The Philip Rational:
Iwata/Yamauchi with cheese.
-By Philip Wesley-
-Presented by DMG
-May contain harsh language and/or rhetoric-
-Presented February 16th, 2004-

Satoru Iwata and Hiroshi Yamauchi are right.

Now I have to explain it to everyone.
Thanks a million, you two.

The first thing that you need to understand is that Iwata and Yamauchi are not senile old men; but people who can see more of the big picture than your average video game consumer or ceo. All of the Iwata & Yamauchi quotes are from and I would like to credit them for that before we begin. First I will begin with Iwata's statements.

Iwata on the Game Cube:
- The main reason for GC's surge in sales at the end of the year was the price cut.
- I heard we even managed to surpass Sony's sales in the US for a moment.
- In Europe too, we were up on the previous year.
- We have been able to provide proof positive that the GC is not a dying platform.
- We were looking for the right time to drop the price from early 2003.

I cover Game Boy games on this web site; but I will comment on these statements about the Game Cube. The Game Cube is one of the cheapest systems on the market at the $99 price point. Despite the rebound the economy has taken, gamers still demand cheaper games and systems. A lot of the people adopting a Game Cube this year, also own a Play Station 2 or an XBox. The price point for the Game Cube made it viable for those people to afford a second system. The introduction of games such as Mario Kart Double Dash or premiums such as the Legend of Zelda Collection Disc added to the appeal of the Game Cube. There is nothing of controversy in these quotes. They just illustrate that Nintendo is doing fine.

Iwata on Nintendo's medium term targets.
- Today's games are complex and take time to produce - the age where we would struggle with graphics and memory is over.
- How can we expand the industry - the Nintendo DS is one way we are trying to do so.
- Yamauchi has the genius perception to see the customers' trends.
- I am thinking more from a scientific viewpoint of what we can do to achieve this.

This is the crucial difference between Yamauchi's style and Iwata's style. Out of respect for Yamauchi, Iwata comments that he respects Yamauchi's opinions. However, Iwata admits to asking for consumer response on games as well. The introduction of the Nintendo DS is a big idea for Nintendo; because they are trying a serious attempt at creating a third "pillar" of revenue. Now, Sega has tried this in the past with the 32X, Sega CD, Game Gear, and the Genesis all running at the same time. They then attempted to add more pillars with the Saturn. None of those items -save the Genesis- stuck with much success. Sony will try this with the introduction of the PSP. They will be supporting the PSP, PS2, and the PSOne at that time. When the PS3 launches, Sony will drop the PSOne support and then continue on in PS2 and PSP support. What Nintendo is doing is similar to Sony's plan. When Iwata comments on games today taking time to produce, he means that the whole game process -from planning and coding to actual final testing- has become more complex and varied. Graphics and memory are not a problem; because of the format that Nintendo is using now. The real test is making games that are complex; but FUN.

Iwata on Nintendo's next home console and portable hardware.
- I don't think our problems can be solved by just increasing the power of the consoles.
- It's not clear what other companies are trying to achieve with their new consoles, we will not make something incomplete just for the sake of it.
- Nintendo's hardware development team is thinking about when we should release the next machine.

Here comes the controversy! Iwata is criticizing two main efforts here: The PC market and the PS3 Cell Technology concept. The second remark about not releasing incomplete technology is a reference to Sony's "Let us sell the PS3 to people in pieces" idea. A lot of early consumer feedback has revealed that people do not like the idea of being forced to buy a home console in pieces. The reference to problems not being solved by increasing the power of a console is a reference to the "leaps" in bits that the home console market took. In a way, I believe Iwata has looked at the Microsoft XBox (A 32-bit system at it's core) and taken a long, hard look at the quality of it's graphics. In other words, creative design of lower powered consoles can yield the same amount of graphics quality as higher powered consoles that use an overkill in processor power. Iwata means that it may be possible to make consoles for less money; but still have an amazing output. Why swat a fly with a nuclear weapon when a fly swatter will do the same thing and for less money?

Iwata should ask people this question: "Is Baseball more fun when you are using a $500 baseball bat than when you are using a $5 baseball bat?" The truth is that both baseball bats do the same thing. You have fun from hitting the ball and making a home run. It does not matter if the bat has space age grooves made out of titanium space alloy blessed by Catholic elves in funny hats made of meat or if it was cut and polished out of part of the Oak tree in your yard.

Iwata on online gaming.
- I wonder how much money companies like Sony and Microsoft are making from this?
- You can't say that appropriate business models are in place yet - customers are also not jumping on board.
- But Nintendo doesn't hold a negative view of "net technologies."
- For example, we're thinking about new forms of play using wireless communication.

What Iwata means is that -despite popularity- online games prove to be hard to police, set up, maintain, and run. People still complain about the prices. In Japan, XBox Live is a failure and Play Online
is expensive. Iwata says that he does not hate the idea of online play, meaning that he may decide to pursue online play in the future. However, he does bring up wireless communication gaming. Considering how well Pokemon Fire/Leaf were accepted in Japan, we may see Nintendo push for that kind of wireless lan as compared to pure online gaming. Which makes sense. You would buy a game, turn it on and see everyone in your town who has the game. This would work extremely well in cities like Tokyo or Shibuya. It would also be cheaper; because it does not require Nintendo to police wireless lans or set up anything further than what is on the software. The more powerful this wireless lan becomes, the more possibilities. No need to set up servers; because everyone in your area would be a server. Thus, no additional cost for the company and the consumer. If you ask me, I like that.

Yamauchi on everything. I am breaking this into small groups of comments.
- Because of other companies' pricing policies, we had no choice but to cut the price of the GC.
- I think the game industry is maturing in different ways to those I imagined.
- The industry is displaying certain aspects of being in a crisis.

Yamauchi is STILL the man among men. He says what Iwata will not. He openly admits that the Game Cube's lower price range was to make it compete more against the other consoles. Nothing is wrong with that. When he admits that the game industry is maturing in ways he did not imagine; this is a remark on content and the proliferation of various destructive philosophies. "A business with no future spends like there is no tomorrow; thus funding their own demise" is the best way to explain it. The increased amount of game reliant on shock value is how the industry has "matured" in a way he did not think it would. Yamauchi believes that the video game industry can stand on it's own and is a little disappointed by the drive to combine it with other types of media in an attempt to create a kind of "media communism." He believes this communism is a sign that the industry is imploding into itself. Making everything the same kills industry GROWTH and does not promote innovation.

- Gamers don't just want beautiful graphics, sounds and epic stories.
- We cannot guarantee interesting and fun games just by using better technology and increasing the functions of the machines.
- But makers have plenty of money, so they won't stop making that kind of game.

He admits that we like games with beautiful graphics, sounds and epic stories; but we'd also like there to be a GAME in all that frosting. Only a fool would want just the frosting on the cake and then throw away the cake. In fact, better sound, graphics and story line can be counter productive to a game. Here is a long and detailed example of this.

The game is Fire and the point of the game is to bounce people that are jumping out of the windows of a burning building into an ambulance. The game is a Game & Watch game and the graphics are one color and simplistic. The music is just beeping. However, the game is fun and immersive regardless of that. A true test of a game is immersion. Now, let us take out the beeping and replacing it with full vocalized songs by the latest pop artist and then add in the Philharmonic Orchestra. Does that make the game better? In fact it may become distracting and disjointed. Now if you improve the graphics like what was done in the Game Boy Game & Watch Gallery games, you still run the risk of the graphics becoming distracting; but the graphics and sound are not too high risk in this game. They can be dealt with easily without ruining the immersive effect. Now let us give the game more of a story line. The heroes are trying to avenge their father who has been murdered over a tree; so they got jobs as firemen to impress their love interests, gather clues from the people they save, stop the aliens, and because a plane has hit the building. Every few people they save means the game must stop and take a rest to tell you about what they had for breakfast that day in a 30 minute cut scene. Do you really WANT that? If the best thing about a game is the story line, than the game play is not up to par. His last comment is a subtle "shame on you" to a few other companies that put out various over indulgent games that have extremely high production costs; but low output.

- The truth is, I thought about the idea for DS about 18 months ago.
- We plan to show the successor to the GC at next year's E3, even though typical gamers aren't demanding high specs. The people who call it the "next generation" are people who don't know games.
- The management are expecting good things from the DS.

Yamauchi is stating that Nintendo will show off the Game Cube successor in 2005 and that typical gamers want games before they want high technical specifications. He also says that people pushing for more and higher specifications forget that the typical gamer is poor and may not be able to afford higher technology. A good example is Sony's PSX machine. It has huge technology; but sells in tiny amounts. It is normal for Yamauchi to expect the DS to do well.

- If we can increase the scope of the industry, we can re-energise the global market and lift Japan out of depression - that is Nintendo's mission.
- If the DS succeeds, we will rise to heaven, but if it fails we will sink to hell.
- The next two years will decide Nintendo's fate.

Yamauchi is associating Nintendo with Japan as a whole. What this means is that it is important for the video game industry to not stagnant; but to create new and exciting products. If the industry fails to embrace creativity, than the industry is DAMNED. Whether Nintendo succeeds in this mission will be decided by 2005 and 2006. In that time we will have: the first full year of DS software, the launch of Nintendo's next home system, the expansion of the Game Cube, and the next Game Boy system. So, 2005 and 2006 are extremely important to Nintendo -and in Yamauchi's opinion- the honor of Japan.

- Dual screen games is my final suggestion.
- From now on, I won't interrupt management flow, though I can still ask for their strength.

Yamauchi is stating that he truly plans to "retire" for good after the launch of the DS. However, he still wants them to maintain high principles and high ideals. Nintendo's principle ideal is to do what they can, the best they can, and await the results. Nintendo should stick to it's guns instead of the money losing philosophies of competition.

I hope I have explained their recent comments a bit better for everyone. Do not be depressed by the slanderous stances that the general entertainment media will take on the above statements. Besides, I do not think the Nintendo DS will fail. It has the specs and will have the support to succeed nicely.

-Editorial by Philip Wesley-
-Sources: Nintendo/Arm
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