Thursday, September 22, 2005

Nintendo Genre Innovation Strategy: Comments and Follow up

Well, that was an exciting moment in the history of this website. In the spirit of my old demo days, greetz go out to all the readers from Penny Arcade, Slashdot, Kotaku, 4ColorRebellion, Joystiq, GameGirlAdvance, Dvorak(?), and more. I apologize for any disruption of service for folks who were visiting the site. Everything should be back to normal, comments are back on, and I'm on a new server with 10x the bandwidth. Post away. :-)

I want to thank everyone for keeping their comments civil and insightful. It is a strange thing, but your intelligent commentary seems to spark more intelligent commentary. Shocking.

There are a couple questions about the previous article that I thought I'd take a brief amount of time to highlight here.

Source of "genre king" and "genre life cycle"
The terms "Genre king" and "genre life cycle" come about from several essays that I've written over the past couple of years. If you are interested in the theoretical background, I recommend you check them out.
  • Evolutionary Design: This was the source of many of the concepts behind my current definition of genre. Unfortunately the same title as a rather popular essay by Chris Crawford that I didn't know about until after this was published.

  • Genre Addiction: This is where 'king of the genre' was used that I subsequently shortened to 'genre king'. Some folks get turned off the use of the word 'addiction', but really I'm talking about basic market segment creation activities.
  • Genre Life Cycle: There are 4 short essays here where I explored the genre life cycle in more detail. Though honestly, I think the topic was so obscure and rambling that very few folks made it through all of them. :-) They also talk about genre death in more detail and clarify some of the wild-assed statements made in the genre addiction article.
Where are the numbers on title costs coming from?
I do need to report my sources a bit more clearly. That tidbit comes from the Japanese Computer Entertainment Suppliers Association. Here's a link to one report on it.

There have been reports that the study was flawed because it only relied on self reported information. However, the numbers are inline with my personal experiences talking to game companies on a daily basis, so I am inclined to believe them. Note of course, that these are averages. There will be Gamecube titles that cost more than certain Xbox titles. The basic concepts still stand.

Nintendo still makes hardcore games
You'll notice Nintendo walking a line in their PR where they say 'games for everyone.' The fact of the matter is that genre king titles remain very profitable for them if a company can get a lock on the genre. And for several genres, Nintendo has that lock.
  • Action RPG: Zelda
  • Multiplayer Casual Racing: Mario Kart
  • Creature trading RPG: Pokemon
  • Party games: Mario Party
The games in these categories are nearly synonymous with the genre and it is unlikely that Nintendo will simply stop making them. So what you'll find is that Nintendo will likely continue to promote hardcore gaming within the genres that they dominate. This is still in keeping with an innovation strategy.

There is also a strong platform component to the console industry that I didn't explore fully in the essay due to already packed space constraints. Each console is what is known as a 'walled garden'. Consumers experience the delightful content rich experience that is available on that console, but unless they make expensive additional investments (like buying a new console) they are locked out from using other company's content. Each console creates micro market segments. For example, Metroid Prime 2 sold less than Halo 2. However, it still managed to be the market leader within the FPS Gamecube market segment.

So you'll also find Nintendo creating genre kings within the protected marketplace created by their ownership of a walled off hardware platform. Again, competition is lower and profits are higher. Typically they'll leverage an existing brand to give their offering even more competitive punch.

What is the rational behind Nintendo leaving some customers behind?
If you like genres where Nintendo does not dominate, then you'll likely have to go to another platform. It is difficult, perhaps impossible, to profitably be all things to all people in the business world. Every company makes a strategic choice on what customers they want to serve. Often that means 'firing' fringe customers that do not fit what is best for the company. Banks do it. Stores do it. Enterprise organizations do it. The benefit is employee focus, increased profits, and superior ability to provide value to your target market. It also takes a lot of balls to give up a paying customers.

Typically firing a customer takes a very simple form "Hey, we appreciate you wanting to work with us, but we think it is in your best interest to go to our competitor X." So the worst customer happily trots along to competitor X and starts demanding bigger production values, additional sequels, etc. The competitor sells more, but they lose money doing it. Who is the winner here?

1st party vs 3rd party
This topic is an entire essay on its own. Historically, Nintendo has reaped the vast majority of its profits from first title releases. They make a small amount from each game sold on their platform, but by being a publisher they a much higher percentage of the revenue on a title.

In this viewpoint, it makes sense to promote a large 1st and 2nd party developer network that are published through Nintendo and focus on innovative titles and genre kings in low competition areas. The result is a smaller number of highly profitable titles.

However, this profitable and logical strategy alienates the 3rd party developers. They naturally take their innovations to other publishers. In the worst case scenario, other platforms become the home of new highly profitable genres that lure potential Nintendo customers over to the competing platforms.

There are lots of ways for Nintendo to get out of this situation. They've tried using character licensing, but they risk tiring out their brand. I'd like to see them start up a new Nintendo second party network that supports smaller companies. They would reap the following benefits:
  • A bigger chunk of the revenue by being the publisher instead of merely being the platform owner.
  • A steady stream of new titles that help guarantee leadership in attaching new genres to their platform.
  • A stage gate style development pipeline where they can then convert into successful second party titles into larger scale 1st party genre kings.
Enough rambling. I'll be back to my regularly scheduled essays soon. :-)

take care


  1. Excellent essays/posts.

    I found it interesting that Nintendo basically solved part of the issue that you addressed in your July 31 post ("A short interview with a lady friend: Why video games are pointless").

    It looks like they're right on target to succeed with acheiving their goal: incorporating entirely new demographics into the definition of "gamer".

    As an aside, I came across a great line at Arstechnica:

    "Nintendo will win the next-gen console wars, because the Revolution is the only next-gen console being made."

  2. You should put in an easily-accessible link on your index page to your Nintendogs article!

  3. Nintendo has been working a lot with small second parties for a few years now. They've been working with Fuse Games on making pinball games, and n-Space for FPSs. The results are the innovative, but not entirely successful games Mario Pinball Land and Geist. They've gotten a tremendous amount of hype from Nintendo, most of it undeserved. More recently, Nintendo published Kuju's game Battalion Wars. In all these examples, Nintendo took a company with potential but a lack of experience, and worked with them very closely to make a game which is a tiny bit closer to Nintendo's standards. If they stick with these companies for another decade or so, these companies might get good enough that they can actually help Nintendo get the diversity in quality games they're looking for.

  4. Is it right to say Nintendo has a 2nd party strategy? Camelot, Alpha Dream, Intelligent Systems, Game Freak, and many others, are creating Nintendo only games.

    By the way, it was good to read your (long) post about Revolution controller. (^_^) Hope to read your opinions about other gaming facts!

  5. Intelligent Systems, Game Freak, Retro Studios, and if I'm not mistaken Alpha Dream, are all owned by Nintendo- making them first-party developers like EAD or that new studio in Tokyo.

  6. I think it can be kind of awkward to know exactly when a second party publisher becomes a first party one. However -- Silicon Knights was definitly a second party, as were Rare, and both of those developers have went their own merry way.

    I think it's a fantastic, absolutly fantastic idea for Nintendo to start throwing some money around at smaller publishers. We need more small, weird, budget priced ($20, say) games for the Revolution. I think it's too bad they aren't going to put in a hard drive (I understand why, but it's still a shame). With the wifi link, can you imagine if Nintendo started cranking bizarre, small little games and releasing them over their network (a la Steam) for $10 a pop? Even if the game's not great, it's only ten bucks and you could end up with some real winners in the process (like "Katamari Damacy").

  7. Check out this funny comic on the revolution controller:

    The site owner quotes you as well.

  8. From the Pixel Junkies opinion piece: "Let me preface everything by saying that I love Nintendo, and want nothing more then to see them succeed."

    Ah--a variation of the ol' "I've been a fan for [x-number of years] now" opening, which never leads to anything good. (See also: "I've been a fan of [name of team] for over twenty years, and this 82-80 season is the worst!")

    It's not that people want to hear glowing praise; it's that the word gimmick has become so painfully overused that (like mature, niche and kiddy) it has virtually no real meaning.

  9. Amen to the quirky budget titles!
    Sheesh, a lot of Japanese companys wring their hands over the fact the market is shrinking then they still have the nerve to go charging $50 on the low, $70 on the high for a new game.

    I've heard Europe sells loads of $10-20 games at gas stations and newsstands. Japan's the vending machine capital of the world, it's amazing they haven't put cheap game vending machines around town.

    I'd be curious if Nintendo slaps the same stringent requirements on who gets Revolution SDKs as they did the Cube.

  10. I just want to say, this essay is great. I love the way you talk about game design, and, frankly, you just made a new fan and I will be visiting your site frequently.

    Great work, keep it up,
    - Keith

  11. Danc:Nintendo actually forged such an agreement this generation, so it's not out of the question. Capcom got an larger cut of the pie (and help with development costs), for their "Capcom five"..Viewtiful Joe, Resident Evil 4, P.E. 05, Killer 7, and the cancelled Dead Phoenix (Which is rumored to being morphed into a Revolution title..potentially with the Kid Icarus brand).

    Pharna and aaron:From what I've heard, Nintendo is going to be offering some sort of SDK to independant developers. It might not be full featured, but it'll be enough to do things that will get you noticed. And I wouldn't be surprised if such small games wern't offered for download off of Nintendo's network.

    I don't think it would be too strange, if for example, you'd start to see PopCap games being ported for the Revolution for download.

    One last thing. In the current generation, the PS2 has gotten most of the test games. The games that break the mold. Why? Because of the market share that the PS2 commands. It's not even close. If you're going to sell to a limited % of a market, you choose the biggest market you can.

    I don't think this is going to be the case so much with the next generation. The PS3 isn't getting a head start. In fact, it's starting kinda behind. As well, there are two very powerful competitors that are waiting to go, with a lot of oomph of their own. And if Sony does it's typical rest on their laurals approach to business, the PS3 could find itself floundering.

    I'll put it bluntly. I'm expecting the Revolution to fly off the shelves. A combination of the novel control method and relativly low price tag is going to give it a serious push..that whole media hype blitz. And if Nintendo gets a large installed base, right off the bat, expect that in about a year..summer 2007, you're going to see a lot of innovation and originality come Nintendo's way. And Sony could be in big trouble. (I think that Microsoft, launching first is in good shape. It's going to be the system of choice for the traditional hardcore game crowd.)

  12. I think that the price tag is one of, if not the, largest factor preventing new consumers entering into the gaming market. An individual may be interested in the idea of playing on a system, but not enough to pay $50 for each semi-alright experience. Another phenomenon that I have noticed is that new gamers have no means of discerning between well produced good games and poor low budget titles. My younger brother has a game cube and often gets lured into buying games such as "Spyro: Enter the Dragonfly," a game that sold only because it was a spyro title. My point is that the reason he bought the game was the price- around 10 or 15 dollars.
    If nintendo can flood the market with cheap, innovative, quirky games they stand a good chance of finding more new genres. A lower price tag means more people will be willing to try the game, but reduced content may even leave them wanting more of the same game. I can easily imagine a scenario where these lower priced games are just preludes to larger, more in depth versions of the same title. If the initial title didn't sell though, then the budget for the end experience can be slashed, if the project goes forward at all. It would be quality control by public perception. The best part being, if someone like my brother buys the first, cheap copy of a game and likes it, they would be so much more likely to invest that $50 in the full experience.

  13. Apparently, Nintendo is going to sell cheap games. They said games wount have different price tags depending on the scope of the game.

  14. First, this isn't a post to prove my gaming cred. There's a point to this, trust me...

    I've been gaming since I was 4. I started on the mechanical arcade games on the New Jersey boardwalk. The first big transition was to the CRT. Frankly, It wasn't all good. I remember old arcade games using projection, light guns, mechanical helicopters, you name it.

    All of a sudden arcade games (the cabinets, anyway) looked the same. Let's call that "cabinet standardization". Then, there were a slew of great, original games that defined the "golden age" of arcade games. Home consoles and JAMMA started to standardize the controller setups, limiting design possibilities. Let's call that "controller standardization" (remember the 2600? That sucker had Joysticks, Paddle and Driving Controllers... not to mention the numpad...).

    The current generation of consoles have defined the pinnacle of sameness. The controllers are the same, the games are all ports of one another, and there is a handful of genres to choose from.

    What Nintendo is attempting here is a revolution. They are attempting to reverse the controller standardization by providing designers with options for control.

    Sadly, not all proponents of custom control (see Shiny Entertainment's CEO) recognize or support what Nintendo's trying to do here. If you truly support innovation, and don't just talk about it, I say vote with your dollars and buy a Revolution. Or two.

  15. Laterx:

    In my opinion, you are oversimplifying. I could point out the irony of the close-mindedness of not appreciating, or even trying to appreciate, what others are so excited about. While I agree with you completely that prettier graphics and faster processors are overrated, they are not completely worthless. Better CPUs will allow for more complex AI programs, which can certainly make a game more interesting. And better graphics can help lessen the player's sense of disbelief. Is it worth the money or the hype, in my opinion? Certainly not. But I can certainly see the appeal to those who have already become fans of certain genres, and are looking only for more refinement. Who cares? Not you or me, but many more intelligent people with valid opinions than you'd care to admit.

    While a good deal of the skepticism toward Revolution is based only on the fact that Nintendo is not currently "in fashion", there is also much which is deserved. The fact is, very few of us gamers have actually picked up this controller, and there have been no commercial games shown. There are still many unanswered questions, most notably: Will this controller distract from the game itself? Will it be intuitive enough to surpass the game pad, or will it just be a fun little gimmick? While I believe motion sensors have amazing potential, I can't know for sure, nor can you until you've had a chance to play the final games.

    We should also not take for granted that the controller's potential will be realized. Most of Cassamasina's examples are the sort of thing I'm afraid will happen. Little gimmicks which are attached onto existing types of gameplay, which do not significantly enhance the experience but only allow the developer to stick a bullet-point on the back of the box saying "innovative usage of Revolution's features". We are seeing much too much of this on the DS- games exactly like every game to come before them, but with a few touchscreen mini-games so that the press won't get too angry at them. The touchscreen actually has a tremendous amount of potential to revolutionize established genres on the most fundamental level, as I have pointed out many times in the past, but we are seeing very little of this in practice. There are plenty of excuses given: lack of budget, lack of time, lack of money, sheer laziness; but the end result is nothing like the rosy picture I had before the system was released. Nintendo said to imagine the possibilities, and I did. While I may not agree with the outcome, this is what Cassamasina has tried to do with the remote. But we should not be so naive as to assume that anything good that can be done on this new hardware will.

    The most striking evidence of close-mindedness in your post, for me at least, is the casual dismissal of Myst. While this is hardly a major part of your argument, I can't stand around while you make the assumption that Myst is worthless. Myst happens to be one of my favorite series, and I will happily explain why I love it so much, not despite but because of the lack of gameplay, in private. (This is not the place. IM me, if you like.) But my point is that it is wrong to examine all types of games with one perspective. You can't say "Gameplay is good- therefore all games which do not focus on innovative gameplay are bad" without ignoring the virtues of certain types of games. Likewise, you cannot make the generalization "Games don't need so many buttons" without ignoring many types of games which do. For example, the question has been raised of how football games will play on the Revolution without losing all the functionality assigned to the many buttons of today's game pads. It is a good question, which has not yet been answered. (On a sidenote, I'm betting the developers of these sports games aren't going to "waste" too much time trying to figure out a completely new control scheme for the games they churn out year after year.) There is the question of how Zelda will play, without confusing the player as to exactly what the remote is supposed to represent at any one point. While gamers may have the answers to these questions, we have not yet been shown that developers have come up with any. So there is very good reason to be skeptical of the Revolution, even when you accept that it is incredible in concept.

  16. Okay, I apologize. It's just that your statement that a bad "game becomes little more than a more fluid MYST" got me on the defensive. In your follow-up post it is even more clear that you assume that gameplay is necessarily the most important feature of any game. But the most important feature in Myst and other exploration games is not the gameplay, nor the graphics, but the world design. Because you came into the game expecting a lot of gameplay, you misunderstood its use of gameplay as laziness, when in fact it just has a different set of priorities than you are willing to recognize.

    Apart from this, I agreed with most of what you had to say. It was the way you said it that bothered me, but I can get over that. I too have stated that I am tired of the graphical improvements in games. Have you played Zelda: The Wind Waker? That game is as graphically advanced as it would ever need to be- its graphics will still hold up in fifty years. As a matter of fact, 2D graphics still hold up today. And I doubt anyone will mind that Super Mario 64's graphics are so outdated when they're having so much fun. I am glad Nintendo is taking this route. Now we just need to see how it works.

    Oh, and for the record, Myst would work on the Revolution better than on a PC. :)

  17. I do not own the DS, because very few games have been released which justify the cost of the system for me. I know it's cheap, but there are so many games I already want for other systems. What substantial games are on the DS that haven't already been done as well or better on other systems? There's Kirby's Canvas Curse, and Pac and Roll looks interesting, and... and- um, that's pretty much it. Local wireless has no appeal to me because here in Israel no one else has a DS, and wireless internet is apparently going to be used only as an addition for games which are otherwise unchanged from earlier, better games.

    With DS, Nintendo has been putting a tremendous amount of time and effort into getting new gamers into the market, but very little effort into making anything substantial, any classics like Ocarina of Time or Pikmin. Nintendogs certainly doesn't count, regardless of how cute it is. If DS is an indication of their new long-term strategy, then I have no reason to be excited about Revolution. So while I have nothing but praise for the hardware, I am not especially optimistic that it will be used well.

    DS is a gold-mine, and developers are only mining dirt, and using it to coat their worthless rocks from outside. There is a very good reason for having two screens- one is for input, one is for output. Very few developers have taken this natural approach: Pac and Roll, and- there must be another one... maybe not. And Pac and Roll was just the tip of the iceberg. The bottom screen can simultaneously be more intuitive, more complex, more nuanced and infinitely more dynamic than a conventional interface. Instead of noticing this, developers make no distinction between the two screens, switching the gameplay between the two at random and by so doing pulling the player out of the game.

    What is the DS capable of, when you accept the top screen as the display and the bottom screen as the interface?
    -Platformers with direct control over the character's body
    -Music playing software for compositions with branching paths
    -Sports games with all the possible actions at any one point laid out clearly on the screen
    -Zelda with a static inventory leading to direct and deep control over items
    -Evolved adventure games played by selecting contextual actions which are constantly changing
    ...and so on.

    Instead, we have games like Viewtiful Joe, which retain old-fashioned control fundamentals but add touch-screen funcionality on top, leading to a gimmicky and unintuitive play experience. If they were to do Viewtiful Joe right, they'd put the action control on the bottom screen, and the game on the top. By using intuitive stylus gestures, you'd be able to pull off many more moves, with much more precision, much more easily. This is what I mean when I say that the DS's potential has not been realized.

    Oh, and by the way, there won't be any "multiplayer Metroid Prime" on the DS. Multiplayer Metroid was a bad idea to begin with, but the new "Metroid game" being released for DS seems to have abandoned all traces of exploration in favor of straight action. Certainly, exploration games could work very well with a touch screen -Myst was ported very easily to the Pocket PC- but there is no sign of any exploration on the horizon. Potential is great, but it doesn't mean much if it doesn't come to fruition.

  18. Isn't the Revolution supposed to be backward-compatible with GC?

    All I can say is, it would be mad-stylish to play Ikaruga one-handed. :D

  19. Laterx:

    I may have misunderstood, but from reading a preview of VJ/DS I got the impression that this was using more or less the same control scheme as the GCN version, but with touchscreen features added on top. It doesn't seem very intuitive to use buttons for some actions and the touchscreen for others, and keep in mind which is controlled with which. Using a stylus for all gameplay is obviously very intuitive indeed; Porting over an existing control scheme and adding touchscreen support on top is not. Of course this is all speculation as I have never touched the system.

    I stand by my statement that The Wind Waker is a reasonably good example of innovation within the confines of an established genre. It doesn't add on gimmicks (elements which are not integral to the core gameplay and in fact contradict it), but it does add in lots of twists. The two-character puzzles had never been done before. The platforming had never been done before in a Zelda game, and it is no small feat to fold that type of gameplay into such an established framework without it feeling out of place. The overall structure of the game was playfully messed with, to the point where it is more like a jazz riff on the established formula then it is following it. Is it anywhere near as innovative as Nintendogs or Electroplankton? Of course not; to say so would be nonsense. It is not even the most innovative within its series- the two N64 games both surpass it in that regard. But it is innovative, and not because it has pretty graphics.

    All these games sound like interesting concepts. Electroplankton looks really cool, in that it allows one to make music without even thinking about it too much. But I am looking for something which is more than just a concept- I am looking for art. In order to create art in music, it is necessary to have a more traditional control interface, and build the art on top of that. I am a musician by hobby, and the DS could do wonders for the evolution of the music Form for reasonably low development costs, but this will never happen, because the system is being used almost exclusively for mass-market entertainment.

    I don't doubt for a second that Nintendogs is a remarkable achievement- I would expect no less from Miyamoto. But Nintendogs is not art. It is a pleasant diversion designed to appeal to as many people as possible. I don't doubt for a second that I would enjoy Nintendogs. But entertainment is, in the end, just a simple waste of time. And to buy a system solely for entertainment would be a waste of money. Where is the art? DS has indeed come very far in its goal of entertaining the masses. But that is not good enough. Fun little time-wasters do not justify a system purchase.

    I was introduced to the Castlevania series a few years back and was not impressed. But if this DS iteration is as you say, I'd better look into it.

    On a side note, Nintendo's PR team lies all the time if they think it'll help them reach a bigger audience. Sometimes this helps sales, as when Nintendo pretended The Wind Waker was just a "Genre King" and not a unique and quirky piece in its own right. Other times it hurts sales, as when they tried to pretend Metroid Prime 2 was a "Halo-killer" -- and completely missed the market the game was made for. I have long said that NOA's marketing team is a bunch of morons.

  20. Amen to that....I have wished for a long, long, long time that all of Nintendo's marketing people would simultaneously explode. I haven't seen a Nintendo ad that got me excited about a game in a LONG time. Mostly because it seems their target marketing this generation was half MTV, which seems to have been a complete failure marketing-wise...the MTV kids are the guys who will tell you how funny it is to blow themselves up in Halo...or the description I heard of Melee where they said "You can throw bombs and make the character hit the screen, it's awesome" I am way off my original point - I love Nintendo, I want NOA's marketing guys to get a clue.

  21. the pixel junkies thing has been taken down. does anyone have the post crititcal or the rev controller archived? It sounds interesting, I'd very much like to see it.

  22. I'd just like to say thanks for this site - there is some great material that has kept me reading for hours.