Reggie Discusses Nintendo's New Direction

A story that came out yesterday from IGN put the hardware capabilities of the Nintendo Revolution in perspective with the competition. The comments by developers seemed to confirm what was already suspected: the Revolution won't have the graphical horsepower of the PS3 and Xbox 360.

However, as if a response to that article, Nintendo of America's chief of marketing Reggie Fils-Aime gave a speech at the 33rd Annual UBS Global Media conference, addressing the strategies behind the Revolution. He reaffirmed much of what the company has already said, and elaborated on Nintendo's business for both home consoles and portables.

Stagnant, decreasing game market has a fever...

The presentation began with some statistics showing the decreasing revenues for the movie industry and a quote from the New York Times criticizing Hollywood studios for making all their movies for the same demographic. Reggie and Nintendo foresee a similar situation with the video game industry, if game companies don't start changing their thinking. He went on to illustrate how revenue for the non-mobile game market has been decreasing steadily in Japan, from nearly ¥800 million in 1997 to less than ¥500 million last year. Year-end sales figures also showed a decrease (though not a sharp one) over the past few years in the U.S.

Reggie then commented on how, even with millions more consoles sold in the U.S., market penetration has remained at about a third of all U.S. households since the 1980s. The number of U.S. teens (one of the main demographics of the game industry) is decreasing, as is their interest in gaming according to the studies presented.

...and the only thing that can cure it is more Nintendo?

Setting the backdrop for the second slide (and most of the presentation) was a Nintendo DS, with a picture overlaying it showing Microsoft and Sony going in the same direction and Nintendo veering off on a different course. To that effect, he talked about Nintendo DS as a "market disruptor." With its secondary touch screen, its microphone, and Wi-Fi capabilities there's nothing else on the market quite like it. He went on to say that Nintendogs has sold very well (950,000 units in the U.S.) and how it's managed to attract more females than most games.

Nintendo is hoping to duplicate the DS' success on the Revolution. It too is unlike its competitors with its controller and features a "virtual console," emulating Nintendo's old systems. The PowerPoint presentation ends with a series of gushing quotes from third party developers, including Sega, Square Enix, and Electronic Arts.

"We were among the first publishers to see it in action, and are looking forward to taking advantage of it..." said a quote attributed to Ubisoft.

Do gamers need (or even want) "the cure"?

When talking sheer number of hardware units sold, Nintendo has been fighting a losing battle with Microsoft and Sony this console generation. Nintendo, realizing this, had two options for the next-generation: continue along the path with its competitors and (more than likely) watch its market share dwindle, or do something drastic and different. Nintendo has obviously chosen the latter.

While the future of the next generation of consoles has slowly become clearer, the result of Nintendo's gambit is still a matter for huge debate. Perhaps Nintendo and third-parties will validate the control scheme by cooking up some great games, "non-gamers" could possibly love their unique and simpler control system, and "old-schoolers" may dig the emulation of old consoles and backwards compatibility with the GameCube. On the other hand, maybe third-parties will abandon the Revolution for more traditional platforms, "non-gamers" may not even care about the Revolution, and "core" gamers might sniff and turn at the "blocky" graphics and scoff at waving around a plastic wand as "not cool."

The next year in the video game industry should be a very interesting one, indeed.