Talking Point: The Nintendo Figurine Platform Could be a Vital Money-Spinner
Posted by Thomas Whitehead
A '90s approach that can still work
The Nintendo brand used to be everywhere. In the late '80s and early '90s the big N's brand, particularly in North America, was ever-present and dominant in the market. Mario and his fellow mascots had TV shows, cereal brands, toys and assorted paraphernalia all over store shelves. If you grew up in that era and lived in an area fully infiltrated by the Kyoto-based company, you may recall that brand Mario and Nintendo were constantly seizing attention.
Nintendo's still a major brand, let's not forget. You can say Mario to a gamer of almost any age and they'll still likely think of Nintendo right away — a personal experience of this writer was of various mushroom-related puns being thrown my way when unconvincingly taking on a 10km run dressed as Mario, and young kids offering high-fives once they spotted the outfit. When two tired runners are slumped on the grass and three young kids and a dad ask for a picture, you know the brand lives on.
Yet the brand power, which is judged more on cold hard facts such as sales in the millions, is weaker now than in previous golden eras. If the Wii and DS period represents a recent triumph, it's not been enough to maintain the Nintendo brand at stratospheric levels to generate 'Nintendo-like' profits in the last few years — far from it. The Wii Sports and Wii Fit concepts that so enraptured a generation have struggled to make a meaningful impact in the Wii U era, likewise Brain Age on 3DS. The struggles of these titles to maintain interest can arguably be attributed to strategic errors from Nintendo, undoubtedly, as well as factors such as the rise of inexpensive smart device games (in the case of Brain Age) that are easily accessible elsewhere.
In any case, the limited relevance of those 'new' brands has been telling for both the Wii U and 3DS; in the case of the former, there's now huge pressure on Mario Kart 8, for example, as the latest entry in a series that has delivered the goods throughout its entire history. Nintendo, out of necessity, also has an eye on the long term, and that's where its announcement and early details on the Nintendo Figurine Platform (NFP) come into play.
While Nintendo may or may not be kicking itself over a rejected Wii exclusivity deal with the first Skylanders game, it's been facing calls to dive into the collectible toy / video game market for a sustained period. Activision's business may be diverse, but its mature audience monster profits come from Call of Duty while the Skylanders brand covers gamers of various ages. We've complained that, technically, this collectible toy / video game model is actually exploitative on-disc DLC — the NFC (near field communication) toys of Skylanders and the more recent Disney Infinity are made up of primitive, inexpensive technology. When you pop a toy on a portal a basic chip is read and interpreted by the disc, with the majority of data and all of the gameplay simply unlocked on the disc; it's not black magic or actually impressive on a technical level.
The counter-argument, which is absolutely fair, is simply "who cares"? Both these brands are now huge business, exciting not just kids but 'big kids' of all ages — the simple act of having a neat toy for your shelf that also interacts with a game is a classic example of an obvious idea well executed. Perhaps it's surprising that it's become such a massive market considering the cost to supposedly money-aware consumers, but that's where we are, and most importantly for both brands it gives the games shelf space that others can only dream of. Game stores and various other kinds of retailers have starter kits, disc copies and rows upon rows of collectible toys to be bought individually. That means big money, but also invaluable exposure and what's often described as 'mind share'.
It's that retail presence where Nintendo's influence has perhaps waned the most. To be doom-and-gloom and suggest the trend is irreversible is foolish, however, and ignoring the impact of the Wii as opposed to the struggles of the GameCube. Nintendo's Figurine Platform also comes in behind two established brands, yet we suspect retailers that still stock some Mario plushes and Nintendo Monopoly will take a very real interest, provided stock levels and marketing are up to scratch from Nintendo. Nintendo's character IPs are still popular, but they need a fresh outlet just like this.
What may tempt parents, or us older fans that have limited budgets, is the early assurance that Nintendo's approach may not be quite as generational as that of Skylanders and Disney Infinity, which gradually phases out older toys and portals with ever-more elaborate new designs. Here's what Satoru Iwata said in his recent investor briefing:
In other words, the figurines, which consumers can buy and collect, are going to work with multiple software titles to be released in the future, and we are aiming to develop more software titles compatible with the figurines.
Nintendo has a lot of well-known character IP that has originated in video games, and we have been regularly releasing titles from game franchises that make use of this character IP. This is why I believe a brand-new type of platform will be born when the character IP becomes compatible with NFP.
Though the company will no doubt aim to maximise profits, it may try to do so more through more frequent software as opposed to toys. After all, Nintendo's stable of characters has its limits, and the diagram above suggests an intention for a figurine to have diverse uses across multiple games. A range of NFP games working with the same toy, which will have data writing capabilities to support character customisation, could become a strong brand on their own. As well as major retail entries, we'd also hope occasional small games on the eShop — with download cards available in stores, of course — will also factor into Nintendo's plans.
Most importantly, Nintendo is more than aware that it needs to act to ensure that an entire generation of gamers aren't more familiar with Skylanders, Angry Birds — seriously, AB toys are everywhere — and actually see Nintendo toys and want them. It follows on from Nintendo making clear its desire to boost the visibility of its IP, as stated in January, but reassuringly means more than licensing useless tat from merchandise companies — the company does, despite the opinion of some that it can be dangerously insulated, watch the market when judging moves to maintains brands and profits.
As for utilizing character figurines, Activision has released video game titles from the Skylanders series over the past three years and Disney Interactive released the software title, “Disney Infinity,” last year. Both video game series are compatible with character figurines and have created an extremely large market for these products. In the overseas markets especially, a huge amount of space has been allocated to those product lines at retail stores with a large market presence. Our primary focus, however, is not to develop software that is compatible with figurines. Rather, we have been developing figurines since last year because we believe there may be different approaches or ways to appeal to consumers by using them, and this could also be one way for Nintendo to utilize its character IP. At the Corporate Management Policy Briefing in January this year, we talked about our policy of actively utilizing character IP imagining that we would be able to show you the actual NFP product, which I mentioned today, at E3. However, when we talked about actively utilizing character IP, people were only focused on to whom and how licenses would be granted. So today, I decided to talk about our own project.
While we're optimistic Nintendo, unsurprisingly after recent financial results, is exceptionally cautious, keeping worryingly low Wii U sales estimates despite the figurines and related games due to start in the "year-end sales season". Perhaps the early launch will be low-key — rather like the Pokémon Rumble U toys have been for their whole run — but we'd actually expect Nintendo to bring out all the stops to target the Holiday season. It could be perfect to offer the Wii U system that has versions of the latest Skylanders and Disney Infinity games, in addition to a Nintendo range that's especially affordable due to the GamePad's NFC reader. There should be relevant bundles everywhere, if common sense is observed. Let's not forget, too, that next year will see the figurine platform come to the 3DS with an external portal, tapping into the portable's sizeable userbase.
Could the Nintendo Figurine Platform be a huge success? It's possible, of course. It certainly gives Nintendo an enticing opportunity to get into the lucrative toy/game market that bring major revenues to Activision and Disney. Most importantly it could get Nintendo toys onto a lot of store shelves, while that big N magic could give the genre a welcome spark of creativity.
As for this writer, I can't wait to customise and explore Nintendo wonderlands with my very own customisable Luigi toy. We'll all have our favourites.