Maciej Mróz Personal Blog

Because why not

Apr 16, 2011 - 4 minute read - Game Industry

What will happen to Nintendo after the Wii, and more

Wii is nearing the end of life. Sure, there is huge installed base of consoles, but I bet that average Wii user does not buy as many games as PS3 or X360 user. Which means that from publisher/developer point of view overall value of all the Nintendo consoles out there is not as great as raw numbers would suggest. Sony and Microsoft are both doing well, and Nintendo is no longer outselling them. It is very likely that in 2011 Wii end up in the third place in terms of new consoles sold. I am sure Nintendo is aware of that.

However, the biggest threat to Nintendo right now is not Sony or Microsoft, but Apple. “Hey, but we are talking Wii, not 3DS, remember?”. I certainly do. I also remember that Apple TV runs iOS and Apple A4 chip. Apple did not open it to developers. Yet. And how long do you think before that happens? A5 is a lot more powerful chip, add a real controller and you end up with … something resembling “Wii HD”? Apple mobile hardware is far away from catching up to PS3/X360 now, but because Nintendo sells what effectively is GameCube 1.5, they do not have the horsepower advantage. All that Apple really needs to get the ball rolling is to create wireless controller for Apple TV. A touch pad, perhaps with analog sticks and a few extra buttons? Perhaps ability to use iPhone/iPod Touch as a controller? This wouldn’t be exactly “game console”, more “a device to run apps on the TV”. With ton of games among them. A device that you can plug under your TV, that you can play games on, and one that does not come from any of the “big three”.

If AppStore business model hits the TV, the one being hurt most by such move will be Nintendo because of their “softcore gamer” audience. At least initially, because in longer term this is just as much disruptive to Sony and MS. This is why Nintendo is hard pressed to release the Wii HD, and this time they can’t avoid the arms race. They really need that 1080p, tons of textures and shaders - visuals that will put X360/PS3 to shame, but more importantly will make next gen A5-based Apple TV obsolete at launch. I don’t think it is enough to stop Apple, but seems like a reasonable short term move. Is Apple really going this way? I would, but I’m not Steve Jobs :)

Apple TV is marginal device right now, but empowering it with AppStore might completely change that. AppStore has almost zero barrier to entry compared to current generation of game consoles, and 70:30 revenue split is probably generous compared to what you currently get when doing console games. There is the “problem” of application prices - typical $1-$3 range is far down even from downloadable PSN games, but it’s not like there’s no place for more expensive and more complicated titles on iOS. Also, iOS games are not expected to last for 40 hours. They are just “snacks” that take 2-3 hours at most to complete, and then you move on. Which means iOS users do not neccessarily spend a lot less on games than console gamers. When I buy DVD/Blu-Ray with game, about $8 of the money I spend reaches the developer - the rest is split between publisher and in the distribution chain. So when I spend $12 on online purchases via AppStore, similar amount of money reaches developers. Also, freemium model is absolutely possible and already used by many. Because of that, iOS has guaranteed developer support for the forseeable future.

Things might get a lot more interesting down the road. We know that Sony NGP will feature quad-core ARM and very powerful GPU. This year we will have mobile hardware that is not very far behind PS3. This means that it is likely that by the end of 2012 Apple might be able to build iOS device that actually is more powerful than the PS3. They have been hiring some game industry people recently. See where all this is going?