Talking Point: Does Nintendo Finally 'Get' Digital?

Mario out of thin air

Now that Nintendo’s got the announcement of financial losses out of the way, it can look ahead to plans for the coming year. As expected, follow-up statements to investors revealed some interesting insights into the company’s plans, with the biggest news that Nintendo's 3DS retail games will be available to download later this year, with Wii U games hitting both digital and retail from day one. It'll all kick off with a little game called New Super Mario Bros. 2 in August, as it’ll be available both as a physical boxed release and as a direct download.

We knew this was coming, with Satoru Iwata previously stating that Nintendo was planning to ‘go digital’, but it’s nevertheless big news now that it’s actually confirmed. The devil is in the detail, however, so let’s have a look at what was said, and how the digital sales will work.

3DS paves the way

The arrival of the first digital retail release from Nintendo is only three to four months away, which reinforces Iwata’s assertion that the foundation and infrastructure on 3DS is practically ready. We knew when Nintendo unveiled the newly branded Nintendo Network that it was planning to improve its online strategies. These improvements were needed, undoubtedly, as DSi and particularly Wii lagged far behind their rivals in online connectivity.

To give credit where it’s due, 3DS has been a beacon of online progress, despite a launch period where it looked like more of the same. Improved Friends List functionality, Nintendo Letter Box (aka Swapnote) as well as major 2012 releases such as Resident Evil Revelations and Kid Icarus: Uprising including substantial online multiplayer modes. Then, of course, there’s the eShop.

After a slow start, the eShop is building a solid library of excellent 3DS-exclusive titles, while also including demo downloads and game trailers, with the front-end getting a makeover this week. Subtle updates, such as the option to redeem download codes, no doubt provide the infrastructure to which Iwata was referring. Another significant sign of progress is the connection rate of 3DS users on the platform; apparently as much as 70% of users in Japan and North America have connected, a major improvement compared to Wii and DSi. More and more 3DS systems are going online, with consumers clearly being attracted, gradually, to the idea of downloading new games. The time for retail downloads seems ripe.

Before we hail the arrival of the digital age on 3DS, however, there are two areas that may detract from the appeal of owning Mario’s latest as a digital file, rather than a traditional game card. The first issue may be the price for a direct purchase from the eShop — Iwata had this to say about pricing:

In terms of the fact that the company is offering the value of the software itself, we do not have an idea to act on such a belief as, “digital download software should be sold at a cheaper price point than the packaged software counterpart.”

Consumers have every right to ask why a digital download could cost as much as its retail equivalent, as shipping and manufacturing costs, to name two areas, will be non-existent. There will undoubtedly be a price to pay for servers to host the files, for example, but it’s surely less than moving physical products. This move is likely to be focused on keeping retailers happy, which we’ll come to soon.

The second downside to the proposed download model is the apparent confirmation that each purchase will be limited to one device only. A downloaded game will be kept on an SD card, just like 3DS software from the eShop right now, but like those downloads the game will be locked to one 3DS system. Nintendo consoles are, arguably more so than any of its rivals, family machines that sometimes lead to multiple systems in one household. To take Super Mario 3D Land as an example, one cart with three save profiles may be shared by siblings, or parents and their children on two or more 3DS consoles. If a download of New Super Mario Bros. 2 is tied to the account on your console, it may only work on that system alone, so the idea of sharing the game with others won’t work in the same way. Though some may say that it’s a choice to make when considering physical or download purchases, it’s a turn-off for some that undermines the idea of digital retail titles.

While those are concerns to consider, for some the idea of retail downloads is appealing and long overdue. The fact that these titles will be stored on standard SD cards is a boon for 3DS, as this memory is available for low prices in comparison to the infamous proprietary format on Vita. Nintendo also seems to be catering for a wide range of gamers with confirmation that retailers will be in a position to sell its download titles as redeemable codes. This will be a boost to retailers having difficulty maintaining physical stock – as was the case with UK retailer GAME in recent months – while a lower wholesale rate may also mean that stores pass the saving onto gamers. Availability in stores will also suit those who prefer to pay cash rather than use a credit card online, while the very real possibility for a lower price will appeal to everyone.

Wii U and beyond

The news that Nintendo is going to introduce downloadable retail titles isn’t surprising: it’s a move that is essential to keep Nintendo competitive with its rivals, and for the company to ensure that no potential sale is lost. The more ways we can buy games, without worrying about whether retailers will have stock, for example, the more we’re likely to buy. The easier it is, the more appealing.

The structure outlined so far certainly has its positives and negatives, but that’s inevitable as Nintendo tries to keep retailers happy and avoid digital buyers abusing the system. Whatever we think of the setup, the launch in August will allow Nintendo to monitor progress and deal with issues before Wii U arrives towards the end of the year, ensuring that its next-gen console has minimal growing pains. We already know that Wii U will launch with a digital store, and with retail downloads included it could be an ideal start in the mission to get the consoles connected. 3DS is evidence that with some effort, despite a disappointing reported 50% connection rate in Europe, Nintendo can persuade its users to sample online delights, as well as good old-fashioned game cards.

So, does Nintendo ‘get’ digital, based on what we know so far? We have to say yes and no: the prospect of the biggest titles being a stylus tap away is enticing, as is the idea of walking into a shop and buying a download code at, potentially, a reduced price. There are still concerns, however, that the direct eShop option will feel expensive, and that a one system limit is draconian. It's a tough balance for Nintendo, but for the first time we can at least be pleased that it’s going to try and join the download age of gaming.

What do you think? Will you be opting for retail downloads, or sticking to physical game cards and discs? Let us know in the comments below.