What with Nintendo’s brutal earnings report on Thursday—the house that Miyamoto built broke it to investors that it experienced its first ever annual loss last year—the company needs to prove, now more than ever, that it is capable of modernizing.
Nintendo has resisted change in the past, like a grumbling old man insisting that an Edison Cylinder is better for music than a vinyl record. It fought against the shift to CDs and DVDs by making the Nintendo 64 a cartridge system; it fought against online gaming by introducing Friend Codes to DS; and it has only grudgingly embraced digital distribution, first through the Wii and DSi’s awful online stores and then only slightly better with the Nintendo 3DS’ eShop.
Wii U will not repeat these mistakes.
Nintendo is finally, fully embracing digital distribution. President Satoru Iwata swore to investors that Nintendo would improve revenue from digital distribution, and he plans to deliver on that promise by making Wii U games available for digital download simultaneously with retail editions. This means that games like Rayman Legends will be available as discs and as digital editions through the still-developing Nintendo Network. People will also be able to purchase download codes for the games at retailers. Nintendo will not however dictate pricing to third-party publishers, so games like Rayman will be priced by Ubisoft across all its editions. This means that publishers and retailers alike will find ways to incentivize different versions with disparate pricing.
“To adapt to the changes in circumstances surrounding the video game industry, Nintendo is intending to deploy its digital business significantly. We would like to prove that our challenges in the digital business will result in an expanded business sustainable for the long term,” said Iwata.
Investors placed heavy pressure on Nintendo last August to begin digitally distributing more titles not just on their own devices but on Apple’s iPhone and iPad. This new strategy with the Wii U should at least quell some of those fears.
The report does highlight many of the mysteries that still surround Nintendo’s new home console. Nintendo has claimed that Wii U will, like the Wii, use internal flash memory for storage in addition to supporting USB and SD Card storage. If Nintendo is offering full game downloads though, it will need to have a substantial amount of flash storage in the Wii. Wii U also uses a proprietary disc format, not Blu-ray or DVD, that can store up to 25GB of data. Not all games will use the maximum capacity of the disc, but if there are 18GB games on Wii U available as downloads, the console better have some beefy internal storage or Nintendo could have a consumer confusion problem on its hands like Sony does with the Vita and its memory cards.