It’s time to let Nintendo of America do what it needs to do to win back market share.
When Minoru Arakawa and a few associates founded Nintendo of America in the early 1980s, it was envisioned as a distribution channel for the parent company’s arcade games. Two decades later, Nintendo Co. Ltd. in Japan still treats NOA like a distribution channel. It was smart business for a while; after all, hard-nosed Japanese business tactics helped Nintendo become the top gaming company on both sides of the Atlantic in the late eighties and early nineties. However, as Sony and eventually Microsoft moved into the market by wooing developers and pushing their games towards new audiences, Nintendo saw its business in America shrink, even as the gaming industry grew rapidly.
Since the end of the N64 era, Nintendo has promised to ease its business tactics, win back third-party support, and appeal towards all ages of gamers. These methods have resulted in limited success; the Nintendo of today is in some ways different and much improved from its cocky personage during the N64 years, but in other ways, little has changed.
One key factor that has not changed much at all is NCL’s near-absolute control over its American subsidiary. Anyone who deals with NOA quickly learns that the company’s bureaucracy extends all the way from Redmond to Kyoto. They can’t say this because NCL doesn’t like it; they can’t do that because NCL won’t approve it. I personally know a lot of smart, ambitious people at NOA who could probably make the company much more successful than it currently is, but their hands are tied by the executives in Japan.
Have you ever wondered why Nintendo Power doesn’t include demo discs for subscribers? The people at the magazine would love to do it, but NCL won’t let them. Would you believe that all third-party games must be tested at both NOA and NCL, even for a U.S.-only release? This drawn-out process may be part of the reason that the GameCube version of multiplatform games is usually last to be developed and last to be released. Wonder why Nintendo’s games seem to get less preview coverage in the press? NCL offers fewer and more limited chances for us to play the games, and requests for developer interviews (especially for anyone in Japan) are usually shut down. That goes for media of all sizes and audiences, not just us independent enthusiast websites.
There’s no denying that NCL is a venerable company with a great deal of experience to work upon. They also happen to be the source for some of the best video games in the world and of all time. But their failure to distinguish the decline of the Japanese game industry from the booming American game industry has left NOA in a terrible position. NCL President Satoru Iwata accentuates this failure with every published interview.
"It is true that the 3D video game gave a boost to our industry but at the same time, people were beginning to drift away from playing games due to the complexity," Nintendo president Satoru Iwata told reporters.
"In other words, the old formula for success -- the combination of high-specification game consoles and advanced graphics -- is no longer working."
Source: GameSpot 12/9/2004
Of course, that “old formula” is still extremely successful in North America, and far from seeing 3D games scare away new consumers, we have seen the market literally explode in the past few years, as games become less abstract and easier for new users to become immersed in. It’s clear that Nintendo needs a new direction in the American market…but it’s not clear that the right direction is to move as far away as possible from what is already bringing success to the company’s competitors.
Some Nintendo fans fear the Americanization of the gaming industry. They see American games as generic, American gamers as having poor taste, and American publishers as being unstoppable juggernauts seeking to condense a talented development pool into one giant sweat shop, pumping out one roster-updated sports game after another. These fears are exaggerated but not unfounded. They are, however, not related to the issue of NOA’s need for independence.
I am not suggesting that NOA should keep any Japan-developed games out of the American market. Nintendo is not in the business of designing dating simulations or elaborate text adventure games, but if they were, I’m sure even those games could be successful in America. It just takes a serious marketing effort by people who understand the American market. There are such people already working at NOA, but they are not being given the freedom to carry out the steps needed to make Nintendo systems and games attractive to American gamers.
There is at least one beacon of hope for NOA, a sign that things are changing: Reggie Fils-Aime, Executive Vice President, Sales and Marketing. This has nothing to do with his fiery speech to the media at E3 2004. Over the past several months, I have heard encouraging talk that Reggie is being given unprecedented freedom by NCL to steer NOA towards a new public image. He seems to have been influential in arranging for the Nintendo DS to be launched in America before Japan. When he requested additional hardware allocation for America, promising that every single unit could be sold, NCL complied despite facing direct competition from Sony’s PSP launch in Japan. If NOA is to make Nintendo successful in America once more, this kind of trust from NCL needs to be given more freely and more often.
Nintendo’s business practices have left us all scratching our heads at one time or another. Maybe it’s because NCL is enforcing a business model designed for Japan upon its American subsidiary. When representatives at NOA give us strange explanations for why they have quickly fallen to third-place in the console race, maybe it’s because they are reluctant to acknowledge the limitations on their ability to make decisions for this region. When we see Nintendo designing its entire plan for the future around a flailing Japanese market, even though the American market has been larger for years and is still expanding, maybe it’s time for NCL to allow, or NOA to fight for, a little independence.
Please visit our Talkback forum to discuss this editorial with other readers and the author.