Nintendo's Big, Bad Gamble

Official word came today of Nintendo's new portable system, the Nintendo DS. I should say upfront that I'm a Nintendo loyalist - if I'm going to buy a game system, I always buy Nintendo. They release the highest quality product, have the best proprietary games (good games from the other systems usually come out on PC), and are the most innovative company out there.

That being said, they've seriously lost touch with the general gaming public over the last 10 years or so. The Virtual Boy was a gigantic failure. The Nintendo 64 was a huge miscalculation - by not using a CD format, they lost out on tons of 3rd party games, all of which went to Playstation. This put them in such a poor position that they've struggled to bring 3rd party interest back for the Gamecube, which is a superb system. But even with Gamecube, they've failed to capitalize on both modern hard drive capabilities (unlike X-Box, which allows players to save enormous amounts of information for later playing) and the online market (another area X-Box was well-prepared for). Thus, it took an enormous price-cut just to stay in the running with X-Box and Playstation 2, but the consequence is that Nintendo is starting to lose money for the first time in its existence.

Meanwhile, the portable gaming end of things keeps Nintendo afloat. The Game Boy and the Game Boy Advance are an unqualified success - a bigger success than even the Playstation 1 and 2. Nintendo completely controls the market, as they have for 15 years, and continues to swat away competitors with little effort. The Nokia N-Gage is the most recent example. But Sony is readying the PSP, a portable system as powerful as a Playstation 2, with additional music and video support (the Game Boy Advance is comparable in power to a 1991 console system, namely the Super Nintendo).

This is the state of play as we enter 2004. Nintendo, though they won't admit it, are in a do-or-die situation here. They have a new console system (as yet unseen) and a new portable system (the Nintendo DS, we now know) coming out within the next 18 months. They can probably survive one failure, but they can't survive the failure of both. Better place your bets on the console, if you ask me.

This new system reeks of Virtual Boy-like overproduction with little payoff. Here's a description:

"There will be twin 3 inch TFT LCD screens of Game Boy Advance SP standard. The screens will be back-lit; the processors are confirmed as an ARM9 main unit, with an ARM7 sub-processor; the DS will be cartridge-based, with semi-conductor memory maxing out at 1 gigabit.

Games will be split into two fields of view, with one screen hosting the main game action and the other managing data and information. Nintendo of Europe confirmed this morning that the screens will be vertically aligned and flush fitting, this layout combining to make one larger screen. No control system was revealed."

The two screen idea is certainly innovative, but I don't feel it adds that much to the experience, and will make the system a bit unwieldy to hold. Sure, you won't have to hit pause to see information and such, and they'll probably come up with some interesting uses for the screens, but the power of the system just doesn't compare to the coming PSP - the Nintendo DS is at a 1996 console-level in terms of graphics, and it's competing against the 2001 console-level of the PSP. Perhaps even more important is the price will be fairly similar to the PSP: about $150 (PSP is looking to be $200 or so). I just don't feel the two screens will be such a advantageous feature that gamers won't mind playing less-advanced games graphically. As one market analyst put it:

"If Nintendo had released a portable GameCube, it would have rejuvenated GameCube development in the wider context. This way, the firm is a generation behind Sony, and is split across supporting three separate platforms, and will incur the R&D costs of developing an entirely new machine. It seems like a mistake."

I have to agree.