In Perspective - Nintendo

What you've heard

Nintendo has bowed out of next gen. After the horrible release of the Wii U, they followed up with “the year of Luigi” which focused on the 3DS, and now they have decided to skip E3 altogether. It’s clear they know they can’t “win” E3 and have given up on stealing the next gen thunder from Sony and Microsoft.

Except

You know in the good old days it was the mainstream media that would try and provide you with context and objectivity on a story like this, but now the drive to get sensational news out there as quickly as possible leaves that job to people like me. There are a few things you need to understand before you can truly evaluate Nintendo’s decision.

First, as I’ve already stated, the Wii U isn’t doing that bad unless you compare it to the Wii, the most successful console of all time. Compared to the Xbox 360, which had 3.7 to 3.9 million units sales at this point in its life, and the PS3, which was hovering around 3.2 million, the 3.45 million unit sales of the Wii U might come in well below the initial target of 4.5 million and even the revised target of 4.1 million, but they are hardly worth the doom and gloom they have been getting. More importantly, understand that Nintendo has been here before with the original DS, the 3DS, and the GameCube and has been able to turn it around with a strategy they have already stated they will be applying to the Wii U – first-party titles. They don’t need a press conference to speak to this; when Jr. wants the new Zelda game and it doesn't play on the system he owns, Mom goes out and buys the new one. Hype and anticipation are irrelevant in this market, and there isn’t anything that MS or Sony can bring to the table at E3 that’s going to have any effect on this market. In fact go ask your non-gamer friends what E3 is and you’ll be surprised to see that the holy grail of gaming, even with TV coverage, has about zero traction outside the “hardcore” crowd.

It’s also important to note that E3, without question the most expensive convention to attend and have the main stage at, had an attendance of around 43,000 in 2012. Compare that with CES’s draw of 150,000 or TGS with 230,000 attendants in 2012 and you start to wonder why E3 even gets the attention it gets, and if the money that is spent to be on a main stage there is worth it. Microsoft and Sony have new systems to show off, but without that who is to say what would have happened. Marketing budgets are being cut everywhere, so why not invest in the biggest bang for the buck?

So what’s the deal?

For years now, E3 has been the cash cow of gaming websites everywhere and the big question is who of the big 3 will “win”. For 4 solid years everyone has brought their game and used the stage to show why their system’s exclusives, features, and developers were the best going and why they would dominate the year to come. Stock prices would jump 5% or more the day after the conference for the “winner” and it's undeniable that the negative buzz to the “loser” had an impact as well. This year, Nintendo simply can’t win. Sony and Microsoft both have new systems coming out, and the budget and hype they will spend fighting each other will be on a level we haven’t seen in 8 years. The money Nintendo would have to spend just to step in the ring would be insane, and for what? To show us a new Zelda game, a new Smash Brothers, a new Mario Party, and a new Pokémon we all know are coming and are going to top sales charts regardless.

There is also this little thing called Nintendo Direct, which has been the focus of marketing dollars at Nintendo for almost a year now and has seen incredible results.

Nintendo made the right choice in bowing out. This doesn't mean they have given up and don’t have a plan to move the Wii U; it shows they HAVE a plan, and it’s a smart, well thought out one.