The most surprising thing about Nintendo's recent shareholders' meeting was company president Satoru Iwata's announcement of a new "quality of life" initiative at Nintendo. Not for its employees -- but as a branch of its consumer products.
"What Nintendo will try to achieve in the next 10 years is a platform business that improves people’s QOL in enjoyable ways," Iwata said.
In the Q&A session following his presentation, he went further: "When we talk about 'health,' it often involves measuring something and showing the results, but if we add an application to something, maybe this application would encourage people to continue in an enjoyable way, and we feel that we can use our strengths in this area. I mentioned that I would like to redefine the notion of entertainment as something that improves people’s QOL in enjoyable ways, and 'enjoyable ways' come from the power of applications."
That is not a trivial promise: it sounds like a new business for Nintendo. The details about it, however, are tantalizingly vague, though Iwata spoke at length about it.
Reading between the lines, it seems that "quality of life" -- which will initially encompass health and then possibly move onto learning or lifestyle products -- may become a third pillar of Nintendo's business, alongside its consoles and handhelds, complimenting them, but also standing on its own.
This is interesting, because if true, it means Nintendo is expanding its business to a "new blue ocean," which is how Iwata put it.
To understand what Nintendo might do, I think it's instructive to look at what Nintendo has done so far. Admittedly, there's a limitation to how useful that is (and Iwata himself says not to rely on the company's history in this space too much, while also playing it up). Iwata's comments were also so cryptic that prognosticating is impossible. That said, it's fun to think about this stuff.
The clues we have: What Nintendo has done so far
In the Q&A, Iwata talked about Nintendo's history of taking a basic piece of technology and adding a game to it to enhance its appeal: for example, the Pokémon Pikachu, which was just a pedometer married to a '90s virtual pet. The important fact here is that you had to walk a certain amount every day to keep Pikachu happy, rather than simply push buttons, as with the Tamagotchi.
The biggest, most obvious example of this strategy is Wii Fit, which is, essentially, a scale. It's easy to point at Wii Fit and say that it's the motivator for this move -- and it's likely true, at least in part, so no skin off anybody's nose to do so.
With Wii Fit, Nintendo gamified exercise, but it did it in very much the opposite way that term is usually applied. Using its extensive game design expertise, the company transformed exercises into minigames -- ones that are actually fun. Its achievement (pointsification) layer is much simpler than what the gamification gurus would suggest.
The result? Late last year, half a million people in Japan were still using their Wii Balance Boards on a daily basis, and the trend was similar in the West. That's encouraging news for Nintendo, and that's what I'd take into account in terms of this QOL news.
Wii Fit U interfaces with a device called the Wii Fit Meter. Like the Pokemon Pikachu, it's a pedometer, but it also tracks your calories burned and can interface with the game to dump that info back into Wii Fit U -- so the game can track your progress while you're not actively playing it. Most surprising, the device is actually usable autonomously, and kind of useful even without transferring the data. This is a concept the company can continue to explore.
Of course, there's Brain Age. Brain Age is probably most remembered as a fad -- and it was -- but it was also taken seriously by a lot of people. It came out of (at least semi-) serious research into helping people improve or retain mental function. People in Japan and in the West used the game this way, even if it wasn't exactly scientific. Of course Nintendo would want to capitalize on this sort of trend again.
The post-Brain Age boom meant that Nintendo released a large number of other learning and productivity apps for the DS: cookbooks, sudoku, and even its ridiculous Face Training game which was apparently designed to "strengthen and stimulate your facial muscles." It sounds dumb (and it probably is) but the fact that it's billed a game to help people relax is actually instructive in the context of a "what might Nintendo do regarding quality of life?" discussion.
The cultural reasons this could work
It's tempting to say this initiative is a harebrained scheme on the part of Nintendo's management, but there is reason to suggest it might work out.
When the Wii was at the height of its popularity, it was installed in nursing homes. Caring for the elderly is a huge problem for Japan which its tech industry is working on. (This article contains the image above, which I adore.) The country is rapidly aging, and in huge numbers. It also has the highest life expectancy in the world. This is, after all, the country that brought us Roujin Z. Nintendo's moves slot right into the future that movie proposed.
Of course, aging isn't the only health issue of relevance; in the West, particularly America, there's the obesity epidemic (so there's Wii Fit again, though notably Wii Fit U has many different programs of exercise, and weight loss is just one among several. Note: "...our new business domain would be providing preventive measures which would require us to enable people to monitor their health and offer them appropriate propositions," said Iwata.) Again, Brain Age was actually on some level intended to combat a serious problem; dementia is currently a major health issue globally, and one that needs much attention.
Problems, challenges, and possibilities
Will Nintendo's top talent be working on this platform? It seems likely. What is worth remembering is that Miyamoto is the driving force behind Wii Fit. That was not a corporate-mandated left turn into serious games; it was borne out of Miyamoto's own mentality: while working to lose weight, he turned using his scale into a game -- and then, given his profession, took that to its logical extreme.
By reputation, Miyamoto can't help but turn his daily activities, such as swimming laps, into games or challenges. Such high-level creative power unleashed in a health initiative should count for something, particularly as (as I said above) "gamification" usually has things backwards to how Nintendo does things:
"There are many players in this market, but Nintendo is one of the few that make both hardware and software, offer and deliver propositions to people throughout the world, and make people enjoy and continue playing with them, so we think we have a great deal of possibilities ahead of us," Iwata said.
There's also the Wii Vitality Sensor, which never came out -- but seems to have come from the same kind of thinking (it was inspired by Miyamoto's own experiences and interests, this time in relaxation).
Speaking of Nintendo and abandoned ideas, it's worth mentioning that the company never permanently dumps good ideas, and will bring them back and deploy them when the time is right. (The Mii began development in the NES era before finally being released on the Wii.) The Vitality Sensor, and many other concepts which have never yet seen the light of day, could emerge if this is a serious new business for the company.
The potential for success does seem legitimate and enormous, but the company also has a number of challenges to overcome.
One will be detaching the QOL business from its games consoles. At least as I see it, the QOL business should be separate and self-sustaining -- so that anybody can enjoy its products whether or not they buy Nintendo consoles or handhelds.
It's also crucial to break the generational cycle issue. I think another major problem with the Wii to Wii U transition was that casual consumers don't have a reason to upgrade -- they may still use their Wiis, they may not, but they aren't like gamers who crave newness. Those hundreds of thousands of Wii Fit users -- why would they upgrade if they're still using what they have so regularly? Wii Fit U probably won't be a success, despite being very well made.
The company's move to a cross-generational Nintendo Network ID system which transcends device, as outlined in the investor talk, is belated -- but hopefully indicative of its understanding of this.
At the same time, these products must interface with games on the consoles/handhelds in a meaningful and deep way. This is not a contradiction. These products (consoles, handhelds, and QOL) should all stand alone yet also support and thus hopefully lift each other. Nintendo's integration of its handheld and console software divisions should make this easier; its lack of expertise in making multiplatform products (its handhelds and consoles always diverged widely from one another) will make it more difficult.
The biggest black box is trying to interpret what Iwata meant when he spoke about "non-wearable" technology. He noted that wearable technology (Google Glass, Oculus Rift) was big at CES, but suggested the company intends to leapfrog that trend (as it mostly skipped smartphones) and do its own thing.
Iwata: "we wish to achieve an integrated hardware-software platform business that, instead of providing mobile or wearable features, will be characterized by a new area of what we like to call 'non-wearable' technology." Here's the insane visual representation of that:
Given that "non-wearable" (seems to?) exclude something like the Wii Fit Meter, and also seems to imply smartphones won't be part of its health services products -- which seems a bad move -- this is potentially troubling. It is, at the very least, confusing.
"I am not planning to announce any specific themes today, but to give you a hint, 'non-wearable' does not necessarily mean it is something that will be used in the living room," is what Iwata said in the Q&A, which doesn't exactly help much.
The biggest and most important question, then, is left completely open. Can Nintendo produce something people will want to buy and want to use? Nintendo has often done a very good job at this. People clearly like its games and devices -- when they fit in with their lives.
Japan has earned the nickname "Galapagos" because it has a tendency to adopt nonstandard technologies that don't catch on elsewhere on the globe and evolve in isolation. This cycle has repeated again and again, for example with its PCs in the 1980s and its cell phones in the pre-smartphone era.
The Japanese are very keen to adopt technologies for business and pleasure (it's the land that brought us the Tamagotchi, it adopted QR codes widely, quickly, and early, and it has also had cell phone-based RFID payment systems for years.)
Smartphones have made massive cracks in this wall, but a long history of this mentality (and Nintendo's stubborn and idiosyncratic approach to hardware R&D) will necessarily affect any moves the company makes. Iwata seems to understand, judging from his comments, but Nintendo is as prone to being a Japanese company as any Japanese company is:
"The popularization of the Internet and smart devices shows that people’s lifestyles are changing dramatically. Just as video games once needed a TV screen and then later handheld devices with built-in screens emerged with the shift in people’s lifestyles, we must once again change our definition of video games to keep up with the times."
If Nintendo can't shake its stubbornness where it needs to, it could prove particularly troublesome when going for devices designed for very wide adoption in a broad consumer market like health.
Outside of Japan, I suspect that while the smartphone has opened many people up to adopting technology, it also means that people are less likely to buy a dedicated device and carry it around (a trend we're obviously seeing with game consoles.) Then again, there's Nike+, so never say never.
This E3 should be very interesting, but knowing Nintendo, it might not be. 2015 -- when the quality of life platform is set to launch -- will be more so. And the 2016 financial meeting, which will be when the impact of this platform is set to be made on Nintendo's results, well… That will have some very interesting comments from Iwata, no doubt.