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Iwata Interview - Nintendo's New Direction

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Anonymous
April 12, 2004 3:31:34 PM

Archived from groups: rec.games.video.nintendo,alt.games.video.nintendo.gamecube,alt.games.video.nintendo.gameboy.advance (More info?)

http://www.gamespy.com/articles/505/505234p1.html


(1)

Nintendo's New Direction
Nintendo President Satoru Iwata discusses what's gone wrong, what's gone
right, and why Nintendo will end up on top.
By Steven L. Kent | Apr. 11, 2004


Nintendo does not open the doors of its gleaming white Kyoto tower to the
press very often, so when Nintendo Company Ltd. President Satoru Iwata
agreed to meet with GameSpy last month, it was an invitation that could not
be refused.

Nintendo stands at a significant crossroads. While GameCube is still the
number two console in Japan, it has dropped to third place in the North
American and European markets. Game Boy Advance is the unrivalled leader in
the portable market, but Nintendo will face a strong challenge in the form
of the Sony PSP in 2005.





During his meeting with GameSpy, Iwata-san was candid about his company's
current situation, mistakes his company has made, and why he believes
Nintendo will still end up on top.

One of the first topics of conversation was Sony's PSP. With its
high-resolution screen and packed with processing power, PSP has the look of
a genuine Game Boy killer. The response to PSP seems obvious -- a Game Boy
Advance/GameCube hybrid that can play both GBA cartridges and GameCube
discs.

This response is so obvious, in fact, that some joker created a seriously
believable mock-up of a prototype device called "Game Boy Enhanced" and
showed it on the Internet. Talk about your clever hoaxes, even people at
Nintendo wanted to believe it.

So why not make a Game Boy Enhanced?

"Some time in the future we may be able to combine the technologies of Game
Boy and GameCube in a unit that will be small and light with a long enough
battery life and a low enough price for the market," Iwata said. "We [will]
need to find a reasonable balance between the high-functionality and the
other requisite features in a portable system.

"Timing is very important. Even if there are new technologies that will make
portable games more fun to play, if the price is too high or the other
requisites are not met, we say it is premature."

History agrees in this case. Shortly after Nintendo launched Game Boy in
1989, Atari launched Lynx. Lynx had higher-resolution graphics and a
back-lit color screen. It also retailed for more than twice the price of
Game Boy, burned through batteries at five times the speed, and had a
smaller library.

Lynx died quickly and was followed by Game Gear, TurboExpress, game.com,
Wonder Swan, Neo Geo Pocket, Nomad, and most recently Zodiac and N-Gage. All
of these units (except maybe game.com) have had some form of technological
advantage over Game Boy. None of these systems managed to cut into Game
Boy's sales.

Along those same lines, Nintendo stands accused of letting the console
market slip through its hands. Sony waltzed into the market in 1995, one
full decade after Nintendo launched the NES in the United States, and walked
off with 66 percent of the market. Now Microsoft has snatched away another
15 percent of the Western markets. And the latest rumor is that Nintendo may
not even launch another game console in the future.

(2)

"In the past, Nintendo competed with SEGA, another gaming company," says
Iwata. "Now our competitors are Sony and Microsoft, companies that do not
have games at the core of their business. I must admit, the competition is
tougher than ever before; and in the short run, we have seen declining
profitability.

"At least in the near-term, as long as people are playing games on
televisions and we can create the best games to be played over televisions,
we will benefit by creating hardware."

So how will they compete with the biggest name in electronics and the
wealthiest corporation in history?





"When it comes to the philosophy of making hardware, our philosophy is
completely different than the direction Microsoft is taking," says Iwata. "I
think they are simply looking toward beefed up technology for the
next-generation console. And from the developers' and programmers' point of
view, that kind of machine will be very difficult to work with. In the end,
there will not be a sufficient reward in exchange for the hardships they
will need to endure.

"That should create an opportunity for Nintendo because we are trying to
make unique hardware -- not just a beefed-up version of GameCube, but
something that will be easy to program. In the long run, that will make game
development on our new system more profitable."

That might well be profitable in the long run, but from a short-term view.
In the here and now, Microsoft and Sony are tearing up the ever-growing
young adult market and leaving only the scraps of the dwindling kids market
in their wake. Asked about this, Iwata shows that he is not ducking the hard
questions.

"Our competitors are always saying that Nintendo is just for children. To
counter that, what we really need to do is explain to customers and
potential customers [that we do not just make games for kids]," says Iwata.

"I think that the shift from Game Boy Advance to Game Boy Advance SP has
attracted more and more young adults to play with the Game Boy product line.

"To answer your question, in the short term, there is some impact [from
Nintendo's inability to reach older audiences]; but in the long term, I
think it is most important for Nintendo to reach the widest variety of
customers. That is our main emphasis right now, and it will be in the future
as well."

And that brings the conversation back around to consoles and what Nintendo
has planned for the next generation. Asked how Nintendo goes about creating
a new console, Iwata contrasted Nintendo's philosophy with Sony's.

(3)

"In the world of gaming, if you are going to only purchase hardware, you
will not enjoy yourself at all. It is our assumption that it is the software
that provides the sensational experiences, and that [the games] are the only
reason to buy the hardware," says Iwata.

"So, from the viewpoint of the software creators, their favorite new
hardware will be the console that will enable them to make their dreams come
true. That is true for the customers as well.

"Once we can identify these unique points [features], we can begin thinking
about which partners we should take for their technology and know-how. Past
generations [of consoles] have been measured by functionality such as
computer graphics technology, processing speed, and power. It was as simple
as that.

"To put it another way, before the launch of PlayStation 2 and GameCube,
game creators mostly cared about working on the most powerful machines so
that they could make games more attractive. But, if you ask me, if the
situation will stay the same in the next generation, [both] Mr. Miyamoto
[Shigeru Miyamoto, creator of the Mario and Zelda games] and I really doubt
it.

"With the next generation of consoles, if the only thing they have is ten
times the functionality [meaning processing power and improved graphics], I
don't think people will be able to tell them apart from this existing
generation. In the end, if the next generation of consoles only represents
beefed-up technology, there will not be much of a future.



"Nintendo is working on its next-generation system. Allow me to call it
GCNext or GCN. The abilities of GCNext will be different from what you have
seen from consoles in the past. What Nintendo is currently discussing is not
about state-of-the-art technology for enhancing processing power. But what
I, Miyamoto, and Mr. Takeda [engineering leader Genyo Takeda] are discussing
is what should be done to entertain people in a new way; and in order to
achieve this, what functionality must be added to our current technology.

"Please understand, I am not saying that technology is unimportant. I
understand that technology is important. But if we are just focusing on
technology and investing in an IT manufacturing plant to come up with higher
performance processing [chips], we will not succeed."

And here Nintendo highlights a well-tapped resource. The best-selling games
for PlayStation 2 and Xbox may come from outside publishers, but Nintendo's
in-house games still rule on GameCube.

When discussing the future, Mr. Iwata often mentions meetings that he holds
with Genyo Takeda and Shigeru Miyamoto. Asked if he weighs their opinions
equally, Iwata gives the right answer.

"When Mr. Takeda was working on the GameCube, he stated that they [his team]
were making the hardware strictly to support the software. In other words,
Mr. Miyamoto's group and the people who create the software are more
important. I think this is a unique feature of Nintendo's structure."

(4)

So Iwata says that the games are the most important thing? Agreed. But in
this market, no company, not even Nintendo, can float a platform on its own.
Sony and Microsoft have worked hard to create good relationships with
third-party publishers. Nintendo, on the other hand, has a predatory
reputation in this area.

"In the past, our third-party relations were quite different," Iwata admits.
"These are companies that look around, and if they think that Nintendo has
created a lucrative market through its efforts and investments, they enter
it. That was our view of third-party companies in the past.





"Now we take a different view. We are more willing to cooperate with
third-party companies. They are thinking in terms of development efficiency
and maximizing the appeal of their products. Sometimes we license our
characters to these third-party companies so that our characters become
guest characters in their games.

"We are also actively working with Sega, Namco, and Konami to create
software. For a platform to succeed, it must have a wide variety of
different kinds of software available. In the future, I believe, it will be
even more important for us to work with third-party companies."

Iwata holds "F-Zero," a co-creation of Nintendo and Sega's Amusement Vision
studio, as a good example of Nintendo's new open-door policy. Namco, which
teamed up with Nintendo to create "Donkey Konga," has openly applauded
Nintendo for its new partnerships.

But Nintendo's new open-door policy has its limits. Mr. Iwata did not want
to discuss what new abilities or technologies might be found in its upcoming
DS and GCNext systems. In his view, Nintendo must drop out of the race for
the most processing power. It must rely on strong technology partners for
developing hardware and provide an easy environment for its software
partners.





"We are going in a different direction than Sony. We believe that other
companies are already investing in state-of-the-art semiconductor
development, says Iwata. "Nintendo is not actually trying to create a
state-of-the-art technology that is not known to the world. We are reviewing
technologies that are in the early stages of development [by other
companies]. Nintendo should be able to find the optimal solution to make the
best possible hardware by cooperating with several partners.

According to Iwata, the technological jump from the current generation of
consoles to the next will be so incremental that most consumers will hardly
notice the difference. Perhaps he is correct, but he is hedging his bets.

(5)

Even after losing more than two-thirds of the console market to competitors,
Nintendo has managed to stay profitable. Letting good technological partners
bear the brunt of manufacturing chips is the best way to cut costs and
maintain power. Providing an easy-to-use programming environment is the way
to attract game developers.


But GameCube, which featured ATI graphics technology and an IBM processor,
was both easy to program and inexpensive to build. What went wrong?

"I think that its biggest shortcoming was that we were late in launching
it," says Iwata. "Because of that delay, our competitors were able to create
a large install base for their consoles. Even though it was easier for
software developers to create games for GameCube, because of the delay, the
developers had a chance to learn more about our competitors' machines. In
the end, we could not match that advantage."

Indeed, while Nintendo would have been unlikely to unseat Sony had GameCube
come out on time, the company would be in a far better situation. Asked if
Nintendo will come to the party on time next time around, Iwata assured
GameSpy that next time it will.








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April 12, 2004 9:27:32 PM

Archived from groups: rec.games.video.nintendo,alt.games.video.nintendo.gamecube,alt.games.video.nintendo.gameboy.advance (More info?)

I would like to see alot more RPG's out for this system.


"UltraNES" <ultranes@nintendo5.com> wrote in message
news:p dGdnWX0NtP6WefdRVn-gg@comcast.com...
>
> http://www.gamespy.com/articles/505/505234p1.html
>
>
> (1)
>
> Nintendo's New Direction
> Nintendo President Satoru Iwata discusses what's gone wrong, what's gone
> right, and why Nintendo will end up on top.
> By Steven L. Kent | Apr. 11, 2004
>
>
> Nintendo does not open the doors of its gleaming white Kyoto tower to the
> press very often, so when Nintendo Company Ltd. President Satoru Iwata
> agreed to meet with GameSpy last month, it was an invitation that could
not
> be refused.
>
> Nintendo stands at a significant crossroads. While GameCube is still the
> number two console in Japan, it has dropped to third place in the North
> American and European markets. Game Boy Advance is the unrivalled leader
in
> the portable market, but Nintendo will face a strong challenge in the form
> of the Sony PSP in 2005.
>
>
>
>
>
> During his meeting with GameSpy, Iwata-san was candid about his company's
> current situation, mistakes his company has made, and why he believes
> Nintendo will still end up on top.
>
> One of the first topics of conversation was Sony's PSP. With its
> high-resolution screen and packed with processing power, PSP has the look
of
> a genuine Game Boy killer. The response to PSP seems obvious -- a Game Boy
> Advance/GameCube hybrid that can play both GBA cartridges and GameCube
> discs.
>
> This response is so obvious, in fact, that some joker created a seriously
> believable mock-up of a prototype device called "Game Boy Enhanced" and
> showed it on the Internet. Talk about your clever hoaxes, even people at
> Nintendo wanted to believe it.
>
> So why not make a Game Boy Enhanced?
>
> "Some time in the future we may be able to combine the technologies of
Game
> Boy and GameCube in a unit that will be small and light with a long enough
> battery life and a low enough price for the market," Iwata said. "We
[will]
> need to find a reasonable balance between the high-functionality and the
> other requisite features in a portable system.
>
> "Timing is very important. Even if there are new technologies that will
make
> portable games more fun to play, if the price is too high or the other
> requisites are not met, we say it is premature."
>
> History agrees in this case. Shortly after Nintendo launched Game Boy in
> 1989, Atari launched Lynx. Lynx had higher-resolution graphics and a
> back-lit color screen. It also retailed for more than twice the price of
> Game Boy, burned through batteries at five times the speed, and had a
> smaller library.
>
> Lynx died quickly and was followed by Game Gear, TurboExpress, game.com,
> Wonder Swan, Neo Geo Pocket, Nomad, and most recently Zodiac and N-Gage.
All
> of these units (except maybe game.com) have had some form of technological
> advantage over Game Boy. None of these systems managed to cut into Game
> Boy's sales.
>
> Along those same lines, Nintendo stands accused of letting the console
> market slip through its hands. Sony waltzed into the market in 1995, one
> full decade after Nintendo launched the NES in the United States, and
walked
> off with 66 percent of the market. Now Microsoft has snatched away another
> 15 percent of the Western markets. And the latest rumor is that Nintendo
may
> not even launch another game console in the future.
>
> (2)
>
> "In the past, Nintendo competed with SEGA, another gaming company," says
> Iwata. "Now our competitors are Sony and Microsoft, companies that do not
> have games at the core of their business. I must admit, the competition is
> tougher than ever before; and in the short run, we have seen declining
> profitability.
>
> "At least in the near-term, as long as people are playing games on
> televisions and we can create the best games to be played over
televisions,
> we will benefit by creating hardware."
>
> So how will they compete with the biggest name in electronics and the
> wealthiest corporation in history?
>
>
>
>
>
> "When it comes to the philosophy of making hardware, our philosophy is
> completely different than the direction Microsoft is taking," says Iwata.
"I
> think they are simply looking toward beefed up technology for the
> next-generation console. And from the developers' and programmers' point
of
> view, that kind of machine will be very difficult to work with. In the
end,
> there will not be a sufficient reward in exchange for the hardships they
> will need to endure.
>
> "That should create an opportunity for Nintendo because we are trying to
> make unique hardware -- not just a beefed-up version of GameCube, but
> something that will be easy to program. In the long run, that will make
game
> development on our new system more profitable."
>
> That might well be profitable in the long run, but from a short-term view.
> In the here and now, Microsoft and Sony are tearing up the ever-growing
> young adult market and leaving only the scraps of the dwindling kids
market
> in their wake. Asked about this, Iwata shows that he is not ducking the
hard
> questions.
>
> "Our competitors are always saying that Nintendo is just for children. To
> counter that, what we really need to do is explain to customers and
> potential customers [that we do not just make games for kids]," says
Iwata.
>
> "I think that the shift from Game Boy Advance to Game Boy Advance SP has
> attracted more and more young adults to play with the Game Boy product
line.
>
> "To answer your question, in the short term, there is some impact [from
> Nintendo's inability to reach older audiences]; but in the long term, I
> think it is most important for Nintendo to reach the widest variety of
> customers. That is our main emphasis right now, and it will be in the
future
> as well."
>
> And that brings the conversation back around to consoles and what Nintendo
> has planned for the next generation. Asked how Nintendo goes about
creating
> a new console, Iwata contrasted Nintendo's philosophy with Sony's.
>
> (3)
>
> "In the world of gaming, if you are going to only purchase hardware, you
> will not enjoy yourself at all. It is our assumption that it is the
software
> that provides the sensational experiences, and that [the games] are the
only
> reason to buy the hardware," says Iwata.
>
> "So, from the viewpoint of the software creators, their favorite new
> hardware will be the console that will enable them to make their dreams
come
> true. That is true for the customers as well.
>
> "Once we can identify these unique points [features], we can begin
thinking
> about which partners we should take for their technology and know-how.
Past
> generations [of consoles] have been measured by functionality such as
> computer graphics technology, processing speed, and power. It was as
simple
> as that.
>
> "To put it another way, before the launch of PlayStation 2 and GameCube,
> game creators mostly cared about working on the most powerful machines so
> that they could make games more attractive. But, if you ask me, if the
> situation will stay the same in the next generation, [both] Mr. Miyamoto
> [Shigeru Miyamoto, creator of the Mario and Zelda games] and I really
doubt
> it.
>
> "With the next generation of consoles, if the only thing they have is ten
> times the functionality [meaning processing power and improved graphics],
I
> don't think people will be able to tell them apart from this existing
> generation. In the end, if the next generation of consoles only represents
> beefed-up technology, there will not be much of a future.
>
>
>
> "Nintendo is working on its next-generation system. Allow me to call it
> GCNext or GCN. The abilities of GCNext will be different from what you
have
> seen from consoles in the past. What Nintendo is currently discussing is
not
> about state-of-the-art technology for enhancing processing power. But what
> I, Miyamoto, and Mr. Takeda [engineering leader Genyo Takeda] are
discussing
> is what should be done to entertain people in a new way; and in order to
> achieve this, what functionality must be added to our current technology.
>
> "Please understand, I am not saying that technology is unimportant. I
> understand that technology is important. But if we are just focusing on
> technology and investing in an IT manufacturing plant to come up with
higher
> performance processing [chips], we will not succeed."
>
> And here Nintendo highlights a well-tapped resource. The best-selling
games
> for PlayStation 2 and Xbox may come from outside publishers, but
Nintendo's
> in-house games still rule on GameCube.
>
> When discussing the future, Mr. Iwata often mentions meetings that he
holds
> with Genyo Takeda and Shigeru Miyamoto. Asked if he weighs their opinions
> equally, Iwata gives the right answer.
>
> "When Mr. Takeda was working on the GameCube, he stated that they [his
team]
> were making the hardware strictly to support the software. In other words,
> Mr. Miyamoto's group and the people who create the software are more
> important. I think this is a unique feature of Nintendo's structure."
>
> (4)
>
> So Iwata says that the games are the most important thing? Agreed. But in
> this market, no company, not even Nintendo, can float a platform on its
own.
> Sony and Microsoft have worked hard to create good relationships with
> third-party publishers. Nintendo, on the other hand, has a predatory
> reputation in this area.
>
> "In the past, our third-party relations were quite different," Iwata
admits.
> "These are companies that look around, and if they think that Nintendo has
> created a lucrative market through its efforts and investments, they enter
> it. That was our view of third-party companies in the past.
>
>
>
>
>
> "Now we take a different view. We are more willing to cooperate with
> third-party companies. They are thinking in terms of development
efficiency
> and maximizing the appeal of their products. Sometimes we license our
> characters to these third-party companies so that our characters become
> guest characters in their games.
>
> "We are also actively working with Sega, Namco, and Konami to create
> software. For a platform to succeed, it must have a wide variety of
> different kinds of software available. In the future, I believe, it will
be
> even more important for us to work with third-party companies."
>
> Iwata holds "F-Zero," a co-creation of Nintendo and Sega's Amusement
Vision
> studio, as a good example of Nintendo's new open-door policy. Namco, which
> teamed up with Nintendo to create "Donkey Konga," has openly applauded
> Nintendo for its new partnerships.
>
> But Nintendo's new open-door policy has its limits. Mr. Iwata did not want
> to discuss what new abilities or technologies might be found in its
upcoming
> DS and GCNext systems. In his view, Nintendo must drop out of the race for
> the most processing power. It must rely on strong technology partners for
> developing hardware and provide an easy environment for its software
> partners.
>
>
>
>
>
> "We are going in a different direction than Sony. We believe that other
> companies are already investing in state-of-the-art semiconductor
> development, says Iwata. "Nintendo is not actually trying to create a
> state-of-the-art technology that is not known to the world. We are
reviewing
> technologies that are in the early stages of development [by other
> companies]. Nintendo should be able to find the optimal solution to make
the
> best possible hardware by cooperating with several partners.
>
> According to Iwata, the technological jump from the current generation of
> consoles to the next will be so incremental that most consumers will
hardly
> notice the difference. Perhaps he is correct, but he is hedging his bets.
>
> (5)
>
> Even after losing more than two-thirds of the console market to
competitors,
> Nintendo has managed to stay profitable. Letting good technological
partners
> bear the brunt of manufacturing chips is the best way to cut costs and
> maintain power. Providing an easy-to-use programming environment is the
way
> to attract game developers.
>
>
> But GameCube, which featured ATI graphics technology and an IBM processor,
> was both easy to program and inexpensive to build. What went wrong?
>
> "I think that its biggest shortcoming was that we were late in launching
> it," says Iwata. "Because of that delay, our competitors were able to
create
> a large install base for their consoles. Even though it was easier for
> software developers to create games for GameCube, because of the delay,
the
> developers had a chance to learn more about our competitors' machines. In
> the end, we could not match that advantage."
>
> Indeed, while Nintendo would have been unlikely to unseat Sony had
GameCube
> come out on time, the company would be in a far better situation. Asked if
> Nintendo will come to the party on time next time around, Iwata assured
> GameSpy that next time it will.
>
>
>
>
>
>
>
>
>
Anonymous
April 14, 2004 12:56:49 AM

Archived from groups: rec.games.video.nintendo,alt.games.video.nintendo.gamecube,alt.games.video.nintendo.gameboy.advance (More info?)

In reply to Bacchus

> I would like to see alot more RPG's out for this system.

I guess most of us feel the same way...

Jammet
!