Nintendo posted the first loss in the company’s history at the end of the last financial year, which is notable for a couple of reasons. For starters, the fact that in a fickle industry like video games they’ve run at a profit for 30 years without a hiccup is pretty impressive. Second, the fact that even a dependable giant like Nintendo can be brought low – to the tune of 43.2 billion yen – suggests that something big is up.
There have been plenty of theories about why this happened. The most prosaic is simply that the strength of the yen, especially versus the US dollar, has stripped the guts from the company's overseas profits. It’s certainly been a contributing factor, one that’s weakened Japanese manufacturers in general, but not to the same degree as Nintendo.
Then there’s the rise of smartphones. The kind of easy-entry, bright and colourful family-oriented games that have been Nintendo’s specialty are increasingly available from the app store for a fraction of the cost of console games, if not for free.
But Nintendo has weathered competition before. In fact, it thrives on it. So why is it struggling against Cut the Rope and Fruit Ninja when it withstood everything Microsoft and Sony, and before them Sega and Atari, could throw at it?
The shelves in your local game store have the answer.
Nintendo’s last massive success was the Wii, which was followed by a deluge of games, many of them made by third-party developers rather than Nintendo itself. And many of them were terrible. Eager to jump on the bandwagon of a console that had cracked both ends of the family market open so convincingly – senior citizens are still playing Wii bowling tournaments today – the company flooded the market with cheap pap that made the genuinely good games harder to find.
If you were part of that new audience, someone who didn’t keep up with reviews and blogs, you were at the mercy of what looked interesting on the shelf. You might luck onto a game as inspired as the jazz-and-graffiti-versus-authoritarian-surrealism of de Blob, or you might wind up with garbage like Final Fantasy Crystal Chronicles: The Crystal Bearers.
With their latest console, the 3DS, Nintendo has kept a tight rein on third-party games. Have a look at its section of your local EB and, a year after launch, you’ll still only see a few shelves dedicated to it – not because the cartridges are small, but because there just aren’t that many of them.
The very short list of big sellers on the 3DS includes The Legend of Zelda: Ocarina of Time, Super Mario 3D Land and Mario Kart 7. The first of those is a remake of a game from 1998 and the second two are the latest iterations of popular franchises featuring their most recognisable character.
The one Wii game that cracked the charts last year was The Legend of Zelda: Skyward Sword. This year’s solitary big release on the Wii has been Mario Party 9. Both are straightforward re-hashes of their formulas, aimed squarely at people who are already devoted fans.
When some species of birds get sick, they stop eating unfamiliar varieties of food. Instinct tells them they ate something poisonous, so they should stick to the safe varieties of food they usually eat. If those sources become scarce, then they’ll starve to death rather than trying something different.
That’s where Nintendo is at now. Things have changed, and its reaction has been to focus on the audience who buy games out of nostalgia, for whom Zelda and Mario aren’t just brands but fondly remembered childhood friends. That’s an ageing and shrinking audience the company can’t rely on forever. The only birds who are thriving in the new video game marketplace are the Angry ones.
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