So it's the start of a New Year, and is the ideal time to reflect on hopes for future success and on what can be done better. Nintendo had an exceptionally busy 2012, working hard to expand the 3DS user-base and releasing the XL hardware iteration, while also bringing us its new home console, Wii U. We can imagine that Satoru Iwata and his team, as well as regional groups in North America, Europe and elsewhere, have all enjoyed a much needed break.
Still, with a New Year not only comes optimism, but a host of challenges for Nintendo to confront and, hopefully, overcome. Below we outline what we think are three of the key objectives for the big N as it seeks to make a success of its current generation systems and, ultimately, survive in one of the gaming industry's most competitive periods. We'll start of with the most serious and important challenge.
Return to profitability
Until recent times Nintendo had enjoyed a significant period of sustained profits and success. The greatest period, for shareholders especially, was the emergence and outstanding success of both Wii and DS, for a time making Nintendo one of the world's most envied technology companies; also undoubtedly the leader in the video game industry. The landscape has changed, however, and Nintendo could potentially never see days quite that golden again.
While that scale of success may be a thing of the past, that doesn't mean it isn't on the cards for Nintendo at a more realistic level. The financial losses last year were hurtful for the company, and some targets were missed, but the outlook was improved over the year before. Sales of the 3DS now generate a profit on each system, and the install base is comfortably over 20 million, even if the spectacular sales in Japan aren't being replicated on the same level worldwide. Wii U has also arrived, though data on sales figures is now a number of weeks out of date for Europe and North America. Stock is visibly available on shelves, but it's difficult to confirm with any certainty whether this is due to Nintendo being prepared and keeping retailers replenished with stock, or whether demand is worryingly low.
We can say, by just looking at trends and results, that 3DS and Wii U are unlikely to hit the same sales figures as their predecessors; yet that shouldn't be naively chalked off as failure. There are more gaming devices than ever, when we necessarily include the smartphone/tablet formats that have eaten into the market that Wii and DS dominated. Despite this dedicated gaming systems still have life in them along with an enthusiastic fanbase, so Nintendo's new goals should perhaps be the less grand ambitions of consistent sales and once again establishing its own identity in the face of more graphically intense competition to come — just as Wii and DS succeeded in doing so. It'll be survival of the fittest, so Nintendo must back its concepts and vision and, most importantly, start making profits to ensure long-term stability; with profits, even small ones, Nintendo can potentially prosper for generations to come.
Bring back the franchises
2012 was the year of Mario, which is hardly surprising as he's Nintendo's most bankable star. Not only did he lead a much needed revival for 3DS at the end of 2011 with some 3D and karting shenanigans, but in the past year he played tennis, got flattened into paper and made two separate appearances in 2D platformers. We've seen plenty of him and, well, it's time for the other mascots to have a chance.
Last year did bring us a long-overdue solo outing for Pit, of course, with the fabulous Kid Icarus: Uprising being a highlight on 3DS, Mallo once again graced the eShop with Crashmo/Fallblox, there was a retro Kirby collection for Wii owners and Pokémon Black and White 2 gave a final hurrah to the DS. It was a fairly slim year, however, with major Nintendo brands such as Donkey Kong, Metroid, F-Zero, Star Fox, Zelda (which is perhaps harsh after two releases in 2011) and, yes, Pikmin, all posted missing — excluding Virtual Console releases. That's not strictly true for all of them, as Nintendo Land technically gave us a fresh taste of a number of these big names but, of course, we're talking about full-fat releases.
Mario's been so prominent in the past 12 months that there's little danger of any of these other franchises feeling over-used should they appear this year. The first half of 2013 looks fairly promising, it must be said, with Pikmin 3, Fire Emblem: Awakening and Luigi's Mansion: Dark Moon all on the way, while we're also keen to see more of Game & Wario; as much as we love the red-capped plumber, the breathing space and variety is welcome. A lot of eyes will be on E3 2013 and Nintendo Direct broadcasts to see what else is coming this year, or even teasers for projects coming in 2014. While Mario Kart U seems like a safe bit of speculation for this year's Holiday season, we can only hope that Wii U and 3DS see some other famous franchises confirmed. Comments about a new Zelda title on 3DS have been swirling around for long enough that this may be the year it emerges, and then there's Retro Studios and its mysterious project...
Nintendo has plenty of IPs that have had a bit of time to rest, so bringing them out in the next 12 months will only enhance the prospects of both current systems.
Embrace third-parties, of all sizes
We know that Nintendo is working to keep third-party developers on board with Wii U and 3DS, with Shigeru Miyamoto revealing that it's a task he's taken on personally with the new system. This resolution is simple, keep working hard at it.
The Wii U launch had a number of ports or enhanced re-makes, while Ubisoft weighed in with a high number of titles, and 3DS did see a group of excellent games last year (not necessarily exclusives, but on the platform) — such as Zero Escape: Virtue's Last Reward, Theatrhythm: Final Fantasy and Resident Evil Revelations. The 3DS eShop had some top-notch releases from smaller indie studios, meanwhile, with Nintendo of America's Dan Adelman telling us recently that some developers have even shared a view with him that the handheld's online store is "one of the best kept secrets in gaming".
Nintendo needs to get the big boys on board, but also needs to continue to court small to medium-size development studios
Those are some of the positives, but Nintendo nevertheless has challenges to face and gaps to fill. There are some high-profile multi-platform titles due in the next six months that are either confirmed as not coming to Wii U, or developers and publishers are still maintaining silence. Wii U is also in an awkward spot that it's arrived as a lot of big studios are wrapping up their efforts on PS3 and Xbox 360 and thinking about what Sony and Microsoft are bringing next — rumours point to a Holiday 2013 release for at least one of these successors. Wii U offers new control ideas with the GamePad and likely boasts more processing power than the launch library has shown — it's standard for a new system's potential to only be seen after the initial period has passed. The question remains how much of a technological difference (graphically) will exist between Wii U and its future rivals, and what really matters is how developers and publishers judge which systems to work on.
Those decisions can come down to lots of things — size of the userbase, the studio's priorities in terms of what graphical resources are used, development budgets and more. Nintendo needs to get the big boys on board, but also needs to continue to court small to medium-size development studios. We've already mentioned that Nintendo needs to carve out its own identity and niche in the coming generation, and it'll need content to back that up. The big N simply can't carry the weight of two software libraries on its own, so it'll need meaningful and attractive 3DS and Wii U games from developers of varying sizes and styles. The eShop platforms will be important, and there's one inescapable truth — games sell systems.
So those are three areas, none of which are really a surprise, where we feel Nintendo needs to have a strong 2013. The next 12 months will be challenging, but we should all know better than to even think about underestimating Nintendo. We'd love to read your thoughts on these issues in the comments below.