The recent uproar about the 2DS and specifically John Gruber’s post that they should give in and start making iOS games has a lot of people speculating on what Nintendo needs to do to stay alive. While I read a lot of ideas, this post is mostly in response to John Gruber’s “Nintendo in Motion”, John Siracusa’s “Nintendo in Crisis”, and Marco Arment’s “Mutex Nintendo”.

Up until Gruber revisited his admittedly terse blurb with a longer post, all the arguments I read suggested Nintendo become a software only company, or hunker down and continue along the same path. His suggestion that they do both was a revelation and really got me thinking.

Many people want Nintendo to just dump hardware, but lumping both hardware platforms together is foolish. The Wii U is a miserable failure in a long series of disappointments, while the 3DS is a profitable and popular device in a growing sector. I see a very logical divide between the two. On the software side Nintendo has made a unique differentiation between old games (sold on the Virtual Console) and new games. In this article I’m proposing a way to take advantage of those divisions to develop a presence on iOS/Android and other consoles without totally “selling the farm” and quiting the hardware business.

If I were to take over for Iwata tomorrow, this is what I would do:

  1. Kill the Wii U
  2. Make the Virtual Console available on iOS and other consoles
  3. Double down on the 3DS / future portable

1. Kill the Wii U

Blurry Vision

Every single selling point of the Wii U has been a failure. It was initially pitched as a half generational step above the current Xbox and PS3. While opinions differ, the Wii U is at best of similar power to the current generation. The revolutionary GamePad and extra graphics power were going to make it the perfect home for Xbox and PS3 ports in addition to Nintendo’s always successful first party games. Thinking that gamers would pay a premium for old ports when the originals are in dollar bins was nuts. Third party developers are moving away from the platform fast. Oh, and the GamePad? You can only use one at a time and the batteries last three hours.

To make matters worse Nintendo employed the kitchen sink approach to the Wii U controller options. There’s a GamePad that’s like a tablet only crappier, and you can use your WiiMote (but only the Wii plus versions!) and there is an Xbox style “pro controller” as well! No one knows what the hell is going on with this thing. Even people who own them have a difficult time explaining the system. Which games work with which control schemes? I don’t know, and your average soccer Mom sure as hell doesn’t either. Remember the halcyon days of seeing a woman bowling with a WiiMote in a TV commercial and completely understanding Nintendo’s vision? That’s over now.

But worst of all is the name. Possibly knowing they had a turd on deck, Nintendo tried to piggyback off the Wii’s success and named it the Wii U (because it’s at college?). The problem is tons of people think the GamePad is an accessory for the original Wii. Iwata says the name has been disastrous for their marketing.

Wii U Development Time is Killing Them

Miyamoto admits Nintendo completely underestimated the switch from SD on the Wii to HD on the Wii U. That explains why it’s been out for nearly a year with no blockbuster software. No major Mario game, no new Zelda, no Smash Brothers, no Mario Cart - Nintendo has made these games dozens of times yet has failed to get a single one out in the first year.

The broken development cycle means that going into this Fall’s new console market, Nintendo’s tent pole games are Pikmin 3 (3rd version of a cult hit RTS), and Legend of Zelda: Wind Waker HD (HD remake of a 10 year old Zelda game). That’s not going to cut it.

Xbox One and PS4

The video game news cycle has already passed Nintendo by. This Fall there will be two new consoles that will destroy the Wii U in technical ability, software library, non-game entertainment options, and online capabilities. If Nintendo hasn’t captured significant mind share by now, doing so will be much more difficult once the new Sony and Microsoft machines are out.

With the exception of the Wii, Nintendo has been losing ground on consoles since the launch of the Nintendo 64 in 1996. As much as I hate to say it, I would stop throwing good money after bad and kill the Wii U immediately.

2. PUT THE VIRTUAL CONSOLE ON IOS AND CONSOLES

Virtual Console as Guinea Pig

Microsoft and Sony also sell ports of their older games on modern systems. Their older games are sold alongside modern digital releases in the same e-shops. From the beginning Nintendo chose to sell older ports under the Virtual Console brand that has now spanned two generations and six years. Sites report “What’s out on the Virtual Console” instead of just listing virtual releases.

If I were running Nintendo I would take advantage of the Virtual Console braaaaand, immediately release a Nintendo Virtual Console app for iOS, and start porting as many old NES, SNES, Game Boy, and GBA games as possible. The controls for the older games would be less difficult on touch screens. The cheap cost of porting (relative to new development) plus the the power of nostalgia should make Nintendo a TON of money even in the $3-7 price range.

Gruber may be right that new iOS games could be released at a higher price point. iOS sales charts suggest otherwise, and other popular developers (namely Square Enix) have failed to sell well above $10. I would experiment with the Virtual Console first. Nintendo would certainly get an awful lot of data very quickly.

I would also consider moving the console version of the Virtual Console to Xbox and PS3 in the exact same way. The Wii U Virtual Console games are already running in HD.

Low Risk

If for some reason this fails then let the Virtual Console brand take the fall. If it succeeds (I think it will) then Nintendo could use it to push people towards its hardware based flagship titles, and / or start developing new games from the ground up for these platforms like Gruber suggests.

3. DOUBLE DOWN ON THE 3DS

Advantage Nintendo

Like Apple, developing hardware and software has always been integral to Nintendo’s culture. I agree with John Siracusa and Marco Arment that they should remain a hardware company. And there is no question that physical controls allow for much deeper game play. Not to mention the fact that Nintendo commonly makes 30+ hour mobile games that have to carry a $30-$40 price point.

As the explosion of smartphones and tablets has shown, computing is moving toward mobile. This is a huge advantage to Nintendo over their gaming rivals Sony (strong console, mediocre handheld), Microsoft (Windows mobile isn’t working), and Valve (zero mobile).

Unlike their consoles, Nintendo’s handhelds have always been popular, and are trending up rather than down. The original DS is the 2nd highest selling video game system of all time, second only to the Sony PlayStation 2. The original Game Boy sold more than the NES and SNES combined, and the Game Boy Advance (the weakest Game Boy ever) sold more than either the Xbox or PS3. These are very popular systems that move a ton of software.

Nintendo needs to take advantage of their aptitude for crafting fun and unique mobile experiences and refocus their resources on improving mobile hardware.

Weak Points

Siracusa is right that Nintendo absolutely needs to improve the usability of its e-commerce experience. It is terrible. They also need to either find a way to make their version of social gaming work better (even though as a father I applaud their dedication to security) or give up on playing cop and open it up.

And Gruber is right that the current screen resolution on the 3DS is horrible. Even free mobile phones have Retina screens now. That has to change fast.

Get back into the living room?

Without a TV based console Nintendo should develop a cheap piece of TV connected hardware that will enable the future DS to push games to the TV and use the handheld as a WII U style GamePad. Airplay has been out for years. The Wii U does this today in reverse. This capability should be well within Nintendo’s skill set.

But…

I highly doubt Nintendo will kill the Wii U anytime soon. Even though the 3DS is doing quite well today it launched (with a lousy lineup) to extremely bad sales. A price drop and loyalty program gave it the jolt it needed to become competitive. Maybe the Wii U price cut announced last week with be the catalyst Nintendo needs to get moving.

But with the Xbox One and PS4 crushing them on the high end, and iOS and Android absolutely dominating mobile gaming, Nintendo’s famously patient approach may end up serving them very, very poorly. I really worry that by spreading themselves too thin they will lose on all fronts. I certainly hope they figure out how to stay relevant.