Archive for June, 2013

Should Nintendo Exit the Console Market?

Courtesy of IGN

Courtesy of IGN


When it comes to consoles, Nintendo just hasn’t been able to find their footing this past generation. Despite strong initial sales, the system was a flop. And if the Wii U sales continue to struggle, it may see the same premature fate. But when it comes to portables, sales skyrocket and stay strong, as is the case with the Nintendo 3DS.  So it begs the question: Why does Nintendo have such a difficult time emulating the success of their handhelds to their consoles?

CEO Satoru Iwata blames the disappointing sale on Nintendo’s lax marketing efforts. Which bears a bit of truth as many gamers perceived the Wii U as merely an accessory that complimented the regular Wii or an upgraded Wii, not as an entirely new console.  More over, Nintendo failed to communicate the value properties of the Wii U and how it would benefit consumers.  Even at rock bottom price cuts haven’t helped invigorate sakes. But there’s more to the story that Nintendo just can’t seem to admit to themselves. And that simple truth is this: in spite of Nintendo strong innovations, they don’t produce content that attract steady consumers.

This is the same enigma that plagued the Wii. Nintendo failed to produce content that connected with the mass appeal (hardcore gamers or the casual crowd who suddenly an interest in the Wii and gaming). Make no mistake about it, from a pure financial perspective, the Wii was a success and dominated sales charts for many years. During this same time, the Gameboy Advance and DS sales were rock solid without cannibalizing each other. Today, that dynamic isn’t happening with the Wii U and 3DS.  While console numbers were phenomenal, actual games sales were a different story.

The generation that grew up on a steady stream of Mario games and other Nintendo icons is becoming older. And as gamings has evolved, they’ve have embraced other icons from different platforms from Halo’s Master Chief, Uncharted’s Nathan Drake, and so on.  As that spectrum grows and fragments in itself, Nintendo’s relevance in the market becomes that much more challenged. Nintendo shows unwavering commitment to their content, even to this day.  There’s no denying that Nintendo produces stellar titles like clockwork.  But the reality is that Nintendo can no longer rely on the financial success of Mario and Zelda titles.

Putting out the Wii U was extremely pre-mature given their poor standing in the market. Most likely, Nintendo’s aim was to capitalize on the success of the Wii. And Nintendo knew where their shortcomings were.  What they didn’t anticipate was alienating themselves further from hardcore gamers and casual users which we’re seeing now with disastrous Wii U sales. Given where the console war is headed, the Wii U appears to have already lost. Even 3rd party publishers are keeping the WiiU on hold. Compared against the competition: Wii U is underspeced, 3rd party support is minimal, and the games still lack the mass appeal addressed earlier. Let’s be clear: the problem isn’t Nintendo’s games but the platform on which those games are produced. If Nintendo wants to stay ahead of the pack, they need to play to their strengths more, and that’s handhelds.

Let’s play devils’ advocate. Instead of throwing more capital and resources in a losing war, Nintendo could bow out of the console race and redirect focus to the handheld space and develop games on other platforms be it console and / or mobile. That may seem blasphemous to many hardcore fans. But no one would have predicted ever seeing Sonic the Hedgehog exclusively on a Nintendo console either. This sort of transition would allow their games to reach an even larger audience. Additionally, dedicating more assets to the mobile / digital space could lead way to more innovations Nintendo is known for.  Not only could Nintendo extend their control of the handheld market; they could start dabbling with other mobile devices / partners. The possibilities for expansion in the mobile market are endless and fits some areas of Nintendo’s wheelhouse.

Obviously, Nintendo is not leaving the console market anytime soon, nor should they. The original Wii is still selling at a somewhat moderate rate, believe or not. And despite the Wii U’s failings, I have no doubt Nintendo has another console in the works to stay current with the competition. I do fear however that if Nintendo doesn’t find it’s footing in this coming generation, they really could be forced in a position where it only make sense for them to get out the race. Sometimes, that’s the only way to stay in play. Just look at Sega.


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Microsoft: Your DRM Policy Wasn’t Entirely ‘Bad’


The media frenzy with Microsoft and the Xbox One continues. In a surprising turnabout, Microsoft has decided to reverse their Xbox One DRM policy. It turns out that vocal minority of whiny gamers wasn’t so minor after all. However, the cynic in me believes that pre-order numbers must’ve dropped at such an unbelievable rate that Microsoft felt compelled to respond in order to stay competitive against Sony’s PS4. But quite frankly, this was NOT the right move to make.

There’s no doubt Microsoft needed to respond to Sony after E3. But conceding on what was essentially the linchpin to their long term strategy was too reactionary. In some ways it reflects a lack of confidence they may have had in their original plan. If Microsoft was truly dedicated to moving gaming into a new digital age that benefited everyone, then they should have stuck to their guns despite the mountain of bad press. Instead, Microsoft backslides into the safer, short term bet of retaining their current customer base instead of betting the farm on the longer term rewards and learnings. All of this just smacks of weakness.

If anything, I was assuming if Microsoft scaled back on the mandatory functionality of the Kinect 2; if not stripping it out completely to cut back the price. This would have easily made it more competitive with the PS4. To date, I have yet to find any information on why the Kinect 2 is critical to gaming on the Xbox One. If any of you do, please share it with me. Removing the Kinect 2 would’ve been a more sensible strategy given the reservations many still have about it.  But this was a head-scratcher from day one. If they were going to make the Kinect 2 mandatory, why not just build into the system in the first place? This most likely would have greatly increased the manufacturing costs. But that’s a cost Microsoft can eat. And it would have easily justified the $500 price point. However, Microsoft is set and locked with Kinect 2 still being mandatory despite removing DRM.

The real culprit throughout this whole Xbox One debacle can be boiled down to one issue: Microsoft’s Ineffective Communication!

From day one, information from Microsoft has been a whirlwind of conflicting sources and vague half-truths. The message about Xbox One has failed to be consistent. Not only that, they’ve failed to really be entirely forthcoming about how the new DRM policy would help benefit consumers and studios.  Admittedly, there are sources outlining some of these details, but not many that clearly painted a picture of the how it translated to users in a practical manner. It wasn’t until I found this obscure article referencing an Xbox One engineer that the whole DRM really made sense. But when the head of Xbox is making flippant comments about disadvantaged consumers combined with everything else, how do you expect consumers to react? And lets face it, they knew enforcing DRM was never going to be a popular decision. But they should have done a hell of a much better job helping consumers embrace the changes and conveying the benefits that could follow.

PR 101: Don't make exaggerated comments.

PR 101: Don’t make exaggerated comments.

Losing DRM eliminates many of the planned services Microsoft had in mind such as digital access to games, family sharing, lower game price points and more. These were all great ideas building on what Steam is already doing. And honestly, it would have been worth the risk. But Steam also has an OFFLINE mode.  Why couldn’t Microsoft offer a similar option for Xbox One? They could have avoided a mountain of resistance around the required internet connection and the 24 hour check.

Seriously? What an empathetic and tactful message.

Seriously? What an empathetic and tactful message.

Many outlets view the reversal as a major win for consumers. And in some ways, it is (despite my cynical inference). But there’s no denying, games are transitioning more to the digital space. And Microsoft tried to embrace that change. Whether or not it was the ‘right‘ approach is neither here or there. The true winner here is Gamestop and other used retail outlets, not consumers. But this still put smaller studios in more danger of layoffs and closures as game production continue to increase. But as I mentioned in previous posts, the ballooning cost of game development really needs to be re-evaluated.  But more importantly, publishers and developers need to crack down on Gamestop and other used retailers for lost revenue. There’s no sound reasons publishers and studios should not be getting a cut from used games sales. That dynamic should have been resolved by now. There is a solution in that relationship, and it’s not by passing the cost down to the consumer.

The DRM reversal also raises a few new questions such as: what does this mean for indie developers? Will the XBLIA space operate under the same manner or is it it still closed off? What does this mean for digital downloads, especially new titles? What about cloud gaming? Sony is already ahead of the curve in this regard. For quite a while, the Ps3 has been offering day one digital downloads for new titles. Sony is poised to stab the knife further into Micosoft’s back if they can offer day one downloads at discounted prices, say $49. And if the rumors of cloud gaming for PS3 titles on the ps4 is true, Microsoft has a lot of catching up to do.

Sadly, even with DRM removed, the Xbox One just doesn’t come off as a more appealing option over the PS4. Bottom line: Microsoft still has a more expensive console with minor issues lingering around Kinect 2. It would have been really interesting to see what Microsoft had in the works and how it played out. One thing is for certain: this console war just got a whole lot more boring. Now we have two similar systems that weren’t event that revolutionary to begin with. Congratulations gamers, your voices (and complaints) were heard loud and clear.  Now lets see if you’ll be happy with the fallout of what’s to come.

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XBox Done!? Is Microsoft Losing Focus or Over-Reaching?


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