Nintendo Talks Past, Present, and Future

Despite playing second fiddle to Sony's PlayStation, the Nintendo 64 has enjoyed some of the most innovative features and software ever to grace a video game console. Now that it's nearing the end of its life cycle and is preparing for its final round of brisk holiday sales, GameSpot thought it would be a good idea to speak with Nintendo and get its perspective on the last four years of its business and the future that lies ahead. George Harrison, VP of marketing at Nintendo of America, was more than happy to share Nintendo's perspective on its business model for the Nintendo 64, Nintendo's image, the future of Nintendo, and much more.

GameSpot: Were you surprised to see that Majora's Mask outsold the PlayStation 2 launch software?

George Harrison: Not really. We've got a bigger installed base of hardware for Nintendo 64. Even if there was a more plentiful supply of the PlayStation 2, there are a lot of people who wouldn't buy it this year. They typically wait for the price to go down or the [software] library to get bigger. And those people want to buy software for their existing platforms. We're very optimistic, but that's one of the reasons we put the Zelda launch right on top of the PlayStation 2 launch.

GS: Now that the N64 is heading into its last holiday season, has it met Nintendo's expectations as far as how it's done in the marketplace?

GH: I would characterize it more as "maybe" its last major holiday season. We don't know what will happen after the GameCube launches. That will depend on what we end up doing with pricing. But we look at the Nintendo 64 as a success. It's sold a significant number of hardware units, and we've had a number of major hits, which is our typical company strategy. We've felt very good about it. It may not have reached its full potential, but that was inherent of some of the business decisions we've made as far as staying with cartridges and those sorts of things.

GS: What about the Nintendo 64 makes Nintendo most proud?

GH: We believe that there are some true software innovations that were introduced. Certainly, Mario 64 was revolutionary in terms of taking you out of the side-scrolling 2D world into a 3D world. The four-player aspect of the Nintendo 64 machine has been very instrumental in great game experiences. Things like Mario Tennis, Mario Golf, and GoldenEye. That's a key feature that we were frankly a little surprised wasn't incorporated into the PlayStation 2. It goes right to the heart of the social nature of gaming that we think is the key to success, and we're going to try to build on it as we go forward with the Game Boy Advance and the Nintendo GameCube.

GS: Were you surprised at how well the four-player aspect of the Nintendo 64 was received?

GH: No, I think we understood it. In prior generations of home consoles, or even Game Boys, we didn't have a very easy way for people to do it. But it was a core thought of what could be the next great gaming opportunity when the Nintendo 64 was conceived. And we're going through that same thinking now. It's not enough to just have a better machine in the Nintendo GameCube - but what's the next breakthrough game experience that will make people want to buy a new piece of hardware? And that goes well beyond just slightly prettier characters and more polygons. In the end, nothing beats a great story. We see that same theory played out with the success of Pokémon. It has really crude graphics but a really kind of ingenious gameplay element was added with the two cartridges and the need to exchange characters.

GS: What regrets does Nintendo have about the Nintendo 64?

GH: I don't think we have any regrets. Certainly, the business model associated with cartridges made it harder to attract the third-party publishers. The economics just weren't as attractive. That maybe limited the full potential of the Nintendo 64 or having developers explore the full potential. We try not to have regrets. This is an industry that doesn't exist in short snapshots. It extends over a long period of time, and we try to do a good job as far as continuity across our platforms and across long periods of time.

GS: Would you say that the cartridge format was the biggest stumbling block that kept the Nintendo 64 from toppling the PlayStation?

GH: I would say that it was certainly a limitation. We did it for what we believe are all the right reasons - to try to combat piracy and those kinds of things. But when it came to attracting third-party publishers and when it came to managing aggressive retail prices, it was clearly a more favorable situation on the PlayStation.

GS: The average game buyer is over 18 now. Do you think that some consumers may have felt that the N64 was targeted toward a younger audience?

GH: I think people buy a hardware system based upon whether they think the software is for them. And while we did make an effort to try to add some software that was more appropriate for consumers over the age of 18 and had big successes like GoldenEye, the product portfolio for people over 18 was probably a little thin. As a result I think they looked at that and said, "Even if I bought Nintendo 64 just for the purposes of GoldenEye, I also have my PlayStation." Our goal with the Nintendo GameCube is to have a much stronger and broader appealing portfolio from the start.

GS: Do you think that public perception has changed? Do you think it will change more with the GameCube?

GH: I don't think that the overall perception has changed, even with those games that were successful like GoldenEye. I think the total perception is still that the Nintendo 64 is a platform for slightly younger gamers. But we intend to start the Nintendo GameCube marketing and launch with the message that we are doing games for every age of player and every type of player.

GS: Does Nintendo need third-party support for its consoles to be successful?

GH: Absolutely. I think there are two sides to that. On the one hand, the exclusive games are the ones that make consumers decide which hardware platform to buy - a game that they can't get anywhere else. And for that, of course, we use our franchise characters and other properties. But the third parties provide a really important value in that they tend to work in categories that maybe our own development teams aren't as proficient. That includes games for older audiences and other genres. So we think they're incredibly valuable and have certainly been a strong part of our Game Boy business over the last three years.

GS: We've heard rumors that Nintendo has decided to dedicate more of its energies to the handheld market, especially the Game Boy Advance. Can you comment on this?

GH: I don't think that any comments like that were intended to mean an exclusion of the home market. Certainly, the Game Boy business, which we dominate with over a 90-percent share around the world, is important for us corporately to be successful. This transition is, in fact, our first priority. But it's also a Trojan horse. It's the first punch of the one-two punch combination with the GameCube. So in Japan, the first order of business is to be successful with the Game Boy Advance and use that as a setup to launch the Nintendo GameCube.

GS: Will Nintendo continue to produce Game Boy Color games after the Game Boy Advance is released?

GH: There is a big installed base for the Game Boy Color, and the Game Boy Advance is backward compatible, so developers can go ahead and work on games that are made for the Game Boy Color and know that they will be playable on the new system. I really don't know over what period of time developers will begin to shift their resources to a Game Boy Advance-only type of game.

GS: What about the Nintendo 64? Will Nintendo continue to support that console once the GameCube is released?

GH: I think we'll continue to support it. But there probably won't be much new, original software. It's just a shortage of development capacity, not only for ourselves but also for all the third parties. Most people will shift their attention to the newer platform. Just like we did with the SNES after the Nintendo 64 launch, it became a platform that was really value-oriented and built on its existing library [of software].

GS: What percentage of Nintendo's staff is dedicated to next-generation projects?

GH: We don't actually have a lot of staff [laughs], so we're all doing everything. The planning is getting underway for the Game Boy Advance. After Space World, we had our first chance to see both of those products [the GameCube and the Game Boy Advance], and our thinking is getting underway. We're doing some basic research to ground us, and that work will probably accelerate. In the meantime, we've got products to launch for our existing platforms. Paper Mario, Conker's Bad Fur Day, and some others for the Nintendo 64. I think as we get on to E3, the work will increasingly shift to the new platforms. That is, that the public unveiling for us of the Game Boy Advance and also, really for the world, of the Nintendo GameCube.

GS: Do you anticipate that software will be playable at E3?

GH: Certainly for the Game Boy Advance it will. The intention right now is to launch the Game Boy Advance in Japan in March, so that should be definitive. And for the Nintendo GameCube, it's certainly our goal to have that happen. But, as with everything, until the software is 80- to 90-percent complete, the people who make the judgement here [Nintendo of America] aren't going to decide which games will in fact be shown. We are certainly going to cooperate with Japan on the decision about which games will actually be shown and which ones will be playable at E3.

GS: You stated earlier that you were planning on shifting to an older demographic with the GameCube, but there are a lot of people who liked what the N64 had to offer. How does Nintendo plan on keeping consumers who were happy with the Nintendo 64?

GH: We will do that in more of an incremental effort. So the increased proportion of the portfolio that appeals to people over the age of 18 wouldn't come at their expense. We're still going to be weighted heavily toward our franchise core characters like Mario, Donkey Kong, Pokémon, and Zelda. So those probably will not suffer. It's the audience we've done best with, and our first priority is to protect that audience.

GS: How does Nintendo plan on winning back consumers who were disappointed with the N64?

GH: We have an amazing industry. If you look at it, consumers have made some pretty bad choices and come back with open arms. There are a lot of hardware systems that have never succeeded. Whether it's the Atari Jaguar or others. Sega drifted off into the 32X and other things, and those consumers came back and were at least open to considering other Sega products. So we feel we have a pretty solid base of Nintendo 64 enthusiasts and can appeal to the people who may have been disappointed with Nintendo 64 with the new offering.

GS: Nintendo has been secretive about its products in the past. Here at GameSpot, we constantly get new burns of games as developers improve them. We end up giving these games a lot of coverage. We don't usually get that from first-party Nintendo products. Do you believe that secrecy is still the best marketing tactic in today's video game marketplace?

GH: Our goal is to make the product available as soon as its likely to be judged well. In other words, we don't want to send you a partially finished product that you would form a bad opinion about. So I think you won't see a lot of change in the way we do business there.

GS: Even with the optical disc format?

GH: I would say that it's probably still going to be 12 to 16 weeks before a launch that a product would typically be available. Again, we want it to be complete as it can be as soon as it can be. Whether we'll change some of our marketing strategy and be able to put some teaser levels and things on disc for consumers, we're not quite clear on that yet. As a goal, Nintendo doesn't want to unveil the software until we feel like it's going to make its best impression.

GS: Dinosaur Planet and Eternal Darkness recently disappeared from Nintendo's release list. Are these games still in development for the Nintendo 64?

GH: They are still in development. I don't know when the determination will be made as to which platform they will be launched for. But they are both extremely tremendous-looking products. I think a decision was made to sort of step back and see what the potential is for those products on the Nintendo 64.

GS: Where do you see Nintendo in four years?

GH: I think you'll see Nintendo in probably not much of a different place. I think you'll see us with a corporate market share that's at 50 percent or 60 percent. Right now we're in the mid-40s as a corporation. As long as we can continue to generate the software hits, we'll be able to drive our hardware sales. Certainly, as we get on to a level playing field with the optical disc for the Nintendo GameCube, that should be one less obstacle to appealing to a broad range of consumers.

GS: Have you decided on licensing fees for the GameCube?

GH: No, I don't think any of that has been published yet to the third-party publishers. We're just beginning to get some development kits out so they have a chance to see what it's all about. I don't think it will be until after the first of the year that the licensing agreements will be in place.

GS: Have any third parties received GameCube development kits yet?

GH: Yes, some of them have.

GS: Are there any surprises left for Nintendo 64 owners?

GH: I think there are some good games coming in the first half of 2001. Before we get there, we have Banjo-Tooie coming, and Paper Mario is a good product coming in the first quarter of next year. And we think that Conker's Bad Fur Day will be an unexpected surprise for Nintendo game players.

GS: It seems like Nintendo is spreading out its releases next year. Is this because it's not certain when the GameCube might be ready?

GH: No, I think products get scheduled for release when they are completed. I think in that you start to see the beginning of the shift of development resources. So as people get underway to work on GameCube games, their willingness to start new Nintendo 64 projects is really limited.

GS: What would you say to someone who is torn between waiting for the GameCube and buying a PlayStation 2?

GH: I don't really think it's any contest at this point. You can certainly wait for the game library to get better on the PlayStation 2, not to mention the availability of the hardware itself. But I think we're not going to have much to show until we get to E3 on the Nintendo GameCube, so it's hard to say to people to take it on faith. But if people look at the history of Nintendo and what we've delivered in the way of entertainment well over the last decade, they should have every confidence that there's going to be some great stuff coming next fall.

GS: When will Nintendo be ready to talk more next-gen?

GH: Not a whole lot more is going to be said before we get to E3. We'll just have to take the pulse and direction we get from NCL [Nintendo Japan] once we get into the beginning of 2001 and see what's possible. For the most part, the direction has been "let's just try to lay low until we get to E3." You may hear something about partner announcements and those kinds of things.

GS: Like third-party announcements?

GH: Right.

GS: What's your feeling on the Xbox?

GH: At this point, we don't know much. We've seen the specifications. They have quite a job to do to figure out what their killer software applications are. We'll be as anxious to get to E3 as I'm sure that they will be. But we haven't seen anything yet on their third-party list of companies they claim have signed up that is overwhelming. We'll just have to wait and see how it develops.

GS: Thanks for taking the time out of your busy schedule to speak with me.

GH: Thank you.