Monday, August 16, 2010

What Game Industry "Analysts" Really Mean When They Talk About Wii HD

Basically, what "analysts" like Pachter are saying when they demand that Nintendo release a Wii HD (or a Wii 1.5, which is the newest one I've read) is this: Nintendo must abandon disruption, and return to the fold, and compete with Microsoft and Sony in the Red Ocean. Clearly, this is not going to happen. Nintendo did just that with the N64 and Gamecube, and look where it got them.

No, Nintendo has to disrupt the video game market, because this core market has been stagnant for a decade, and is now in decline. In a country like Japan, where the population is falling, this decline is even more evident. The game industry cannot appeal solely to 30-something males. There must be new customers if video games are going to survive.

And let us not forget the global economy, which continues to be very sluggish, and will remain depressed for some time. This will be an influence on consumers for some time to come.  The future lies in sleeker, more compact, more focused, and lower priced.  Excess and bloat are what define Playstation and Xbox, and this is why these brands are struggling today.

Nintendo has to disrupt the video game industry because the old path is no longer sustainable. We cannot manufacture more and more powerful hardware every five years, with game budgets exploding by tens of millions of dollars, aimed at an aging fanbase, while ignoring everyone else. This paradigm must be changed; the values themselves must be changed. Nintendo has been talking about this for years, before the Wii and the DS.

Look to the smartphones. Look at Apple and Google. The disruption is here and it's coming, one way or another. If Nintendo didn't disrupt the market, then Apple and Google will. This is a rough business, folks. Either you adapt and evolve to changing environments, or you go extinct. And the history of video games is littered with tombstones.

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