Wii-U: A repeat of the Wii? Nintendo's Doom? The sound of a fire engine siren?

The Wii is, or with sales dipping was, the most commercially successful console of the “generation” of consoles that stretched from approximately 2005 to 2012. The question is, why?

The first thing I'll admit too was that if I'd had the money I would have invested in Nintendo just before the end of 2006. I was excited about the new controller! Others were excited for the console, there was a palpable air of interest in the product among many. If I had done so I probably wouldn't even bother putting ads on this blog.

The second thing I'll admit was that I may have been wrong. Back in 2006 I was excited for the possibilities of the new controller. For many, any excitement for the “Wii-mote” was clearly overblown. The controller never did deliver any particularly new or exciting experience, in fact it was often decried as a hinderance in controlling many types of games. So why did my advice end up being good if the reasoning was wrong?

Was it the hype? Nintendo had it in 2006, it had interest, it had marketing, it had people hooked. And for its newest console it has hype once again. If you read reports from people trying the demo of the Wii-U at E3 2011 you'll read mostly excited and positive experiences. If I decry the Wii-U's possibility of failure to others they scoff and mock. The Wii-U, at least for now, has hype. It has marketing, it is growing towards a similar interest level as the Wii had just before it's launch in 2006.

So, should you buy stock in Nintendo? Right now might not be such a bad time if you were thinking about it. The failure of the 3DS to come even near expectations and ever slowing sales of the Wii have driven Nintendo's stock down quite a bit. The strange reality is that the vast majority of investors in the world can only understand graphs and quarterly reports rather than prospects; and this may give people the chance to earn a large profit off them if they buy. But let's examine things a bit closer before you hit up your online stock broker.

Does Hype really sell it?

So what was the key to the Wii's success, that “hype” that I mentioned? Honestly I don't think so. Hype can do a lot. Hype can have people lining up for the newest I-phone before the stores open. Hype can sell a crappy video game almost to the point of its previous installment's success. Almost, I'm referring to the generally decried Dragon Age 2.

While for reasons I don't know the “press” seemed to love the game, the majority of consumers have characterized the game as anything from slightly underwhelming sidestory to a complete waste of money. Hype and the initial reviews from the press may have driven initial sales incredibly quickly, but they fell of just as steeply, leaving the game with a lower total in sales than Dragon Age 1 and some bad PR for developer/publisher Bioware/EA.

So what does this have to with consoles? Well, hype can do a lot, initially. But consoles are now expected to last at least 6 years for a “life cycle”, or time the product will be on the shelf and selling. Considering in the case of Dragon Age 2 the steep decline in sales started less than two months after the games release, I'm going to predict that initial hype alone will do anything but guarantee a console's success. Nice to have? Certainly, but the Wii-U is going to need more than initial excitement to succeed, or even survive.

So why was the Wii a success?

Innovation. But it was innovative in a way few could foresee. I suspect even Nintendo was surprised at what sold the console. It wasn't the controller's new functions or features. The price and ease of use made the Wii a success. Casual made the Wii a success.

Back in the olden days of 2006 the term “casual” hadn't even entered video game lexicon, let alone being the large section of the market it is today. The idea that people besides children and nerds would enjoy video games was original and disruptive. Nintendo decided to try and see if there was anything to this idea, and so made sure its new controller was relatively easy to handle while looking and feeling more familiar to the average person than a game pad.

The idea worked, in a big way. Combined with undercutting the competition in price the Nintendo Wii managed to outsell both Microsoft and Sony in dramatic fashion for years. While many console makers relied on the sale of games for their consoles, for which they receive a percentage, Nintendo instead relied on making its console as cheap to manufacture as it could and selling each unit for a profit.

Nintendo managed to stack up profits and thumb its nose at Microsoft and Sony, its stock soared and the good days rolled. Until this year when it appears the Nintendo Wii has hit something like market saturation and has seen sales reliably dip month after month. The 360 now outsells the Wii every month and is pretty much guaranteed to beat the console in sales this year. But Nintendo has made its profits and has its new product on the way, apparently (though not perfectly guaranteed) about a year ahead of the competition for this newest console “cycle”.

Innovation? Feh

There is, however, a problem. Nintendo's new console doesn't tap any new markets such as the Wii did, and indeed there might not be any new markets to tap. It is at least socially acceptable for most anyone to play video games now. Meanwhile the new “innovation” for the Wii- U is that a large tablet like touchscreen has been successfully fitted onto a traditional controller.

Of course the I-pad, and smartphones have already been doing the “touchscreen gaming” thing since the original Wii was launched. Considering the largest section of paid apps for these devices is games I'd say the market for this is successful and large. However I'd also say the reason it's successful is because the games are on something portable and are cheap. Their success does not seem in any particular way linked to controlling them with a touchscreen.

Another supposed innovation of this tablet controller is that it will be able to show anyone holding it different information than is on the tv. The very notion that this would be particularly desirable is utterly laughable. Now before you dismiss this, let me remind you that most people, like you, have a strong tendency to automatically reject original thought and ideas. I say this because from my experience you are already sold on the “showing different things is new and good and innovative”, and you are dead wrong.

Let me explain. First, consider trying to look at two different screens at once. Who does this? The answer is office workers, usually computer programmers, and they use two screens to spread out all their windows so they don't have them overlapping a lot. Another use for this is for presentations, someone uses a projector and controls it from there laptop. In other words, you don't do any of this with your game console. Splitting peoples attentions between two screens is simply not going to work, and running a user interface off the touchscreen is going to be a minor extra convenience at best.

Another supposed innovation that has to do with this is multiplayer. One person can see something completely different from the other. A demo showed off four players, playing on the tv, running around in a maze in first person while someone with the tablet got an overhead view. I'm going to be unduly sarcastic here.

Hello 1991? Yeah, it's the internet calling Nintendo. Would you please pick up already?

The point, facetiously made, is that if people were on their own consoles or computers then this exact scenario has been available since the dawn of internet gaming. While it is interesting to have this scenario available “locally”, i.e. with people over it's still not a huge leap from anything consoles with a good online service can do already.

The final “innovation” and the only real benefit I can see is that your game can seamlessly transition from your tv to your tablet. Of course most people won't be playing games on the tablet's screen most of the time. But the idea that your wife/husband/parents/kids/whoever can take over the tv while you still get to play your game is a solid one. There may even be a few people who buy the thing without a tv and just play on the tablet.

But all of this comes at a price. Specifically the price of the tablet itself. Remember, part of the Wii's success was being able to undercut the competition while still being sold at a profit. With an incredibly expensive controller added to the cost of every unit sold this going to seriously hinder that strategy.

Blue Ocean, Red Ocean.

And what about “Casual”? Well, as I said casual is now a huge part of the market. Everyone wants a piece of it. In 2006 Nintendo was able to dominate the “casual” side of the console market. It was able to navigate its way into a so called “blue ocean” market, one where there was little if any competition.

But the sharks have come to casual. Microsoft's quite successful Kinect has showed it understands how to appeal to the casual crowd at least in one way. And while Sony hasn't been as successful yet it continues to try new things, pouring talent and money into capturing its own portion. Combined with the meteoric rise of casual on the pc and smartphones/tablets Nintendo no longer has its Blue Ocean and lack of competition.

That means it will have to compete straight up with everyone, and I doubt it can. Digital distribution is going to be a key factor in “casual” titles for the next generation of consoles. Certainly it will be a benefit for big publishers. Getting rid of some of the hassle and expense of dealing with manufacturing, shipping, and warehousing all those game discs and boxes is going to be a boon to anyone. But digital distribution will be the key to allowing casual titles to be distributed at all.

One of the keys to casual seems to be its low cost. Certainly the hardest of the hard core, such as MMO's and DOTA clones have benefited from new “low consumer cost” business models as well. But for casual games it seems a necessity. Boxes and discs and shelfspace are not part of this low cost arena, to get casual games to sell to the people you need a slick, functional way to deliver these games over the internet.

Nintendo doesn't seem to understand the internet. Nor casual. Extremely odd for one of the pioneers of casual perhaps, but I can't help but think it true none the less. Remarks by Saturo Iwata show only disdain for the rise of Angry Birds, Farmville and the like. Repeated statements of having no desire to participate, followed usually by haranguing that such games actually exist seem to indicate a definitive rejection of the very notion of casual.

Add on top of that a seemingly complete lack of understanding concerning digital distribution. Valve's Steam service has been stacking up profits for years. On the PC digital distribution has become so popular it has now surpassed retail as the primary means of delivering games on the platform. Meanwhile Nintendo has put a measly 2 gigabytes of flash memory into its 3DS, not even enough to hold an entire high quality game.

Much the same has been said of the Wii-U. 8 gigabytes of ROM is, again, probably not enough to hold a single average “hardcore” Wii-U game. But we were talking about casual. And while the stated had drive (or rather flash drive in this case) memory is enough to hold Angry Birds and etc., I take the lack of space and statements by the company president of all people to mean that Nintendo has neither understanding nor a cohesive strategy for digital distribution of games. You can rest assured that both Microsoft and Sony, who already have more successful and cohesive strategies, will not neglect digital distribution in the least for their next consoles.

Technological Archaism

I could mention Nintendo's continued lagging in the arena of online play versus its competitors. But I just did and no more needs to be said about that. What I will mention is the Wii-U's anemic technical specs. “It's a good transition console” is a quip about the Wii-U's hardware by Gearbox president Randy Pitchford.

Not a next generation console at all, but “a good transition” from the 360 and PS3 into whatever the PS4 and “720”? will be. Despite the success of the Wii it missed out on the most successful non Nintendo games because of its anemic hardware. Graphics matter, as does the hardware that computer programmers sitting in their darkly lit little cubicles use to get those graphics onto your screen.

Or more specifically. Being able to make creating games as easy, painless, and cheap as possible is an incredibly desirable thing; especially as games cost too much to make already. But at the same time game designers, and artists, and etc. all want to do as much as possible. They want their imaginations to pour out onto the screen in front of you, so the more power they have to do this the better.

What this ends up meaning is that if two consoles, such as the 360 and PS3, are the most powerful and even enough that they can generally run the same games without too much trouble then they will. But if a much less powerful console is available next to these other two, then it's going to be left behind. The game developers are faced with either limiting themselves to the lower console's ability, or are face with programming a very different game just for it. In other words one option hinders the very reason many game developers are at their job, the other costs a lot of money.

The Wii-U looks to be in much the same position as the Wii was. Without its domination of casual can Nintendo really afford to miss out on the next Call of Duty? Well there is a caveat to all this. John Carmack believes some things are getting “good enough” in gaming on the 360 and PS3. And while I disagree, it's still an interesting notion. With the Wii-U being more powerful than the 360 and PS3 will it simply be “good enough” for most things?

Possibly, but that's no guarantee. There's another thing I mentioned, and that is that games are too expensive to make. Long, well polished products and high risk (read: originality) do not often go together. So anything that can get games to be cheaper to create will be a powerful advantage.

Now, this requires a bit of explanation. All of the models you see in a game (near anything made of polygons) are made in a modeling program like Z-Brush. At first, a very highly detailed model is created in the program. Then either by hand or by another program another model with a more reasonable amount of polygons is made, often based on the initial high polygon model.

Then to make the normal maps (that little trick that makes surfaces look bumpy) you take the high polygon model, the low polygon model, and a program can move the differences into a normal map for you. Then there's lower lod levels to consider and... the point is this takes a lot of time doing what is essentially annoying busywork.

Now I mention this because the Wii-U is, for reasons most likely due to Nintendo trying to make a profit off each sale again, using an older spec'd graphics chip (for now). Open Gl 3.0 by the sounds of it, but I'm just guessing off what little information has been allowed to leak out. Now this is a problem, not only because OpenGl 4.0 (Direct X11, essentially) is out and an improvement, but because it allows graphics programmers something called tessellation.

I could go on about what this does, but what it means is that artists would no longer have to go through much of that annoying busywork I mentioned. It has the potential, for any graphics engine programmed as such, to allow artists to be more effective and probably happier as well. And while the (720?) and PS4 will doubtless support tessellation, the Wii-U does not right now. And that means artists trying to support the platform will be required to go back and do everything the old and tedious way, essentially negating the benefit of tessellation to them.

And if they don't want to bother? Not a game breaking consideration perhaps, but another nail in the “do we really want to support the Wii-U” question for game developers.

So, what's my conclusion after all this? That the Wii-U is in trouble. That it's not only impossible for it to repeat the success of the Wii, but that it's going to have a hard time competing at all. But it's not out yet. I hope, perhaps in vein, that someone bright and ambitious at Nintendo will read this and realize the product is in trouble. Competition is good for everyone and the last thing I want to see personally is the end of Super Smash Bros and the like.

Or more likely I hope that someone at Nintendo realizes these things on their own and seeks to redress them. A more modern graphics card that supports efficient tessellation. A coherent and robust digital distribution solution with a 120gig hard drive at least. Acceptance and support of casual titles coming to Nintendo products for cheap. Regardless of what you think of the Wii-U's prospects all of these things would help see the console as a more competitive product. And I sincerely hope that bright, ambitious person at Nintendo is trying to be heard.