I am a Brazilian student in Norway. I also happen to really, really like games! I'm a huge RPG fan, especially JRPGs and party-based WRPGs, but I also enjoy nearly every genre, from Mario Kart to Limbo to Bulletstorm.
Fatal Frame Series
Far Cry 3
Ninja Gaiden 2, 3
Castle of Illusion
Dungeons And Dragons Chronicles of Mystara
Legacy of Kain Pack
Natural Selection 2
Resident Evil Revelations
Silent Hill Downpour
Metal Gear Solid HD Collection
Legend of Dragoon
X-com Bureau Declassified
Final Fantasy V, VI, Tactics
Persona 2 Eternal Punishment
Dust Elysian Tail
DARK SOULS 2!!!!!
Currently playing (as of 1503/2014): Dark Souls 2, Dishonored, Dark Souls 2 and Dark Souls 2.
My 3DS code: 3995-6846-8256. For some reason it doesn't appear in the player profile.
So, Nintendo! Again! Maybe you've noticed, but it's like I've been bit by the Nintendo bug or something. After my previous blog, I wanted to follow it up the next day with a "why Nintendo will stay in the hardware business" piece, but fortunately I came to my senses and spared the community the Nintendo overdose, not to mention a blog about an extremely tired and overused topic.
And then we had the NPD November report and my puny brain couldn't resist, so here I am again. Not sure why, but I've been paying way too much attention to Nintendo lately. Heck, in the past couple weeks I've found myself checking Wii U sales news with startling regularity, which is kind of depressing and more than a little embarassing.
I mean, I just turned 30 (happy birthday me!), surely there are more important things I could be doing with my important grown-up time instead of wasting time with the stupid "console wars" like a goddamn teenager? Like, say, playing videogames! Or taking better care of my stock trades and investments so I can be a big, manly, winner-man. Or helping my wife deal with her cancer. Or treating my myriad mental issues. Or losing weight. Or properly learning the freaking local language, because it's bloody embarrassing that I've been here 3 years and I'm still not fluent! Or focusing on my studies so I don't have a horrible semester (a great one is out of the question at this point) and don't betray the trust the University put in me when they accepted me or waste the mountain of Norwegian taxpayer money that is paying for my tuition.
While we're on that note, if there are any Norwegians reading this (or one of the many, many, many foreigners who saw in Norway's 3% unemployment rate a way out of the crisis in your home country and pay taxes here), allow me to say a heartfelt thank you. You money saved my wife's life with what looks like one of the best treatments money can buy, pays tuition for both of us and provides for my psychiatric treatment. I can perfectly understand if you're not happy that you're spending so much money on outsiders, all I can say, besides thank you and I'm sorry a billion times, is that I really, really, really didn't expected we'd be such a burden when we came, and I can only hope we'll be able to give something back and contribute a tiny bit to help make your country even better.
Ah, but enough of that. That NVGR stuff wasn't supposed to find its way here, but I guess I needed to vent a bit, so I'll let it stay. But don't worry, you came here to watch a Nintendrone work his magic and then proceed to join forces with me/show me the errors of my ways, and that's exactly what you're gonna get!
Alright, let's get to it, November U.S sales are in, and the obvious conclusion is that Nintendo is doomed! Doom mongers are even managing to spin the 770k 3DS sales as "doom evidence", believe it or not, but of course the main punching bag is the Wii U. Nintendo didn't release numbers (which speaks volumes in itself) and just said that Wii U sales grew 340% over October. Word on Neogaf is the actual numbers are 220k. Which I hear is less than half Gamecube levels, and more incontrovertible evidence of DOOMED!
Except it's not. I think those Wii U numbers are actually a very good sign. If you disagree, you're welcome to it, but you're wrong. Why are you wrong? Well, because I say so, of course. What? That's not enough? You want me to back that up with "arguments", "reasoning" and "data"? Man, what a pain... ok, ok, I'm getting to it. Gee...
First, it's important to put those numbers in context. It's already established Nintendo misfired with the Wii U (or at the very least they ruined a potentially good idea with atrocious execution). The Wii U is not going to be the next Wii, it's not going to win anything. The problems are too numerous to be reversed overnight, and there's nothing Nintendo can do about it. What I mean is that, even if they are now on the right course, and it looks like they are, the bottom was too deep for them to get out of it overnight. Nintendo will do their best to make the Wii U as successful as possible while they ready its successor 3 or four years from now, but they know by know it won't be their next huge hit. Which doesn't mean it can't be successful in its own right, maybe selling 40 or 50 million units. Perhaps even more, but I'm pretty sure Nintendo is no longer shooting for the moon.
More important than the numbers themselves is that the Wii U continues on the uptrend, and that seems to happening. Sure, it can be argued that November boosts everything regardless, but a 340% is not the norm, it is a sign of more consumers showing interest in the Wii U.
Selling less than Gamecube numbers in a November isn't the death knell, the death knell would be consistently selling those numbers. Even "famed Wedbush analyst Michael Pachter" says that we only really get a clear picture of a console's long term fortunes by its third Christmas on the market. And if the Wii U continues on the uptrend, that third Christmas could well look a lot better than the second.
The Gamecube didn't sell, well, like the Gamecube because it did Gamecube numbers in one November, it sold like it did because it never went beyond those numbers throughout its lifetime. Guess who else sold Gamecube numbers for a time? The Playstation 3.
In November 2007, its second holiday on the market, the PS3 sold 466k, aka "Gamecube level". However, on November 2008, it performed... even worse, selling under 400k. That was its third holiday on the market. Can you imagine the cacophony if the Wii U sells on that same level on its third holiday, or if it sells worse than the year before? Then, at last, on its fourth November in the market, the PS3 sold over twice as much and finally, to use Sony's favorite phrase, "hit its stride".
It took 3 full years on the market for the PS3 to take off, and so far it's sold 80 million units, with several more million on the way before it retires for good. And yet, after the very first post-launch quarter, the punditry was killing off the Wii U en masse, how does that make sense? Even now, it's the same song: too little, too late. Of course, just because past products struggled for years in the market before succeeding doesn't mean history will repeat itself, but it does mean it's not impossible. You'd think people who make a living writing about the game industry would't have such short memories.
The Wii U, following a very successful launch, had a terrible start, possibly the worst ever. At one point it was selling 2500 a week in Japan and 30k a month in the U.S. That's not a hole you get out of overnight, but so far it seems to be happening, slowly but surely. Those 2500 weeks in Japan seem to be a thing of the past, and performance is improving in North America as well. There's no tracking for Europe (newsflash: UK is neither Europe nor an accurate representation of the European market), which is where the Wii U has its worst performance by far (and that's saying something!), so we can't tell yet how things are faring over here, but retailer rumblings and Amazon Charts in places like France and Germany point suggest things are also improving over here.
This holiday season has been painted as "do or die" for the Wii U (never mind that the PS3 was closer to the "die" than to the "do" part for 3 holidays, but I suppose a different logic applies to Nintendo), and that is true, to a degree, in that it will be extremely important, but it won't be make or break for the Wii U. Make or break will be the following year, when we can see how the Wii U is doing relative to the disastrous months of 2013. If a further price cut plus Mario Kart, which is far bigger than 3D Mario or Smash, doesn't push it above current levels, then yes, we can start its funeral, but I truly don't understand why so people are so impatient to see the Wii U and Nintendo fail. As Rob Fahey put it in this Gamesindustry.biz opinion piece, It's terribly sad, I think, that people who describe themselves as gamers or who work within or around the games business would take such pleasure in imagining the downfall of a company whose products are so squarely focused on the experience and joy of games - even to the extent where they will distort reality and wilfully forget history in order to "prove" the accuracy of their claims. Nintendo and its consoles aren't in the dominant position they enjoyed a few years ago, but they've been here before and they aren't going anywhere; why that fact seems to distress some people so much, I will never quite understand.
Another thing I don't quite understand is why my blogs always end up so much bigger than I originally expected :( I also intended to tackle the 3DS in this amazing editorial, but for the sake of sanity I'd better end it here. Maybe I'll come back later with the Nintendo Defense Force 3DS edition. Or Maybe not. If I don't, please try not to be too depressed.
Ah, the joys of the console wars!
Now, fellow console warriors and morbidly curious passers-by, it's your turn. Will you join me in defending honor, freedom and all that is right and just in the world? Oh, and Nintendo too? Or will you join the dark side and oppose me? Fire your shots in the comments!
My relationship with Nintendo is a curious one. Like most children of the 90s, Nintendo had an inordinate influence on my life and the industry, and those memories continue to shape us to a degree long after Nintendo stopped almost literally owning the game market. It is no coincidence that industry types from all corners can't stop talking about Nintendo, whether it's to praise or to criticize: Nintendo may no longer own the market, but its influence on gamers, developers, executives and game critics alike, one way or the other, far exceeds what its market share would suggest.
It's funny, I've always been a self-identified Nintendo fan, and considered Nintendo to be a big, important part of my gaming life that I couldn't do without, until one day it suddenly hit me that, for several years now, the vast majority of my gaming time was spent outside the Nintendoverse. Which makes it all the more ironic that it was the Wii U of all things that brought Nintendo back to my life in a big way. I started once again following industry trends more closely, watching Wii U sales, you know, the kind of time wasting only enthusiasts do. Oh, and I may also have played a lot of Wii U this year. Not that it matters, because talking about it is way more fun! And since everyone is an analyst on the internet, I'm going to impart my wisdom with you lovely people and reveal what all that Nintendoeing told me about their next generation plans. You're welcome!
Yes, there will be more Nintendo hardware.
Make no mistake, the Wii U won't drive Nintendo out of the home console market (much to the delight of pundits and analysts. Imagine if Nintendo actually did that and they suddenly lost one of the most effective clickbaits in the gaming world!) regardless of how well it does. Nintendo is simply too long-term oriented for that, and you can bet they were already planning its successor before it even launched. Over the past years, Nintendo hired 1000 extra employees (meant to prevent precisely the sort of problems the Wii U faced. It was too late for the Wii U, but hopefully it will pay off next time) and opened a brand new 30-billion yen facility to better integrate handheld and home console development, and this isn't company known for freaking out and changing everything over a single flop.
There will still be two of them
Why isn't the Wii U portable? Is there even a reason to distinguish consoles between home console and potable in this day and age? Surely the next Nintendo hardware will ditch this ancient divide, possibly a Gamepad-like tablet that is the console itself, right? Wrong.
I get that the future is exciting and we want new and exciting things. I get that consumers and pundits want what they want, and "making business sense" isn't exactly their number one concern, but I'd bet the farm Nintendo has a new handheld and a new home console in the works. There are several reasons for this, but I'll stick with just two big ones: for one, it's risk management. If they release only a single consoles and it's a disaster, they have nothing to fall back on, having two products lessens that risk. The other reason is the same reason laptops never made desktops obsolete: cost. The idea that it's "pointless" to have a home console AND a portable console in "this day and age" reminds me a bit of the excitement of the early days of the internet, when it was supposed to make geography and the old economy irrelevant. As exciting as it would have been, it didn't happen, just as the tablet revolution didn't rewrite basic economic rules.
Keeping costs low and focusing on the games themselves will once again take center stage
I've argued before that keeping prices as low as possible were always a priority for Nintendo, until the DS and Wii taught them the wrong lessonsgave them confidence to go for higher-end products. It didn't work, and next time keeping the price low will take precedence over expensive features like 3D and the Gamepad.
By the same token, the focus will be back on the games, not on cost-adding "unique features" or "new ways to play" like the 3D and the Gamepad. 3D never sold the 3DS, a price cut and an onslaught of big games did. Likewise, if the Wii U turns around, it won't be because of the Gamepad, it will be due to games like Mario 3D World, Mario Kart, and Smash Bros, which largely limit Gamepad integration to off-tv play.
That's not to say Nintendo isn't trying to come up with another Wii. If they can, all the better, but they won't sacrifice affordability, and they won't expect the "gimmick" to carry the system on its own.
The second screen isn't going anywhere, but the Gamepad is
Nintendo is possibly the most stubborn and proudest (as in the capital sin) company in the business. They seem to really, really hate using something they didn't create first, to the point of settling for something worse just to be different (I'm looking at you, Gamecube Controller). I strongly suspect that is the main reason Nintendo so far wants nothing to do with achievements.
Which brings us back to the second screen. By now it's well established the Gamepad costs too much and didn't resonate as expected, so it's a safe bet it isn't coming back. It's possible the Wii U Gamepad will be compatible with their next console, but that's it.
That's not to say Nintendo will give up on the second screen. The success of their handheld business mean a PS4/Vita style combo could be significantly more successful than, well, a PS4/Vita combo, and that's the direction I suspect Nintendo is going. I just hope their pride doesn't get in the way!
Backwards compatibility will die for good
Backwards compatibility is pretty neat, and as far as the internet goes, everybody loves it. I played Gamecube games on my Wii and Wii games on my Wii U (they're from different regions, thanks Nintendo...), and it's a big deal that I don't need to rebuy all those Wiimotes again. Unfortunately, it's just not a deciding factor for the vast majority of consumers, as the successful launches of the Ps4/Xbone demonstrate. I will be the first to admit I wouldn't have boycotted the Wii or Wii U over it. As such, it won't be a priority for Nintendo. Their next console will likely follow in the footsteps of Sony and Microsoft and significantly change its architecture, hopefully making it more developer-friendly, and goodbye backwards compatibility.
Hello there! Have you heard of Brazil? It's country in South America populated by green mutants, wild savages and sadistic warlords. At least that's what videogames tell me. But all is not lost: we also have games and game consoles, including the all-new Playstation 4, which, for the first time ever, was launched there alongside the rest of the world.
You may also have heard that the Playstation 4 retails in Brazil for an incredible R$4000, or $1800. Not exactly a mass market friendly price, but even so, cynical people, myself included, reacted with a "oh well, at least a dozen very rich people will get one, and maybe another 20 not so rich people will also get one just to keep up and show it off". As it turns out, us cynics were wrong. So far, if reports are accurate, there are a grand total of ZERO PS4s officially sold in Brazil!
Some of you, lacking the gift of foresight that I posses, may be thinking this is a disaster, but you'd be wrong. Sony is thinking long term. Just think about all the bragging they did about selling 1 million consoles in 24 hours and breaking records left and right. Now consider that, by the time the Playstation 5 rolls around, odds are Sony will have found a way to sell at least one Playstation 5 in Brazil. Can you imagine the amazing headlines? You think those "Wii U sales spike by 1500%" headlines are kind of okay? Well, Sony will be able to claim that, in Brazil, the PS5 sold infinite percentage points more than its predecessor at launch! Actually, as far as math goes, that's not even a thing, so they will have to come up with a whole new mathematical concept to describe it. It will be on the Guinness book of world records. Excitement will be so great, that PS5 unit will single-handedly save Sony! All goes according to plan... maybe.
Seriously though, this is all kinds of depressing. Of course this doesn't mean there isn't a single Playstation 4 in Brazil. There are imports, there are friends going to Disneyland, and there's the black market, but that's doesn't make it any less depressing. I don't think North Americans and Europeans can fully appreciate just what R$4000 means, and that $1800 conversion doesn't do it justice. Not by a long shot.
Straight currency conversions are an extremely poor way of comparing prices across countries. If the Brazilian Real gains 15% on the U.S dollar in a month, our GNP in $ suddenly became 15% bigger, and a PS4 proportionately cheaper when converted to greenbacks, but that's meaningless in the real world. Brazilians didn't become any richer and prices didn't get any cheaper.
A better, if still flawed, way of comparing prices is using PPP, or purchase Parity Power. I couldn't find anywhere that conclusively stated how much a Brazilian Real is worth in U.S dollars in PPP, but I'd say that $1800 is really closer to $3000. Can you imagine? $3000 on a game console? $150 on a game? Man!
To be fair, there's not a whole lot Sony can do in this particular case to bring prices down too much, (although if you look at the graph they released breaking down the insane price, you'll notice retailer and distributor margin accounts for 22%. In the U.S, it's reportedly under 5%, and can be as low as 3%) but it's worth noting the blame isn't entirely at the government's feet. Brazilians have grown accustomed to paying (much) higher prices for everything, and companies are not shy about taking advantage of that. For instance, cars. We have (surprise!) the most expensive cars in the world, and while manufactures are forever whining about taxes and the "Brazil cost" (justifiably so, to a certain degree), it just so happens that the profit margin of the average car in Brazil is three times higher than elsewhere. You can't blame taxes or government for that.
It's such a shame our government doesn't see (or doesn't care) the massive losses its tax policies inflict on our economy. In the United States, the games industry creates tens of thousands, possibly hundreds of thousands of direct and indirect jobs and generates tens of billions in revenue. We are now at a point where, were prices similar to what they are abroad, we'd have tens of millions of consumers ready and willing to spend money on games, consoles, accessories, you name it. Our government fears losing tax revenue if they lowered the taxes, but odds are it would result in a massive increase. As the PS4 shows, hard to lose what you don't have in the first place.
Have you heard about something called a "smartphone"? Yes? What about tablets? You have? How nice! Maybe you even play games on them! You do? Well, congratulations, good sir/madam, you are killing hardcore games, you filthy traitor!
Or are you (killing hardcore games, I mean)? Smartphones and tablets are the new cool kids in the block, and everyone loves them. I've never seen a product so thoroughly capture the imaginations of so many so quickly, at least not in my lifetime, and I don't mean anything snarky by that. Smartphones and tablets didn't resonate with me nearly as much for some reason, but there's something about them that just fires up our brains, sometimes to a fetishistic degree, and maybe one day psychology and neuroscience will explain what.
When people talk about smartphones/tablets, I'm often reminded of "Extraordinary Delusions and the Madness of Crowds", an 1841 book that recounts the tulip bubble in the Netherlands, which reportedly got so crazy people were selling land to buy a goddamn flower. While it's since been claimed and possibly even proven that the author sensationalized his account, the lesson stands.
If you visit game business sites like gamesindustry.biz and gamasutra.com, you will come across the most amazing statements by industry professionals, pundits and market analysts alike. The smartphone is the most important product ever created (not, electricity, the wheel, a way to control fire, the internet, no sir, the smartphone!). Everything in today's market is irrelevant. Touch controls are superior because you touch the screen and interact directly with the game. The tablet is such an incredible invention, it's just you interacting with that beautiful screen and you can touch it all over and use it for anything. That's a fetish if I've ever heard one, and I actually read a quote similar to that on Gamasutra (the exact words escape me). The euphoria is such that successful people routinely compare console sales with the billions-strong smartphone "install base", and they do it with a straight face! Recently, while everyone was gushing about the PS4 launch, IGN helpfully reminded us that "outside of consoles, the comparisons are decidedly less flattering", and pointed out that Apple sold 9 million smartphones "in a weekend a couple months ago". Do you know what else plays games since the 80s and is also owned by billions of people? Personal computers. Do you remember ever hearing anyone comparing console sales to computer sales? I don't.
But it's not just wanton enthusiasm, they have hard data to prove that console games are on the way out. Retail games have declined year after year after the iPhone was introduced, and last I heard the U.S game retail was far from its 2008 peak and back to 2006 levels. Gamers are clearly buying less games, and most publishers have drastically cut down the number of games they release per year. Xbox Live is now more used for Netflix and other media than for games, another sign interest in console games is waning, and Microsoft apparently took this bit of data so seriously, they decided to focus almost entirely on people who don't play games with their next console. Next-Generation consoles won't just compete with one another, they will compete with everything that take player's time, like mobiles, spotify, HBO, etc. New research suggests that core gamers spend more time with their tablets and phones than with their consoles. On top of that, as is often pointed out, there's so much more money to be made on mobile, why would anyone stick to console games?
All of the above data is seemingly damning, and clearly proves that console games are dying. Or does it?
Interpreting data can be a bit like picking a jury, you can choose the one that best suits your needs and there's a good deal of confirmation bias involved, and it baffles me that apparently nobody asks some obvious questions. Let's start with the decline of what we now call AAA console games. I've personally never understood how anyone could argue that such games are dying when the blockbusters sell far, far more than they ever did, but overall industry sales are what matter to a market analyst, so let's run with that. It is true that console gamers are buying less games, but is that really because mobile is luring gamers away or because people are losing interest in console gaming? Perhaps it has something to do with online multiplayer and DLC. Before consoles went online, we bought a game, played it until we got tired of it, then bought another. Now, we can spend months or even years playing the same game. Not only that, but publishers do their best to get us to keep spending on DLC for months, money that could have gone to a new game. So while overall sales are lower, that doesn't mean it's because gamers are losing interest.
Xbox Live is now used more for Netflix than for gaming, and I've lost count of how many times that was linked to the death of consoles and the rise of mobile. But is that really all that new, and does it really change things all that much?
Do you remember a time before the Internet, before corporations had the capability to track everything you do with their products (and if Microsoft had their way, everything you do, period)? Odds are you had a TV and a DVD player. Maybe you and your family watched a lot of TV, maybe you rented lots of movies. Maybe you and your family even spent more time watching movies and TV than you alone did gaming! Now, we have Internet, we have Netflix and odds are your house only has one Xbox. Now, instead of renting DVDs and watching whatever crap was on TV because there was no option, your family can enjoy the wonders of Netflix. And maybe, just maybe, your family and youself don't really spend a lot more time with Netflix than you did with DVDs and TV, back when, you know, nobody had any idea how long you spent doing what. Maybe your Xbox is being used for Netflix more than for gaming not because you lost interest in games, but because you're the only gamer in the house but your entire family watches TV shows and movies, and they often use Netflix to do it.
It is true that we now have more entertainment options and games have to fight harder for our time, but hasn't HBO always existed? Didn't you have a ton of music in your iPod since forever? I don't disagree with the belief that consoles, more than ever, now compete with other entertainment choices and not just competing console, but when I hear HBO thrown into the mix, I can't help but think the herd behavior is getting a little too wild.
Core gamers are spending as much time with their tablets/smartphones according to some survey, which proves there's no way $60 dollar AAA games can compete with free mobile games...right? Maybe. Or maybe it's just because people don't usually spend most of the day at home. They spend the day at work or at school. But they aren't busy every minute of the day. They commute, they have lunch break, class breaks, etc. 10 minutes here, 20 minutes there. Maybe you have an hour-long commute. Those minutes add up. And what do you do to pass that time? Maybe you take out your tablet and play games on it! And since you're a responsible grown-up (you ARE a responsible grown-up, right?) that takes care of your responsibilities, that doesn't leave a whole lot of time for long game sessions during the week. Such was the case before smartphones, and after smartphones... that's still the case, only now you have a device with you at all times that you can play games on. But who knows, maybe it's not because you lost interest in console games or decided not to spend money on them since your smartphone has free games. Maybe, just maybe, you sometimes daydream of getting out of the office as soon as possible, not because you can't wait to play Angry Birds uninterrupted, but because you're dying to know what happens next in the new Mass Effect.
Finally, my favorite: "why would anyone make console games if mobile is where the money is"? When I hear an analyst say that, I silently give him/her (come to think of it, it's always a he) credit for choosing the right profession. Being paid to advise clueless people about business is harmless (to the businesses they talk about, not so much for the clueless people they advise), but god forbid they actually had to make business decisions and live with the consequences.
Why would anyone make console games, then? Well, say you have to choose between two markets. The mobile market is worth $100 billion, and console market a paltry $5 billion. Unfortunately, there are hundreds of thousands of companies spilling blood for a sliver of those billions, almost none of which will ever make serious money, because most of it goes to a couple of big, entrenched players who dominate most of the market and make things very difficult for new comers. But wait, it turns out everyone serving that $5 billion market suddenly left for the greener (or so they hope) pastures of the $100 billion market, and now there are $5 billion dying to be spent on something, if only SOMEONE would give them something to be spent on. Mobile may be where the money is, but are you sure it's where YOUR money is?
The numbers above are completely made up to make a point, and the example is obviously an exaggerated caricature, but you get the point.
So did I just prove I'm right, everyone's wrong and nothing's really changed? Hardly. As an enthusiastic core gamer who doesn't get anything out of mobile games and is uncomfortable with the creeping of F2P mechanics into $60 gamers, among other things, I have my own confirmation bias. And I am absolutely not suggesting times have not changed, or that mobile doesn't affect consoles and handhelds. Times have changed, and mobile can't be ignored. Sticking your head in the sand and pretending it's still 1999 is as dangerous as blindly following the herd, if not more so. And my interpretation of the data is likely not terribly accurate either. As in most cases, the truth is probably somewhere in between. Maybe some console owners did lose interest on new consoles following mobile, maybe some former core game cash is now going to social games, but at the same time, maybe not every gamer spending more time with tablets than consoles is doing so because they prefer tablet games. Maybe someone who was never an enthusiastic gamer was talked by his friends into buying a Playstation, but won't buy a new one because he's now perfectly happy playing Minecraft. Maybe mobile and free games are challenging but not killing consoles and traditional games. Maybe Xbox Live being used for Netflix more often than games doesn't mean people are losing interest in console games. I know this may sound crazy, but maybe, just maybe it doesn't even mean people want to rush out and buy a $500 Netflix player! Wouldn't it be nice if at least someone was asking these questions?
So if mobile isn't killing it, why is the industry shrinking, and why do we hear about layoffs so often now? Like I said before, mobiles, F2P, etc are indeed a factor, but I believe the main reason the industry is struggling is much more basic: it got too damn big, and inevitably the market needs to adjust. It's as if the wild success of the likes of the Wii, DS, Angry birds, Call of Duty and social Games made everyone lose perspective and the industry got carried away in its own hype.
"Everyone is a gamer" is something we hear all the time now, and its ubiquity is only matched by its pointlessness. Everyone is not a gamer, and will never be. The Wii and DS first took games to the masses, and then the iPhone sealed the deal, and then somehow industry people got into their heads that people playing Angry Birds and Metal Gear Solid are one happy family of gamers! Where the hell did that come from?
As I've argued before, core games are niche, and will always be. Every single one, even behemoths life GTA and Call of Duty. Sure, GTA is a sizable niche, and core games have become big enough that arrow-in-the-knee jokes traveled all the way to an NCIS episode, but the numbers of people who actually play or even know of them? A tiny portion of the population. TV, music, movies? Now, those are really mainstream. Smartphones are getting there, but their market penetration is still very limited outside the rich world. But, say, TV? Notwithstanding people in places like Somalia, which makes a poor Brazilian neighborhood look like a five star hotel, and perhaps those living under Orwellian dictatorships like North Corea, I'd wager almost one 100% of people watch TV in one form or another, most own or have access to one, and all of them definitely know what a TV is. Drive through a Brazilian favela, and will notice people may lack food, or basic sanitation, but they don't lack TVs and cellphones. Years ago, when working in my father's restaurant, I remember talking to an excited minimum-wage employee who had just bought a new $100 cellphone that he was paying in ten installments.
Next to truly mainstream entertainment options like TV, movies, music (you know, these other entertainment options new console will suddenly compete against but somehow current and previous consoles never did) or even a mobile mega-hit like Angry Birds, GTA V looks like a tiny niche. And the vast majority of core games, even successful games, have only a small fraction of GTA's popularity.
But now that "everyone is a gamer", that distinction seems to be lost on too many industry types. Not only sales expectations are totally out of whack, but even though major publishers significantly scaled back the number of games they publish to focus on a few core franchises, we're still swamped by a flood of games every month. Add to that the proliferation of digital and indie games, Humble Bundles (which even includes huge AAA games now from time to time), Steam, etc, etc, etc, and we there are simply too many games. Something's gotta give, especially when you're selling a $50 million production that must sell 5 million in two weeks but your audience is distracted by hundreds of other games yelling for attention.
Take me for instance. I'm as enthusiastic as they come, and while RPGs are my favorite genre, I like damn near everything besides sports games, racing games and puzzle stuff like Tetris. Take a look at my backlog, listed to the right. There are over 30 names. Since there are now so many games that interest me, I've started to write them down to keep track of them. That list has 181 titles in it, and I haven't updated it in months. It also doesn't include the PS2 and Gamecube games I intend to emulate eventually (some of which I already did ) or the many DS games in my R4 card (a remnant of my days as a gamer in Brazil, please don't hate me).
Because of that, and because of the industry's now all but standard practices of drastically discounting prices shortly after release, I bought a grand total of one new release this year, unless you count the games I bought alongside my Wii U, and even those were several months old by the time I got them. That new release was New Super Luigi U, and if Nintendo wasn't notorious for keeping the standard MSRP for years, I'd probably wouldn't have bought it. It's not that I'm struggling to restrain myself while I wait for a good deal for that new game I'm excited about, but there are simply many other older games that excite me just as much, many of which I already own, so waiting until I cam get Bioshock Infinite for $10 is hardly a sacrifice. I'm not even sure "waiting" is a proper term in this case. How can the industry not shrink if supply far outstrips demand?
That's a far cry from the 90s and early 2000s. Back then, even though my tastes were just as broad, relatively few games cough my attention, I could actually get even less, and I'd often spend months with the same game. The market was definitely not saturated.
Of course, some caveats apply. I'm not equally interested in all those games and I surely won't play them all. Some I'm just mildly curious and mean to maybe check out someday. I'm also probably not representative of the average market, but even if you're not as into gaming as I am and have much more specific tastes, odds are you're still swamped by options. Everyone has a backlog now.
Pundits and analysts often make a big deal that the industry has fallen far from its 2008 heights, and often tie it to mobile or whatever horse the writer has a stake in, while I see it as an inevitable, and welcome, market correction. If people weren't so enthralled by the "everybody is a gamer" mindset, perhaps they wouldn't be freaking out and shouting DOOOMED so much.
All that said, there is no doubt the past years did bring many changes, and change is scary. Even though mobile fanatics and cynical developers resort to that when they can't answer our questions, it doesn't make it any less true. I'll be the first to admit I'm uncomfortable with some trends, but at the end of the day, I believe the market will sort itself out. The mobile market maybe be hundreds of times bigger and sexier, but as long as there's a market for the niche games we like, someone will make them.
Yes, change is scary. But if that's the best you can do when someone questions those changes, they are probably not very good.
Edit: holy shit, this ended up much bigger than I expected!
If you've never seen me around, you're probably thinking "dude, are you high? The 3DS is the best-selling platform everywhere", and if you did see me around, then you might be wondering, besides what drug I'm on, "wait, aren't you a Nintendo fanboy and Wii U enthusiast"?
Ok, first of all, I'm not a fanboy and I'll thank you for not calling me that awful, awful insult. The word "boy" implies a child, and I'm not a child. I'm a very sophisticated adult, so I can't be a fanboy. I'm a "passionate Nintendo connoisseur". And I don't play videogames because they are toys and I'm too mature for that, I "experience interactive entertainment"!
Now that we got that out of the way, on to the topic at hand. What I mean by the title is that both the 3DS and Wii U are anomalies by Nintendo standards, spawned by the confidence gained from the unbelievable success of their predecessors, anomalies Nintendo won't repeat.
How are they "anomalies"? The 3DS is now very successful, and Nintendo consoles sold poorly in the past, but I'm not referring to units sold. To understand what's different about the 3DS and Wii U from what Nintendo has always done, a history lesson is in order.
If you look at pretty much every single Nintendo hardware ever release, there are two crucial similarities between all of them that have been staples of Nintendo's strategy since forever: one, maintaining a low(er) price point takes precedence over incorporating the latest and greatest technology or premium/multimedia features, at least next to the competition, and two, profitable hardware. Granted, adjusted for inflation, $199 in 1985 or 1990 equals LOL ARE YOU FUCKING KIDDING ME in 2013 dollars, but times were different. Technology was way more expensive back then and those were standard market prices at the time. For reference, the Atari 2600 launched in 1977 at $200.
When Nintendo finally had some really big competition, starting with the 32-bit era, they doubled down on keeping prices as low as possible. The Gamecube and N64 both launched at $199 next to their $299 competitors, and the Wii needs no explanation.
Nintendo's business was always solid: make money on hardware, make money on games, make money on royalties. Which is the same basic business strategy used everywhere since the dawn of time: sell shit for more than it costs to make.
But wait, didn't the Gamecube fail? And aren't consoles typically sold at a loss? Well, not quite. The Gamecube failed in the sense that it only sold 20 million units and obviously Nintendo wanted to sell way more, but it was always a successful business. Far more successful, in fact, than the Xbox business ever was. And consoles weren't always sold at a loss. Sony introduced the business model of subsidizing hardware (i.e selling at a loss) with the Playstation, and Microsoft copied it with the Xbox, but before that, consoles were sold for profit like everything else, and Nintendo wisely stuck to the old model.
However, the wild success of the DS and Wii gave Nintendo the confidence to abandon those two staples of its hardware business. Its difficult to remember now, but waaaay back when Nintendo introduced the DS, Iwata (or maybe Miyamoto), humbled by the Gamecube, said they'd be happy if they got 10% of gamers interested in it. When the Wii came, they were similarly cautious.
The post-DS/Wii Nintendo apparently wasn't nearly as cautious, and when the successor to the DS came around, it cost nearly twice as much as the DS did at launch. Nintendo no doubt bet that the 3D and the DS brand would be enough to get customers to open their wallets.
Same with the Wii U. Thanks to the Gamepad, they priced it at $350, and for the first time ever, launched a console at a loss even at that steep price. Sure, they sold the 3DS at a loss for a time after the price cut, but that was in response to weak demand. The Wii U was, from the beginning, meant to be sold at a loss.
People often say that Nintendo doesn't care about third-parties or even doesn't want them, but that couldn't be farther from the truth. It is true that, unlike Sony and Microsoft's consoles, Nintendo doesn't NEED third-parties to survive, but that doesn't mean they aren't important to Nintendo's business.
One of the most baffling videogame myths, one that endures even among hardcore Destructoid readers, is that nobody bought any Wii games. In fact, the Wii has an attach rate of over 8 games per system, a very good number, many of those games sold by third parties. But, but, but, the Wii had no Assassin's Creed, no Bioshock, and surely nobody bought Call of Duty on it?
The thing is, even before smartphones, games were already bigger than just those hardcore games. Remember EA? The one that doesn't release any games for the Wii U, and Chris Carter somehow assumes that not selling games you don't have is proof you shouldn't have those games in the first place? Well, back in the Wii/DS heyday, they were selling nearly $1 billion a year on Nintendo platforms. Ubisoft's Just Dance? Over 10 million sales. Those crappy minigame collections we don't even remember the name from the likes of Take-Two and Majesco? Also million sellers. And we're not even considering DS games. Which meant fat royalty checks to Nintendo.
So, back to the Wii U, Nintendo's first ever crack at subsidizing hardware out of the gate. Say Nintendo doesn't care about third-parties and expects to get by just with their own games on their own systems. Does it make any sense to sell hardware at a loss if you're not counting on royalties to make up for it? Does it make any sense to sell hardware at a loss if you're only going to sell your own games on that hardware?
It absolutely does not make sense, which tells us Nintendo fully expected the Wii U to be as successful as the Wii was, meaning they expected lots of third-party games and and lots of royalty revenue, much like they had with the DS and Wii.
As we've seen, it didn't quite work. The 3DS needed a price cut that cost them hundreds of millions of dollars, and even after they stopped losing money, their margins on the 3DS hardware were severely compromised, while the Wii U continues to drag down profits. I do think it will follow a pattern similar to the PS3 and that its best years are still ahead of it, but even if the Wii U does succeed as a consumer product, it's likely it will never be good business, not unlike, again, the aforementioned PS3.
I recall Iwata once said they almost scrapped the Gamepad idea because at first it wasn't economically feasible. Clearly he eventually decided they could make it work, a decision I'm pretty sure he regrets. The Gamepad alone is estimated to add over $80 to the cost of the console. When we consider the technology inside the Wii U that goes along for things like 100% lag-free streaming (as lag-free as a TV, anyways), I wouldn't be surprised if that number closed in on $100. Like they did with 3D, Nintendo bet that the Gamepad features and the Wii brand would be attractive enough to consumers despite the price, and so confident they were in its success that they risked selling it at a loss. The cautious Nintendo of yesteryear would never take such a risk, and whatever happens next, I'd bet the farm that the Nintendo that will emerge from these difficult years will never do so again. And by "never" I mean "until there's a change in management and enough years have passed for them to forget all about it".
Edit: to be absolutely clear, I'm well aware that the problems with the Wii U go way beyond price (as did those facing the 3DS), and yes I know things could have been different if we'd had, say, Mario Kart at launch and Smash Bros in April 2013, or "if teh Wiiu had any gamez" in Internet language, but the point of this blog isn't so much about the performance of a single product as it is the larger Nintendo culture and corporate strategy.
We gamers love to talk about what's selling and what's not. Actually, scratch that. Not just gamers, it seems to be a human phenomenon. Box office and music charts are regularly reported in the mainstream media. I'm not sure why we're so fascinated by charts, but we are.
The two main ingredients of our regular chart diet are the weekly UK UKIE report and monthly NPD sales for the United States. We tend to divide the world into two neat categories: "Japan" and "West", so we generally assume that the UK and U.S charts are more or less similar to what's going on elsewhere in "the west". But is it?
Out of curiosity, I decided to check the Amazon best-sellers in the videogame category in five countries: U.S, Canada, UK, France, Germany, and I was surprised at just how different gaming tastes can be in those countries. Even Canada and the U.S have significant differences between them. Sure, the big blockbusters sell well everywhere, and as expected the Xbox brand dominates the U.S and the UK, while PlayStation rules everywhere else, but beyond that there are considerable differences. A game that's in the top five in one country may be nowhere to be found in the top hundred in another. It's quite fascinating! Of course, we can't assume what's selling on Amazon is selling across the whole country, but I think it provides an interesting window into local tastes. Also remember that Amazon.com doesn't officially sell Wii U hardware and only recently began selling a limited number of 3DS models again, so that skews things a bit on that front.
I don't want to drag this on too much, so I'll keep it simple. I'll link the five charts and write a bit about what I see, nothing fancy. I mostly just wanted to talk about this with somebody, and who better than the Dtoid community to talk to about VIDEOGAMES?!? BTW, these charts are updated all the time, so don't be surprised if what you see don't exactly match what I wrote.
First of all, next-gen! We can clearly see that the common perception that the U.S and the UK are Xbox land while PlayStation dominates everywhere holds true in these charts. I was actually under the impression that Xbox's dominance extended to Canada as well, but apparently I was mistaken. However, if Amazon is any indication, Microsoft is doing a mighty fine job of giving back their hard-won market share to Sony. Everywhere, the PS4 and PS4 games are doing considerably better than their Xbone counterparts. Tellingly, in both Xbox strongholds there are more pre-orders for CoD Ghosts for the PS4 than for the Xbone, timed DLC exclusivity be damned. In the U.S, there are 4 PS4 games before the first Xbone one, Ghosts, shows up at #30. Microsoft will either have to work extra hard to win back gamers or hope that TVTVTVSportsTV woos enough "normal people" to make up for it.
Are gamers "starving" for next-generation, as we're often told, or are many perfectly content with what they got right now? From the looks of these charts, I'd say many gamers are perfectly happy with current gen and are in no hurry to upgrade.
Unless your're Germany, that is. Boy, are those guys ready for next-gen! 5 of the top 6 sellers are either PS4 consoles or PS4 games, and a full 11 of the top 20 are PS4 products (The Xbone comes in at 19, and no Xbone games are currently in the top 20). I think it's safe to say Germany is very much looking forward to next-generation. Go Germany!
Now, pop-quiz time: In which of the five countries is Zelda the most popular? According to Amazon, the answer is, far and away... drum roll... Canada! A link Between Worlds is at the very top right now, while Wind Waker HD comes in at #33 (charting higher than Black Flag IV and Battlefield 4 on the Xbone), its best performance by far. Elsewhere Wind Waker is either near the the bottom or outside the top 100.
Speaking of Canada, have I mentioned that Canada rocks? I'm officially in love with it. A Link Between Worlds number one? Super Mario 3D World number six? Tales of Symphonia Chronicles (!) of all games (which is nowhere to be found on the top 100 anywhere else) charting higher than the likes of Assassin's Creed and Ni No Kuni still in the top 40? There may be hope for humanity yet!
Canada also seems to be more receptive to the OUYA. The OUYA is currently in the top 20, and a couple days ago it went as high as #4. In the U.S and UK, the two other countries where Amazon officially sells it, there's no sign of it in the top 100.
On the other side of the spectrum, the United Kingdom seems to have the least amount of love for Link and co (and for Nintendo in general), with A link Between Worlds all the way back at #50 and Wind Waker nowhere to be found. Hum... I always felt there was something wrong with that country... now I know why! :)
Speaking of Nintendo, it's probably no coincidence that the two markets that have moved most heavily towards blockbuster shooters (U.S, U.K) seem to be where Nintendo is least popular (compared to the other 3 countries). I mean, if all you care about is shooters, "Nintendo" is the last name to cross your mind.
France has perhaps the most interesting and quirky tastes. This is a country where the €99 (yes, €99) collector's edition of Bravely Default is currently outselling both next-gen versions of Ghosts on the local Amazon! As I write this it's in the top 20, but earlier in the day it was even in the top 10. Do you know what else is outselling next-gen Ghosts? Inazuma Eleven: Lightning Bolt and something I've never heard of called Monster High: 13 souhaits (13 wishes), all for the 3DS. This Monster High thing must be big over there, even the DS version is performing relatively well at #40. Oh, did I mention that Professor Layton and the Azran Legacy is in the top 3?
France and Germany may be right next to each other, but if Germans are going crazy for next-gen (or at least German Amazon customers), the French are in no hurry. Like, at all. Between consoles and games, there are a whopping 6 next-gen products in the top 50, with the first being the PS4 Killlzone bundle at #12. If they're not not terribly enthusiastic about next-gen in general, they're even less about the Xbone. The first Xbone game on the top 100, Black Flag, comes in at #66. Among the games currently doing better than every single Xbone games as well as most PS4 ones, besides the 4 already mentioned, are such blockbusters as Wii Party U, Sonic Lost World and Inazuma Eleven: Feu Explosif. Oh, and FIFA 14. On the Wii.
If France isn't embracing the future, I suppose it's only natural they are all about Nintendo, right...? Sorry, that one just flowed right out! Anyways, of the 5 countries, France is where Nintendo seems to be the most popular. Between Nintendo hardware, accessories, Nintendo games and third-parties, a whopping 48 positions in the top 100 go to Nintendo stuff. A couple days ago I even spotted the Wii U version of Ghosts in the top 100, believe it or not.
One thing that surprised me in all countries is just how well Wii games are still selling. Isn't it supposed to be dead and forgotten? In France there are 2 Wii games in the top 6, and elsewhere they're still doing surprisingly well. If Nintendo can somehow convince those Wii owners to upgrade eventually, the Wii U might succeed with exactly the opposite sales curve of the Wii: while the Wii took off right away, peaked and vanished almost overnight, the Wii U could have a very slow start and take off in its later years, not unlike the PS3. Of course, that depends on Nintendo successfully reaching those active Wii owners, a big if.
We usually focus on the top of the charts, but the bottom also tells an interesting story: there are plenty of very old Wii games in them, and not just in France. Have you ever wondered how come Nintendo games rarely have impressive opening sales compared to the big blockbusters, and then when they release sales numbers after a couple years it turns out that game that didn't even make the top 3 in its opening month sold like 15 million copies? This is why. They keep selling for years, long after we've forgotten all about them. On Amazon Canada, Super Smash Bros has been in the top 100 for 1438 days. In France, Mario Kart Wii, currently at #72, has been in the top hundred for a whopping 1818 days. That means it pretty much never left the top hundred since it launched 5 years ago, while last year's blockbusters are nowhere to be found. Even some DS games are still there.
Remember when I said in the beginning that I wouldn't drag this on? Yeah well, so much for that. I just found it so interesting to see how different gaming tastes can be in supposedly similar countries that I could keep ranting on and on, but I this is enough for now. I hope you enjoyed it, and remember: next-time you see an NPD or UK chart, don't assume it's the same story everywhere else!