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Analysis: Should Nintendo Launch The Next Generation Now?

Analysis: Should Nintendo Launch The Next Generation Now?

April 15, 2011 | By Chris Morris

The rumors have been gaining steam for a couple of weeks now. Nintendo, they say, is planning to announce its next generation console at E3 this year.

While the company, not surprisingly, isn't commenting on the chatter, it's hardly going out of its way to downplay it either. And the second quarter lineup for the system (along with growing whispers about a looming $50 price cut in May) didn't do anything to quiet speculation.

So, for argument's sake, let's assume it's true. Has the time come to start bracing ourselves for the next generation of console systems? Is this simply an effort by the company to update the Wii just enough to keep it competitive for a few more years? Or is it something else entirely?

If it's just an effort to patch the Wii, it will be a surprising and disappointing move by Nintendo. For the past seven years, the company has had a pretty clear "go big or go home" philosophy when it came to new products - taking risks and putting its weight behind those. While the DS line has had iterative design changes, too much time has elapsed since the Wii hit shelves for that to be a viable option.

To simply tack a high-definition component onto the system would reek of desperation and put Nintendo into a role it has desperately tried to avoid for years: That of a follower. More importantly, it probably wouldn't be enough to convince the millions of people who own a Wii to buy the new system.

Now, certainly the next system will support HD. The time has come - and even Nintendo will begrudgingly accept that (though not, of course, on the record). And while it's easy to point fingers at the Wii's SD standard, keep in mind that when this generation first hit shelves, HD sets were nowhere near as prevalent (or cheap) as they are today. By jettisoning the costs associated with having a high def output, Nintendo was able to keep costs down and offer a system with immediate mass market pricing appeal.

The bigger questions are: Will this new system, whatever it is, have a new control scheme? Will the graphics be on par with the Xbox 360 and PS3 (or even greater, as Kotaku claims)? And will the company, finally, get multiplayer right?

There are no answers at present, of course. Even Game Informer, which says it has verified the whispers with several of its sources, is light on details. But the magazine reports that whatever this new system may be, "Nintendo is trying to embrace the western gamer and will likely launch a new brand with this console."

That reeks of a big move. And if, in fact, Nintendo actually is introducing a fully-fledged next generation device at this point in time, it could be one of the savviest - and boldest - moves the company has made to date.

The gaming world has gotten used to new systems from all three of the major players within a year or so of each other. But Microsoft and Sony are in no hurry to jump into the next generation. (Just check their retail prices for proof.) So, to put it plainly: No, we're not about to launch the next round of the console wars - at least not in the traditional sense.

Instead, by launching a new system/brand at this point in the current cycle, Nintendo would once again be creating its own space - and would, in some ways, further remove itself from the so-called "console wars".

In TV terms, it would be akin to Fox's decision all those many years ago to begin aggressively programming during the summer months - building an audience when other networks were looking in the other direction.

From an investor standpoint, it would boost excitement in the industry - as always happens when a new generation starts. And that's something third-party publishers are eager to see happen.

Similarly, it's entirely possible the company could plan to keep the Wii on shelves, as a sales alternative alongside this new system. It's employing a comparable strategy with the DSi and 3DS. And Reggie Fils-Aime certainly implied the company has no plans to do away with it during a recent conversation.

"The Wii has a long life in front of it," he says. "We're still sitting at $199. There are a variety of marketing tools at our disposal."

Hyperbole and rumors about whatever Nintendo has planned are going to run rampant until the company makes an announcement - or issues a firm denial. That's normal as new systems draw near. But what a lot of people might overlook is that in this case, the timing could be just as interesting to watch as the system itself.

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