Iwata: Nintendo's Online Services Are A Bad Patchwork

So far, Nintendo has built its official website, started the Club Nintendo membership service, made its dedicated video game systems network compatible, started Miiverse and has constructed other online services one at a time. When we constructed each one of them, we were trying to create a certain solution to achieve a certain goal or to address to a certain issue. In other words, we did not have an overall vision as to what the final and comprehensive format should be like and, as a result, we cannot say each of these services was connected to one another in an ideal way. Also, when we were designing them, we did not have the idea of building a bridge between smart devices and dedicated video game systems and, at least five years ago, we could not foresee that smart devices would have increased in significance to be the dominant window through which consumers connect with one another and society. When we look at Nintendo's current network services from this perspective and others, they look like patchwork. They are not ideally designed for user convenience, and when we try to improve one, we have to modify not only the portion directly related to that service but also other seemingly unrelated components, so it cannot be done easily. In other words, we have many ideas that we would like to realize but we have not been able to execute them as smoothly as we had hoped.

You pointed out in your question that it would be normal for us to place this sort of order with a systems integrator. I understand that many seemingly similar cases have been dealt with in that fashion. For business affairs in which the requirements can be firmly fixed beforehand, it would generally be fine. However, the circumstances will keep on changing even from now, so it will be rather difficult for us to firmly define the requirements in advance. I understand that there are many system integrators who are pretty good at constructing the systems for which the requirements have been firmly predetermined, namely, when the client can completely identify what kind of specs are to be integrated. On the other hand, many of them are not very good at constructing the systems which are subject to clients' ever-changing demands or if the clients require them to make modifications in accordance with changing circumstances. Of course, there are some systems integrators who are good at such requirements, and I am just talking in general. For this time, Nintendo will operate a smart device business jointly with DeNA, where we create new applications and operate the relevant services. The operations include analysis and feedback, and we will design the structure in a way that we will be able to carry out our consumer management duties based upon this analysis and feedback. We have come to understand that there are great overlaps between this structure and the integrated membership service that Nintendo aims to establish. Also, through the various negotiations leading up to the business and capital alliances, we realized that DeNA's corporate culture is well acquainted with constantly changing requirements and that they are highly capable of flexibly changing the system and then quickly reconstructing it. In addition to carrying out the smart device business, we concluded that we should also construct an integrated membership service together so that the "bridge" will be built more cleanly, because even though we will not be able to perfectly define the requirements in advance, or even when we are faced with further environmental changes, we will be able to construct a structure which can flexibly deal with these changing requirements. We concluded that, even though this is something Nintendo cannot execute with its own internal resources, we can achieve it if we work with DeNA.

As you pointed out, this project has neither been widely reported nor covered, and although it might not have captured a lot of media attention yet, I believe this is going to be a very important challenge for us. The better the system can operate, the more smoothly and frequently our consumers will be able to travel between smart devices and dedicated game systems. It will increase the number of reasons for our consumers to keep on playing games or to keep on playing with their friends and relatives, increase the opportunities where one can recommend some games to others and vice versa or where people can exchange game-related information. Today, the speed at which information can spread is extremely fast. Anything that experiences a boom in today's world is almost always riding on the wave of this information spread, so we have to construct a system which matches today's environment. In the past, TV ads and word of mouth might have been the main components of that system, but today, people argue how we should add the Internet to a system and how we should combine these efforts with smart devices, and we are aiming to construct such kind of comprehensive system. So far, we have been offering a loyalty program in which we offer corresponding points to those who have purchased our products, and we have been offering some rewards based on these points. What we are aiming to establish is not a simple extension of the existing loyalty program but a loyalty program with, say, the entertainment elements where the members feel that they have received certain rewards as a result of not only their purchases but also the history of their gameplay and how each consumer has interacted with others. Since it is impossible to define the requirements for this sort of loyalty program 100 percent in advance, we see it very advantageous that we are able to work with DeNA who will be able to flexibly deal with such requirements. We have not decided if the next meeting with you will be a Financial Results Briefing or a Corporate Management Policy Briefing, but around the end of October this year, we will probably have the next opportunity to communicate with you. We will prepare for that so we will be able to disclose more concrete information at that time.

That is one harsh criticism of his own services if I ever saw one. i really hope that this time around, Nintendo finally manages to deliver on the sort of coherent network that everyone else has had for well over a decade.

Fuuuuck that probably means a paid Nintendo online service incoming.

Just look at what XBL, PSN, and Steam are doing if you want a proper service. That's all they need to do.

inb4ohrightpaidsubsdur

No. Just a service that make you feel like you're in the year 2015.

"In other words, we did not have an overall vision as to what the final and comprehensive format should be like and, as a result, we cannot say each of these services was connected to one another in an ideal way. Also, when we were designing them, we did not have the idea of building a bridge between smart devices and dedicated video game systems and, at least five years ago, we could not foresee that smart devices would have increased in significance to be the dominant window through which consumers connect with one another and society. When we look at Nintendo's current network services from this perspective and others, they look like patchwork.They are not ideally designed for user convenience, and when we try to improve one, we have to modify not only the portion directly related to that service but also other seemingly unrelated components, so it cannot be done easily. In other words, we have many ideas that we would like to realize but we have not been able to execute them as smoothly as we had hoped."

I am not a business professional, but I just don't understand how this man retains his job. I really don't. At every investor briefing, we get the same Iwata-isms.

"We failed to do this...."

"We we unable to reach that...."

"We didn't foresee this...."

This keeps happening over and over. Is there no accountability found within this company? Are there no standards? What are these investors doing?? How long are they going to be led along by this dope and his excuses and lines? These statements are nothing but outright admittances of incompetence and inability. Most scathing, however, is the admission of holding NO VISION for online in this day and age. Jesus Christ. That's a "no shitter" of course, but that he'd actually come out and admit such, and still be assured his job, is un-fucking-believable. If I were Iwata, I'd be downright embarrassed and ashamed. There is no way he deserves to be sitting in the CEO seat. Nintendo deserves so much better than this tool. It's a sad state, and any future plans Nintendo has (as long as Iwata is at the helm), I hold very little confidence in.

@charizard1605: Link pls. I prefer reading this on the website it was posted.

we did not have an overall vision as to what the final and comprehensive format should be like and, as a result, we cannot say each of these services was connected to one another in an ideal way.

What do you mean you didn't have an overall vision of what you were developing!? Effin-A, are you serious? If true, it's mind blowing. This is a whole new plain of incompetence that I never thought Nintendo was capable of achieving.

@MirkoS77:

It's hard to get rid of the guy who has been CEO during Nintendo's most successful period with the DS and Wii.

http://www.nintendo.co.jp/ir/en/library/events/150508qa/02.html

Thanks.

Eh, it's not like people didn't know that already Iwata :P Cool of them to acknowledge the error though. That's usally the first big step in correcting and improving anything :)

Interesting read. You can actually see how fragmented everything was. The DDP was on a separate website, Club Nintendo was on its own site, then you needed NNIDs and of course those were tied to the consoles. Not to mention their own site for Miiverse. They were literally all over the place. All 3 services worked fine when they were in tandem. Digital purchases were rewarded and Club Nintendo points were added right away, but you had to go fill out surveys to get the coins.

Then after that you had to go to the DDP site so you can get a code to get your 10% cash back. It was all over the place to get the most out of the system. Just recently they made it so you can buy games on the eshop from your PC and that shop was a mess the last time I was there. They need to do this and its good that they finally realized that this kind of move is necessary. But the window between now and when it launches is tough.

.....and the only CEO that has presided over its only (and worst) losses in its entire 125 year history.

Do you find it a coincidence those systems were during a time of managerial transition (mid 2000s)? I believe Iwata had a hand in their success, but Yamauchi was still heavily involved in the company's on-goings at that point, and Iwata hadn't yet had the opportunity to appoint people to the board as he saw fit. It was a largely different company back then. What we are seeing now is 100% Iwata's Nintendo, his appointments, his style....his excuses. Sorry, but I can't give credit to a CEO for such stratospheric success when he then allows the immense opportunity that success afforded him to progress the company to instead slip away, putting Nintendo in the position they are today.

The Wii and DS Nintendo felt different from the Wii U and 3DS Nintendo, and you don't need to look far to know why. The company is now his with those he's chosen running it, and the remnants of the old crew are absent. He was just privileged to be in the right place at the right time, handed a golden platter by the capable on their departure, to then be awarded credit for the fruits, of which he sat on, doing barely anything.

It amazes me they did not see smartphones becoming what they are in a way. I'm glad to see them taking a Nintendo network seriously and it sounds like they are on the right track.

@MirkoS77:

Iwata took over in May 2002, the DS came out in November 2004 and the Wii came out December 2006 and even then the hardware was pushed by software like NSMB, Brain Training, Wii Fit and Nintendogs.

Yamauchi was a complete jackass who was responsible for killing their own console business for two straight generations as well as being in charge for the Virtual Boy. They were pretty much strung along by handhelds in which they were pretty much unopposed due to the competition's incompetence until the PSP, which even then the PSP was born from Yamauchi handing the keys to the game industry over to Sony. I'd go as far as to say Yamauchi owes most of his success to to Gunpei Yokoi and Miyamoto.

The biggest issues Iwata and co face today are trying to figure out a way to still make money from the console market after Yamauchi ruined it for them with the N64. Maybe you're right, maybe the Wii was down to Yamauchi's old team, but either way the Wii was only a temporary solution and now that the fickle audience they gained has moved on, Iwata is left facing the same problems which drove them to such a drastic chance of direction with the Wii, which is making a successful game system after the N64 lost almost all of their console market share and third party support.

Iwata could be doing far better, but at least he didn't inadvertently create the Playstation.

They made the Wii U bro, I knew they were capable of this :P

Iwata can admit everything wrong with Nintendo, but he's said things before and undelivered, a lot. I'll wait and see how the next generation turns out for them.

He missed something vital with Wii U and that was the gamepad. Love it, but its cost completely defeats the purpose of what the Wii was meant for. Not only that he didn't make a next generation wiimote and nunchuck. Should have been the main controller along with the Pro controller.

bu bu bu the networklz is FINEZ!!!!!! @Bread_or_Decide

As always, you get what you pay for.

The network itself is fine. Its just the services that are problems. I buy a game after launch. I gotta go to the DDP, Club Nintendo, and fill out surveys, get codes, and go through all sorts of hassle to get the most out of their system. It was like the DMV of video games.

@MirkoS77: I was going to post a comment but you said it all. In this day in age there should be some vision and accountability.

No excuse.

I don't mind paying for a working service.

No crap.

They need to just face the facts like Sony had to and start charging for online so they can invest into it. Otherwise its always going to be like behind, lacking features and as you pointed out a general pain in the ass.

That will most likely happen after they unveil their new setup with DeNA. I'll buy into it if it the incentives are worth it.

I always said they should update the gamecube controller, and update the Wii mote and nunchuck with better ergonomics and more precise IR.

Had they had those things, a 5770 level gpu, and a strong ARM Cpu or updated the Wii CPU more than they did, they would've been set.

It's frustrating that they seemingly don't care about the wii mote anymore, after playing sin and punishment 2 I knew it really was an important new method of control. The gamepad is just a clunky hunk of crap trying to copy the success of the DS.

Sadly these days just the basic playing of online costs money which these console makers cant just take the hit on anymore.

And I would have loved the Wii U if the gamepad actually mimicked the 3DS. If it had a slot built in that let me play 3DS games I would have loved the gamepad. But it was like a brick with a screen that they didn't know what to do with it. I fully expected a next gen wiimote and I'm still hurt that never happened.

I knew that they are out of touch, but this is being directionless. Not proactively engaging 3rd parties or building hardware to suit their needs - that's typical from Nintendo. Slapping patchwork solutions on something because you don't have a damn clue as to what you're doing? That sounds more like Sega.

Way to go dipshits, at least you're finally admitting what EVERYONE ELSE ALREADY KNEW. Now it's finally time to fix it...

Nintendo "Always late to the party!™"

LMAO!!! If Nintendo thinks that I'm going to pay for their online service they better be including every Virtual Console game with it.

I'm already paying for PS+ and XBL what can Nintendo offer that would make me pay for three?

@ryno1179: @ryno1179:

If they offered "free" games they'd instantly be better than both of those services without lifting a finger. I also pay for both PS+ and XBL and they're not worth the price of admission, so no I wouldn't pay for Nintendo service either. As soon as my other subs run out I'm not renewing for both PS+ and XBL in the future.

Paying extra for all online content is a straight up joke.

did Nintendo finally figure out how to use the internet?

Not yet. Nobody can voice chat them to tell them.

Didn't Nintendo come out with a chat accessory for Wii? It worked like kinect in which you yell at the device from across the room.

Iwata shouldn't be so hard on himself, its not like Sonys services are much better

TLDR....

Does it suggest that i may have to pay if i go with NX Next Gen? If soooo FU Nintendo.

Iwata, if you're gonna ask for a subscription, then give me the free bad patchwork instead.

I'm not paying to play online. Not a single fucking cent.

First big step in correcting yourself is admitting your mistakes.

@drummerdave9099: Lets just hope they actually do the work to fix them.

I'm glad to hear Iwata state this. Hopefully future Nintendo Network services will address these issues.

Yamauchi was not without his mistakes, but before you say he killed off their console business, I think it's prudent to keep in mind that when Iwata took over, one of his first moves was to kill off all NoA development. An excerpt from Neogaf:

"From 1990-2000. Nintendo of America had production and management autonomy from Japan. NOA basically culminated its own production team, along a few co-designers, and started funding and producing games with developers.

• DMS Designs: Uni Racers, Body Harvest (a precursor to GTA, the studio eventually became R* North).....Nintendo dropped it in 1997, Midway took it.
• Angel Studios: Ken Griffey Baseball, Buggie Boogie.
• Bits Studios: Warlocked, Riqa
• Rare: DKC, KI, Golden Eye, Perfect Dark
• Software Creations: Ken Griffey Baseball, Tin Star.
• Silicon Knights: Eternal Darkness (N64)
• Left Field Productions: Kobey Bryant in NBA Courtside, Excitebike 64
• Looking Glass Studios: Mini Racers
• Mass Media: Star Craft 64
• H20: Tetrisphere
• Saffire corp: Nester's Funky Bowling, James Bond 007
• Midway: Cruisin' Series

NOA also procured the Ken Griffey and MLBPA licencse, NHL license, Kobe Bryant and NBA license, PGA license, PGA license, Disney license, James Bond license, Starcraft license, Star Wars Episode 1 license. They were producing their own first party games separate from Nintendo of Japan. That all changed when Iwata transitioned from Global Marketing Chief to President. NOA Production was killed, and Nintendo of Japan's SPD Department took over all Western development (Star Fox Adventures, Geist, Eternal Darkness GC).

Henry Sterchi, Brian Ullrich, Ken Lobb, Ed Ridgeway, Jeff Hutt, Faran Thomason, and the whole crew left NOA to Microsoft and other developers. Since then, we've seen the Nintendo Western model we have today. Western developers reporting directly to Japanese management, and pretty much making B/C sequels to Nintendo IPs."

All that talent, all those studios.....gone, under the wisdom of Iwata. Yamauchi may have been a prick that inadvertently brought Sony into the industry through underestimation, but at least he wasn't dumb enough to outright dismantle an entire foreign branch of development at a time when the West was demonstrating rapid growth and relevance to the industry which held significant impact upon their console position in the marketplace. Under Iwata's tenure, third party has continually deteriorated to be....literally....almost being non-existent, in addition to having basically no Western support, something that wasn't the case under Yamauchi. Iwata has shrunk Nintendo into extreme Japan-centrism, insularity, and conservatism. He has ignored standards people want, failed to capitalize on an incredible backlog, left long loved IPs many desire to rot, claimed "People don't want online games", failed to expand the company to compensate for third party absence, continually failed to rectify droughts that he has apologized for and has promised time and time again yet continues, and on and on.

Then he comes out, years later, and says, "we didn't predict this", "we couldn't foresee that" and says he'll get right on it (as usual) when many of the things he acknowledges have been done for years by others. This guy is a clueless dolt of a CEO, I don't even think this point is really arguable anymore. What he has failed in aren't minor issues, they're enormous, and I think anything Yamauchi did to Nintendo's detriment pales in comparison to the damage Iwata's incompetence has bred and the harm it's doing to the brand. Even with Sony in the game, Nintendo had more than enough to take them on with a driving, visionary hand at the wheel. And even if he was the main reason for the success of the Wii and DS, past successes do not excuse current failures. Again, at what point does accountability come into the picture?

At least Yamauchi was smart enough to understand Nintendo should be an international company borne in Japan, not a Japan borne company with foreign branches that exist for nothing more than to translate and market their products. He granted foreign territories the freedom to work within them and identify and cater to tastes pertinent to their particular markets, not attempt to micromanage them from afar with stubborn dogmatism as Iwata is doing. Nintendo was once international, they are now VERY Japanese and almost seemingly xenophobic.

At least you *may* be getting an actual online service.

The Great Sean Malstrom has for seen this a long time ago, that Nintendo has always been behind. Miyamoto still thought that 3D is still a big deal over Online gaming for crying out loud!

You read Sean Malstrom's blog too? Because I agree that Iwata did destroy all of Western development teams which forced a lot of NoA employees to work elsewhere. Even when the n64 was failing, NoA's management has done a great job convincing the rise of Western third party devs to make games for the system. Yamauchi practically had NoA and NoE run themselves as he had no knowledge of Western businesses and consumers. You're right, Iwata has no clue what western gamers want and it destroyed all western 3rd party relations with Nintendo

The only Western developer on that list that had produced any hits was Rare, maybe they should have kept Rare around, but then again they've not made anything of any particular note under Microsoft. Throughout the PS2 era there weren't all that many stand-outs in western gaming, you had GTA which skipped the Gamecube under Yamauchi, Halo which was owned by Microsoft and third party games which did go to Gamecube like FIFA, THPS, Need for Speed, Splinter Cell etc.

The Gamecube was ALWAYS going to lack third party support because of the disc capacity being a meagre 1.5GB and proprietary, as well as the controller missing a second shoulder button and clickable thumbsticks, it required a peripheral to connect to the internet and it had no media playback functions at all. All of these things happened under Yamauchi, including GTA III skipping the Gamecube, which was the most important game of the entire generation. So including FFVII AKA "the game that sold the PlayStation" which Yamauchi actively and deliberately drove away, Yamauchi had watched the generation defining games of two generations ignore Nintendo all together.

Which of these long loved IPs have been ignored? Kid Icarus came back, Donkey Kong Country came back, Punch Out came back, PilotWings came back, Golden Sun came back, Yoshi's Island came back, they even revived what won them the console market in the first place in 2D Mario, which has been hugely successful after 2D games in general were discouraged by Yamauchi.

His statement about people not wanting online games pre-dates Halo 2, which up until that point online was still mostly just a PC thing.

Nintendo at the point leading up to the Wii pretty much had zero chance of taking on Sony head-to-head, PS2 had all the momentum in the world and the looming Blu-Ray looked set to do for the Ps3 what DVD did for the PS2, as well as Microsoft finally gaining momentum and having at the time the third and final (lol) instalment of what was being called this generation's Star Wars in the works with Halo 3, while Nintendo were already in dead last. At that point every sign pointed to Nintendo going the way of SEGA if they tried to take on Sony and Microsoft head-to-head again.

Only in hindsight would they have MAYBE been able to go head-to-head, because after all, it was nearly impossible to predict Sony launching the PS3 at $599 with no compelling games. Even then they would have had to predict just how much online gaming would take off. These things forced the drastic change in direction that led to the Wii, everything went great, it was the hottest product out there and it got more games and sold more than the PS3 and 360.

However, it was an incredibly long generation, Sony had stuck it out and recovered from the disastrous launch and Microsoft managed to keep up with the once ruler of the industry, Sony (and are still both getting games today). Meanwhile the Wii fad had died down, after Skyward Sword (which required a peripheral) launched, the Wii Remote had pretty much exhausted it's uses, sales had slowed, third party support had dropped off and the hardware was showing it's age like milk.

It was the end of 2011 and Nintendo needed a new console. They were stuck between a rock and a hard place, releasing a traditional console would have allowed Sony and Microsoft to leave them in the dust when they launched theirs two years after. So it was looking like more of a realistic solution to try and catch lighting in a bottle again with the Wii U, which of course failed.

The Wii U could have gone far better, but it's the product of the chain reaction set off by Yamauchi and the N64.

As a footnote, they've shipped over 10 million Amiibo, so even the Wii U has some measure of redemption.

I love the ideal of a united online service. Thanks for keeping it real Iwata, much love.

So Iwata has woken up to where he should've been in 2005. Neat. Unfortunately we see nothing from them that hints they actually "get it" at all. The best we have so far is an admission that they know they don't know what they're doing.

Could nintendo turn this around in a hurry? Sure! They have the clout and the cash,but I'd be shocked to see it happen while Iwata is at the helm.

Probably, but you probably won't have to pay for online with the service.You may only have to pay for certain features.

No, the Wii U is a product of years of neglecting to address basic desires within the modern gaming landscape, combined with a failure of foresight and the lackluster and incompetent execution to build required infrastructure in various areas of their business. You make very valid points in errors of judgement on Yamauchi's end, but as you noted, Iwata has been president since May 2002, so these points also are an indictment of him as well. That's 13 years ago this month.

Does the fact that Yamuchi was also responsible during a time when the hardware was designed proprietary with less than 3rd party friendly concerns currently preclude Iwata from reversing course in their approach to them to be proactive and design their hardware with them in consideration? What exactly did Yamauchi do that presently excuses Iwata for failing to take initiative on holding a viable vision for online years after it's been shown to be what people want? What is it that he did that excuses Iwata the droughts that he can't fix? Or the virtual console that's a goldmine laying barely utilized? Or digital accounts that can't even match up to standards 10 years ago? Or Amiibo shortages? Or no Western support? Or region locking?

Nothing. Nothing that you listed caused such irreparable damage to Nintendo's prospects or their propensity and potential to take on Sony and MS, even on their own terms had Nintendo listened, looked ahead, and acted instead of sticking their head in the sand as if it's some point of virtue. As Iwata's very statement exemplifies, it is a lack of vision, and with that admittance and constant excuses, they are demonstrations of ineptitude. To attempt to say that Nintendo was forced down a certain path when it's been nearly a decade and a half past the passing of the torch is absurd. Iwata has had ample opportunity and resources to rectify and get Nintendo in the shape it needed to be during the Wii's period of proliferation and prosperity, even granted your points. It wouldn't have been easy for sure, but it would've been possible if this dunce removed his head from his rear and got a clue as to what gamers desire today instead of believing it's still the 1990s. Nintendo's position they find themselves in today (much less years ago) is not an absolute given by Yamauchi's hand. It's a product of dogmatic philosophy misaligned to the market's wants combined with incompetence.

Sorry, if it were only a few years Iwata's been in office I may be more inclined to agree with you. As it is, he's had his shot post decade, and he is currently performing abysmally.

As for old franchises, I'll grant you Donkey Kong and Punch Out (even though that's been a while), but Kid Icarus? Pilot Wings? I suppose low budget hand held games constitute reviving old classics? How about F-Zero? Where's Metroid? Or 1080? Where are these games in their full, AAA budget glory? Instead we get some what mine as well be e-shop titles thrown out there which feel like afterthoughts considering what Nintendo's capable of, which I suspect, IF we get a new Metroid or F-Zero after this wait, that's what they'll be. As for Yoshi's Island....you mean the one that got critically panned because Nintendo saw fit to throw it out to some no-name, non-talent, third-rate hack developer?

Don't know who that is, I just nabbed that off Neogaf. I'd appreciate a link if you have one.