An iconic but changing brand

This week could be an interesting one for Nintendo fans. With E3 creeping ever closer the company will be revealing its annual financial report - beyond profit figures this means details on sales and projections, and will also bring us Tatsumi Kimishima's media briefing and investor Q & A. It's the Nintendo President's presentations, ultimately, that will draw the most interest for all but the statistic buffs interested in the company's bank balance.

It's worth acknowledging, of course, that 2016 is a notable year for Wii U and 3DS, which we've covered in 'Biggest' games lists and other features - both potentially have major blockbusters to give them life late in the year, along with some other intriguing titles. It's also important to be clear that, for many, the narrative has already moved on, and Nintendo's own priorities and resources have clearly - based on the limited release slate for Wii U, in particular - shifted to other areas. As a result we can expect Kimishima-san to be addressing the future for Nintendo, which mainly revolves around 'NX' and mobile.

What investors will care about, most of all, will be the issue of returning to 'Nintendo-like' profits, which has been a goal unfulfilled for around five years. In the Wii and DS era Nintendo was dominating the gaming space, with the DS 'family' becoming the second best-selling platform in the industry's history and the Wii capturing the public's imagination to 'win' its generation - albeit with a lifespan that faded quicker than for PS3 and Xbox 360. Forgetting all of the ins and outs one thing is clear - Nintendo was an industry leader and one of the most highly regarded (and profitable) technology companies in the world.

Early 3DS buzz had to be revived shortly after its launch

Of course, technology evolves in the blink of an eye, and the public's drift away from motion controlled gaming and the rise of tablets / smartphones, to name just two factors, changed the game. When the 3DS system arrived in late February 2011 in Japan (late March in Europe / North America) it was picking up the mantle of the DS. Yet it never had a hope of matching its predecessor because of the varied changes in the market, and Nintendo had to respond with a rapid price cut and some major releases to achieve some momentum. We've frequently argued that the 3DS has been a success considering the tough odds it faced, and it's been the only thing holding Nintendo's finances relatively steady on a consistent basis - yet it'll potentially only reach about half of the DS family's sales if it has some strong sales in its twilight; as of 31st December last year the 3DS family had sold 57.94 million units, the DS reached 154.01 million.

The reliability of the 3DS and its sales, despite diminished returns and a smaller consumer base, has been vital because of the Wii U's struggles. As of December 31st the home console had sold just 12.6 million units, a poor number for three years on the market. As only selling between 3.5 - 4 million units is a good year the system, it's utterly failed to make a meaningful breakthrough with the mainstream. Mainstream, as a term, doesn't necessarily apply to the so-called 'hardcore' gaming audience, either - it simply represents a critical mass of people that buy into and establish a dominant trend. Wii and DS, selling over 250 million systems between them, were mainstream successes.

The Wii U's lack of early momentum proved disastrous, as did Nintendo's inability to reverse the slide. Many major third parties (and their franchises) ditched it early, and no matter what fantastic titles Nintendo and its closest partners have released it's failed to take off. Even when games like Mario Kart 8 and Splatoon have shown trending potential in terms of media coverage (old-school and social) the console has remained resolutely at the bottom of the retail food chain.

Splatoon has been a welcome success on Wii U

The Wii U is proof, not that it was really required, that a company's dedicated fan-base is never enough on its own. For every generation there's a core of dedicated fans and a larger group of consumers that know about the Nintendo brand and like the games, but decide on a case-by-case business whether to buy into the concept - tens of millions of Wii owners didn't blindly follow onto Wii U. It's not a problem unique to Nintendo - Sony struggled to shift notable numbers of Vita systems, and there's evidence that plenty of Microsoft's Xbox 360 fans defected to PS4 in this generation. Consumers waver and go with what they feel are the best and most desirable systems - when a console only appeals to a dedicated fanbase you get Wii U levels of sales. We know the Wii U base is committed to the cause, to give one example, through the fact that Mario Kart 8 has sold 7.24 million units as of 31st December, an extraordinary rate of 57% of the system's total sales.

Nintendo knows all of this, of course, as it'll have experts and highly paid analysts that have broken all of this down in great detail. Fans, however, clearly don't all recognise of accept this reality. We all have our bucket-lists of what we want NX to be, for example, but our priorities may not all match Nintendo's - the big N will have produced a system and concept it thinks will capture the general public, the wavering case-by-case crowd that bought DS and Wii in huge numbers and never came back. Likewise with mobile - there's a vocal fanbase that bemoans Nintendo's moves into smart device apps, shuns Miitomo without hesitation and slams the presence of free-to-play experiments on the eShop. And yet Nintendo is doing what it has to do.

Miitomo is just the beginning for Nintendo on mobile

That's why, for every fan-pleasing reveal in the coming months there'll be another that targets a broader audience, earning inevitable criticism from some on social media and the web in general. After all, it was in seeking the 'blue ocean' that Satoru Iwata brought Nintendo screaming back to the top of the industry in the last generation, a period that brought us the term 'Nintendo-like' profits. Such has been the shift in consumer technology, however, that Nintendo has to embrace smart devices and, perhaps, trends and approaches in NX that'll rub fans of 'traditional' or 'conventional' gaming the wrong way.

Of course, for most fans the over-riding priority is for Nintendo to be successful and keep making games. We've argued in the past that gaming needs Nintendo, simply because it produces content that's still unique and fresh in the industry. Ultimately gaming needs all of its inclusive parts - including Call of Duty, Angry Birds et al - in order to flourish, and an industry without the big N is an unpleasant prospect.

So in wishing for a successful Nintendo, we'll have to accept its modernisation and shift in approach. At some point a treasured franchise is going to arrive (officially at last) on smart devices, and we may hear a lot more about engaging customers, building brand awareness and all of these terms that prompt some to roll their eyes. It's a difficult reality to accept due to the speed at which it's happened - it was only a couple of years ago that the idea of Nintendo 'games' on smart devices seemed fanciful at best; now we're expecting multiple arrivals before this time next year. The codenamed 'NX' could ultimately be far from the expected, too; with Nintendo it's hard to predict.

Just recently we polled the community on how optimistic it is about the rest of 2016. Pleasingly the numbers show plenty of positivity. It may be that the 'good old days' that brought regular generational cycles of gaming systems and old-school ideas are drifting away, but that certainly doesn't mean change can't be hugely exciting.

Whatever Nintendo does this year and beyond, though, it needs to do more than win over the most eager of its fans. If the company is to return to a leadership position in the gaming industry it needs to find the magic formula for mainstream success - for all of the pros and cons around this, we should hope it succeeds.