This is part of a much larger article. For the previous entry in this article, please click here.

10. As an investor, one would like to see Nintendo invest some of its $10 Billion fortune in order to meet the demands of the marketplace. And although Satoru Iwata stated in the Corporate Management Meeting that Nintendo “need to make efforts to balance revenue with expenses to post operating income for the next fiscal year”, surely he must realise that short term cost-saving efforts would have long term consequences of not allowing Nintendo to equip itself with the necessary tools to compete in future.

Satoru Iwata needs to realise that he isn’t wasting money, but investing it in Nintendo and the company’s future – with short term “losses” eventually coming to yield long term dividends. Spending money is therefore not a loss-making exercise, especially if it allows Nintendo to safeguard its future.

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But maybe that’s the problem: Nintendo don’t like to compete, yet also “cannot continue a business without winning”. Hence the reason as to why the company is looking towards an increasingly gimmick laden future where “from a medium to long-term standpoint, however, we don’t believe that following trends will lead to a positive outcome for Nintendo as an entertainment company. Instead, we should continue to make our best efforts to seek a blue ocean with no rivals and create a new market with innovative offerings as a medium- to long-term goal”.

If Satoru Iwata has basically announced Nintendo’s intentions of leaving the gaming industry, in pursuit of financially more lucrative pastures, then its arguable as to whether anyone (apart from the most nostalgia ridden of Nintendo fanboys) will miss his company’s recent contributions. After all, and apart from the momentary success of the Wii (which Nintendo weren’t able to sustain), Nintendo’s fortunes have increasingly seen a downward slide for the best part of over a decade, to the extent that now the company is seen as being largely irrelevant by some commentators within the business.

But even if Nintendo have cryptically announced plans of cashing in their chips and exiting the games industry, it’s worth noting that the company can still use its vast reserves to turn around the Wii U’s fortunes if it truly does desire a more benevolent outcome for the beleaguered console.

Part of this would be to use the Wii U as a stepping stone in order to elevate consumer and industry confidence, so as to ensure that the console enjoys a healthy future, with its successor also benefiting from the building block successes of the Wii U. Nintendo therefore need to invest sizeable amounts of money into R&D in order to realise future hardware. And of course, if Nintendo does plan to release a successor to the Wii U home console (as it surely does), then it needs to ensure that its future hardware is able to meet the needs of the marketplace.

One of the key detracting arguments regarding the Nintendo’s recent hardware strategy (since the Wii) is that its consoles have eschewed raw power in favour of gimmickry. These tactics are short term fixes which lack substance and long term appeal, and Nintendo needs to stop insulting its customer base and take more decisive measures so as to earn the respect of gamers once again in a mass-market industry. And by taking a more refined look at the long term picture, Nintendo can once again seek to provide hardware that is in line with modern industry expectations. After all, and as a fellow gamer recently pointed out, “gamers want technology not gimmicks. That’s the difference between a Wii U and a PS4. The NES, SNES, N64, Gamecube were all good technological consoles for their time, but the Wii onwards have been too gimmicky”.

Having access to powerful hardware also plays a dual role, in that it attracts the best (and most talented) developers. If Nintendo’s (Wii U) hardware isn’t in line with industry expectations, then its technical deficiencies will only act to alienate developers in the process, who will feel insulted for being tasked to work with what it essentially substandard technology. Therefore, Nintendo not only end up antagonising third parties, but also hamper their own recruitment efforts by not being able to attract and retain key talent.

As an example, Eurogamer recently published an article which pointed out the Wii U’s hardware deficiencies, and how much of a hassle its widely different architecture was for developer pipelines. The author stated that “as far as the CPU optimisations went, yes we did have to cut back on some features due to the CPU not being powerful enough. As we originally feared, trying to support a detailed game running in HD put a lot of strain on the CPUs and we couldn’t do as much as we would have liked. Cutting back on some of the features was an easy thing to do, but impacted the game as a whole. Code optimised for the PowerPC processors found in the Xbox 360 and PlayStation 3 wasn’t always a good fit for the Wii U CPU, so while the chip has some interesting features that let the CPU punch above its weight, we couldn’t fully take advantage of them”.

In short, Nintendo needs to try harder with its future hardware offerings in order to ensure parity. And RayMaker (of NeoGaf) goes one step further by simplifying developer protests, by arguing as to “why the hell should we make our games for the WiiU, not only do Nintendo make hardware vastly different to the 360/ps3, but the tools are not as good either and its no where near the tech level of the X1/PS4. We dont want the headache, waste of time,resources and money WiiU development would result in. Come to us with a console that is not vastly different to the competition and a platform which are games will sell on and then we will take you seriously”.

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Click here to go to Part Twelve.

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