Seen and copied from Gaffanator.
Most people know you as “the indie guy”, but when you worked for Microsoft, you negotiated Xbox contracts with major third party publishers such as Lucas Arts, Activision, THQ, and Midway. You also worked on major Xbox deals involving Sega and Electronic Arts. At Nintendo of America, you built business relationships with small developers and worked closely with Nintendo of America’s licensing department.
What do you personally believe caused Wii U’s third party support to collapse and fall apart? I’m talking specifically big publishers like EA, Take Two, etc. If Nintendo had asked for your advice on how to fix these third party relationships, what advice would you have offered?
Adelman: It really comes down to the business case for these publishers. Nintendo consumers buy Nintendo systems primarily for the first party content. There’s a bit of a self-fulfilling prophesy in that publishers feel that they can’t compete with Nintendo first party, so they choose not to invest in making high quality products for the platform. There are some notable exceptions to this over the years like Rayman Legends but many times third party publishers set low sales projections for their games, and then decide a development budget based on that. I can’t say outright that they’re wrong either.
There have been cases where companies decided to pull out the stops and make a great game for Nintendo platforms only to find that consumers weren’t interested. And it could be because consumers have been burnt by third party games on Nintendo platforms before.
For Nintendo to break this cycle, I think they need to invest and absorb some of the risk for third parties who try to embrace the features of Nintendo platforms and help communicate to consumers which games are on par with Nintendo first party games in terms of quality. Sony and Microsoft spend a lot of money securing exclusives – or at least exclusive features – on the top games and since Nintendo doesn’t really do that, third parties focus on the other systems. I’m not sure about Sony, but I know Microsoft also has a team of technical people that will go work with a studio for a few weeks or even months to help them make their games as good as they can be on those platforms.
If Nintendo doesn’t want to be a first-party-only system, they may need to be more aggressive in securing those games and making sure that they’re high quality.
But why was it so difficult to get things done at Nintendo?
Is there a lot of bureaucracy, additional layers of management, and red tape?
Is it because NOA offices are not very autonomous, and you need to always report to Japan (NCL)?
Adelman: Nintendo is not only a Japanese company, it is a Kyoto-based company. For people who aren’t familiar, Kyoto-based are to Japanese companies as Japanese companies are to US companies. They’re very traditional, and very focused on hierarchy and group decision making. Unfortunately, that creates a culture where everyone is an advisor and no one is a decision maker – but almost everyone has veto power.
Even Mr. Iwata is often loathe to make a decision that will alienate one of the executives in Japan, so to get anything done, it requires laying a lot of groundwork: talking to the different groups, securing their buy-in, and using that buy-in to get others on board. At the subsidiary level, this is even more pronounced, since people have to go through this process first at NOA or NOE (or sometimes both) and then all over again with headquarters. All of this is not necessarily a bad thing, though it can be very inefficient and time consuming. The biggest risk is that at any step in that process, if someone flat out says no, the proposal is as good as dead. So in general, bolder ideas don’t get through the process unless they originate at the top.
There are two other problems that come to mind. First, at the risk of sounding ageist, because of the hierarchical nature of Japanese companies, it winds up being that the most senior executives at the company cut their teeth during NES and Super NES days and do not really understand modern gaming, so adopting things like online gaming, account systems, friends lists, as well as understanding the rise of PC gaming has been very slow. Ideas often get shut down prematurely just because some people with the power to veto an idea simply don’t understand it.
The last problem is that there is very little reason to try and push these ideas. Risk taking is generally not really rewarded. Long-term loyalty is ultimately what gets rewarded, so the easiest path is simply to stay the course. I’d love to see Nintendo make a more concerted effort to encourage people at all levels of the company to feel empowered to push through ambitious proposals, and then get rewarded for doing so.