Tag Archives: Wii

And the Alarm Went “Wii U, Wii U, Wii U…”

There have some been some criticisms surrounding the new Nintendo console, the Wii U. I’ve seen complaints that they focused too much on the new controller, and glossed over the new console itself (seems valid, and something Nintendo has admitted to dropping the ball on). There are also other complaints that seem less valid, and a remarkable amount of press attention to Nintendo’s stock price dropping 10% after the announcement. The reactions to it seem fairly down the middle, with the dividing line basically coming down to those that got a chance to demo a unit in person thinking it’s an interesting device, and those that didn’t get to demo the unit thinking Nintendo has completely dropped the ball.

A New Console, Now?

You can find what specs have been published for the device from Nintendo’s website, so I won’t bother rehashing it here. The quick summary: beefed up processor, beefed up graphics capabilities, full HD support, all around decent specs for a modern console. It’s not a mindblowing leap forward, but that is not, and has not been the point. The point is that the cost of having the higher end graphics is finally low enough that they don’t have to sacrifice their target pricing model in order to compete graphically with the other consoles. So basically, they let their competitors take a significant loss on every console in order to support HD, and then once the technology had matured, caught up while having made a profit the whole time.

It makes sense that they’d put out the Wii U now. Look at their past development cycles:

  • NES – 1983 (Japan), 1985 (US)
  • SNES – 1990 (Japan), 1991 (US)
  • Nintendo 64 – 1996
  • GameCube – 2001
  • Wii – 2006
  • Wii U – 2012

It doesn’t take a rocket scientist to see the trend here: Nintendo puts out a new console every 5-6 years. By contrast, we’ve heard nothing concrete out of Microsoft or Sony for a new console (and if so, it’s unclear what they would be adding), with as recently as a few months ago, Sony claiming the PS3 would have a 10 year product lifespan (it sound like they are no longer saying this, instead claiming somewhere between 8 and 10 years), meaning we can’t really expect a new console from either other major console company until at least 2013, more realistically 2014-2016. This all puts Nintendo in a great position by putting a new console out now.

What about their existing user base?

Wii U is backwards compatible with the Wii, so it becomes a no-brainer for consumers to upgrade. Easy migration plus a HUGE existing install base (86 million units, versus Microsoft’s 55 million and Sony’s 50 million). So, again, why not put out a new console now? Getting out of sync with the other console maker’s schedule is a good thing: less competition for consumer dollars, and games currently in development can ostensibly add support or the new console fairly easily (known architecture, and comparable specs to other consoles).

The Stock Drop is Irrelevant

Full disclosure: I do own some shares in Nintendo (a whopping 4 shares). That said: I don’t care what the stock price is. Nintendo is a dividend-bearing stock, unlike a number of other technology companies. As long as it continues to make a profit, the stock price is largely irrelevant to existing investors, unless they are the sort who feel the constant need to buy and sell shares (to which I say: go play with your IPO stock bubbles and leave long-form investment alone).

So considering the nature of Nintendo’s stock, why the hell is the gaming press making a big deal about their stock drop? It has absolutely NO relation to the quality or nature of the new product. Further, it shows a lack of historical awareness: it’s not uncommon stock prices to dip after a keynote — look at Apple. For years, even when they announced hugely successful products (that were clear to be successful from the start, no less), their stock took a marked dip immediately after.

Disruptive Technology is Called Disruptive for a Reason

It feels like a lot of the people complaining about this announcement are complaining for the sake of complaining. They don’t understand the new technology and its potential effects, or in rarer cases understand but disagree with the direction. A lot of those complaints were also levied against the original Wii as well, which then swept the market for the last 5 years, with a significantly larger install base than either competitor. Iwata’s 2006 GDC keynote discussed expanding markets and to not keep only vying for the same hardcore gaming market — this philosophy worked with the Wii, it worked with the DS, Microsoft adopted a similar stance with the Kinect to great success. Given all this, it increasingly feels like the complaints are coming from a small subset of people who are either resistant to change, or simply have a myopic view of the gaming industry and the shifting landscape of the market.

Here’s something to think about: the gaming news media is comprised of people who love games. Its why they chose that field. Don’t you think that this love of how games are now or have been, might bias their views on what could shift or change the gaming industry?