Although I really shouldn't have to, I will begin this post with a disclaimer: I love Nintendo, in case you didn't already know. I grew up on Nintendo, I love their games, I've owned their systems, I think they are the greatest game company in the world. My Wii U is my most played console, and my 3DS my most played system outright every year for the last three years.
And yet I think it's time for Nintendo to do the smart thing, the wise thing, and stop making hardware.
The gaming industry is slowly moving towards a platform agnostic future. Eventually, there will be no dedicated hardware to play games sold- all games will be streamed at a server farm to local clients on PCs (or at worst, will be locally installed on PCs via game/company specific clients). In today's world of convergence centric devices, there is no place for dedicated game devices, handheld or console. Yes, I know the PS4 is breaking all records, but it's only the PS4 that is breaking all records- the console gaming industry itself is shrinking (the total number of consoles sold this gen will be far lower than the staggering 260 million sold last gen; further proof lies in the sheer number of high profile studio closures and game and franchise cancellations).
Nintendo's strength has never been its hardware- yes, they make good reliable hardware, and they have genuinely contributed to the advancement of console gaming more than any other console manufacturer, except for maybe Sega. Nintendo's strength has always been its games. Nintendo's games are amazing- arguably, Nintendo makes the best games in the world. You don't buy a Nintendo console or handheld because holy shit it's so awesome, you buy it to play Mario Kart or Pokemon. It's Nintendo's games that are its biggest asset, and you desire their games, not their hardware, never their hardware. For you, the hardware is just a (costly, and mostly inconvenient) way to buy into playing Nintendo's games.
Nintendo would be best served by dropping the hardware side of the equation entirely. Focus on the games- those amazing games that have defined the industry. Do your incredible game developers justice, they don't deserve to be hamstrung by the limitations that a Nintendo system poses on them, they deserve to have the latest and greatest hardware to show off their prowess with.
I don't like this. No console manufacturer has ever survived the transition to going third party successfully.
No console manufacturer has been Nintendo. Atari's talent in making games was, by the end, laughable at best. Sega was very good, it was excellent, but when all was said and done, it neither had the depth of catalog that Nintendo has, nor the expert management that Nintendo has, nor the great funds that Nintendo has, nor the sheer talent that Nintendo has.
If Nintendo were to go third party, Sony and Microsoft would bend over backwards to accommodate them- don't you for a minute think they wouldn't. Again, Nintendo's games are the best. This is something that Sony and Microsoft have outright, in public, on the record, acknowledged. You really think they won't heavily court Nintendo in co-branding/co-marketing/bundling deals to get preferential treatment?
This isn't even to consider the amazing things Nintendo could manage on a PC. They would probably not allow mods for their games- Nintendo likes to ship what it thinks is a finished product that needs no further work- but just think how well Nintendo's artstyle and its lovely limitless gameplay would come to life on a PC, unhindered by the artificial restrictions and limitations that Nintendo's machines pose.
So, why will Nintendo survive this transition when no one else has? The answer is simple:
- Nintendo is better managed
- Nintendo has more funds
Both, Atari and Sega, when they went third party, were on the verge of bankruptcy, and could scarce afford making the kinds of games that they had been known for in the past. Their poor management also ensured that the companies were eventually bought out by larger corporate entities that cared about the brand, but not about the business. These are not problems Nintendo has- they're incredibly well managed, and they have a staggering amount of money. More money than any third party publisher in the world. They not only would survive this transition, they would thrive.
What about the money that they make from their hardware? They'd lose out on that revenue stream.
What money? They don't make any money from their hardware. The Wii U is a loss making venture. The 3DS has never met a single sales target that Nintendo has ever set for it. Their hardware sales have constantly contracted, DS/Wii aside, and they will continue to contract, because Nintendo makes dedicated devices that have no place in today's world.
What about all the jobs that they would lose? Their entire hardware segment laid off...
Yes, that will suck. Unfortunately, it's also an inevitability. As stated above, the entire game industry is moving away from a hardware based business model to a client based model (and if you don't believe me, ask Sony and Microsoft, with their emphasis on PS Now/Azure Cloud respecitvely). Sooner or later, Nintendo's hardware department will be useless, simply because no one will buy consoles anymore, ever. They will buy multi purpose devices that also happen to play games, and Nintendo's best bet is to make that transition now and get a head start, instead of waiting ten more years and play catch up with the industry. That never works out well for them.
What about the money that they make from third party licenses?
What third party licenses?
What about the money they will have to split with the console manufacturers?
They don't have to. They can easily just go PC only, and make their own Nintendo client to sell their games, where they will have no one to share their revenue with. If for some reason Nintendo decided that they wanted to go to consoles as well to expand their market, well once again, they would have a of leverage- Sony and Microsoft would kill to have their games on their systems (for as long as those systems last- eventually, all dedicated hardware will be a thing of the past, as stated above multiple times), and would almost certainly provide them with much better license terms than are offered to any other third party publisher or developer.
What about Nintendo's game output? What reason will they have to make anything but Mario and Pokemon if they don't have a console to sustain?
Because they won't have to worry about losses from the hardware end anymore- think about it. An F-Zero, or Star Fox, or Metroid, these have always been loss making franchises. Currently with Nintendo losing as much money as it does, what are the odds that it licenses big budget titles in these (and their other dead) franchises? They would lose even more money on top of the money they are already losing.
If they went third party, they wouldn't have to worry about hardware losses at all, and their software sales for higher selling games like Mario Kart or Pokemon could easily subsidize their development for an F-Zero or Metroid.
Why can't that happen now, you ask? Because right now they have additional hardware losses to consider, don't they?
This entire argument about only focusing on the money making franchises is one that I find asinine. Think of EA, for example. Biggest publisher in the world. Does it focus only on FIFA and Madden? **** no. It also produces games that cost more and make less- Dragon Age, Mass Effect, Need for Speed, Battlefield, Dead Space, Medal of Honor, and so on. Nintendo won't be any different. They will constantly try to diversify their lineup. In fact, no longer held back by the consideration of trying to sell their expensive hardware, which is what causes them to fall back on established franchises to begin with, they will probably end up experimenting more than they do now.
How do Nintendo's games benefit?
By them not being hindered by asinine restrictions or considerations imposed on them by their hardware (oh, so I somehow have to take advantage of motion controls, you say? All right, waggle to roll!)
Imagine a Mario or Zelda game with the power of the PS4. Or a Pokemon game utilizing the online functionality of Xbox Live or PSN.
How do Nintendo's economics benefit?
Are you daft? Have you been reading so far? Go back and re-read the entire topic. I refuse to answer this question again.
So you're saying you hate Nintendo now?
No I don't, I love them and want them to survive, that's why I'm prescribing what is the best move to them.
So you hate their systems?
No, I love their systems, but I love them because of their games, not for any other reason. Their machines aren't impressive or anything special in and of themselves like an Xbox or a PlayStation is. They're just something I need to play their games, and my love for them is restricted to my needing them to play said games.
If Nintendo doesn't want to go third party, it doesn't matter to me. I will continue to buy their games and systems for as long as they continue to exist. But pure market conditions dictate that won't be for much longer. Nintendo would be best served to make the transition now, get a headstart, be better established by the time the rest of the industry makes the transition, and shore up their economics and development in the meanwhile.
Okay, sorry about another long topic, but once again, I wanted to ensure that I covered everything. What do you think, System Wars?