It feels like forever since I last did a Night Cap, but with so many juicy things being unveiled in a Q and A sessions with Iwata back during the Investors meeting in April, it’s only fitting to round up all the juicy stuff and get the discussions flowing. We’ll analyze and dissect what Iwata had to say about their missed goals with the Wii, and move onto discussing how Nintendo plans to address the future which will effect how they release their own games, as well as how they provide what third parties are looking for – including the use of an advanced online system.

“Also for “Changing the relationship with television” or “Changing the relationship with the Internet,” we have made several attempts, but as of today, I do not think we have come to a point where we feel we have gained a definite response. Surely, there are many consumers who say, “I have never done anything like this before” or “This is my first time to experience anything like this,” and therefore, I do not intend to say that every attempt we executed was a mistake. In fact, we have made several attempts that no one has ever done before and I think we were able to make movement; however, in our scenario, we wanted more and more growth with an increasing number of people using it, and we wanted to have people keep on using it, but we fell short of this goal. In particular with Wii, for example, the challenge with start-up time when changing channels, or the current situation where we cannot automatically turn on Wii, turn on the television and change the input mode in the event that Wii receives a message, have led to challenges where we had difficulty having the users use Wii in the way we had intended. I don’t think that the concept was a mistake, but I think that Wii has yet to fulfill these concepts.”

It’s interesting looking at what Iwata feels is important here when dissecting how the Wii connects people with the internet. In general he admits some mistakes and that the Wii has not been able to fulfill their initial concepts. However, what Nintendo wanted to do with the Internet also did not necessarily serve the purposes of 3rd parties either, which Iwata explains later. Overall, the Wii accomplished really only one of the 3 goals stated back in 2006. That goal was “change the relationship between family and games”. The Wii succeeded brilliantly in bringing families together to enjoy gaming.

” The policy “Jimae-shugi” you mentioned has two aspects: it is a great honor to succeed in a business by making the best use of our own unique strengths, but on the other hand, it is a shame to fall behind the times clinging to it. I believe that it is the key to Nintendo, which develops both hardware and software in-house, to create new experiences which have been neither enjoyed nor requested by consumers, and let them say, “This is the very thing I have been wanting to play” once they have actually tried it. The more we depend on outside resources for this point, the more strength Nintendo will lose. It is vital for Nintendo to reinforce this point and cultivate developers inside the company. I hope that Nintendo is continuously considered as a company which is particularly good at such a thing, and I will make efforts for this.

On the other hand, it is not true that Nintendo is able to internally develop everything and keep up with the current pace of change. In fact, some of the software titles published by Nintendo are developed by outside developing companies, called “second-party developers” in this industry. There are already a lot of companies which receive various advice from Nintendo in the process of software development and whose products are sold under the brand of Nintendo, and for instance, I was working for one of such companies, HAL Laboratory, Inc., which developed “Kirby’s Dream Land” and “Super Smash Bros.” Considering the existence of such companies, Nintendo is not totally based on the policy “Jimae-shugi.”

Here Iwata explains plainly how Nintendo handles their in house and 2nd party creations, and he’s pretty spot on if you look at them as a company. However, this begs the question: We know you’re so great, but why are you shunning away those 3rd parties that are also great?

“Next I would like to tell you why we announced Wii’s successor system at this time, not at GDC. Naturally, the earlier we announce a new system, the more speculation will be encouraged and there will be a higher risk of information leakage from those who are working cooperatively on it outside Nintendo. In addition, a lot of people interested in our next move might be less amazed at E3 if we disclose too much information in advance.

At the same time, however, if we make a totally surprising announcement at E3 on the spot, which would be an effective way to astonish people, some busy people might say, “Oh, Nintendo is a mischievous company. I could have visited E3 if I was informed of the announcement in advance.” We decided to make the announcement at this time because now is our last opportunity to inform people so that they can arrange their travel schedule for E3.”

So, the Wii Successor was announced not because rumors we’re flying, but so people could plan to attend who otherwise might not. Honestly I have to call a little bit of bullshit here. It’s not like anyone was purposely not going to go to E3 because they weren’t aware of Cafe, and it’s likely the same people who were going to attend are still going to attend.

“On the other hand, the reason why we have not yet set the launch dates is not only because of our development status, but to create an environment in which third-party titles will also sell well, which is the aim we set when we announced Nintendo 3DS. If we fail to create such an environment, we will not be able to maintain the momentum of the platform continuously. We don’t believe Nintendo can do everything by itself. Of course, we are strongly aware of the fact that Nintendo’s titles are obliged to drive the sales of the hardware, but we are not as arrogant as to think that Nintendo can maintain the market on its own. We want the other companies to be successful. In order to accomplish this goal, we would like to decide on the dates after we know the release plans of other companies’ games so that we are able to consider how we can maximize the sales of our titles without affecting the sales of other companies in the short term. However, especially for the two titles I introduced today, which are the new iterations of “Mario Kart” and “Super Mario,” I did not talk about them with the image of launching them in the next fiscal year or thereafter, so please understand it in that way.”

In essence, part of the reason Nintendo is spreading out their titles isn’t just to allow their own material to be spread more evenly, but to give room for third parties to have some spotlight. In reality this is a brilliant concept, but in practice it may not work out as well as Nintendo has hoped it would. Take the 3DS: It is reliant on major third party support with some bigger budget titles. It relied heavily on third parties at launch and they simply didn’t deliver. Everything we are excited for going forward seems to be made by Nintendo. The point here is that despite 3rd parties excitement over the 3DS, we haven’t actually seen any “major” support yet in terms of new and unique to the 3DS titles.

This may change at E3 as we hear about more games, but for now I am mostly wondering if this strategy is truly best given the 3rd parties do not have a history of showing a lot of support in the last decade.

“Regarding your analysis that cooperation with third-party software developers didn’t go as well for Wii as it went for Nintendo DS, there actually are some arguments which attribute the reason to the system’s “performance,” but in terms of “performance,” Nintendo DS did not overwhelm other devices by its performance. However, it proposed what other devices could not, and that value was recognized, and as a result the software sold well, which is the most important point. Unfortunately, there are very few success stories of third-party software in Japan on Wii. This lowered the motivation of the software developers, and at a time when these software developers should have been running their businesses on the platform with the biggest installed base, this wasn’t the reality. On the contrary, in the U.S., several titles sold well. Not only “JUST DANCE,” which I introduced today, but for some titles, such as “Guitar Hero,” even if the titles were released for multiple platforms, the Wii version sold the most, and in such a situation, the developers did not completely lose motivation for development on Wii. However, Wii is good in some areas but not in others, so especially for games like “Call of Duty,” the Wii version sold pretty well, but the unit sales were very different from the versions of other platforms, and I assume that one of the reasons is the issue with the graphical representations which you mentioned before, and also, the consumers who like that kind of game will have other platforms at home as well, which led to this result. Of course, we would like to cooperate with software developers for Wii’s successor, and as I am repeatedly saying, I don’t believe Nintendo can carry out everything alone. I am saying that we are responsible for building up the market, but I don’t think that Nintendo can maintain the market alone; We are aiming for creating a situation where software publishers will be willing to cooperate. As for commenting on such things as the performance, I already stated in the beginning that I would not mention any specific plans. Thank you for your understanding.”

Now here is where we truly start getting into some meat. Iwata understands that without 3rd parties you are really hindering your console year to year, as it becomes so reliant on first party software that Nintendo can’t keep up with demand, and likewise, they can’t provide the full extent of content users want. While he has a couple examples of games that sold well, he mentions some other games sold well on other platforms specifically due to graphical implications. He wont say anything specifically about what the Wii Succesor can do, but it’s safe to say at this point that it’s going to have some beefy power. Iwata knows 3rd parties want it.

“I would not use the term “draw in” third parties, but I hope we can create a market that is attractive to third parties. The end result might turn out to be the situation you call “drawing them in,” but I do not use such words as “draw in” or “enclosure,” as I do not like such expressions.”

In the end, Iwata’s goal is clearly to increase third party support for both the 3DS and specifically the Wii Succesor. We’ve all heard the rumors and we know Nintendo is going out of their shell to try and make it a reality, so we’ll see what happens. There were some other interesting tidbits I skipped over in the Q and A that include some talks about how the Vitality Sensor is actually still in development, along with a few other tidbits about the 3DS, but overall I didn’t find them to be that interesting. Still, you can read the full Q and A here.

We didn’t necessarily learn anything new. At the same time, I think we have a better understanding for how Nintendo thinks about their future as it stands right now, and that they recognize and do indeed want to get some of the market they have lost to Playstation and Xbox over the years. What they do to make this a reality will be seen, of course, at E3.

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