We’re only a year out from finding out what the future holds for the next-generation consoles. With these machines all scheduled to release in 2005 (likely no more than weeks apart from each other), E3 2004 is going to be when they start trying to capture mindshare and gain those early-adopter sales. Each is likely to go in separate directions, but knowing Nintendo, they’ll take what they have now and expand on it. Looking back at what happened in this generation, it’s clear what Nintendo needs to do going forward. By some of the comments that Satoru Iwata made at a recent investor's meeting, it's clear that Nintendo recognizes those needs as well.

First, Nintendo must eliminate the head start that Sony got with the PlayStation 2. By all accounts, Nintendo has this squarely in their sights, as Perrin Kaplan (Vice President of Corporate Communications) has stated that Nintendo will have their next machine out in 2005. Sony’s lead of over a year is widely considered to be one of the key factors in Nintendo and Microsoft’s inability to gain market share over Sony (along with including DVD-Video playback when DVD was poised to explode).

Next, Nintendo needs to design a console that will appeal to all market segments, and let the games deal with appealing to their traditional “family” market. GameCube was unfairly pigeonholed into the “kiddy” market with its purple color. Take a cue from Sony and Microsoft, and make your main “flagship” color a basic neutral black, or possibly the “limited edition” Platinum that Nintendo now promotes heavily. Sales of the platinum GameCube and Game Boy Advance SP should indicate the wide appeal that silver has with the masses, with many mainstream consumer electronics taking on a silver color. Nintendo would be wise to look at the award-winning designs from companies like Apple to see what drives “technolust”, and take their cues from there. A silvery finish and a slot-loading drive seem to be eye-catching enough to get the job done, with a slot-loading drive protecting the sensitive optics.

Designing the system to be portable is still a winning philosophy, especially for the Japanese market where space is at a premium. The form-factor of the GameCube is just about perfect. What would really win over the masses would be a flip-up LCD screen on top of the machine, making it the first portable all-in-one console (Sega Nomad notwithstanding). Nintendo's already been playing with LCD screens, shown at E3 2001, and by 2005, these screens could be cheap enough to include. A console with a built-in screen would certainly fit the "surprising and unique" quote that Iwata dropped in regards to their Spring 2004 announcement.

Nintendo needs to leverage the assets that they already possess and do better than anyone. While Nintendo’s domination of the portable handheld market is undeniable, this also means looking at what Nintendo excelled at in the current generation. Nintendo took a highly demanded feature, that of wireless controllers, and managed to perfect the technology beyond what anyone expected. Nintendo should raise the bar and make wireless controllers standard for their next console. Integrated receivers with two-way communication are a must. The controller itself should include the Lithium-Ion rechargeable battery pack that Nintendo included with the Game Boy Advance SP, and preferably a charging cradle or cable for when it isn’t being used. Additional controllers shouldn’t need separate cradles, saving space and money. Of course, the Game Boy Advance SP shouldn’t be ignored, and a wireless clip-on transmitter instead of a cable would be a very smart move. Nintendo went the right direction eliminating cables with the WaveBird, and now they simply need to complete the mission they started. Sony was hailed for having many of their accessories for the PlayStation compatible the PlayStation 2. Nintendo does this to some extent with their cabling, but could improve if they give the new console the same footprint and expansion options as the GameCube, giving players immediate access to the Broadband adapter and Game Boy Player already released. Advertise these features ahead of time, so that those that are interested can buy those peripherals now and enjoy them in the current generation as well. Nintendo could go as far as making the new console backwards-compatible with the GameCube software as well, but that would have diminishing returns. Nintendo isn't in a position of protecting marketshare like Sony was.

Nintendo shouldn’t ignore developers' desire for storage, and that means not only a disc large enough to hold everything they need (DVD-sized storage of 4.7GB a minimum), but local offline storage as well. To maintain the unit’s small size, a 10GB 2.5” drive (like that found in many laptops) should be plenty. Nintendo has a partnership with Panasonic already, so having their standard memory card as an SD adapter would give players as much space as THEY want to buy. On that same note, Nintendo should make the operating system capable of accessing more memory on a card than they think it should, so users with very large cards aren't stuck running into file limits.

Nintendo has started to embrace LAN gaming, which is halfway to an online strategy. Nintendo should plan for not only the past, but the future as well, and either integrate the Broadband adapter into the unit, or make it backward compatible with the already released unit. That way when online comes to fruition, Nintendo already has the hardware in place to capitalize on it. The only other piece left out of the online equation is some means of communication. Microsoft hit on something special with their voice communicator, but at a minimum, a keyboard is necessary. A rechargeable keyboard that can use the same cradle or charging cable as the controller uses would be a terrific synergy of the technologies. Having a controller and communication accessory talk on the same wireless frequency would ensure that four players could all get online from the same console, the best of the online and offline worlds.

Nintendo made a strong statement this time around, omitting DVD playback in order to focus their console on games and games alone. However, Sony’s huge installed base was almost directly a result of having a DVD player integrated into the unit. While this cannibalized their software sales in the short term, it paid off in a gigantic installed base down the road. Nintendo needs to analyze this situation and determine if DVD playback would be wise. DVD isn’t going through the boom period that it was when Sony launched, and that boat might have sailed. These “convergence consoles” are largely responsible for homes having multiple movie players, and not many people out there need another one. At the same time, there are still many homes without DVD players at all. It’s a tough choice. If Nintendo does include DVD playing abilities, a wireless remote control should be an available accessory and the ability to turn on the console with either the remote or with the wireless controller’s recessed “Start” button is a convenience that can’t be overlooked. If a wireless remote control won’t be included, giving the packed-in controller that ability with buttons labeled appropriately would fill the gap, such as a “Play” icon on the green button, “Stop” on the red one, etc.

Finally, Nintendo should be keen on making sure a customer can connect their console to their home entertainment system in any way they may want. Having connections for video and audio in both analog and digital are no longer optional; they’re necessities for any enthusiast. Most importantly, Nintendo should continue focusing on what they do better than anyone, and that’s imaginative games with outstanding gameplay mechanics and engaging stories. In that area, Nintendo can rarely be beat.