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The Wii has been successful in every region, selling unprecedented numbers of consoles, and in no region was it a hit faster than in Japan. The console was virtually sold out for almost a year and in contrast to the West has not yet had a viable console competitor. It seemed a matter of time before Wii would have PS2 level domination.
Now, in late 2009, this has not been the case, and after the launch of the PS3 Slim the Wii’s dominance seems more tenuous than ever. Nintendo profits and hardware projections have dropped. Iwata admitted that Wii sales have stagnated. Where has Nintendo went wrong in its home country?
1. Lack of Strong Third Party Support
This is undoubtedly the most obvious factor, but still crucial when analyzing the Wii‘s troubles in Japan. Whether this is Nintendo’s fault or not, third parties have not given the Wii a steady stream of successful software since its launch in late 2006. Last year, 2008, Wii had three third party titles that sold more than 200,000 units- Tales of Symphonia Knights of Ratatousk, Deca Sports, and Taiko Wii (Joysound Karaoke reached that amount in early 2009).
By contrast, for this holiday season, Wii arguably has five third party titles alone that could reach that number (Biohazard:Darkside Chronicles, Samurai Warriors 3, Final Fantasy Crystal Chronicles Crystal Bearers, Taiko Wii 2, and Tales of Graces). Nintendo needed these titles, which can maintain momentum and attract a different type of consumer than the Wii Fit crowd, much later than Holiday 2009. This lineup in 2007 would have quickly established the Wii as a system that the PS2 owners could feel comfortable moving on to. Instead, coming now, this lineup is quite possibly too little too late.
After a respectable Holiday 2008 (approximately 415 thousands units sold in December according to Japanese tracker Media Create), the Wii fell swiftly to unheard of levels during the first half of 2009, flirting with ten thousand units solid weekly. The biggest third party release during that period, by far, was Monster Hunter G, an identical port to the PS2 game pushed out by Capcom to help build the audience for Monster Hunter Tri.
Of course, Nintendo itself didn’t help matters with its biggest release prior to Wii Sports Resort being the GCN port Mario Tennis. That is the crux of the matter- possibly the Wii could have better maintained sales with a steadier stream of 3rd party titles despite their own substandard 1st half of 2009 lineup.
The other concern with the lack of strong third party support has been the inability to build a “core” gamer market that supports niche titles such as Arc Rise Fantasia, Fragile, Muramasa and others. This leads to a cycle where smaller titles under-perform leading publishers to refuse to devote more assets towards the platform. In many ways Nintendo and third parties flipped the usual pattern on its head- instead of releasing the big high profile titles first and providing a home for lesser titles, they released the lesser titles first, leading to a weak market for those niche titles.
Because of this, for the most part, when third party games are released they do not do well, further exacerbating the perception of the Wii user base not being friendly towards third party games. By contrast, the PS3 has received many PS2 franchise entries that at this point have lead to friendlier eco system for more niche titles such as Demon’s Souls (first party published but third party developed), Bladestorm, Way of the Samurai, Rorona Alterier, and others.
This is not to just put the blame on Nintendo for whatever failings they exhibited by not lining up more significant third party support; All parties share the blame. Third parties absolutely expected the PS3 to dominate and planned many of its franchises accordingly. If you don’t build a market, the market won’t exist. On the other hand, Nintendo, with its vast war chest, undoubtedly could have been and still could be more aggressive in securing major third party franchises that help build a different audience.
The only question is whether it is too late, with increasing competition from the PSP, DS, and the PS3. As previously stated, this holiday is the first period where there is a consistent stream of high profile third party software. However, there is currently not much announced for 2010, and if this holiday represents the high water mark for third party franchises on the system then the Wii is in serious trouble in its homeland, no matter what type of impact Nintendo’s first party franchises have.
2. Lack of RPGs.
Nintendo has done a woeful job building an RPG market on the Wii. Despite having two first party studios who make RPGs, Monolith Soft and Intelligent Systems, after 3 years on the market Nintendo has released two- Fire Emblem and Super Paper Mario, which were both in 2007, and are not traditional JRPG‘s. Third party support hasn’t been much better aside from low profile projects like Arc Rise Fantasia and spinoffs like Dragon Quest Swords.
In fact, the Wii’s first truly first rate high profile traditional RPG is only coming out this December, Tales of Graces. Square Enix, which has given the portables and the HD systems significant support, still has not given the Wii a high profile traditional RPG. Dragon Quest X is announced, but won’t be arriving for years. Crystal Bearers, which has received positive early impressions, is not a traditional RPG. Chocobo’s Dungeon is probably the closest, but even that genre (rogue like RPG) is relatively niche.
What could Nintendo do? First, increase their own RPG output. This may very well be going on behind the scenes, but it is a point that bears making. Second, and this may be easier said than done, get Square Enix on board with significant support. Dragon Quest 7 remake. More Final Fantasy. Companies follow the leader and the leader is Square Enix. There is no reason PS2 franchises that cannot afford to go HD should not come to Wii. Without legitimate RPG support, the Wii will never enjoy PS2 level success and may cede ground to the PS3, not to mention the handhelds.
3. Lack of consistency in controller output.
Another problem for Nintendo in trying to revitalize Japanese market is the lack of consistency as to what the Wii is supposed to represent to the public in terms of how you control the software. On one hand Nintendo released Wii Sports Resort with Motion Plus to much fanfare this summer and recently released the Balance Board supported Wii Fit Plus.
On the other hand, Nintendo is pushing the traditional Classic Controller Pro with 3rd party titles such as Monster Hunter 3, Tales of Graces, Samurai Warriors 3, and even Winning Eleven 2010. Nintendo is essentially engaging in one marketing push towards the new motion based output and another push at the same time to capture the PS2/traditional gaming crowd.
Clearly Nintendo is trying to thread the needle and appeal to both the casual grandmother’s and the traditional teen market, but without a coherent strategy, this seems doomed to fail. If Nintendo really wants to push its machine as for everyone, they need to bundle every single Wii with a Motion Plus and a Classic Controller Pro and market Wii Sports Resort right along side Monster Hunter. That way, right out of the box, both markets have their controller and the parents can play their Wii Sports Resort while the teenager is already equipped to play Monster Hunter or Samurai Warriors.
Right now, Nintendo’s marketing in Japan is disjointed and at odds with each other. The gamers who buy Monster Hunter probably aren’t buying Wii Fit Plus, and unless you at least tie the two outputs together in the SKU, The Wii marketing has no real continuity and the two competing messages can possibly harm each other.
4. Lack of continued support for peripherals
Related to the previous point, Nintendo has done a terrible job following through on initially successful peripherals. The Balance Board has an install base nearly equal to the PS3 and yet as of nearly two years after its release in Japan, there has been zero Nintendo games supporting the platform and two third party titles- the two We Ski titles from Namco. For a peripheral with as much success as the Balance Board, to have Nintendo and third parties essentially ignoring that success is inexplicable.
Similarly, Wii Sports Resort/Motion Plus has been followed by one announced Nintendo game supporting Motion Plus, Span Smasher, and zero Japanese third party games. Contrast this to the situation in the U.S and across PAL territories where the device actually launched with third party software (EA’s Tiger Woods and Grand Slam Tennis), and a major third party game is launching exclusively with Motion Plus early next year (Ubisoft’s Red Steel 2).
This is a missed opportunity for Nintendo. The Wii sold for nearly a year after Wii Fit and the Balance Board launched, and that impact could have been even larger with immediate and strong support for the balance board. Motion Plus with just the promise of Wii Sports Resort is not going to give consumers confidence to invest in the peripherals.
Consumers are more likely to invest in the system and the peripheral if they know it is going to be supported. This again speaks to confusion and the lack of a clear strategy for Nintendo in Japan. Nintendo has to communicate to its consumers what benefit’s the system brings, and the continued introduction of peripherals with no following software undermines the success and appeal of every new piece of white plastic introduced.
5. For core titles, lack of a differentiator
Finally, a fundamental problem with the Wii design is there is no real differentiating factor to spur developing of core games on the system. This is not to say that core games cannot succeed- the argument is that these games succeed based on their own merits, not on any inherent advantages to the Wii system. Compare the Wii to its competitors. The PS3 offers increased graphical capability. For developers and customers, this can be a draw. Compare the DS and PSP- both offer portability, a differentiator to the usual PS2 software.
Now, looking at the Wii, it offers very little over the PS2 in terms of traditional, core games. Monster Hunter 3,Tales of Graces and Samurai Warriors 3 could easily have been done on the PS2. There is nothing besides a little bit of graphical capability that distinguishes the two systems. The only “core franchise games on Wii that take advantage of the systems controller is Dragon Quest Swords, the Biohazard Chronicles series, and the upcoming Crystal Bearers. This incongruence makes it less likely for developers to commit to the system and less likely for PS2 games to make the jump to the Wii.
One partial solution is for developers to utilize the pointer functionality, which could provide some interesting mechanics for RPG’s and action games. However, one potential issue is that when you try a different controller output you risk alienating the reliable, core audience. Take Final Fantasy Crystal Chronicles the Crystal Bearers; The game uses the pointer technology and from all accounts is not an RPG at all, but rather is being pushed as a pure adventure game. Square Enix is apparently trying to tap into the more casual part of the Wii user base.
However, there is a risk- if the title fails to catch on with the casual crowd, the title could flop. It appears (based on lack of retailer preorders), that the traditional RPG and Crystal Chronicles audience is not on board. This illustrates the danger to third parties; if you create a core game that does not use anything unique about the Wii, your software might have a ceiling and sales might not be maximized. On the other hand, if you do use the Wii’s strengths, you risk alienating that core group and not selling at all. There is no easy answer to this issue as it is inherent in the actual design of the Wii hardware. However, this issue can be minimized by solid marketing and fostering of third party relations.
Conclusions
To conclude, there are no easy solutions for the Wii in Japan. It has competition not only from the portables but also as of late from the PS3, and aside from New Super Mario Bros. Wii there is no title on the horizon that could anticipate being a genuine system seller. Some problems can only be solved with a complete retooling in software development, and some problems are so inherent in the actual Wii hardware that they can probably never be satisfactorily dealt with.
However, Nintendo could start taking efforts right now to stop the bleeding and at least remain competitive in the market. Essentially, Nintendo needs to streamline and focus in its marketing of the system and its controller outputs; increase support of its peripheral; and improve first and third party software marketing and outreach.
Solutions
Short Term:
1. Bundle the hardware with CC Pro and Motion Plus and streamline the marketing approach to include the casual and core gamer.
2. More promotion for core titles, even lesser titles such as Dynamic Slash, Monado, etc. Build up hype and promotion in Famitsu and other gaming outlets instead of stealth releasing any title that isn’t expected to be a big seller.
Long Term:
1. More RPG development from Nintendo’s internal studios and invest in third party developed RPG’s.
2. More software support for already existing peripherals.
3. Increased Third Party support through incentives and co-marketing.
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Anyhow what the author doesn't get the fact that most of Japan's game playing public have all but grown up and as a consequence they are going to be more mobile.
As for your solutions, first of all its well known that neither Sony or Nintendo don't buy(or bribe for) exclusives so I don't none of those will not
Maybe behind again. They were far ahead of any time when they went in the motion direction with DS and Wii
Back to the topic and I think this article raises a lot of good points - though to my mind, what they all seem to come down to is "Nintendo are not addressing the non-casual market".
Third party support: the casual demographic is almost by definition not interested in "hardcore" exclusives or third-party franchises - the big Wii sellers to date have all been tied into Nintendo franchises (e.g. Mario Kart) and/or peripheral tie-ins (Wii Sports, Wii Play, Wii Fit, Wii Sports Plus - even Mario Kart came with a plastic steering wheel!).
Lack of RPGs: again, modern RPGs involve a significant committment in time and attention, which is in direct conflict with the "pick up, play, drop" ethos of the casual demographic.
Controller consistency: I'd actually argue that this is an issue with the targetting of demographics, not the controllers. In any case, the result is the same: the hardcore/casual demographics have limited overlap (give or take party scenarios) and virtually all of Nintendo's marketing efforts to date (at least in the EU) has been focused on the casual market. Equally, there's been reports on Gamasutra of "Lifestyle" media being given significantly higher priority over traditional game reporters.
Controller support: controller: the casual market loves new peripherals: they make it a lot easier to play the game they've been designed for. Conversely, it causes a problem for developers, who generally want to try and target the lowest common denominator for maximum sales - i.e. the Wiimote. That said, the Balance Board has sold well enough to justify targetting - though again, will people who bought Wii Fit be that interested in other gaming genres?
Lack of differentiation: I'm not sure what this is meant to mean. The Wii is a standardised hardware platform with a huge potential audience and a well-established, flexible standard controller (Wiimote + nunchuck).
I think the big problem is that the Wii is simply not powerful enough to handle the level of "reality" players have come to expect from modern games - specifically in terms of the amount of physic calculations and on-screen action which can be managed. Note that this is separate to graphical fidelity, though this is also an issue: assets created for the PS3/Xbox 360 have to be downsampled for the Wii.
As a result, third-party developers have to either spend a lot more time and effort optimising specifically for the Wii (e.g. Dead Rising) or release a completely different game with some gameplay/plot details ported across (e.g. Ghostbusters). Either approach is a gamble: in Dead Rising's case, the gamble looks to have failed with Wii sales barely 10% of the X360 sales (1.7m vs 0.18m, according to VGChartz).
On a related note, I'd also argue that the active userbase on the Wii is generally heavily overstated. The general trend appears to be that if you ignore the major hardware bundles (Wii Sports/Wii Play, Wii Fit), games sales hit a ceiling around the 5-8 million mark - Smash Bros, Super Mario, Mario Party, Wii Sports Resort, Zelda, Link's Crossbow training.
Obviously, vgchartz data isn't amazingly reliable, but I'd still be inclined to use this as a guide and state that the active Wii userbase is approx. 8 million (from a total of 50 million units sold) and break this down as follows:
1) 6 million "casual" - i.e. interested in peripheral based games and casual-friendly Nintendo franchises
2) 4 million "casual-hardcore" - i.e. interested in traditional Nintendo franchises (e.g. Zelda)
3) 2 million "hardcore" - i.e. interested in Nintendo and third-party franchises
Obviously these demographics have a lot of overlap, but if these numbers are anywhere near true, they reflect the key concern for third party developers: a potential market of 2 million is nothing compared to the PS3/X360 install base - the same rule of thumb gives an active "causal-hardcore" userbase of around 10m on the Xbox and 6m on the PS3.
Alternatively, taking Dead Rising as a rough guide: by the end of 2007, DR had sold approx 700k on an install base of 4.5 million Xbox 360 consoles. This is approximately 15% of the total userbase - and at this stage, it's reasonably safe to assume the majority of X360 units were still in active use.
Assuming this "interest" ratio holds true and rounding DR sales on the Wii up to 0.25 (as it's only been out for 9 months, not 12), the hardcore market on the Wii comes out at about 1.6 million.
Again, these numbers are very much based on assumptions, uncertain data and hacks that would make a statistician weep, but it's still food for thought...
You raise some good points, but remember I am specifically talking only about the Japanese market, where third parties have shown no aversion to dedicating major support to less powerful platforms (the DS and PSP), so I don't think the lack of support can only be explained away by that.
Re: the lack of differentiation. I apologize if that was unclear (it made perfect sense in my head!). My main point, again, only talking about Japan, is that when you look at the choices that a publisher can make when deciding to move a PS2-era core gaming franchise, there is not really any compelling reason aside from user base to move it to the Wii, which is a problem for Nintendo when sales are slowing down.
When looking at the traditional genres that do well in Japan, none of them seem to really be enhanced by the Wii's motion control technology, which to my mind takes away any real reason for a developer or publish to want to move a franchise to the platform. Essentially what you are left with is a slightly more powerful PS2 where as the other systems relevant in Japan have some aspect that clearly distinguishes them from the PS2 (portability and graphical capabilities).
I did take your point to a degree on the fact that the Wii is essentially "PS2++" - but this has been pushed by Nintendo as a positive thing - not only were developers able to build on their GC experience, but the development costs were expected to be significantly lower than for the PS3 or X360.
In practice, I suspect the costs are only lower if a developer is prepared to commit exclusively to the Wii. Even then, this misses a major element in the cost equation: publicity and marketing. With Nintendo doing very little to support the "hardcore" market, these costs are likely to be higher on the Wii than on alternative platforms.
Also, I'm not sure what the most popular game genres in Japan are, but there's more than a few ways in which motion control could be positively integrated - drawing magic spells in RPGs, picking up Mahjong tiles, etc. Admittedly, it's not as useful for fighting games (e.g. Tekken).
Finally, the biggest draw for any mainstream developer isn't the technology: it's the user-base: making games that don't sell is a surefire way to shut down a company. However, given that both EA and Ubisoft are making noises over the Wii's attach rate and total sales, it's clear there's something wrong there...
Outside of the game industry, I am a consumer and I support ALL companies, consoles, handhelds, and video game genres.
I own a Wii and have had it since (midnight) launch. Overall, I am very disappointed that there isn't more third-party games like Nintendo promised. I did, however pick up MadWorld, House of the Dead: Overkill, House of the Dead 2 & 3 Return, Castlevania Judgment, The Conduit, Deadly Creatures, Escape from Bug Island, Cursed Mountain, Elebits, Klonoa, Manhunt 2, Medal of Honor Heroes 2, No More Heroes, Red Steel, Resident Evil 4: Wii Edition, Soul Caliber: Legends, Spyborgs, Sam & Max: Season One, Resident Evil Umbrella Chronicles, Tales of Symphonia: Dawn of the New World, Dragon Blade: Wrath of Fire, Dragon Quest Swords: The Masked Queen and the Tower of Mirrors, BlastWorks: Build, Trade, Destroy, and Zack & Wiki: Quest for Barbaros' Treasure. I may have missed a few, but many of these third party games just do not hold up to the third party games on the PS3/360 for different reasons.
Many of these games are way too short, are simply ports with Wii Remote functionality, are a one trick pony, and/or just don't have a lasting appeal. Don't get me wrong, many of these games I mentioned are quite good, but I want Street Fighter 4, Resident Evil 5, Ninja Gaiden, Final Fantasy, Prince of Persia, Assisan Creed, Batman, and others on my Wii.
For Nintendo based systems, I feel like the DS/DSi gets the better deal when it comes to third party support. Many of the third party games I miss on the Wii actually appeared on the DS.
Besides overall third party support, if you want to break it down, the Wii lacks (realistic) Sports titles, RPG's along the lines of Final Fantasy, fighting games, strategy games, and action games along the lines of Ninja Gaiden or Resident Evil. I get my fix from Sony and Microsoft's system and it's not simply for the graphics, but for the fact that those particular types of games are readily available in abundance on the PS3/360.
I still support the Wii and will buy games like Muramasa: The Demon Blade, Mushroom Men: The Spore Wars , Need For Speed Nitro, Teenage Mutant Ninja Turtles: Smash-Up, Dead Space, A Boy and His Blob, Resident Evil: The Darkside Chronicles, and a few more, in the near future, but more could be and should be done.
I know it seems like the games I listed are and should be enough, but again, when you compare the Wii's third party catalog with the PS2, PS3, 360, and even the Gamecube in terms of variety and quanity, the Wii is lacking and many of the third party games currently available for the Wii lacks substance.
I will continue to purchase GREAT third party games on the Wii, but overall, I am not a satisified customer, even with games like New Super Mario Bros. Wii, Super Mario Galaxy, and the next Zelda on the horizon.
Also you stated: "Of course, Nintendo itself didn’t help matters with its biggest release prior to Wii Sports Resort being the GCN port Mario Tennis."
I was trying to remember the other Nintendo releases in Japan this year...
Seems like there was just one - Trace Memory R (Disaster: Day of Crisis and Captain Rainbow were last year weren't they?) I personally believe the biggest problem is a lack of games...but not from 3rd parties or from Nintendo trying to be like 3rd parties (Sin & Punishment 2 didn't push the needle).
Finally, I wonder how the Wii is different than the DS? The DS is very under-powered compared to the PSP, uses a different control scheme, and yet has retained its momentum. It was not very well supported when first released (until nintendogs came out it was selling quite poorly). Some 3rd parties have sold well on it (Professor Layton). However, outside of the huge DragonQuest IX, I wouldn't say it's gotten much 3rd party support (no Monster Hunter), or differentiation. (Maybe you disagree?) Anyway...why is the DS successful compared to the PSP, while the Wii has fallen behind the PS3 of late? It seems like there are many similarities there. (btw, haven't there been more 3rd party games selling 100,000+ on the Wii in Japan this year than last?)
Re: the DS- third party support is actually probably the strongest out of all the systems in Japan- The platform has 7 third party titles over a million units sold in Japan and 19 third party titles to sell over 500,000 units. By comparison, the Wii currently has zero third party million sellers and only two to sell over 500,000 copies (Monster Hunter Tri and Taiko Wii). The DS number is also stronger than the PS3 and PSP in this regard.
I think what happened with the DS was that third parties, for whatever reason, got on board relatively quickly, especially Square Enix which has given the DS very strong support which in turn has led to a relatively healthy market for third parties. That initial surge of strong support has never really happened on the Wii (though this years holiday lineup is relatively strong).
Re: third party games hitting 100K this year- So far there have only been three (Monster Hunter Tri, Monster Hunter G, and the latest One Piece game which is 5 units shy), compared to 8 last year.
The comments from Reggie today wondering about how far the audience could be expanded perhaps go along with your piece.
Maybe Nintendo is seeing the 'blue ocean' as both limited and limiting? Certainly I agree that the key problem has been a lack of software. I remember when WiiFit came out having a discussion with my wife where I mentioned that in just over 1.5 years (November 07-May 08), Nintendo had done a sequel to every major IP they owned (Zelda, Metroid, Mario, Smash Bros., Kart), created two new major franchises (WiiSports, WiiFit), and released a large [make that HUGE] number of '2nd tier' games (Paper Mario, Fire Emblem, Battalion Wars II, WarioWare, ExciteTruck, Mario Strikers, Brain Academy, Endless Ocean, Mario Party, Pokemon). I remember wondering outloud "What will they do for an encore...I don't know, but it seems like they've already fired every shot they have."
Since then the lack of good games isn't as big a problem as just the lack of games. Some of them really make you wonder about Nintendo. For example, shouldn't a new Mario Party be close to release using either the balance board or Motion+? Those used to be annual affairs on the GCN, but have all but dried up on the Wii.
Looking at the list of games released in just a little more than 2 years of release, it's not hard to see why Nintendo lost momentum. It's just really hard to understand why Nintendo has positioned themselves so poorly. Where are the games, any games? It's very, very curious that Nintendo has so drastically cut their output.
Just looking at the math I think it becomes very clear what the problem is, I'm just baffled by Nintendo's lack of response given their position and financial affluence.
Nov 07-May 08 (18 months) - 20 Nintendo Titles
June 08-Nov 09 (18 months) - 8 Nintendo titles (+ 6 New Play Control, + 5 additional if you live in Japan, -1? WiiFit Plus is included in the 8)
Agree completely, the software drought is baffling. Either Nintendo is having a lot of development problems or there is indeed a Wii update being planned for 2010? That is the only thing that makes sense to me.
Nintendo is such a fascinating company. They have done so much right this gen but then seem to make some confusing decisions after that initial success.
...then again, it may just be more baffling Nintendo decisions. The last 1.5 years (and counting!) may in some future textbook be the given as the example of how to self-destruct your own success and go from #1 by no small margin, to marginalized in a frighteningly short amount of time.