Will Nintendo's Comeback Strategy Work?
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Reports of Nintendo's impending death are greatly exaggerated. The company actually made a profit on its entertainment products last year, it has a large nest egg of money saved up from better times, and the 3DS is riding high right now. Still, the flailing Wii U means that Nintendo isn't meeting sales expectations, which means its shareholders are getting restless.

Thus, in a shareholder meeting this week, President Iwata outlined the company's strategy to get back on track and entice more customers to pick up the Wii U. He acknowledged the marketing challenges that Nintendo has had with the console, especially the fact that many customers think the Wii U is an accessory for the Wii rather than a brand-new HD console.

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Going forward, Nintendo wants to emphasize the unique properties of the GamePad controller, which so far has been better-used by several third-party games than by most of Nintendo's offerings. The company hopes to re-capture the wide demographic that enjoyed the Wii in this way.

Another way Nintendo wants to bring casual gamers back into the fold is by advertising its games on smart devices. The company won't actually be releasing any games for phones or tablets because it is determined to keep Nintendo games on Nintendo hardware, but it hopes to entice phone gamers back to the land of Nintendo by showing what they're missing.

Will either of those two strategies work? It's very difficult to predict what kinds of things will be picked up as fads, so it's possible that a snappy GamePad game could capture the public imagination. It's going to be more of an uphill battle than Wii Sports was, because the GamePad looks so much like the tablets that people already own. Similarly, I'm not sure how smartphone ads will penetrate through the massive amounts of noise that people already sort through on app stores.

One of Nintendo's ideas that does have a good chance of being successful is a new focus on health-related hardware. With aging populations in Japan and the Americas, the company could do quite well accessing that market with fun, user friendly fitness devices. They may not be of interest to many self-described gamers, but they could be a nice new source of revenue for Nintendo.

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What does all of this mean to core gamers? Not a ton, because Nintendo's latest announcements were geared more towards shareholders than fans. The lack of information about the company's core franchises here isn't necessarily cause for alarm. For that, we should look towards the next few Nintendo Direct broadcasts and its presence at E3. A Nintendo NFC game (like Skylanders and Disney Infinity) is planned to be announced at E3, and we'll hopefully also see information about the next Zelda game or perhaps even a true 3D Mario.

In addition, Nintendo is finally getting with the times online, working towards an account structure that is universal instead of tied to individual pieces of hardware. It's about time the company caught up to everyone else and stopped making its users do somersaults to recover their digital purchases when a piece of hardware breaks.

In terms of strategy, Nintendo looks to be riding out this generation as best it can, relying on its dominance of the handheld market and hoping to scoop up enough Wii U owners to improve its yearly revenue. That's probably the best call, especially if Nintendo learns well from the lessons of this generation and makes a more effective home device (perhaps the rumored portable-home hybrid) next time around.

Becky Cunningham
Becky Cunningham
@BeckyCFreelance

Senior Contributing Writer
Date: 02/03/2014

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