. While it had beaten back the PSP, the times were a'changin'. Cell phones and smart phones were ubiquitous and as their technology improved, the ability to play games cheaply and easily was a growing feature. However, it was the splintered nature of the market that prevented service carriers from producing a standardized platform quickly enough to effectively sell games on cell phones and smart devices.
As is usually the case, the biggest threat came from an outsider. After years of dismissing questions of its interest of entering the games business, Apple has finally gone fullbore towards games as a way of further increasing its appeal and forcing game developers and publishers to take note and look outside of the usual suspects for content delivery. And it finally has Nintendo's attention.
Earlier this May, several sources were reporting that Nintendo's Satoru Iwata told senior executives at Nintendo that the race with Sony was over and that it was time to focus on the new "enemy" in Apple. Of course, you can debate whether the race with Sony (or Microsoft for that matter) is truly over, but its not difficult to see why Iwata would feel the need to focus on Apple. Apple has marketshare, the very nebulous "mindshare", the technology that people want , not to mention a fervent following of Apple fanboys in the general public and the media that probably dwarfs any following Nintendo still posses after the four years of selling the Wii.
What Apple has going for it:
- Apple possesses some truly sexy tech. As the company recently unveiled the latest iteration to the iPhone (iPhone 4), the world was wowed by a smaller smartphone with more features and improvements on the previous version. This is after releasing a tablet computer (comically) dubbed the iPad. With processing power that produces high-resolution graphics on crystal clear displays, both the iPad, iPhone as well as the iPod Touch can steal gamers by offering games on two or three unique platforms that Apple controls.
- If there is one thing Apple also has going for it, it is the must-have adult toy of the decade. If Nintendo enjoyed that status for a while with the Wii, I believe Apple has reclaimed that with its new toys and it doesn't look like that will change anytime soon. Look at the lines that form where ever new Apple products are set to go on sale—it never seems to matter that those products will be available in larger supply only days later, Apple fans will sleep on the streets of New York just to be able to say they were the first to own one. And price doesn't seem to be an issue. Of course the cheaper models sell the most, but the cheapest model still sells for about $200. Even at a premium price, consumers still want Apple product.
- Apple offers features to justify the purchase. Wi-Fi, large storage options, long battery life (at least with the iPhone 4), cell phone communication with iPhone, it's a mutlifunction device.
- The last thing it has going for it, is arguably its greatest advantage: iTunes marketplace. Games, apps or music. If you want them you can go to one source and cycle through hundreds of games and thousands of apps and millions of songs. Navigating is incredibly simple and is the example that even Microsoft with its Xbox Live service should take not of.
That is just a quick overview of what Apple brings to the table. For Nintendo to compete, I think it needs to:
- Nintendo looked at what no one was doing in the handheld space and decided 3D was the thing. This isn't the first time Nintendo dipped its toes in 3D waters, but the company thinks it has gotten it right here. For its sake it had better get it right. Has Nintendo managed to do what no one else has been able to prior? Has it gotten resource-intensive 3D tech onto a small screen device and do it without the need for 3D glasses? Whatever it is, Nintendo really needs to nail it and then it would have to sell skeptical consumers to buy it. (And the feature needs to be turned off without hurting gameplay which interestingly Iwata has admitted can be down.)
- Backward compatibility. Nintendo scored huge points for offering backward compatibility on the Wii and continuing backward compatibility on the DS. It loses almost all of those points when it comes time to replace a Wii or DSi and transfer that content from one machine to another. Nintendo set itself as the only source should you want to do something that other manufacturers allow to be done with a simple phone call.
- No Nintendo 3DS Phats. Right out of the gate, Nintendo has to get it right. With its own DSi, the PlayStation Portable and the Apple products, slim and sexy is what people are expecting. If it is going to compete with Apple it needs to nail that from day one. A 3DS would need to attract older players (usually early adopters) and keep them over the course of its early life.
- Maybe it will need to charge a premium to dump the kiddie toy stigma. As with the iPhone and iPad, Apple is making a killing on gadgets that adults are lusting after and would never think of passing off to younger family members.
- Grown-up communications. That means up-to-date Wi-Fi. Nintendo's wireless services were quaint. Low-bandwidth was the result of cheap hardware, but it just limited what developers could offer in terms of online play, DLC or episodic content of any kind. If Nintendo is serious it has to face the reality that these are an important aspect of gaming.
- No Friend Codes. This has been the bane of our existence as Nintendo console owners for I don't know how long. It is 2010 and no one else does this. Not only is it annoying to use, it feels punitive towards the very people who want to use it legally.
- On a related note, Wired Equivalent Privacy (WEP) was perfect back in 1997 when it was first unveiled, but a decade of abuse from hackers, has relegated it to the trash heap as far as security measures go. It is time for Nintendo to step it up and provide the kind of security that would encourage gamers to use online features and by extension developers to provide more interesting content.
- This leads me to something that has been a sore spot since the Nintendo Wii was launched. Virtual Console and later WiiWare and DSiWare. These three services were meant to be the answer to Microsoft's Xbox Live and Sony's Home/PlayStation Network. And to Nintendo's credit, Virtual Console started off strong with lots of titles that fans flocked to pick up. WiiWare and DSiWare have offered cheap digital content from sources previously unavailable to Nintendo users. That is, until recently. For whatever reason, be it lack of interest or lack of content, Nintendo has slowed the flow of content to a trickle. This has only pushed developers into the waiting arms of Microsoft, Sony and now Apple. It's horribly outdated and at times useless services must be overhauled with the new handheld. And it wouldn't be so bad if Nintendo took a cue from Apple as Capcom's Haruhiro Tsujimoto has suggested.
The next challenger is indeed Apple. Nintendo has gone on the record calling Apple out—that's somehting it never did before. It's either the sign of a company that let recent successes cloud its perspective or a company that knows where the biggest threats to its bottomline lie. Recent moves and announcements, however, point to the latter. It has acknowledged some weaknesses although begrudgingly and promises changes. But is that enough to fight against the deep pockets and momentum of a media darling like Apple? We'll find out this summer after E3 2010. Just remember that the Sony PSP was the handheld console that everyone thought they wanted until they got a Nintendo DS and a copy of Nintendogs. Nintendo just needs to unveil the technology and let us know immediately why we need it.
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