Nintendo is, in the ongoing understatement of the ages, very Japanese. That can be a huge strength, and some of its key successes as a business have resulted from sticking to its core culture and, as a result, winning over legions of fans. In the current day the big N is well known for its quirkiness, creativity and prioritisation of fun and the gaming 'experience' above all else, and those are key differentiators from the tech-driven 'mature' focus that broadly typifies its immediate rivals.
These are broad strokes, of course, but I feel matches the general reality away from occasional examples that buck the trends. Yet a topic that's been swirling around in my mind for some time is that Nintendo continues to make key decisions that are baffling, and in the case of the 3DS and more-so the Wii U has made mistakes when gauging the global market. The 3DS came in at a premium price and was partially saved by a drastic price cut just months after release, and the Wii U has struggled both conceptually and in the market, failing to truly forge an identity for itself.
Overall strategy will be hugely important for Nintendo in the next 12-36 months, some of which will already be in motion. In the next couple of years Nintendo's going to reveal and release its NX hardware, will make tangible moves into the smart device app market and kick off its Quality of Life (QoL) product range. A problem for Nintendo is that what was quirky and innovative in the Wii / DS era is now old hat and needs to be redefined, while its audiences in Japan and the 'West' - by which we broadly mean PAL territories and North America - have very different demands and focuses.
Yet, at a boardroom level in Kyoto Nintendo remains a Japan-only club. Nintendo of America, the most powerful subsidiary with some autonomy, has Reggie Fils-Aime as COO and President but overall company President Satoru Iwata as CEO, a positive in terms of a direct working relationship between Kyoto and NA but still with NCL very much in charge. Nintendo of Europe is the over-arching organisation for smaller nation-based subsidiaries in the region but, from what we've observed for years, has less creative freedom than NoA while being led by Satoru Shibata.
Now, to be clear, this is not to question the abilities and qualities of these senior executives, but I'm highlighting a lack of diversity, and that can restrict Nintendo's ability to be flexible, respond to each major market in the right way and - at the end of it all - have the best possible results.
Let's consider some detailed examples here. Sticking with Nintendo initially, part of the reason I and my colleagues continue to believe the NX is a some kind of portable / home console hybrid is actually a result of the company showing an awareness of different markets. Portable systems traditionally perform the best in Japan - certainly true in the case of the DS and 3DS - while home consoles are statistically the bigger market in the West. With Nintendo heavily reliant on its own teams and partners for major releases, and having unified its home console and handheld departments a couple of years ago, it'd make sense to have a platform with one set of games to develop, while simplifying matters for third-parties. This unity would also allow the company to target global audiences in different ways, prioritising the hardware angle most suited to each region in its marketing.
In any case, it's true that Nintendo - particularly Satoru Iwata in Q & A sessions with investors and shareholders - does show plenty of awareness of the disparities between ideas likely to succeed in Japan and those better suited to the rest of the world. Iwata-san has highlighted how free-to-play models vary around the world, acknowledged the aforementioned gap in portable and home console successes and more. Yet awareness doesn't always equal action - just look at Nintendo revealing the New Nintendo 3DS for Japan for October 2014 and trying to stay silent in the West until early 2015, as if the world hadn't seen its Japanese online broadcast. Culture clashes are also possible in development, too, with recent revelations around Project H.A.M.M.E.R highlighting the worst of the problems that can occur.
What I'm really talking about is Nintendo, at the top level, truly engaging with and understanding what fans and consumers are saying around the world, and reacting to the fact that the feedback will vary greatly between regions. Just look at gaming history, with SEGA of America driving enormous success in North America during the Genesis era and then clashing with SEGA Japan; divisions, disputes and seriously muddled strategies contributed to chaos and the company's eventual exit from the console business. Lack of cultural understanding backfired for Microsoft, too, which messed up its original Xbox launch so badly in Japan that the brand is effectively dead in the country.
At this stage we'll highlight Sony as an example of a company achieving some success in the struggling Japanese home console market, while leading the way in the lucrative Western markets. The PS4 effectively addressed the key issues and complaints that hindered the PS3 in the last-gen system's early days. The PS3 had complicated infrastructure that made development difficult; PS4 uses conventional infrastructure. The PS3 launched too expensive; PS4 undercut Microsoft with a reasonable price at launch. Though the 'race' with Xbox One has now evened out a little, PS4 answered critics and gave the Sony audience what it wanted, winning in the West and achieving modest success in Japan courtesy of some major software releases.
The key thing here is that while Sony operates out of and is a powerful Japanese company, it continues to employ management staff from around the world in senior and vital positions in its global PlayStation business. Mark Cerny was a key architect of the PS4, while Andrew House is president and Group CEO of Sony Computer Entertainment.
I'm not suggesting for one moment that Nintendo should replace experienced, talented senior executives and staff in Kyoto, yet I can't escape the feeling that in a global world the company could broaden its core management. Forget regional subsidiaries that deal with marketing, sales and localisation - I'm talking about a global representation working directly with and within the Kyoto boardroom.
It often comes up, in conversations about Nintendo and decisions that have us scratching our heads, in which we may say "that probably fits the Japanese market better". Nintendo should continue to cater for that market, of course, as it's valuable - yet we're seeing a slightly stubborn refusal to stretch out and really diversify approaches to different regions. Yet it should be possible to cater to a global audience, but worldwide knowledge and perspectives are needed to make that happen.
Ultimately, I don't think it's a coincidence that sales trends of recent years show the split between handhelds leading in Japan and home consoles leading in the West, and beyond that Nintendo's increasing reliance on the Japanese market. The numbers speak for themselves, with the dominant 3DS selling more units in Japan than in the Americas and Europe individually.
The funny thing is that, actually, Nintendo is loosening up a little, just not enough. A case in point is the eShop - Nintendo of America (and Europe, it seems) appear to have significant autonomy to lead strategies with the download store. The final say on major decisions - based on comments from NoA staff past and present - still resides with NCL in Kyoto, but eShop initiatives have flowed freely with both regions at the vanguard. We've seen the eShops transform with regular themed 'Nindie' sales promotions, we've seen cross-buy, the trailblazing Humble Nindie Bundle and a general outreach to the independent development community. It's been a seriously positive couple of years of evolution for the eShop.
Yet the eShop is a different beast in Japan, with a very different library and style. Part of this is to do with gaming culture in the country, and Nintendo still requires publishers registered in Japan for its eShop releases; that's why Western Nindies often team up with other companies to bring their games to the country. Whatever the rights and wrongs, it's a clear example of Nintendo tackling each market with a strategy that's localised, and in the process is better for global performance. If North America and PAL territories had all the same restrictions as in Japan, the eShop would look rather different.
Ultimately, will we see key executives from outside Japan, with a major say in Nintendo's future, sitting in the Kyoto boardroom? It may happen eventually, but my real hope is that Nintendo gets a little smarter and sharper now in how it approaches different markets. It's not just about having regional marketing, sales and localisation - it's about the overall company strategy, hardware and games being designed with global tastes and trends in mind. Successes and failures of the past and present from SEGA, Microsoft and Sony all show how important this is.
In the next couple of years we'll see how well connected Nintendo is with the desires of a global audience. I truly hope the company gets it right.
Image 1 credit: leavelucktogames