Nintendo: Changing the Game
How the world’s most famous video game company has consistently made history by going against the grain
This is an exclusive expanded and updated version of a feature article in the forthcoming Oct 2017 issue of Hyperlink.
By Matthew Gartland
Nintendo is an iconic brand, one whose reputation precedes itself — or so you might think.
You might think that Nintendo got its start during the golden age of video gaming in the ’80s. You might think of Nintendo as a video game console company. You might think of Nintendo as a one- or two-trick pony, on the basis of its heavy investment in its Super Mario Bros. and Zelda brands.
You might also think that Nintendo, a once-dominant influencer, has lost its touch and tenancy for innovation in the modern era of computing and gaming. And as such, you might think that Nintendo has become irrelevant, an aged dinosaur fighting for survival.
If you thought along these lines, you would be, in a word, wrong.
In truth, the story of Nintendo is far more complex and adventurous, full of surprises, like the very best of today’s multiplayer role-playing games. Nintendo is no near-fossilized dinosaur out of breath and stamina. Quite the opposite: it’s a shapeshifter of immense creativity, ingenuity, resilience, and vision that once upon a time pioneered the future of computing and gaming — and may be on the cusp of changing the game again.
Nintendo’s story began all the way back in 1889, as a playing card company. After the company went public in the early 1960s, it branched out into other products, including physical toys. It wasn’t until the 1970s that it took on the identity by which we know it best: a video game company.
At the time, Nintendo was an upstart in a market dominated by one major player: Atari. But Atari had adopted an “open” platform for its popular 2600 console, with no restrictions on who could produce games for it. This meant the market was flooded with a glut of mediocre games. There was also a proliferation of competing hardware; it seemed like everyone and their cousin was making their own video game system, all with their own libraries of game titles.
And so, by the early 1980s, the market was oversaturated. At the same time, personal computers were becoming less expensive and more attractive as alternatives to video game systems. The confluence of these factors led to a massive crash in the video game market in 1983. Between 1983 and 1985, industry revenues dropped from a peak of $3.2 billion in 1983 to around $100 million by 1985 — a dizzying 97 percent drop.
Video gaming seemed done for. But upstart Nintendo had an ace in its pocket that would reverse the entire industry’s fortunes. In 1985, Nintendo pulled off one of the best branding maneuvers of all time, rebranding its flagship product, the Family Computer or “Famicom,” as the Nintendo “Entertainment System” or NES. The company soft-launched the reimagined console in New York City that fall, and it quickly vaulted both the company and the entire industry back to relevance.
Nintendo’s brand position, combined with a stellar product, triggered the dawn of mass appeal for video gaming. With the NES, Nintendo realized what made video games work. It wasn’t about having great hardware, or even a ton of games. It was about the quality of the experience — an engaging reality unto itself.
With the NES, Nintendo also learned what not to do thanks to Atari’s example. By opening up its 2600 console to any developer who wanted to create games for it, Atari had allowed the market to become flooded with games, many of dubious quality. To avoid a similar dilemma, Nintendo laser-focused on only allowing top-notch games on the NES. They were ultra selective about who could develop games for the console, and enforced strict quality control on third-party titles. They even went as far as making developers sign non-compete agreements that barred them from producing games for any other video game platform.
Nintendo was stingy, but their gambit paid off. On the heels of the NES, Nintendo became a cultural force. Several of the original games for the NES, including Super Mario Bros. and Duck Hunt, became instant classics that remain revered today. The NES’ success among youth of the early 1990s even led this cohort to be dubbed the “Nintendo generation.” Nintendo merchandise flooded the market — there was even a Super Mario Bros. movie and TV show, as well as Nintendo Power magazine, which ran from 1986–2012.
With the NES, Nintendo realized what made video games work. It wasn’t about having great hardware, or even a ton of games. It was about the quality of the experience.
A few years after the NES launched, Nintendo made another huge splash with the Game Boy, a portable gaming platform that heralded the advent of mobile gaming and that sold, along with its successor, the Game Boy Color, nearly 120 million units. Never before could someone lose themselves in an alternate reality experience with just a handheld device — and the Game Boy set the stage for Nintendo’s incredibly successful later line of portable gaming systems, the DS, 2DS, and 3DS.
Thanks to Nintendo, the future had arrived, and it seemed unstoppable.
Nothing lasts forever, of course. Nintendo’s dominance and influence waned through the 1990s and into the 2000s as competitors like Sega, Sony, and Microsoft burst onto the scene, caught up technologically, and, by many measures, surpassed it. So how has Nintendo stayed relevant?
In one way, the story of Nintendo can be told by looking at how they’ve succeeded by choosing purpose over power — and how when they’ve done the opposite, it hasn’t worked out as well.
Simply speaking, Nintendo’s success has come in large part by producing less powerful hardware than its competitors and focusing more on the quality and accessibility of the gaming experience.
Exhibit A: In the late 1980s, Nintendo lagged behind Sega in producing a console that could match Sega’s current console, the 16-bit Genesis, in terms of hardware specs. The console that would eventually match up with the Genesis, the Super Nintendo Entertainment System (SNES), didn’t come out until 1991, leaving the underpowered NES as the Genesis’ main competition for two years. But the NES and SNES were still both huge hits, because even if the hardware didn’t quite match up with the competition, the games and the experience definitely did.
Exhibit B: In 2006, Nintendo released the Wii console. The Wii was significantly underpowered compared to its competition, namely Sony’s PlayStation 3 and Microsoft’s Xbox 360. But it was a groundbreaking platform, thanks largely to its innovative motion-sensitive controller that let people play video game versions of sports like tennis and bowling more realistically than ever before. With the Wii, Nintendo tried to appeal to the “casual” gamer — parents, dabblers, people who had never tried their hand at gaming before. Thanks to the Wii, many a living room became the domain of a once-uncommon sight: entire families playing together. By top-line markers the Wii was a huge success, selling over 100 million units, and drawing in a wider cross-section of people than just about any gaming device that had come before it.
Unfortunately for Nintendo, there was a dark lining to this silver cloud; “hardcore” gamers turned up their noses at the “fun” console. As a result, Nintendo’s next hardware offering was almost destined to up the technical ante. Dubbed the Wii U, it was a hybrid tablet-slash-gaming system. Under the hood, the Wii U was a lot more powerful than the Wii, making it more relevant on paper to serious gamers. But customers quickly found the Wii U’s built-in touchscreen unnecessary for gaming, since the console plugged into the TV anyway. The explosion of tablets right around the time of the Wii U’s launch kept it from being a viable tablet device, either.
It soon became clear that the Wii U was a console with no target market in particular. As the Guardian said, “Investors hate it, developers love it, our testers are intrigued by it, others can’t quite see the point of it … there’s no single take on Nintendo’s successor to the Wii.” Wired called it “the game system for nobody” and its sales bore that out, at just 14 million units, the lowest of any Nintendo system by far. In September 2016 SlashGear declared, “It’s time for Nintendo to exit the console business.”
As the Wii U showed, flipping the script and choosing power over purpose didn’t really work out. Nintendo’s greatest strength has been its ability to create a well-rounded gaming experience, not match up spec-for-spec with its competition.
That brings us to Exhibit C. Jump back a decade and a half before the Wii U mini-debacle and you’ll find an equally high-powered flop: the Virtual Boy. The Virtual Boy was a kind of proto-virtual reality console, with hooded glasses that provided an immersive gaming experience. In a way, it was ahead of its time — but mostly, it just wasn’t very good. The graphics were lousy (it only had two colors, red and black), the console was clunky, and — most importantly — pretty much no one made any games for it.
Thanks to the Wii, many a living room became the domain of a once-uncommon sight: entire families playing together.
One thing that’s consistently set Nintendo apart is its willingness to diverge from the pack, making head-scratching decisions whose wisdom is revealed only later. They’ve succeeded with less-powerful consoles. They’ve created games considered “nontraditional” when they were launched — like Mario Paint, which allowed players to create pictures and simple animations, or Nintendogs, a pet simulation — but went on to become unexpected hits.
According to Jeff Ryan, author of Super Mario: How Nintendo Conquered America, “Nintendo is very good at doing the right thing, but being so ham-fisted about it you don’t see it’s the right thing until too late.”
At times, this tendency to go against the grain has hurt them, such as with their refusal to embrace the emerging compact disc (CD) format for their Nintendo 64 (N64) console, opting to stick with the older cartridge standard. As a result, Nintendo lost a lot of third-party developer support for the console, losing ground to the N64’s main competitor, Sony’s PlayStation, which had a CD drive.
In a way, Nintendo is like Apple, another company known for (in its own words) “thinking different.” While Apple has maintained firm oversight of the software that’s allowed to run on their Mac and iPhone hardware, Nintendo has long “locked down” its gaming ecosystem by placing tight restrictions on who can develop software for its consoles.
Nintendo’s willingness to think outside the box and be misunderstood may lie partly in its diverse origins as a card and toy company. But it’s also because of its people. Several leaders at Nintendo have attained almost mythical status for their contributions to the company and the video game industry, and for making Nintendo the iconoclastic force it has been for so long. Among them is Gunpei Yokoi, the Game Boy’s inventor, who died in 1997; Hiroshi Yamauchi, the third president of Nintendo, who led the company for fifty-three years and died in 2013; and Satoru Iwata, the fourth president, under whose guidance the company saw significant growth with the launch of the DS and Wii consoles, and who died in 2015.
But maybe the most iconic of them all is Shigeru Miyamoto. Miyamoto was one of the first video game designers who was an actual designer, an artist — rather than a programmer. As such, he valued gameplay over technical wizardry when it came to making games. As the person responsible for the timeless Donkey Kong and Super Mario Bros. games, Miyamoto ushered in an era of video games based on story and immersiveness — and he’s a big reason Nintendo has o en swum against the tide when it comes to game design. In a 2014 interview with the Telegraph, Miyamoto said, “What the other companies are doing makes business sense. But it’s boring. The same games appear on every system. At Nintendo, we want an environment where game creators can collaborate and think of ideas for games that could have never happened before.”
After the Wii U misfire, the pressure was on. Nintendo came out of this phase with a lot to prove — and that burden rests almost entirely on their newest console, the Switch, an attempt to bridge the gap between a handheld and a powerful home-based console.
Much like the Wii U, reaction to the new system has been divided so far. On the critical side, the Switch is expensive, has poor battery life, is bulky for a handheld, and isn’t as powerful as its console competitors (the Playstation 4 and Xbox One). In a way, it’s trying to be the best of several worlds and fight a war on multiple fronts. In the opinion of gaming expert and YouTube commentator Adam Koralik, “While I think Nintendo’s attempt [with the Switch] was to appeal to everyone, they might ultimately appeal to no one.”
On the optimistic side, the Switch is a truly innovative gaming platform, one that seemingly only Nintendo could create. It’s the first platform that attempts to cross over between mobile gaming and console gaming, unifying the handheld and TV- based gaming worlds. And after all, it’s less powerful than its main console competitors, which is good news for Nintendo, right?
Jeff Ryan agrees that the Switch is a great move for Nintendo, calling it “a fantastic idea.” Says Ryan, “What [Nintendo is] is a games maker, and their trick is that they only make games for their own hardware. You need to buy the hardware to get the software, so with the Switch, they’ve once again come up with a new hardware that doesn’t look like anything else, because it’s both a screen and a handheld, and it goes on your TV all at the same time.”
One huge key to the Switch’s success could be the emergence of a robust game library. Aiding in this quest is the Switch’s first “killer app”: The Legend of Zelda: Breath of the Wild. Zelda is one of the most famous and lauded video game series of all time, and it’s arguably one half (along with the Super Mario line) of Nintendo’s crowning duo of game franchises. Breath of the Wild’s popularity as the Switch’s flagship title has helped the console sell well in the early going. And if the great games keep coming, then gamers will be more likely to overlook the console’s deficits.
But Nintendo’s influence on the future of gaming isn’t only riding on the Switch. Nintendo has given us other things to get excited about in recent years, more than thirty years after they changed the gaming world with the NES. 2016’s smash video game hit was Pokémon Go, an augmented reality (AR) game that married the lovable cult characters with real-world exploration. Although it wasn’t developed directly by Nintendo (they only own one-third of The Pokemon Company, which actually made the game), the game was a huge success that gave the company a big lift and catapulted AR from a high-promise vision into an addictive reality the world over.
The past year has also seen Nintendo (finally) embrace mobile with the launch of Super Mario Run for iOS, as well as tickle the fancy of their older fans by releasing “classic” editions of several of their original gaming systems. They started with a nostalgified edition of the NES in late 2016, with a similar version of the SNES following in September 2017. Rumor has it that 2018 could bring classic editions of both the N64 and the original Game Boy.
Nintendo may be stoking the flames of nostalgia, but they’re not resting on their laurels either. They know that it’s ultimately by looking to the future and doing things differently that they’ll continue to innovate and succeed. Sustained dominance in any industry is never assured, but Nintendo seems destined to continue to pursue success on its own terms.
Jeff Ryan believes the company’s “ultimate goal is to, believe it or not, have 5 percent market share. Their ultimate goal is to be the elite company that makes the world’s best games. And their consoles may cost a little bit more, and their technical specs are a little bit less, but anyone who’s buying it is getting a superior gaming experience.”
It’s not the path to dominance we might expect any company to pull off. But it may be opportunity enough to evade extinction and evolve into the leader of the next great revolution in gaming.
As famous game developer Peter Molyneux said in an interview in 2014, “Never underestimate Nintendo.”
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