Yesterday Nintendo announced a new lower priced 2D variant of their 3DS console, that shouldn’t come as a shock to anyone. John Gruber sees it as further proof that they are “not going to win this battle.” The vocal Nintendo community has stepped up again to challenge this assessment of the situation.
It’s presumptuous for any of us to suggest what Nintendo should do. They’ve been at this for a long time, and know very well how to maintain a profitable company. Nintendo isn’t seeing slumps because their hardware is getting worse. The original Nintendo DS and Wii were unusual and underpowered consoles by contemporary standards, and they were two of Nintendo’s biggest successes. What’s happening here is that Nintendo is falling victim to digital convergence. Go ask the big players in point and shoot cameras, GPS navigation, netbooks, and feature phones what happened to their markets. If they don’t all give you the same answer they’re lying, or potentially oblivious.
Nintendo pushed with the DS and even further with the Wii to make a console that included everyone. One that was accessible, fun, and social (like, real-life social, not Internet social). They succeeded just at a time when an “everyone” video game market was primed to be eroded by digital convergence. Today, not everyone wants to buy a specialized device for gaming, especially when they already have access to more games than they could ever want to play. The everyone market is now inaccessible to anyone who is making something as specialized as a video game console. If they want to keep trying to attract everyone, then they need to up the ante and make their own digital convergence device. Someone would need to be able to have their console instead of a smartphone. This is a very competitive space right now with a pretty established set of players. Nintendo might be able to break in with a strong enough effort, but it would draw too much focus away from making games, which is clearly their passion.
But I think Nintendo might be past seeing everyone as their potential market. They’re doubling down on core gamers. The people who never left them behind. The people who have always valued their games, and the care they put in making them. But leaving the bigger market behind will look like a step back. How can you compare the broad success of the original DS and Wii with the limited market they’re approaching today. Can Nintendo be successful with a market of tens of millions vs. the billions appeal of smartphones? Actually, it’s a far more addressable market, and one they’ve been serving for decades now.