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Reggie - Wii U won't be rushed, achievements, E3 reaction factors into price/launch, competitors
GM: Nintendo has recently experienced some difficult financial times. Is Nintendo rushing Wii U to market to compensate for sluggish Wii sales?
RFA: The short answer is no. This is not a system that has been rushed in any way.
And, in fact, our challenging financial performance has not been due to the Wii’s performance. It was driven by our performance on Nintendo 3DS.
In Canada and the U.S. the sell-through rate of Nintendo 3DS after 14 months is better than it was at the same point in time for the DS. However, because of the lack of strong software from Nintendo, the lack of online capabilities, and the lack of other entertainment at launch, it caused us to [reduce the handheld console’s price], which generated a significant negative situation for us.
Now that our 3DS business is healthy and on a positive path, that product is going to be the predominant volume and profit driver for our business this year. The impact that the Wii U will have will be somewhat modest because we’re launching it during the holiday season.
GM: You just mentioned online activity. Nintendo has struggled with online features in the past. Now it looks like online is central to the Wii U experience. What was your driving philosophy behind online for Wii U?
RFA: We recognized that the Wii U had to have a strong account system.
Here’s a little bit of background. Up until the Wii U, the device held all of the account information. Whether you played or your kids played or your partner played, it was all one set of data to the Wii. The same was true for DS and 3DS.
With Wii U, we’re going to have an account system. This means you’re going to create a Mii, as will all the other members of your family, and the behaviour for each Mii is going to be captured in an account. For example, if you’ve achieved a certain level in a game, that information will be unique to your Mii. Parental settings will be specific to each Mii.
This is critically important, because it means things like messaging and achievements and other key online functionality is tailored to you.
GM: Nintendo’s press conference lacked a lot of information that people expected, including launch date, pricing, specific launch software, and what would be included in the package. What was your rationale for withholding that key information at this stage?
RFA: The rationale is this: We want to see what resonates. We want to understand which games and experiences really resonate with consumers, and then use that information to make decisions moving forward. This is something we’ve done every launch year. We did it with DS, we did it with Wii, we did it with 3DS.
We’ll take all of the information coming from E3 and use it to make final decisions on launch date, launch price, configuration, launch day software, launch window software, and follow up-software. Because now we have the benefit of information.
GM: Nintendo is sticking with its traditional hardware cycle [five to seven years], but Microsoft and Sony are stretching theirs. That means that while the Wii U will launch as a relatively powerful machine, it may no longer seem so in just a couple of years when its competitors release their next-generation consoles. Consequently, some people are expressing concern that Wii U might date itself quickly...
RFA: Three comments. First, it’s not about power. If it was about power, then the GameCube would have been the number one system in its generation and the Wii wouldn’t have been the number one system in this last generation. It is not about power. It is about fun, it is about the experience.
Second. Our competitors can say what they want about some super long cycle, but let’s see what their behaviours are.
Thirdly, the way development works is that the longer developers work with a system, the better they can tune performance. Case in point: Look at the very first GameCube games, and compare them to a game like Resident Evil 4. It was graphically beautiful, and demonstrably more advanced than the first GameCube games.
The same was true for Wii. A great example is Super Mario Galaxy 2. The graphics are just beautiful. And look at the motion control we were able to achieve in The Legend of Zelda: Skyward Sword.
The longer developers work on a system the more they tune it, the more they push the system, the more they learn tricks to really optimize performance. I share this because what you see here at E3 are games that represent a relatively short amount of development time. Imagine what we’ll see two years from now when developers have been working with Wii U longer and learn how to push everything out of the system.
Our competitors will do what they want. From our perspective, this is the right time to launch a new piece of hardware. And, the fun, the capabilities, and the experiences that we’re offering today with a second screen are demonstrably better than what can be done today on other platforms.
GM: Third-party publishers need to see more than just capable hardware. There needs to be a sizable audience. To create an exclusive, high-quality game for a new platform, they have to believe that they’ll sell a certain number of copies. It’s very early in the Wii U’s lifecycle. How are you approaching third-parties to create these games for Wii U?
RFA: Well, the proposition for a third-party publisher or independent developer is pretty simple. We need to show them that the install base is there for them to sell a quantity of games that represents a profitable proposition.
What we’re sharing with these publishers and developers is how first-party games will drive an install base, and how, from a marketing standpoint, we’ll reach the type of consumers that they want to create content for.
Then we have to deliver on it. What will help us are games like Batman: Arkham City – Armored Edition, Assassin’s Creed III, Mass Effect 3 and Zombi U.
Full interview here
RFA: The short answer is no. This is not a system that has been rushed in any way.
And, in fact, our challenging financial performance has not been due to the Wii’s performance. It was driven by our performance on Nintendo 3DS.
In Canada and the U.S. the sell-through rate of Nintendo 3DS after 14 months is better than it was at the same point in time for the DS. However, because of the lack of strong software from Nintendo, the lack of online capabilities, and the lack of other entertainment at launch, it caused us to [reduce the handheld console’s price], which generated a significant negative situation for us.
Now that our 3DS business is healthy and on a positive path, that product is going to be the predominant volume and profit driver for our business this year. The impact that the Wii U will have will be somewhat modest because we’re launching it during the holiday season.
GM: You just mentioned online activity. Nintendo has struggled with online features in the past. Now it looks like online is central to the Wii U experience. What was your driving philosophy behind online for Wii U?
RFA: We recognized that the Wii U had to have a strong account system.
Here’s a little bit of background. Up until the Wii U, the device held all of the account information. Whether you played or your kids played or your partner played, it was all one set of data to the Wii. The same was true for DS and 3DS.
With Wii U, we’re going to have an account system. This means you’re going to create a Mii, as will all the other members of your family, and the behaviour for each Mii is going to be captured in an account. For example, if you’ve achieved a certain level in a game, that information will be unique to your Mii. Parental settings will be specific to each Mii.
This is critically important, because it means things like messaging and achievements and other key online functionality is tailored to you.
GM: Nintendo’s press conference lacked a lot of information that people expected, including launch date, pricing, specific launch software, and what would be included in the package. What was your rationale for withholding that key information at this stage?
RFA: The rationale is this: We want to see what resonates. We want to understand which games and experiences really resonate with consumers, and then use that information to make decisions moving forward. This is something we’ve done every launch year. We did it with DS, we did it with Wii, we did it with 3DS.
We’ll take all of the information coming from E3 and use it to make final decisions on launch date, launch price, configuration, launch day software, launch window software, and follow up-software. Because now we have the benefit of information.
GM: Nintendo is sticking with its traditional hardware cycle [five to seven years], but Microsoft and Sony are stretching theirs. That means that while the Wii U will launch as a relatively powerful machine, it may no longer seem so in just a couple of years when its competitors release their next-generation consoles. Consequently, some people are expressing concern that Wii U might date itself quickly...
RFA: Three comments. First, it’s not about power. If it was about power, then the GameCube would have been the number one system in its generation and the Wii wouldn’t have been the number one system in this last generation. It is not about power. It is about fun, it is about the experience.
Second. Our competitors can say what they want about some super long cycle, but let’s see what their behaviours are.
Thirdly, the way development works is that the longer developers work with a system, the better they can tune performance. Case in point: Look at the very first GameCube games, and compare them to a game like Resident Evil 4. It was graphically beautiful, and demonstrably more advanced than the first GameCube games.
The same was true for Wii. A great example is Super Mario Galaxy 2. The graphics are just beautiful. And look at the motion control we were able to achieve in The Legend of Zelda: Skyward Sword.
The longer developers work on a system the more they tune it, the more they push the system, the more they learn tricks to really optimize performance. I share this because what you see here at E3 are games that represent a relatively short amount of development time. Imagine what we’ll see two years from now when developers have been working with Wii U longer and learn how to push everything out of the system.
Our competitors will do what they want. From our perspective, this is the right time to launch a new piece of hardware. And, the fun, the capabilities, and the experiences that we’re offering today with a second screen are demonstrably better than what can be done today on other platforms.
GM: Third-party publishers need to see more than just capable hardware. There needs to be a sizable audience. To create an exclusive, high-quality game for a new platform, they have to believe that they’ll sell a certain number of copies. It’s very early in the Wii U’s lifecycle. How are you approaching third-parties to create these games for Wii U?
RFA: Well, the proposition for a third-party publisher or independent developer is pretty simple. We need to show them that the install base is there for them to sell a quantity of games that represents a profitable proposition.
What we’re sharing with these publishers and developers is how first-party games will drive an install base, and how, from a marketing standpoint, we’ll reach the type of consumers that they want to create content for.
Then we have to deliver on it. What will help us are games like Batman: Arkham City – Armored Edition, Assassin’s Creed III, Mass Effect 3 and Zombi U.