What must Nintendo do to survive?

Nintendo’s recent financial troubles have been well reported of late. The Wii U isn’t selling and that isn’t expected to change, the projected sales numbers for the 3DS have been significantly lowered, and the projected number of games sold for both consoles have been slashed. The Big N reported a loss of a third of a billion dollars this year (around £200 million), and it regularly looks like the company has no idea how to save itself. Luckily for Nintendo, we know just what to do.

Release modern hardware, for once

For as long as anyone can remember, Nintendo has been unable to break from the bad habit of releasing hardware that is underpowered compared to its competitors’ offerings. Even when the console world was still measured in bits, the 64-bit Nintendo 64 was held at a noticeable disadvantage to the 32-bit PlayStation, partly due to its use of cartridges instead of high-capacity optical media. In keeping, the Wii U – a current-gen console – doesn’t always run last-gen games better than the PS3 and Xbox 360. The Nintendo 3DS is significantly less powerful than its director competitor, the PS Vita, as well as its true competitors, smartphones and tablets.

The Wii was actually more closely related to Chris Hecker’s infamous description than anyone wanted to publicly admit at the time. The console sold well, but that’s because it lucked out and broke into a new market – people who weren’t gamers. However, that’s also why the Wii came in dead last in software sales that generation, and ultimately died before the PS3 and Xbox 360 called it quits.

“Powerful hardware doesn’t matter so long as the games are good,” you might be shouting right now, surrounded by a pile of Wiimotes capped off by a lone Wii U GamePad. It does matter, actually, and it’s one of the major reasons the Wii U is sinking – most developers just can’t devote time and effort to retrofitting their games to run on an underpowered console.

Recently, a leaked report claimed Nintendo is already planning Wii U and Nintendo 3DS successors – the Fusion Terminal and Fusion DS. The report surprisingly listed the hardware specs in great detail, and if Nintendo tucked tail and abandoned this generation with unprecedented speed in favour of this new hardware, it could release in time to be competitive with the PS4 and Xbox One.

Whatever Nintendo does, it needs to finally release hardware that can compete with its adversaries. It doesn’t need to blow the competing consoles out of the water – it doesn’t even need to match their power – but it needs to feel like a modern machine, and that’s something Nintendo hasn’t achieved in quite some time.

Embrace mobile

The old adage “if you can’t beat ‘em, join ‘em” has been around so long because it’s often wise advice. Nintendo has always ruled over the mobile gaming landscape with an iron fist. Sony’s PSP eventually took a small portion of that landscape, but the mobile scene has always belonged to Nintendo. The rise of smartphones has quickly and drastically shifted that landscape though, creating a new market of gamers on a much larger scale than the Wii ever did, as well as pulling in the traditional market. The smartphone disrupted Nintendo’s handheld monopoly, but rather than embrace it and attempt to tame the wild smartphone beast, Nintendo simply stood firm and tried to shove 3D down our eye sockets.

Well, Nintendo just cut 3DS forecasts by around five million units, and it even cut 3D from the console named after 3D (which also didn’t sell too well). Meanwhile, mindless, shallow games like Flappy Bird are dominating the mobile gaming market, and even though Nintendo has been suffering a rut of unique ideas for a while now, it can certainly do better than Flappy Bird.

Nintendo needs to develop for iOS and Android. It can start slow, and simply port a popular game to smartphones to test the waters. Once that does well, the Big N can develop unique games for the platform that would translate well to touchscreen controls, such as a Professor Layton or Brain Age. Since the infini-runner is still extremely popular, Nintendo could release a Mario-themed version of the genre, complete with official Nintendo assets.

The company doesn’t have to release deep games you would find on a dedicated gaming console, and it doesn’t seem to realise that. If it did release deep games for smartphones, then the (much) larger iOS and Android install base would likely make Nintendo more money than if it released that deep game for 3DS owners.

Nintendo doesn’t want to compete with itself, but in the end, abandoning dedicated portable gaming devices altogether in favour of dominating iOS and Android would likely be much more profitable for Nintendo than its current strategy.

A Pokémon MMO

Simply put, if Nintendo wanted to just sit back and print money for the foreseeable future, all it would need to do is finally release a Pokémon MMO. Release it across multiple platforms – Nintendo 3DS, iOS, Android, PC, Wii U, whatever – and there’s a good chance it could overtake World of Warcraft at the game’s highest peak of popularity.

Nintendo has always stood staunch against this prospect, but it’s for two reasons, neither of which matter very much anymore. First, Nintendo is obviously afraid that a PokéMMO would cut into the series’ profits, and players wouldn’t hop aboard the new generation release. This isn’t the case. Each new Pokémon generation sees the creation of a new region, which could release as it always does. After that release, the new region could be updated as an expansion for the MMO. Easy peasy. If this cut into the sales of the portables at all, the new profits from the MMO’s monthly subscription would surely rectify the matter.

The second issue is simply that Nintendo is not very good at creating an online experience, but it has been much better with the Wii U. Hiring veteran online talent wouldn’t be too difficult for a company with the brand recognition and cash pile that Nintendo has.

Pursue more exclusive titles

As my colleague Grant Brunner has pointed out, if Microsoft didn’t spend boatloads of cash securing Halo and Gears of War, then it wouldn’t have many big-name exclusives. Nintendo recently shelled out some cash to secure the upcoming Bayonetta 2 as a Wii U exclusive, and Pokémon sells Nintendo portables all on its own. As mentioned above, though, the Wii was dead last in software sales, and the Wii U – only leading the way in the amount of Mario appearances – is dead last in just about every relevant sales category. Since Nintendo can’t drum up enough excitement with its own franchises, making the Wii U the only place to play other popular franchises is the next logical move.

Hire Western talent

As a Japanese company and the place where video games were really popularised, Nintendo has served Japan first and foremost. Unfortunately for Nintendo, the West has been the dominant gaming market for a while now, and the gaming sensibilities between the two cultures are still very different. Nintendo shouldn’t abandon serving its Eastern fan base by any means, but it needs to hire developers who understand Western sensibilities, and begin developing more games for that market.

The excellent Metroid Prime trilogy – pictured above – is what happens when Nintendo trusts a Western developer with one of its prized properties.

Focus on games, not hardware gimmicks

The original Wii was a hardware success, but like a razor coming in the mail for free so you buy the blade refills, the real purpose of a console is to get you to continually purchase software. The Wii sold because of its motion control gimmick, and once that novelty wore off, there wasn’t a strong enough games library to keep the console flying off shelves. Trying to emulate the success of the Wii, Nintendo then bet big on another hardware gimmick and created the tablet-style Wii U GamePad. A gimmick that may or may not become a hit is a significantly more dangerous bet than releasing consistently good games.

Good games will sell more often than a questionable gimmick. Nintendo (presumably) still has the talent to make enjoyable, unique games, and if the company wasn’t so focused on creating and utilising unique hardware, it could get back to its roots and release titles that’ll keep the company afloat, rather than putting all its eggs in the hardware gimmick basket.

Nintendo, Nintendon’t

The company recently bought back $1.1 billion (£670 million) worth of stock – probably to assuage investor fears – but its remaining plans likely won’t bail out the flailing company. Ultimately, good games make hardware successful – not the other way around. Nintendo needs to move with the times and give the gaming world what it wants, not force what it thinks we want down our throats.

The Big N was in a similar spot back when the GameCube was flailing, and it just so happened to strike gold with the Wii and Nintendo DS. This time around, the Wii U and (to a lesser extent) Nintendo 3DS are not living up to expectations. Nintendo does have over $7 billion (£4.3 billion) in cash reserves (it was almost £5 billion before the stock buyback) and no debt, so the company isn’t haemorrhaging money. However, a full generation is a long time to sit still and lose money year after year. Nintendo needs to change its stubborn ways, but it doesn’t have a track record of taking the necessary steps to do so.