Views from the Nintendo E3 conference

Soundbites from:

• Mr. Satoru Iwata, President, Nintendo Co., Ltd.
• Mr. Shigeru Miyamoto, Senior Managing Director and General Manager, Entertainment Analysis & Development Division, Nintendo Co., Ltd.
• Reggie Fils-Aime, President and Chief Operating Officer, Nintendo of America Inc.

Gameplay footage:

• Legend of Zelda: The Skyward Sword for Nintendo Wii

One of the biggest franchises by Nintendo has always been Mario. When Super Mario Galaxy was released in late 2007, veteran and new comers a like were pleased as to how the game turned out. It was a successful hit and many have been anticipating for the sequel. Since the start of the Super Mario Bros. series on the Nintendo Entertainment System, no one has expected that up until now Mario is still a fab hit even to older gamers. With Super Mario Galaxy 2 now available worldwide (New Zealand release, June 17), can fans expect an awesome adventure once again?

The Super Mario Galaxy series was inspired to the 3D platformer Super Mario 64 that was released 14 years ago on the Nintendo 64. Both have the same type of gameplay but with Super Mario Galaxy on the Wii, there is more to it since there are motion controls involved. Comparing the first Super Mario Galaxy to the second one, nothing has really changed in terms of the gameplay. If that’s the case, then what makes Super Mario Galaxy 2 so special? Before starting the review, Super Mario Galaxy 2 is a perfect game in every aspect of platform gaming. Why? Let’s take a look on the HOTs and NOTs of the game:

HOT

Same Old Story

Nothing is really special when it comes to the story of each Mario game. In Super Mario Galaxy 2, Princess Peach is once again kidnapped by King Bowser, who somehow obtained the power of the Stars. As always, Mario comes to the rescue and seeks the help of the Lumas whom he aided once before. Thanks to the Starship that the Lumas gives Mario, he can now go and rescue Princess Peach from Bowser into the eight different worlds. Throughout his adventure, Mario will be meeting friends that he will be able to recruit to his Starship. Each of them will have a specific purpose as Mario is near the end of the game. Similar to the first Super Mario Galaxy, there will be Toadstools that will give Mario some help such as delivering a letter from Princess Peach and such.

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Analyst: Nintendo's Focus On Games Drives Handheld Space

A new report from analyst group DFC Intelligence's David Cole has examined the handheld game space, particularly focusing on Nintendo with its phenomenally successful DS as compared to the competition offered by Sony with the PSP as well as the growing mobile market.

The full text of Cole's report, which was released on the analyst firm's official website, follows below:

"The appeal of portable games is fairly obvious. Portable is all about the ability to play a game anyplace and anytime, untethered by a bulky TV set or computer. It is a way to capture both the hard-core gamer and the more casual mass-market consumer that can be intimidated by the complex and expensive console and PC game market. Portable games are at the forefront of many of the leading trends in interactive entertainment: mobility, casual games, emerging markets, role-playing/character building/item trading and so on. This is an industry already generating billions of dollars a year from over 100 million users around the world. So why does it seem that when it comes to actual revenue generation only one company has figured out the portable game market?

Of course, Nintendo is the dominant player in the portable game space. Despite the fact that hundreds of millions of cell phones and other portable devices can play games, it has been the dedicated portable game devices from Nintendo that make all the money. Even with significant competition from Sony with the PSP, the Nintendo DS was the hot system of 2006. The DS is driving the mobile game space even as other devices continue to become more sophisticated in their game play capabilities. The DS is even taking much of the steam away from the new console systems. Recently much of the attention has been on the Nintendo Wii, but in terms of numbers and impact it is the DS that is creating the biggest revolution.

In many ways it is not surprising that it takes a company with a singular focus on games to really drive the mobile space. Why should portable games be any different than console and PC games? Hundreds of millions of people own personal computers. PC software is widely available and doesn’t require buying a dedicated hardware system that will go out of date in a few years. Furthermore, anyone can develop a PC game without having to pay expensive license and royalty fees to the hardware manufacturers. Nevertheless, games for the console systems from Sony, Nintendo and Microsoft far outsell PC games.

There is clearly something to be said for devices dedicated to a single task over multipurpose devices. This is especially true for those consumer types that have more than a casual interest in the product. In other words, a dedicated device is most attractive to the type of consumer that is willing to pay actual money for a product. A cell phone or basic PC can be great for playing free games, but if you want to spend money on an activity, to most consumers it makes sense to invest in the proper tools. A Swiss army knife is a handy little gadget, but would you use it to cut steak or chop firewood?

When viewed in that sense, dedicated game systems have the key advantage of being inexpensive. Sure you can buy the latest flashy cell phone or a souped up PC to play high-end games. However, those devices are likely to cost a combined $1,000 premium over lower-end devices that don’t focus so much on playing games. That is more than a PlayStation 3 and a PSP combined. At under $400, a Nintendo Wii and DS combination truly looks like a bargain, even for a game player that also wants to buy a PC and cell phone.

However, cost is only one reason for the success of the Nintendo DS. With the DS, it seems Nintendo has finally been the one to get a good handle on the “casual game market.” “Casual games” are a bit of a trendy misnomer. They usually refer to games that are simple to pick-up and play but can be very competitive and addictive.

Oftentimes, it is used to refer to simple action games like Pac-Man and Tetris. However, it is also used to describe the play of classic card and board games like hearts or solitaire. No matter how it is defined, for years there have been tens of millions of users that play “casual” games but generate very little revenue. This is especially true for all the free play that is done on personal computers.

The original Nintendo Game Boy, launched in 1989, came with the casual game Tetris. Tetris was a huge hit, but by the late 1990s Nintendo’s portable systems were focusing on products targeted towards the core, often younger, Nintendo user base. The most notable line of these products was the massively successful Pokemon franchise.

The core Nintendo products remain a key focus for the DS, but the company has diversified its line-up, and thus audience, with games that appeal to a wide variety of users. These include the virtual pet Nintendogs series, the brain training games, interactive storytelling mysteries, Elite Beat Agents music game and familiar games like Sudoku and Clubhouse Games which has popular card and board games (poker, checkers, mahjong etc).

What makes these titles standout from similar versions for previous portable platforms is the touch screen interface. DS is short for dual screen and at what first appeared to be a gimmick is a truly utilitarian addition to the portable platform. A user can still control the system using the traditional button pushing, but now there is the option of using a stylus and touch screen. This control scheme works great for more low key products and those intimated by button mashing.

Most importantly, Nintendo has put real thought and money into its development and marketing. The company doesn’t simply port its franchises onto mobile platforms, but instead either completely rethinks its key franchises or creates new IP. For example, the Pokemon franchise was developed for the portable systems. This is in stark contrast to most mobile games which tend towards cheapo affairs with a big name license as the only selling point. Sure throwing well-known IP onto a portable system can make a quick buck, but it is a far cry from what Nintendo does. Consumers have clearly rewarded Nintendo for its extra effort.

In 2006, DS sales exploded around the world. By the end of the year, the DS had sold about 35 million units in only two years on the market. The Game Boy Advance, launched in 2001, has sold an additional 75 million units. If you add in the Sony PSP at over 20 million units by the end of 2006, you get some really big numbers. That is 130 million dedicated portable game hardware units sold in a little over five years.

That is not far behind console system sales and compares favorably to the ubiquitous Apple iPod which has sold nearly 90 million units since its launch in 2002. In Japan, the DS dominates the entire game market and has sales surpassing the console systems. With about 15 million units sold by the end of 2006, the DS is well on its way to becoming the best selling game system ever in Japan.

In other words, portable games are clearly hot. Unfortunately it often seems that Nintendo is the only company making money in the market. If you look at the top-selling DS and GBA games they are all from Nintendo. Third-party publishers have had some success, but it pales in comparison to Nintendo franchises like Pokemon and Nintendogs.

In the console market, a similar trend occurred where third-party publishers had trouble making money on Nintendo platforms. Publishers truly began to thrive in the console market only when Sony came along and established the PlayStation platforms. In the portable market, Sony is trying to do the same with its PSP. The PSP targets an older, more hip crowd that has not been a primary focus for Nintendo. Although overshadowed in the past year by the DS, the PSP did manage to ship over 20 million units in less than 2 years. It also has become a legitimate platform for independent game publishers. Take-Two Interactive’s Grand Theft Auto: Liberty City Stories became the first third-party title to generate over $100 million in revenue, even though it was released less than a year after the PSP had been on the market.

The PSP is behind the Nintendo portable systems in sales, but it has already surpassed the cell phone game market. In North America the clear leader in cell phone games is EA Mobile, established from Electronic Arts’ purchase of Jamdat in December 2005. For cell phones, EA Mobile has over 100 top games available via leading North American and European carriers. However, for the first nine months of fiscal 2007, EA Mobile generated over twice as much revenue from a handful of PSP games than all its cell phone games combined (in that period, EA even made more money from Nintendo portable platforms than its cell phone business).

Next month DFC will be releasing several new reports, including detailed analysis and forecasts for the portable game market. We highlight that while this is a market that is clearly growing, it is also a market with a proven history and track record. Unfortunately many companies looking to enter the space choose to ignore both the realities of history and the current market conditions. Even if one claims they are competing with Nintendo it is important to understand what the company has done to make portable games successful.

Of course, it is hard to imagine how someone can be in the mobile game space in a major way and say they are not competing with Nintendo. One can not become a big dog without facing the other big dogs. As for those that claim mobile games are a market waiting to emerge, they are ignoring a key fact. Mobile games are a market that is already here."

NINTENDO NEWS: WII ARE NO. 1

Feb. 21, 2007 - Nintendo's new Wii™ has become the best-selling video game system of any kind in January in the United States, and the fastest-selling new-generation home system. According to the independent NPD Group, Wii sold through 435,503 systems to customers in its January reporting period. By comparison, that's 70 percent higher than any other new video game system in its first January of availability during the last 10 years.

In addition, Nintendo DS™ once again triumphed as the top-selling portable system, with nearly 239,000 hardware and more than 2.4 million software units sold. In combination, Nintendo game systems accounted for nearly as many unit sales (46 percent of the total market) as those of all other manufacturers combined.

The continuing success of Wii and DS demonstrates that the public has embraced Nintendo's philosophy of entertaining current gamers in new ways, and expanding gaming for the masses. Four of the top 10 best-selling games in January were for Nintendo systems, both home and portable.

The only limit on Nintendo's success is the availability of Wii and DS systems, which continue to sell out as fast as Nintendo can ship them. Shipments are being made continuously to feed the huge demand around the country.

If you don't already know someone who has bought Nintendo's new console, meeting new friends on Wii may be a daunting prospect. MapWii.com is attempting to make the friend meeting process easier by allowing you to search for gamers within your area by way of a map system.

Currently, there are approximately 3,500 people signed up to free service, which allows you to search your country and view the 'Wii console number' of gamers in your town.

Japan is the only territory that has an online enabled Wii game, but Pokemon Battle Revolution, which was released last month, has received criticism due to the universal friend's code being dumped in favour of a unique friend's code that relates specifically to the game.

Other territories are going to have to wait a but longer before pitting their gaming skills against friends as Wii's online communications are currently restricted to sending messages, phone text messages, emails, photos and exchanging Miis.

Despite pre-launch rumors that a number of Wii titles would feature online multi-player options they're yet to materialize and Nintendo have been surprisingly shy in revealing which games will be online enabled in the future.

Warning: Unfortunately, www.MapWii.com doesn't tell you anything about that particular person, so you could end becoming friendly with a lunatic. You've been warned.