Nintendo: 25 years of games

 March 2, 2011, game developers conference, San Francisco– Nintendo president Satoru Iwata gave a historical perspective and also looked into the future of games. The developer community is seeing increasing confusion and instability in a changing world. Over time the industry evolves and changes, but overall, content is key.

25 years ago, HAL laboratory started developing games and the founders understood that engineering is less important than innovation. At this time, there was no gaming industry so the company was more like a hobby. Game designers had many roles; artist, sound engineer, architect, and many others.

Over time, graphics performance was improved, and the requirements have gone up exponentially, as have costs, the size of teams, and the amount of time required to create a game. In the past, $1 million was an unthinkable amount of money to spend on a game development. Now, companies spend upwards of $50 million for some of the larger games.

The good thing is that the number of people playing games far offsets the other increases. In 2007, 114 million people played a game in the last three months. Less than 30% of these people consider themselves serious gamers. In 2010, 110 million people consider themselves active gamers, and the average each of the gamer is going up.

One reason for the dramatic increase in active gamers is the move to social networks with associated games. However, social network intentions do not equal social games. In fact, one of the first social games appeared in 1962. Space war enabled head-to-head competition between computer-based players. In 70, a text-based MMO appeared, and Atari came out with their console in 77.

Nintendo follow soon after with their NES which later changed to the Nintendo 64. The ongoing changes in game consoles and content has led to a split in the industry where one can’t assume towards higher graphics performance and the Wii has moved towards greater interactivity. The N64 allowed multiple players with hand-held controllers to play the same game.

The Game Boy had the capability of connecting to platforms together via a cable to allow interactive gaming. When Pokémon came out, platforms had the capability of interacting with other wireless systems. Online games preceded social networks, and still represent a major segment of the industry. Call of Duty has over 1 million people playing online, and over 12 million people play World Of War Craft.

Games, therefore, have become the “must-have” for new experiences in three ways. First, portable hardware is highly desired, as the Game Boy showed. Second, the games must be attractive, but can range from high-intensity, lean-forward games like Grand Theft Auto, to highly social games like Just Dance. And finally, players are now looking for social appeal as part of the games they play.

Looking in games from a developer perspective, start with Mario. This game largely spread through word of mouth is still popular, but has changed considerably. Pokémon added capabilities for collecting, training, and trading parts of the game with others starting in 1989. This game was designed for interaction. Tetris was the first game to address a female audience and still accounts for 45% of all players. The Sims sold over hundred 55 million copies, emphasizes social connections, and is constantly being improved.

These examples show that to expand the audience for games, developers must challenge existing notations of games and playing to approach more universal appeal. For example, Kirby was again designed so anyone can finish the game as long as they had patience and perseverance. This required changes in the nature and mechanisms of games and game play. One constant over time has been that in game development is done in a high stress environment with limited resources. It continues to be hard.

Next-generation of game platforms is the 3DS. This new platform will change the paradigms of portable gaming and will attract even more people to the gaming industry. This new platform integrates games, a Mii maker, Face maker, and some AR games. The platform is designed to emphasize social aspects of gaming.

Reggie Fils-Aime, president of Nintendo USA described connectivity aspects of the new 3DS platform. The 3DS games will have a range adjustment to control viewing a 3-D game. 3-D displays permit content and location to change look and feel of the game. In addition, the 3DS, through a partnership with Netflix, can stream videos and if paused, can switch the video to other platforms.

The menus are currently in 2-D, but future offerings will permit 3-D menus, movies, and movie trailers. This will give studios a new distribution vehicle for the 3-D titles. In addition, Nintendo will help distribute short form videos such as comedy, music videos, etc. from other sources. Although 3-D a portable game player is in its infancy, they will offer capabilities for photographs and stereo 3-D view recorders in coming platforms.

Location-based services will include a street pass, local connectivity, and a spot paths for connections to wireless broadband hot spots. Because stores have found that sales are six times higher near a hotspot compared to this distant ones, there’s a lot of interest in the retail community for these features. In May, 3DS users will have free, automatic access to the 10,000+ AT&T WiFi hotspots.

Nintendo will host an online store that will include DS iWare, virtual consoles plus being here etc., classic games remastered in 3-D, and game promotions including trailers, links to screenshots, and other incentives. Iwata continued on new services associated with the 3DS. There’ll be new games and new elements such as 1996 Mario in 3-D. The design challenge is understanding how to jump in a 3-D space.

Looking forward, we have to recognize the challenges facing industry. In the short-term, the three biggest concerns are craftsmanship, talent development, and the effects of mobile and social networks. Developers are deemed a lot of capabilities, but at the same time being lost the crafting of details. The polish is missing in many games because of resource limits for lack of concern about the small details.

Developers are becoming specialists, but games need more generalists because it’s now harder to sense the nature and entirety of a game. As a result of specialization, game integration suffers. And finally, there is concern that mobile and social gaming is cannibalizing industry. Last year there were over 500 games released for the PS3, 700 for the Xbox 360, and over 1000 for the Wii and DS.

Among all these releases, there are very few big hits and it’s getting harder all the time to get attention from gamers. In comparison to the console game releases, there were tens of thousands of downloadable games. These games are cheaper to create but they also do not generate much revenue. 92% of downloadable games are free and the balance are less than $10 each.

So the question is, are high-value gains a top priority for any developer? For any game, some hardware is required. The game creator must match a game with a hardware and create a premium value for that software. Smartphone and social game developers have no motivation to optimize the game for the hardware, the goal is just to gather software into a cohesive unit, so the software itself has no value. The download segment of the industry is just interested in volume.

In comparison, the big games have very high development costs. Platforms like the Wii have changed the audience profiles. To get noticed as a game, developers must create games that have central appeal, and capture attention immediately. They must create games which are quick and easy to describe to others, much like a social networking. This structure will games reached the tipping point where the game sells itself.

One solution to the challenges of alternative platforms is innovation. The definition content must be to make the impossible possible. Multiscreen development is not hard, so other platforms should not be viewed as a threat, but as an opportunity. It is easier to start with customers who find your business than the reverse. Trust your passion, believe in yourself.