Would You Like To Continue? Laying Odds On Nintendo’s Next Move

Last Friday Nintendo announced their third quarter financial results, and while they weren’t all bad new, they were mostly bad news. Nintendo was forced to drastically cut their hardware sales forecasts, slashing predictions for the Wii U from 9 million to 2.8 million units, and the 3DS from 18 million to 13.5 million.

Now, a little perspective — Nintendo’s forecasts were ridiculously high, and even though Nintendo failed to reach their goals, the 3DS is still the best-selling game system of the year, and there was a respectable uptake in Wii U sales in December. Nintendo will likely lose around $240 million this year, but they also have around 8 billion in cold hard cash sitting in the bank. They’re in no immediate danger.

What really got people talking though was the fact that Nintendo President Satoru Iwata seems seriously shook by the situation if quotes like this one are any indication

“We are thinking about a new business structure. Given the expansion of smart devices, we are naturally studying how smart devices can be used to grow the game-player business.”

This set off a stampede of “Nintendo is/shouldn’t/should go third party/start developing for smartphones/do something else crazy” articles and comments from “analysts”.

While much of the commentary has been totally overheated and unrealistic, it’s clear something is stirring behind the scenes at Nintendo. The next big date Nintendo fans are marking on their calendars is January 30th — that’s when Nintendo plans to hold a Corporate Management Policy Briefing for investors. It’s also expected a major Nintendo Direct for fans will drop sometime around the same time.

So, what does the future hold for Nintendo fans? Let’s look at the likeliness of some of the scenarios pundits are suggesting…

via USGamer, Gamespot & Joystiq

Stomping his way to the PS4?

Nintendo Goes Third Party

This is always suggested whenever things seem to be getting even slightly rocky for Nintendo — probably because there’s a lot of former Nintendo gamers who still want to play Zelda without buying Nintendo’s systems.

That said, anyone who thinks Nintendo is going third party after a couple years of bad financials a) doesn’t know much about Nintendo and b) doesn’t know much about the video game industry in general. Any analyst that suggests going third party is the answer to Nintendo’s woes is an analyst you can safely ignore.

There’s a reason Sega, the only major console player to drop out of the game, only went third party with extreme reluctance and became a much smaller company once they did. Most people assume that console makers make money from selling the hardware and selling their own software for that hardware, but that’s only half the story. Console makers also get a cut of every third party game published on their system. Every single one. A successful console is a colossal cash cow, and once you establish yourself in the console world, you don’t drop out lightly. There’s a reason Microsoft put up with years and years of Xbox loses and Sony put their heads down and plowed ahead when the PS3 initially bombed. There’s a reason Nintendo has 8 billion in the bank.

Aside from the financials, Nintendo’s games rely on Nintendo being able to custom design their own quirky hardware. Super Mario Bros., Star Fox, The Legend of Zelda: Ocarina of Time, Wii Sports, Nintendogs, Pokemon — all of Nintendo’s greatest software successes relied on unique hardware, which the competition didn’t have. A world where Nintendo was always a third party is a world where most of your favorite Nintendo games never existed.

Odds Nintendo Goes Third Party: 1 in a 100

I’m not saying there’s no chance it will happen, but Iwata would be as dumb as some people are saying he is if he let it happen. I don’t see it.

Possibly a look at Nintendo’s future. 

Nintendo Goes Partially Third Party

Another scenario being suggested is that Nintendo might go partially third party, publishing some games for smartphones or on the Xbox One and PS4, while keeping others exclusive to Nintendo systems.

This doesn’t really make much basic business sense. If you can get Nintendo games on non-Nintendo systems why bother with Nintendo systems? Unless you’re a super-diehard who has to have every Nintendo game published, but then Nintendo already has that demographic sewn up.

But maybe Nintendo could get away with it if they were very careful. The recently released NES Remix may be a look at the future — NES Remix is a collection of short, simple challenges based on NES games. You don’t get the full games, just little snippets. Perhaps games like NES Remix that cash in on Nintendo’s iconic characters without providing a lot of depth could end up on smartphones. Play a quick one-dollar minigame as Link, then buy a 3DS to play one of his full-fledged adventures. It might work, although I could see a lot of today’s casual gamers being satisfied with just the minigame and never bothering to upgrade.

Odds Nintendo Goes Partially Third Party: 1 in 5

This could happen, just not in the way you’re hoping. The next Zelda game isn’t going to be on the PS4, and you’re not going to be able to play classics like Super Mario World on your phone. That said, some simple Nintendo-branded minigames or apps could start to slowly creep their way onto smartphones.

Hopefully Nintendo’s next hardware revamp is a bit cooler than this one. 

Nintendo Revamps Their Hardware In A Major Way

Neither the 3DS nor the Wii U have been blowaway successes, so maybe it’s already time for new hardware. There’s a few different ways Nintendo could go with this…

a) Nintendo swaps out the core Wii U box for something with PS4/Xbox One level processing power while sticking to the GamePad. The few Nintendo fans that have already bought a Wii U could upgrade for a discounted price.

b) Nintendo cans the Wii U altogether, announcing a totally new console.

c) Nintendo announces a successor to both the 3DS and the Wii U. The catch? It’s all one console — a portable with console-level graphics that connects to your TV. There seems to be a lot of wishful thinking about this scenario.

d) The 2DS XXXXL — a new version of Nintendo’s handheld the size of a coffee table.

Odds Nintendo Revamps Their Hardware In A Major Way: 1 in 5

I absolutely think hardware tweaks are on the way — a new 3DS model or changes to the Wii U GamePad perhaps. That said, the heading is “Nintendo revamps their hardware in a major way”, which I’m not as certain about. I have no doubt they’re furiously working on a Wii U and/or 3DS successor as we speak, but they might not be ready to unveil them yet.

The spirit of Ravio may be infecting more Nintendo games. 

Nintendo Changes How They Sell Games

That Iwata quote I posted earlier predictably resulted in a lot of, “Iwata mentioned smartphones! Nintendo is developing for smartphones!” hyperbole, but a more careful interpretation of the quote is that Nintendo is simply studying the ways smartphone developers make money.

Nintendo’s games, even their big ones like Super Mario 3D World, aren’t really what you’d call typical triple-A games in 2014. Maybe it’s time for a new approach. Mario games could adapt to free-to-play pretty easily — let people play the first level free, then charge a couple bucks for each new world, and a few cents for extra lives and power-ups. Sure, us old-timers would gripe, but which console would parents be more likely to buy, the one with games that cost $60 – $70 or the one where the games were “free”?

Nintendo Changes How They Sell Games: It’s Happening

This is the most probable shake-up in my opinion. Nintendo’s already dipping its toes in with games like Wii Sport Club that gives you the option to rent instead of buying. There’s going to be more of this — I wouldn’t be surprised to see Nintendo try to match Sony’s Playstation Now service somehow. Free-to-play Mario is only a matter of time.

This bit of official art was recently leaked. I think a few people may want to play this game. 

Nintendo Unleashes Dream Games

There’s still a chance Nintendo will stick to its guns and try to make the Wii U happen through software alone. It worked for the 3DS (to a certain degree), and Nintendo is sitting on a lot of potentially huge games. A full-on, MMO-style console Pokemon. A massive, Skyrim-like Zelda. Hell, get Valve on the phone and do a Mario/Portal crossover! 8 billion dollars can make a lot of crazy s–t happen if you let it.

Odds Nintendo Unleashes Dream Games: 50/50

Nintendo hasn’t announced a major new game in over a year. There’s been concept art and rumors about a major HD Pokemon game circulating for a while. We know there’s a new Zelda on the way. Nintendo can’t sit on these megaton bombs forever.

Nintendo Shrugs And Does Nothing

Of course there’s also the slightly depressing prospect that Nintendo will simply do nothing. They’ll shrug and say, “Hey, Mario Kart and Smash Bros. are coming out!” and hope they can stick it out for the next few years.

Odds Nintendo Shrugs And Does Nothing: 50/50

Sadly predicting Nintendo will stick their heads in the sand and take the conservative route is usually a safe bet, so all these prognostications may be for naught. That said, I can’t shake the feeling that Nintendo is going to stray from the safe path just this once.

So, that’s how I see things shaking out over the next couple weeks. What about you folks? What do you see in Nintendo’s near future?