The Future of Nintendo (Long Read)

The NPD numbers from yesterday painted a very bleak picture- there is no market for the Wii U. Not just that, but even the 3DS itself failed to pick up the slack. In a tracking period that included a new Pokemon game, a new Zelda game, a new Mario Party game, a new hardware launch, a price drop to $99, and the largest shopping season of the year which has traditionally been Nintendo's strongest showing, the 3DS couldn't even hit its own monthly peak.

Given all of this, one thing becomes abundantly clear: the time of Nintendo as a hardware manufacturer might be coming to an end. Their consoles do not sell (outside of the Wii's one off success with an expanded audience that abandoned the brand within four years). Their handhelds sell, but not enough, and the market is contracting by the day, not just in the west, but in Japan as well, where the 3DS actually shrunk year on year in spite of the release of a new Pokemon, Dragon Quest, and Monster Hunter.

Given all of this, where is the future of Nintendo? What can the company possibly do? Below I list out a few possibilities:

• RIDE OUT THE WII U, RELEASE A NEW CONSOLE IN 2016 THAT OFFERS CLEAR GENERATIONAL LEAP OVER PS4 AND XBOX ONE

This sounds like it would be a pretty smart thing to do- ride out the Wii U even if it does not sell, release games for it, terminate it at the quickest possible chance where you can argue that it had a full lifecycle, and release a new successor with a proper hardware strategy, instead of the gimmick focused one that they adopted with the Wii brand.

The pros of this approach are evident- Nintendo could get a jump start on the next generation, they could get third party support on their console, and force Sony and Microsoft's hand much quicker than they had initially planned. They also retain consumer confidence because they didn't ditch the Wii U early and continued to support it.

The cons are equally self evident: if the Wii U continues to sell as badly, Nintendo suffers massive losses, of revenue and of brand name and value. If it is not selling, then retailers may refuse to stock it or give it shelf space, meaning Nintendo can't sell it, even if they want to. If its software sales continue to be as dismal, then Nintendo will have a hard time recruiting any third party support for future games, simply because of precedence as dictated by the Wii U. Finally, even if Nintendo does make the perfect console with the Wii U successor, third parties might not be likely to support it at all- this has already happened before with Gamecube, DS, and 3DS. Third parties are less likely to support Nintendo than other console manufacturers, meaning Nintendo might be left in the lurch again.

• GO HANDHELD ONLY

Essentially, release all the games that are in the pipeline for the Wii U, but greenlight no new projects. Stop Wii U production and clear out the remaining inventory. Nintendo remains in the market as a hardware manufacturer, but for handhelds only. This has the obvious benefit of them consolidating all their first party into one system, along with their system also getting third party support, since their handhelds do that, and their resources all being unified and consolidated for one system.

The cons are obvious, though- the handheld market is rapidly shrinking, and might soon be too small to be profitable or commercially viable. Going handheld only would mean Nintendo loses one major hardware stream of revenue. Plus they will be competing in an increasingly cut throat market with a dedicated handheld device.

• RELEASE ANOTHER CONSOLE WITH A UNIQUE 'HOOK'

The Wii strategy succeeded twice with the Wii and the DS, failed once with the Wii U, and had moderate success with 3DS. Nintendo could easily try to make some unique hardware and sell it next generation too, maybe trying to get some compelling hook. They could make it a cheap microconsole that would have access to the full catalog of Nintendo games digitally. They could do something with the controller. Maybe they could try VR. Who knows? Point is, they could try the same strategy again.

The pros? It could take off like the Wii. The cons? It could backfire terribly like the Wii U.

• GO THIRD PARTY

This is the one that most of you want, isn't it? This is what you all want them to do.

Let's see what the pros of this would be: we get to enjoy Nintendo's incredible games without having to buy special hardware for them that is then just used for Nintendo games and nothing else. Nintendo does not have to worry about losses from their hardware, a nd they can focus on doing what they do best, which is their games.

It's a lovely scenario for us as gamers, and to a degree, it makes sense for Nintendo commercially too, as they are not being assuaged by bad press and losses.

But let's see the cons of this scenario as well: Nintendo loses out on massive revenue streams, from hardware sales and licensing. Nintendo, now just a software maker, will also lose most of its diversity and variety in its lineup. Remember, as a hardware manufacturer, Nintendo commissions a lot of games it knows won't make a return on the investment to give some depth to their console's lineup. If they were a software only maker, they would not have to worry about that. That would also mean that we would never see their less profitable franchises ever again- no more Fire Emblem, no more Metroid, no more Star Fox, F-Zero, Kid Icarus, Advance Wars, Pikmin, no more one off projects like Xenoblade, The Wonderful 101, or X, nothing. It'd be a yearly spamming of Mario, Pokemon, Super Smash Bros., and Animal Crossing, and that's it.

We also need to remember, if Nintendo were to do this, they would enter the cutthroat environment of the AAA games development industry. Not only is that a precarious position for them to be in (look at how companies like THQ fared), but it could also mean that, if Nintendo were to go third party, they decide to forego console development entirely, like so many Japanese studios, and decide to double down on iOS and Android.

Given all the scenarios above, what do you think is the best bet for Nintendo? Where do you think should the company go for here?

Also, I do hope that people will keep trolling to a minimum in this thread, and try to have a serious, rational discussion. Yes, I know this is System Wars, but still, this is a forum about discussing a hobby we all love, and I hope to hae a proper discussion about a very important part about that hobby here.

Let's see how it goes.

Releasing a console in the middle of a gen would be stupid.

More powerful than X1\PS4 but probably won't benefit it with multiplats.

Nintendo 1st party has never been about the graphics

And it would be outdated 2 years later when new gen come out

Nintendo will be fine

None of those options are nice, but their best shot is to ride out Wii U and try something else when the cycle is up.

That and by that point, people will be digging too deep in the other consoles to even give a damn.

I'm a gamer not a fanboy, but what happened yesterday was not an indicator of anything other than "finally! next gen is here!!". It's apples and oranges to go beyond that. And there is a market for Nintendo, especially between people who don't want to invest that much into gaming, people who love Nintendo, and people who are looking for a complimentary console.

Nintendo's future does look very bleak indeed. But they have nothing to blame but themselves.

Not necessarily especially when people jump at the next tablet or smartphone each year, people love new technology. It is a bit of gamble however as the only successful console to do so, I believe is the Sega Genesis/Megadrive.

Nintendo is fine.

Yes the Wii U is a gigantic failure. (probably a bigger retail failure than gamecube, although I think gc was a very good console)

Why is Ninty fine? Because they have a sh*tload of money.

That's why I don't see them going 3d party or going only with handhelds. And they have loyal and "good" shareholders.

MS is the one in the biggest trouble, if the Xbone fails to sell well, it will probably be the last Xbox console. Because MS is under a lot of pressure from important shareholders who want to get rid of the Xbox division.

Nintendo should just go another route/strategy with their consoles. IE, get more third-party, don't focus all of your attention on casuals because they aren't loyal,...

Ubisoft should just buy them.

As someone else mentioned they have only themselves to blame but they still have room to improve i mean they are a one rich company they can always either make a whole new bundle without the WiiU tablet and include a normal controller all for $100 as a cheaper option updating all games that required to the tablet to not require it anymore.

OR make a new console, an advanced console not some last gen tech with an HD pokemon game.

So one stumbled console after what must be the better domination for around 10 years, and Ninty gets doom and gloom? Don't make me laugh.

To the TCs points though they should ride it out, take whatever low sales and potential loss as they might, and get a new console out that will hopefully be more in the consumers tastes.

The issue here seems to be that Nintendo makes consoles, and no one wants a console. Most of the complaints leveled against the Wii and Wii U, is that it stayied a console and not a wannabe PC.

Nintendo will likely be fine, unlike nearly all other console manufactors they are not in the red constantly (gaming divisions). So I doubt there is logic in them going 3rd party, and seeing that going 3rd party is pure poison for anyone WHO went that route I would not suggest it in any way.

Internet functionality is something I struggle with for Ninty, online have brought very Little with it that can not be boiled Down to angsty preteen yelling insults into everyones ears.

3rd party is a good point overall, given that is how Nintendo got big in the first place, and they are out of touch with 3rd party atm. Should be corrected.

Hardware wise: Well I will be honest, If I can get a Nintendo console with a fairly pleasent envioment, able to have 3rd party like the other platforms, and have a typical controller, then Im on board.

I can make do without the need to reinvent input device every gen. I can make do with a console that is focused more or less on sp and local mp (as in splitscreen, you know the ting the other consoles killed off to be more like PC's), but what I really want to see, is a good chunk of Nintendo games and IPs, I would also like to see new ones.

What I do not want to see: another console like the "twins" it would be suicide, and give us near nothing.

Do people keep forgetting how much money Nintendo has? 0___0

The 3DS is super sucessful and the Wii brought in boats of money, the made a mistake, oop de doo. They'll just ride out the gen with the gamecube and things will go into equilibrium soon enough.

@charizard1605:

Nintendo should go 3rd party. That's how they started, anyway - Donkey Kong was a multiplat on the ColecoVision and Atari 2600. Famicom was originally going to *be* an Atari console, but the plans fell through.

The Gamepad is what defines the console Have you used it? It's pretty fun.

I think we're overthinking/ worrying about this way too much. If you like Nintendo, buy their products and support them.

Nintendo doesn't have much money though.... wasn't they filling yearly losses along with Sony ?

what if Nintendo still made hardware, but not graphics processing hardware?

This would be similar to RockBand or uDraw, only on a much bigger scale. They could release their weird controllers as general gaming peripherals for PC/Mac or even 360/X1/PS3/PS4. Then, they could start releasing games that used it, and of course games that don't as well.

The more I think about it, the more I believe Nintendo should go third-party or double-down on mobile and produce a device that is game-specific but utility-capable (meaning it can run apps, make phone calls, etc.). Their future in the living room space is all but dead.

Still won't be the same and would be financially suicidal on their half.

it seems their best bet is to ride out the wii u, and ditch the gimmicks next gen. i dont know how they can sell it better though; i already bought a wii u, and if they killed it now i'll be pissed, and so will all their fans

If they went third party, I fear the quality and quantity of games will decline, rendering Nintendo redundant as a whole.

If they went handheld only, I won't get certain kinds of experiences they provide on a console. Although, this point may be nullified if handhelds get stronger and have the ability to mimic both a handheld and a console seamlessly (we aren't there yet).

I really hope they stay in the home console business. My personal preference is just to do what they did in the GCN era and ride it out - the GCN still had an awesome library. My second preference is that they release another console early. I hope they make enough money to at least keep them in business.

Ride it out > Release early > Handheld Only > Third Party

Nintendo will have to ride it out for now, not because it's their best option, but because it's their only option.

Long term, I can see either Google or Apple buying Nintendo if they aspirations of competiting in console gaming.

Nintendo 3DS hardware unit sales have increased by 15 percent year-to-date through November

Not all bad news.

If only rareware didn't sellout to MS. Rareware was so good at developing games that went mainstream, alot of people didn't care for the FPS genre till golden eye. Rareware had great IP's that worked well on Nintendo consoles and they were a Developing powerhouse during the N64 years. Also Rareware would have kept Nintendo in line when it came to advancing the Console tech. ( I'm talking about the wii)

Nintendo does need third party because that's what a large demographic follows. It would solve all their problems: Nintendo could still develop their E rated games the way they like too and all the older gamers could be satisfied with the third party titles that usually target that demographic anyway.

I feel like they hurt their image with the wii and they lost alot of loyal fans who didn't like the change the wii brought to nintendo. They were lucky that they were able to cash in on casuals with the wii. I think the gamepad was pretty innovative but the only problem is that 3rd parties don't really care for it.

Well, as far as my tastes as a gamer go, I haven't been impressed by any third party titles on the 360 or ps3. I mean sure when those systems were new they were graphically impressive but I'm getting tired of all the generic games that keep coming out.

PS: charizard1605, the fact that a nintendo fanboy like you is losing faith in Nintendo is scary.

i say ride it out, go handheld only, and release third party software on consoles like sony and ms.these all can be done at the same time. but the very first thing they need to do is fire iwata and fils aime before anything else.

@charizard1605 Really, you're going to be all that dramatic about Nintendo's future?

This is why I read Sean Malstrom's blog than any poster in a forum. Nintendo will be fine, what they need to do is make compelling software for all audience. If they need to make a compelling 2D Mario game that isn't a recycled NSMB formula, then we maybe on to something.

I'm not going to blame the hardware, its mostly Nintendo's marketing decision on a lot of issues that has kept the Wii U from selling off the shelves. Also, I rather wait until February to know the future of either the PS4 or Xbone as either one can't share the same living room for a lot of people.

@jsmoke03: problem is them releasing games on other platforms would devalue their next handheld. People won't want to put money down on it if they can get their pokemon or mario fix on a system they already own

Nintendo should develop kinect games w/ Rare

Gamers that say they want Nintendo to go third party are gamers that want to keep playing Nintendo games. Therefore, if they love Nintendo games so much, why not buy the hardware and get the games? It really makes no sense if someone rather buy both the PS4 and Xbone first parties, but want to buy Nintendo games for third parties.

3rd party please but keep 1st party hand held.

Tired of great games being on crap devices nobody wants. its an insult to mario and freinds.

The most important thing Nintendo needs to address:

BUILDING A STRONG RELATIONSHIP AND PROVIDING A CLEAR MESSAGE TO 3RD PARTY DEVELOPERS.

@MBirdy88: Mario goes third party or Nintendo goes handheld. Pick one.

why? they dominate one market... the mobile gaming market.

Then the bigger console-only franchises could be on PC/PS4/X1 .... being much better than they would of been. or more ambitious even,

Nintendo has in excess of eleven billion dollars and they have never reported a full year of loss.

I'm not a Nintendo fanboy, I'm a Nintendo fan, one who has been more than willing to call them out on and discuss their shortcomings as and when necessary. Such as now.

They'll have to ride out the Wii U no matter what. They can't abandon the Wii U user base.

There is another downside to going third party. Usually Nintendo adds a gimmick to their devices which they incorporate into their games, can't do that if they go third party.

Also people need to remember, the PS3 had a worse time than the Wii U. It was almost company crippling. So bad the chances that Playstation recouped the money by the end of the gen let alone made money are slim. Heads were close to rolling at the company. I'm actually quite surprised Sony came back with the PS3 in the end.

Nintendo need to get some new guys in at the top that can take the Wii U in the right direction. They're like a sports team that need to make some transfers and get new management. You see how MS and Sony are constantly looking at getting the right people at the top.

Nintendo need to swallow that pride and really look at what makes the competition successful in terms of how they handle their consoles. What Nintendo is failing at isn't the hardware, it's the business and politics in the background. Make it more open, let every developer and their dog make stuff for the console, open it up like android or something. The possibilities are endless.

The problem with Nintendo is Nintendo and their closed minds.

No, it wouldn't

Third party is the obvious choice here, it's better for everyone. The only thing i would worry about is how much they would focus on mobile in comparison to the consoles.

I have said this before, but there is a problem comparing the wiiu to the ps3.

The ps3 was always a future-oriented console. It's architecture was cumbersome, meaning that it would take time to make games that represented the true power of the hardware. They also used a lot of expensive components that were rare. It took time to increase production of these components to where the ps3 was not a financial disaster. The ps3 took off when costs were cut so extremely that they could lower the price in the store and make a profit at the same time rather than losing hundreds of dollars on every console sold. And, of course, the graphics capabilities of the console increased many times over as devs became familiar with how to use the console's power.

The wiiu seems like it is a present-oriented console. The graphical disparity between the wiiu and its competition is only going to get higher, with the graphics on the console improving not a whole lot from what we see today, and a lot of the fun and novelty of the tablet controller will wear off over time. The cost of the console will come down, but the money savings will be insignificant compared to the nearly $1000 swing that the ps3 had.

I would say, software is what saved the PS3. It has taken a while for Nintendo to release software and sure, maybe 3D Mario didn't sell as expected nor did the unpopular Toon Link, but still Mario Kart is more of a system seller than 3D Mario and it's coming out in the spring.

Sure the Wii U is weak, but compelling games and lots of it, is what its needs. Also, Sony did change their market tune from focusing on PS3's media features to more gaming orientation.

The ps3 had very little software at first because they continued to support the ps2 for so long. That made the ps3 a future oriented console because it was under supported at first. The opposite is true for the WiiU. Nintendo stopped supporting the Wii almost as soon as the WiiU was announced. The WiiU has had a HUGE amount of games released on the system so far. That might not seem right since it is a small amount compared to the ps3/360, but late-life consoles usually do get a ton of software in the last couple years just because of third party support who want to take advantage of the large userbase. Sure the ps3 had a game drought at first, but the 360 was almost as bad itself. It had a year head start where a lot of writers were wondering when the next gen would hit, because the ps2 was still a much funner console to own.

Just compare the launch libraries of different consoles. You might be alarmed by how good the WiiU had it, especially compared to the ps3 like you mention.

@Shinobishyguy it wouldnt devalue their next handheld because they dont have to be the same game. a mario handheld doesnt have to be a console version of a game...and just because i said they should go third party and release a handheld doesnt mean they have to throw business sense out the door. what you said doesnt necessarily go hand in hand.

@FireEmblem_Man there are a lot of reasons why i would want them to go third party

1. not everyone can afford to buy more than one system (not a problem for me, but it is for a lot of people)
2. the controllers have been horrible since n64 (my personal opinion)
3. there isnt enough interesting games on nintendos platform to justify buying a whole system. if i only like fire emblem, pokemon and xeno games or i only like mario games, that is like 10 games i would buy for a system while i like 30 games for another, then i would pick a system that gives me more games i am interested in.
4. nintendo didnt compete with ms and sony on computing power....
5. gimmicks
6. controller

and every other reason under the sun why a lot of people dont buy the console

You're flat broke, yet you can afford buying either a PS4 or Xbone, but can't make room for a Wii U?

I want a PS4, but like you I'm broke too so I may have to settle with a Wii U instead or just a 3DS all generation long as I still has a good PC to run most games that are coming out for the X1 and PS4.

People seem to forget games have to be approved by console devs and publishers

Nintendo wouldnt be what they are in history if they had to follow somebody else's rules

Thats why Bayonetta 2 is a Wii U exclusive, everybody else rejected it

and in that, Nintendo's games wont have the magic they had with all these limitations.

I think they should ride this gen out, then learn their lesson and correct their mistakes with the next system just like Sony did with the PS4. Nintendo can survive this gen by releasing big titles like a new Zelda and a new Metroid game, also adding online support for their games.

Super Mario 3D World, even though it's my personal GOTY, Should of had online multiplayer.

A Wii U Fire Emblem would be pretty sick also.

The CELL processor was the single biggest problem, In the end the troubles weren't worth the benefits of the CPU. Developers were trying to support the console but it was expensive and development was slow, the PS2 had nothing to do with it, because a ton of developers one by one flocked to the X360. The CELL was the main reason the X360 was allowed to get off to a flying start and get enough momentum to become a viable threat to Sony. It caused such problems competing, that is the main reason the PS4 is designed the way it is, back to the easy development of the PS1 days. In comparison everything on the 360 more or less had a 2 year development cycle. Sony was coming off a time when they already had the whole industry behind them. It's the only thing that kept the PS3 alive. The Wii U doesn't have that support and it's mainly their own fault.

I'd do a longer reply but am on my phone.

I disagree Char; I think there is a huge market for Nintendo hardware. Nintendo is simply not addressing and offering many things the market wants. They are continually stubbornly refusing to acknowledge that many now view gaming in a much broader spectrum then they are, and are acting as such, seemingly without a care in the world. And what we're seeing is them reaping the benefits.

"Our way or the highway" is what Nintendo is arrogantly saying, and consumers are replying in kind. And rightly so. I admire when a company does its own thing, but not when it outright ignores market desires.

Nintendo needs to drop the price. $300 for a console 1/5 as strong as the PS4 is madness. Im thinking because their portable market is doing so well they can afford to take the hit of low Wii U sales...for now.

But theres no way Im buying an underpowered Wii U for $300 just to play a few exclusives with bad or no online play.

Nintendo will just have to take their licks for the next few years and then release a proper console in 2017, about a year before the PS5 comes out. Have a true, 3D mario like Mario 64 ready at launch with a $300 price tag on the system (3-4x stronger then the PS4). It will sale like hotcakes.

You're being overly pessimistic. The WiiU will ride a full generation, and Nintendo will do something, maybe a aggressive marketing push, to make it perform well enough for it not to produce worrisome results. It won't compete with the other two, and it'll land in a respectable 3rd place.

As for the 3DS, it didn't perform as well as people predicted, but maybe that's because of the release of the next generation consoles. Did people think of that? Besides, look at the Vita. It's dead at around 5-6 million sales, though Sony doesn't seem to have any sort a plan to let it go just yet. The 3DS is easily at over 40 million by now, and it'll explode this month for obvious reasons.

Times have changed, the handheld casual market is dominated by tables and smartphones. The fact that the 3DS is still selling, well enough actually, is nothing short of a miracle. It's an anomaly, and i honestly think the 3DS will be the very last dedicated handheld system to do so well.