A little over a year ago, many inside the games industry thought the Nintendo Wii would be a flop.
Nintendo’s console was graphically weaker than the competition. It had a newfangled — some said gimmicky — controller. And don’t get us started on the name.
Fast-forward a year. The Nintendo Wii — graphically weaker, funny controller, funnier name — was a smash hit right from the get-go. As of September, Nintendo has sold 13.2 million of the $250 console, within spitting distance of the year-older Xbox 360’s overall worldwide sales.
So what did Nintendo know that the rest of the industry didn’t?
“First, we knew that many consumers had been turned off of video games because they were too complex,” says Reggie Fils-Aime, president of Nintendo USA. “We knew consumers valued innovation, and wanted something fresh and different.”
Fils-Aime says the Wii also had something that no other console can claim: truly immersive gameplay. Using the motion-sensing controller, gamers can slice a forehand, rip a fastball, pull and turn levers in “Metroid.” And that all-consuming gaming experience would help the company sell not only hardware, but its first-party software too.
Nintendo’s success with the Wii has been curtailed primarily by its inability to keep the consoles in stores. Almost as soon as the machines arrive, they’re quickly snapped up by consumers. Fils-Aime says the company has drastically stepped up its manufacturing to meet projected holiday demand, but many shoppers still report seeing empty shelves.
I spoke with Fils-Aime recently about whether or not the company was too conservative in its manufacturing estimates for the red-hot console — and whether its other blockbuster system, the Nintendo DS, will have the same long lifespan as the Game Boy.
I wanted to start out with a question about you. You were the turnaround guy at VH1, so why come to Nintendo, which is famously conservative? We're they looking for a turnaround?
I think what attracted Nintendo to me was the fact that, throughout my marketing career, I’d spoken to a range of consumer demographics … everything from the 25- to 49-year-old demographic of VH-1, to younger consumers during my Procter and Gamble days, to even older consumers during my Guinness beer days. So, I think that was the attraction. For me, the personal attraction was to work with a brand that I knew well from my own game-playing days.
Industry watchers, and some gamers, were wondering if the Wii was going to be the GameCube 2. How have you managed to avoid that same fate?
I can’t speak to our challenges with GameCube. I wasn’t here for much of that generation. What I can tell you is that as we launched the Wii, we made sure that we had strong software support at the launch. We made sure that we had a fantastic consumer proposition, and we made sure that we had follow-up support.
What do you mean by follow-up support?
Follow-up in terms of new games, in terms of games from key third parties. … We knew that launch was just the beginning. Just like, truly, our first year in the marketplace is just the beginning, we need to make sure that we have ongoing surprises to really excite our consumer base.
You mentioned third-party titles. I would argue that most of the really strong games on the Wii are first-party titles. Is that a concern for you?
I would argue that there are a number of very strong third-party titles that are doing very well in the marketplace. Whether you look at “Guitar Hero III” from Activision, that’s doing exceptionally well. Whether you look at “Mario and Sonic at the Olympic Games” from Sega that’s doing well in the marketplace. What we have is … fantastic breadth of support from third party, and we also have a tremendous pipeline of new games coming out for the balance of this quarter.
I probably should have said original [intellectual properties]. All of the fan favorites, the really great original IPs, are developed by Nintendo. Do you have third parties lined up to do original games for this system or the DS?
We absolutely do. There were recently numbers published by Screen Digest, that showed there would be 21 Wii exclusive titles this quarter, versus less than half of that number for the 360, and less than a quarter of that number for the PS3.
The Wii has a ton of accessories. The nunchucks, the Zapper, the Wheel and the board that will be coming out with Wii Fit. Those of us with limited living-room space may revolt. Do you think the Wii is becoming pretty accessory-heavy?
Each of the accessories is meant to bring the gameplay closer and closer to the consumer and make it more immersive. Whether you’re talking about the Zapper for a first-person shooter type of game or the Wheel for Mario Kart or the balance board [for Wii Fit], each of these is an integral part of the experience, and we think that consumers certainly are enjoying and will enjoy everything that we have to offer.
The Wii’s online features aren’t as well-integrated as Xbox Live and what Sony has planned for Home. I’m talking specifically of things like gamertags and friends' lists — it’s a lot more difficult to share that type of information on the Wii. What are your plans to change that?
Our view is that the online experience needs to be something that adds value to the consumer experience and enables them to have a more in-depth experience – especially with the Wii remote. When you talk about gamertags, that really is a hardcore desire versus activity like creating Miis and other functionality that in our view, is much more what the mass market wants in their video-game console.
A lot of your long-term fans would also be characterized as hardcore gamers. Those same hardcore gamers have decried this move to the mainstream. What’s your answer to those fans?
The answer to those fans is “Super Mario Galaxy,” which on every major gaming publication is receiving near-perfect scores. And “Super Smash Bros. Brawl,” when it launches on Feb. 10, it’s going to make every core gamer fall in love with “Smash Bros.” all over again.
We have games that satisfy the core, but in our view, that is but a small part of the total gaming market. There are more than twice as many consumers that used to game, but don’t game today. We need to make sure that we include them in the mix as well.
That is, of course, assuming that they can get a hold of [a Wii.] The inventory issues have gotten a lot of press so I won’t go back over that with you, but do you think that Nintendo as a corporation was too conservative in its manufacturing estimates for the system?
You know, the very first annual estimate for Wii was 14.5 million units. No home console had ever sold that many in a first year. And so we were very aggressive at the start. Our issue is one of unprecedented demand and for this holiday season, we are putting more than twice as many Wii consoles into the marketplace as we had at launch. So we are not conservative in our manufacturing. If anything, we’ve been too conservative in understanding the depth of enjoyment and passion that the consumer has for the console.
Is it better — and you’re a marketer, here — to have news story after news story of people who are queued up and they’re trying to get a Wii, and units are in short supply … or to have plentiful stock on shelves? The latter can backfire, as in, “Wow, nobody’s buying that console, look at how many there are on shelves.”
In absolute terms, it is highly, highly unfortunate that consumers cannot find a Wii to purchase. And anyone who suggests that a shortage is good for business really doesn’t understand business. We want the consumer to walk into any retail establishment and find the product. And that’s what we’re working tirelessly to make happen.
Let’s talk for a minute about the Nintendo DS, which has sold, at last tally, about 56 million units worldwide. Why do you think that the DS has been so much more successful than Sony’s PSP?
Well, the DS is successful first because of its intuitive control system — the touch screen, the voice activation — that enables the product to be so much more pick-up-and-play than any of the competitors. And then additionally, we’ve got the breadth of software to appeal to every type of consumer, whether you’re wanting to work on your brain age, or raise a virtual puppy with "Nintendogs," or race against the world in "Mario Kart" — those two fundamental business drivers are why Nintendo DS is poised to be the most successful handheld device of all time and could potentially be the most successful hardware platform of any kind, period.
Do you foresee that the DS will have the same sort of evolution and long life cycle as the Game Boy?
Our goal is certainly to have the DS be the dominant handheld device forever. And as we create new software and new content, that is absolutely our intent.
To date, nothing’s really taken advantage of the DS’s wireless capabilities. Is Nintendo trying to change that … encouraging third-party developers to change that?
I have to disagree with you. “Metroid Prime Hunters” took advantage of the wireless capabilities, “Mario Kart” took advantage of the wireless capabilities, “Diddy Kong Racing” took advantage of it and so did “Pokemon Diamond and Pearl.” So, we’ve created quite a number of key software to take advantage of all the DS’s capabilities and we’re certainly encouraging all of our licensees to do so as well.
Why should consumers buy a Wii this holiday?
In our view, the consumer should be making three purchases this holiday season. They should buy a DS, and take advantage of the long library of titles that we have. They ought to buy a Wii, and that’s to take of the unique Wii remote, and they ought to buy the software for both of those systems. Everything from “Guitar Hero” for Wii to “Legend of Zelda: Phantom Hourglass” for DS to “Super Mario Galaxy.”
And fundamentally, because we play in all three parts of the industry —portable hardware, home console hardware and software — that’s why we believe that Nintendo is going to have a very strong holiday.