There’s a pretty big chance that, when someone mentions the phrase ‘video game’ one of the first names that pops into your brain is the global juggernaut Nintendo. With the original NES, they singlehandedly pulled video gaming out of its 1983 crash, and they’ve been pioneering the industry ever since, releasing beloved home consoles and handhelds for over 30 years now. There are countless childhoods that have been touched by their games, countless lives that have been made better because of their work! From Mario, to Zelda, to Pokémon, and beyond, this company has done a ton of good. But the industry is changing. PlayStation is leading console sales, and PC gaming is stronger than ever with the help of Steam. Now, with the upcoming release of the company’s newest console, the Nintendo Switch, gamers are asking an important question: Is it time for Nintendo to bow out of the hardware market? Would they be better off focusing solely on creating software as a third party developer? Is it time that Nintendo go the way of its old rival Sega? Well, if there was ever a person to debate this question, it’s my guest for the day, President and COO of Nintendo of America,
Reggie Fils-Aimé. The battle: should Nintendo keep their consoles? Ladies and gentlemen of the Internet, welcome to Deadlock! MatPat: First, as a big fan of Nintendo, it is an honor to have you back on the show, Reggie. Reggie: Glad to be back here again, Mat. I’m surprised you wanted me back, considering how I trounced you in the last debate about motion controls. MatPat: Oh… so that’s the way it’s gonna be, huh? Alright, well, let’s be honest here, Reggie, 56% to 44% is hardly a shutout! That’s only… what? 12%? Not even close to the spike Nintendo stocks saw, in 2015 when the company first announced it was gonna be making games for mobile devices: that was 24%. In fact, as COO of Nintendo of America, you probably follow percentages pretty closely so here’s another one: In 2016, Nintendo stock was up over 50%, not in a console release year. In fact, in a year without a console release, Nintendo stock is at its highest point since 2011, with a big part of that coming from your decision to develop games for mobile platforms. Whereas, when you unveiled the Nintendo Switch in October, Nintendo stocks dropped… by 7%. It’s not the most auspicious start there, Reggie…. Reggie: Starting this debate with hard numbers, Mat? Stock prices?! Seems like the gloves are off! MatPat: Last time, the comments thought I was a bit soft on you, so I’m going full on Little Mac! Not pulling any punches this time! And, let me be clear, I don’t relish starting a debate with a bunch of business numbers! But this is a fight about Nintendo’s big time business decisions. Nintendo is the company that has made gaming what it is today, and what you do for the industry is important, so I just want you to be around for a long time. So, when numbers like this show that you can be successful without needing your own console, it’s something worth noting, Reggie. Reggie: Well Mat, you just made a lot of my arguments for me. As you just said, what Nintendo does for the industry is important. It’s what we take pride in. Innovating the world of video games. Pushing the industry forward, and a big part of that is by creating unique hardware that allows for more unique gaming experiences. The biggest and most obvious example of this is the Wii. The Wii introduced tracking system and accelerometer can make controlling a game go simply beyond pressing a button. And we did this all at a price point that most families could afford. By taking a risk, Nintendo was able to introduce the world to a new way of playing, no one had ever considered. It made gamers out of people who had never touched a controller before. In fact, a lot of elements considered standard today for the way you control and play games were either invented or made mainstream by… Nintendo! The D-Pad, Start, Select, saving, portable gaming, shoulder buttons, thumbsticks, rumble, wireless controllers, touch screen gaming, motion controls, 3D gaming, augmented reality, and asymmetrical gaming. Even endeavors that some gamers consider ‘non-starters’, like the Virtual Boy, were pursuing concepts decades ahead of its time. MatPat: Thanks for the monologue, Reggie… Thanks for, uh, giving me a chance to talk there Thanks, thanks for that… Speaking of the Virtual Boy, I did see you on Twitter the other day with one. Facebook has Oculus, Google has Daydream. Nintendo returns to VR market with the Virtual Boy 2.0? You can even add a new colour… green. It’ll be like Christmas. Reggie: We don’t joke about Virtual Boy, Mat. It’s listening. MatPat: Well that was weird… Reggie: Without taking risks, the gaming industry could stagnate, and innovations might simply stay at “What’s the best graphics card we can put into this?” instead of “How can we create a more unique gaming experience?” It’s our goal to change how the world thinks of console gaming, and we’ll be doing it again with the release of the Nintendo Switch. A console that delivers entirely new ways to play where ever and whenever people want. MatPat: What you’re saying makes a lot of sense, sure, and I agree with all of it, but you’re assuming that Nintendo needs hardware to innovate new games. Games like Super Mario Run and its use of existing technology to make a completely new version of an classic game are proof that Nintendo can still bring new ideas to the table without creating its own hardware. Plus, you could just produce the peripherals. USB systems don’t make it particularly difficult to create hardware that can plug into a port and then just be ready to go with a little setup. Guitar Hero, Rock Band, both did a great job of doing it in the past! Reggie: Certainly, but when Nintendo creates a console, we’re not just thinking about creating the next generation of an easy to use gaming computer. We’re rethinking the way you play games. That’s what differentiates Nintendo from the rest of the market, no matter what platform we’re talking about. Take Nintendo Switch: it combines the power of a home console with the mobility of a handheld. But take a closer look at the Joy-Con controllers. Controllers are how you interact with your games, so we’ve always worked hard to get this right, and the Joy-Con controllers that come with Nintendo Switch are truly amazing. Each Joy-Con has a control stick, gyroscope, and accelerometer. They can be used together, or as a fully functioning standalone controller for multiplayer. Plus, they include additional technology, such as an improved HD rumble, an NFC touch point and an IR motion camera. We are introducing the world to new experiences, made possible by the unique characters of the Nintendo Switch hardware and Joy-Con. MatPat: Don’t get me wrong, Reggie, I love innovation, but I also love games, and it seems like the two are sometimes at odds with each other. Case in point: the Wii U. Sure, Super Smash Bros and Super Mario Maker were great, but they were also Nintendo made games. Overall, the asymmetric system was difficult for third parties to wrap their heads around and as a result, they didn’t really develop material for it. Games were slow to port over, if at all! As a result, gamers are being put into positions where they’re spending hundreds of dollars for a new console, just to play the next installments of their favorite Nintendo franchises! But then they’re left with a console that gathers dust in between Nintendo’s big yearly releases! It’s a vicious cycle, Reggie 🙁 Poor third party support makes Nintendo consoles less attractive to players, which reduces sales. Reduced sales means it’s harder to get third party support! And gaming is an expensive hobby already these days! Most people don’t exactly want to shell out a few hundred bucks, just to obtain the hardware necessary to play a few select titles Reggie: Well Mat, we don’t want to prevent gamers from having access to our games. That’s a large part of why we try to keep our consoles at a lower, more manageable price for consumers relative to others. With the Nintendo Switch, we’re dedicated to creating a steady flow of games, both first and third party, at launch and through the holiday and beyond. MatPat: Sure, and I’ll concede that we’re trying to simplify some complex economic ideas here, but considering that almost every manufacturer loses money on the consoles, and then recoups that cost on their games, then why not remove that risk entirely and just bring games over to some place like Steam? We could see The Legend of Zelda: Breath of the Wild pop up on the Steam stores front page, featured on the PSN or on the Xbox Live! You’re making the Nintendo brand of games more accessible in more homes! Other than the Wii, which is an impressive but outlying data point, Reggie, the N64 sold 33 million units to the PlayStation’s 110 million. The Gamecube clocked in at about 22 million, and the PS2 sold over 150! Fast forward to today, and there have only been about 13 million Wii U’s sold, only just surpassing the Dreamcast. The PS4, though, is in 50 million homes. The Xbox One, 25. I’m sure many of those gamers would love to play the latest Zelda or Mario game, but never will because they’ve already spent their allotted budget on those consoles for this generation. Reggie: Maybe. But Nintendo doesn’t just stand for innovation in gaming. It stands for creating a safe place in gaming. By producing the console, we’re able to help shape a positive gaming experience for anyone picking up a controller. Not only our biggest fans, but also for families and kids. Nintendo Switch will have parental controls, similar to what we have on Nintendo 3DS and Wii U, but with the Nintendo Switch, we’ll also have a parental control app that’ll allow parents to set daily limits on how long the system can be played, view the games that have been played on the system, and for how long. Parents can even set a cut-off time, such as no gaming allowed after 9pm. MatPat: Oh, that wouldn’t fly if I was a kid. Just saying, sneaking down into the basement to play more… Reggie: And if you’re worried about third party support for our systems… Don’t! We recognise that delivering a wide catalogue from the top third party publishers is essential to creating a competitive console in today’s market. And with the Nintendo Switch, we’re looking forward to broad third party support from top developers and publishers including: Activision, EA, Take Two Interactive, Ubisoft, and more. Did you notice that Bethesda’s joining Nintendo for the first time? Nintendo Switch players will be seeing some of their favorite franchises, like The Elder Scrolls, NBA 2k, Minecraft, and more. We just announced that over 80 games are in development by our third party partners. Mic, drop! MatPat: Don’t take what I’ve said as me wanting Nintendo to go out of business, quite the contrary! One, this is just the side I have to argue because it’s the format of the show and two, I gotta grill ya because I need Nintendo to be around for a long time. I mean, I don’t know if you’re a loyal Theorist or anything, Reggie…. * 🙁 crickets chirping 🙁 * MatPat: We’ll just… move past that one then…. But we do cover a few of your games around here, so I’m just sayin’! All I’m trying to point out is that the console game is the single riskiest one in all of gaming! Case in point: after years of fighting (and losing) in the console wars, Sega was down and out, losing money every year. But the year after they bowed out of the hardware business and went purely into developing games, they finally turned their first profit again! Reggie: Well, Nintendo’s been around for over 100 years and it’s my job to make sure we’re around for many years to come While we appreciate your concern, Mat and the concern of all the gamers out there, rest assured Nintendo’s doing just fine. You just worry about Ganon or Bowser, let us worry about the business. And more importantly, let us have the privilege of bringing great experiences to gamers everywhere with the launch of Nintendo Switch. We can win. (Hard to understand what he’s saying here) MatPat: It’s hard to argue with that. But I guess my last point here is that the landscape of gaming is changing Can the Nintendo Switch, as a portable dedicated gaming device, stay relevant in the face of the still ongoing smartphone revolution? Can any compete, when smartphones and PCs seem like they’re taking over every area of technology? From our games to our TVs and more. I guess the question isn’t whether Nintendo should stop making consoles, but whether we’re entering an era where the idea of a console is a thing of the past? You say that Nintendo has been innovating by bringing new ideas into their consoles, I’m inclined to agree, but as technology evolves around us, is this Nintendo’s chance to continue innovating in a whole new way? By being a trailblazer into a new era for the industry that puts new and unique gaming experiences on all consoles, not just their own. Voiceover: Ladies and gentlemen of the Internet, we have reached Deadlock! Now, the decision is in your hands: are you switching to the Nintendo Switch? Or is it time to switch off the console wars? Click on one to cast your vote! And a special thanks again to Reggie, and Nintendo, for participating in this debate.