Nintendo Isn’t Worried About The Impending Xbox One/PS4 LaunchesBy: Zach Walton - November 5, 2013
Ever since the Wii U launched last year, there’s been some talk about whether or not Nintendo could compete with the PS4 and Xbox One once both consoles launch this month. The reasoning is that players will view the Wii U as an inferior system in comparison thanks in no small part to its current gen tech. Nintendo rejects that reasoning, however, and thinks that the Wii U can thrive in a market full of more powerful consoles, just like the Wii did.
In its quarterly Q&A session between CEO Satoru Iwata and shareholders, Iwata was asked what Nintendo’s marketing response would be in the face of the PS4 and Xbox One. In short, Nintendo is sticking to its guns:
We have an offering of software for the end of this calendar year that encourages family fun at home. Nintendo is preparing a number of Wii U games for next year that greatly appeal to highly skilled users, but at the end of this calendar year, we have quite a few offerings that can be played by the whole family, dad and the kids, or grandparents and the kids. Other companies will launch new consoles (in the overseas markets at the end of this year), but I think they focus on targeting highly skilled users. Therefore, in that sense, though the competition will heat up because new game consoles will come out and there will be a “war of the game consoles” played out in media articles, we wonder if the target user will actually be the same.
Iwata then points to a number of titles launching on the Wii U this year, like Super Mario 3D World and Wii Sports Club, as titles that will expand the Wii U’s appeal. He’s confident that these titles and more will draw consumers to Nintendo’s hardware, but says that the launch of the PS4 and Xbox One will do the same:
Thus, in the sense that we attract consumers interested in this category of video games, I think the launch of other video game systems is also good for us because they energize the video game industry as a whole. Though there are some who take the view that intensified competition means overseas competition will be tough for Nintendo, no matter how Nintendo does domestically, I do not necessarily see it that way. This year, what Nintendo is promoting is, conversely, to stand out in the game industry for individuality. I believe we have become a unique value.
What about smartphones and tablets though? Does Nintendo view their meteoric growth as a threat to its business? Well, it’s a little bit of yes and no:
On the other hand, I believe that the era has ended when people play all kinds of games only on dedicated gaming systems. For example, I think it is natural that many people feel that it is more convenient to use smart devices, as opposed to dedicated gaming systems, to play games to kill a bit of time. That is to say, there are some areas in which dedicated gaming systems were once used that now have greater potential on smart devices. On the other hand, dedicated gaming systems are developed by considering the software that is designed to run on the hardware, enabling us to make unique propositions. With that in mind, my view is that the gaming market will be segregated to a fair degree. However, this does not mean that smart devices will simply compete with dedicated gaming systems. Given their growth, I feel that we should make an effort to take advantage of their existence.
As for third party support, Iwata recognizes that the Wii U and 3DS are mostly machines that you buy to play Nintendo software. That being said, he would like to increased third-party support, but not through the usual platform holder strategy of offering money or exclusive deals:
In terms of how we view our relationship with third-party publishers, I think it is natural that there is a difference between publishers who have the software development resources like Nintendo’s to build a software lineup of their own and publishers who do not. Since former President Yamauchi passed away, I have been considering what he taught us in the end, and his words that the worst thing we can do in entertainment is to follow what others are doing spoke directly to my heart. Following and imitating others is the kind of reasoning that Nintendo tries to avoid the most, and while we certainly do not have a negative attitude toward strengthening our ties with third-party publishers, employing the same methodology as the other manufacturers would only lead to the most simplistic competitive approaches, such as price wars or money-giving that would never end. We would like to take a unique approach of our own and build sustainable relationships with our third-party publishers.
The rest of the Q&A session deals directly with shareholder value, expansion into emerging markets and the viability of special promotions in the Japanese market. In other words, stuff that wouldn’t interest the majority of Western gamers. If you do find that fascinating, you can read the whole Q&A session here.[Image: Nintendo/YouTube]