Nintendo is not dead, despite all reports. Yet, after three consecutive years of loss, it does appear that Nintendo’s leadership is finally willing to admit that all is not well in the house of Mario.
Wii U is not selling and while the DS line of handheld gaming devices continues to sell, Nintendo’s reliance on branded hardware, limited first party releases and a denial of market trends may be the three things that end its reign. When tech companies have troubles, tech journalists suggest that the biggest competition will gobble them up whole through acquisition. I have a completely different idea. One that might help it return to profitability in two years or less. Yet, it has to admit several problems before it can do it.
The Software Problem: Nintendo is a for-profit company that needs to maintain its IP, earn revenue from that IP and while it might make more money by creating more titles based on that IP, it doesn’t. My suggestion would be to create a program where Nintendo approached game studios with a proposition. Create a stellar game on any IP in the Nintendo library. Nintendo would still need to approve of the IP use but giving a license to any game developer to create the next Mario, Donkey Kong or Wario game would be welcome.
On the same idea, developing a program where Nintendo allowed up and coming (or indie) game makers to use its IP would help add new titles to the small online libraries it has. Nintendo would still maintain the distribution but these solutions would do something that Nintendo fans would embrace, a wealth of choice.
The Single Purpose Problem: The Wii can’t play DVDs. The Wii U can’t either. You can’t use the DS to Skype. Sure, you can use Netflix (finally) but adoption of Netflix on those devices can’t be high. The Wii U is a powerful device that simply does one thing – it plays a limited amount of games. Players invest in products to use in their everyday lives that have more than one purpose. The phone in your pocket plays games, plays music, plays videos, monitor stocks, watch sports scores… Nintendo needs to finally embrace its Japanese culture. A culture that is addicted to technology because its culture has helped innovate technology worldwide. Now it needs to embrace what its fans want and deliver a device that does more than just play games.
The Hardware Problem: Developing hardware is not a cheap activity and while it helps Nintendo maintain its exclusivity, it hurts distribution. While I am a big proponent of broad releases (like Sega’s post-Dreamcast strategy), Nintendo would never go for it. Yet, it would need an innovative, global partner who had the means to stay ahead of the industry, had an already established product line to use as a platform and wasn’t Sony or Samsung. While the Wii U has problems, I do think that the Wii U’s GamePad is where Nintendo’s future will head. It’s a smart way to let the less profitable Wii line lessen, move DS gamers to a new platform on a bigger screen and still maintain its exclusivity. Yet, with extremely limited power supply, the GamePad isn’t able to keep itself going very long.
The Solution: Nintendo needs a global partner who can take over its hardware development, improve its current hardware, offer security to limit piracy, products that it wants to sell, no gaming competition and access to a high-powered cloud infrastructure and distribution engine. The answer seems obvious….
Amazon. With its Kindle HD line of tablets, the company has a solid platform of tablet devices, a third generation all-digital distribution engine, global marketing and, I believe, would love to have exclusive rights to having Nintendo games on its devices. Amazon has recently been dabbling in the gaming universe but a super-exclusive deal with Nintendo would make Amazon a global player overnight and would allow Nintendo to be creative powerhouse it has always been. And, I think that with Amazon’s drive, it could develop that platform in less than two years.
That device, which might be based on parts of the Wii U GamePad design, would get games on the day they released, offer new ways for gamers to communicate, more access to potential add-ons, create an engine for MMO-like titles for games like Pokemon and might help developers come back to Nintendo.
Bash if you must but I think that Nintendo isn’t dead. And I think that a deal with Amazon gives Nintendo an unprecedented opportunity to push itself to the forefront of gaming on tablets.
Mr. Iwata, it’s time to give Amazon’s Jeff Bezos a call.