In a recent interview, Nintendo EAD General Manager Shigeru Miyamoto revealed that he is no longer in charge of hardware development. While he’ll still observe the development process, he’s no longer “actively participating and making decisions.” Some are alarmed that the driving force behind most of Nintendo’s successes is reducing his role, but Miyamoto stepping down from hardware development is actually good news for Nintendo.

Where Miyamoto Went Wrong

Shigeru Miyamoto made the hardware decisions for both 3DS and Wii U, and even though they are both very enjoyable devices, they are on pace to be the lowest-selling Nintendo handheld (excluding the Virtual Boy, if that can even truly be considered a handheld) and home console of all time. That’s not to say that Miyamoto alone shoulders the blame for their sales struggles, but his ideas contributed to many of the difficulties that Nintendo has faced in making these two devices profitable. Let’s look at what Miyamoto himself had to say when asked about low sales:

“Unfortunately with our latest system, the Wii U, the price point was one that ended up getting a little higher than we wanted. I don’t think it’s just price, because if the system is appealing enough, people will buy it even if the price is a little bit high. I think with Wii U, our challenge was that perhaps people didn’t understand the system. I think unfortunately what ended up happening was that tablets themselves appeared in the marketplace and evolved very, very rapidly, and unfortunately the Wii U
system launched at a time where the uniqueness of those features were perhaps not as strong as they were when we had first begun developing them. So what I think is unique about Nintendo is we’re constantly trying to do unique and different things. Sometimes they work, and sometimes they’re not as big of a hit as we would like to hope.” — Shigeru Miyamoto

First off, Miyamoto mentions price. He pushed for stereoscopic 3D functionality on 3DS and a second screen via the GamePad on Wii U. Both of these decisions open up Nintendo to some creative possibilities, but they also drove up prices significantly. Neither console has particularly impressive specs, but both were launched at higher price points than Nintendo had hoped. Even with the higher-than-planned price point, Wii U had to be sold at a loss when it launched, and 3DS sales were so low early on that Nintendo slashed $80 off its price just a few months after launch, causing it to be sold at a loss as well. This was unprecedented for Nintendo, and it was one of the biggest reasons why Nintendo as a company had operating losses three years in a row.

Of course it’s not unusual for consoles to be sold at a loss outside of Nintendo — Sony and Microsoft do it all the time — so if these hardware gimmicks cost a little extra, it’s okay as long as they serve as major selling points. Unfortunately, this brings us to Miyamoto’s second reason for poor sales: people don’t understand the product. In this case he was referring to Wii U, but Miyamoto and other executives said the same things about 3DS when it was struggling to gain momentum. If the value of your product (or two products in a row, in this case) is not easily understood by customers, they won’t be willing to pay a higher price for that product. I was really disheartened to see Nintendo say that they hope their lineup of games this holiday season will justify the GamePad to customers. Wii U has been on the market for two and a half years now. The key selling point of the console, and an expensive one at that, should have been ‘justified’ a long time ago.

Finally, Miyamoto points to tablets as a Wii U killer, saying that the evolution of tablets has made Wii U seem less unique. The initial brainstorming for Wii U began
in 2008. Tablets were definitely part of the marketplace, but they weren’t the phenomenon they are now. However, the GamePad controller wasn’t conceived right away, as Miyamoto initially just proposed “a small monitor of sorts other than the TV, where we could always see the status of the Wii console,” and the hardware development team started from scratch many times. As late as December of 2009, Miyamoto said there were no concrete plans for future hardware yet. In April of 2010 (just four months after Miyamoto said there were no concrete plans for Wii U, and a full two and a half years before Wii U released), Apple released the iPad, and the tablet craze really started to kick off.

Miyamoto is arguably the most influential and successful video game software developer of all time, but those skills don’t necessarily translate into the ability to create hardware that can compete. Miyamoto says people don’t understand Wii U, but the real problem is that many people (outside of the Nintendo faithful that buy each new Nintendo console regardless) don’t understand why they would
need a Wii U. Miyamoto says he was trying to do something unique and different, but by the time Wii U launched, dual screen gaming had already been done on DS and 3DS, tablets had been popular for over two years, and to a lesser extent, Microsoft had already launched a competing gameplay experience with SmartGlass. Wii U wasn’t seen as a unique and different gaming device by the market. It combined several pre-existing ideas into one console, and while there’s definitely some value in that combination, it’s not enough to attract a large audience.

Why The Future is Bright

Miyamoto stepping away from hardware isn’t just a positive change due to his past missteps, but also due to the potential for a better future. Miyamoto has been saying for several years now that he’d like to take a lesser role with Nintendo and focus more on creating games again. As the General Manager of Nintendo EAD, he has a producer role in almost every game that Nintendo publishes. Add hardware development to that mix (which in the case of Wii U was a process that took up four years of his time) and you’ve got one very busy man.

One big problem with the launch of both 3DS and Wii U is that they lacked compelling software in their early months. Since Miyamoto isn’t actively participating in the development of NX, he has a lot more time on his hands leading up to its launch than he did for either of this generation’s platforms. Hopefully that means that he can devote more time to ensuring that when Nintendo does launch new hardware it will be accompanied by exciting software.

This extra time also means that Miyamoto could potentially focus on creating a new IP. Many of Nintendo’s greatest franchises, such as
Mario, Donkey Kong, and The Legend of Zelda, were Miyamoto’s creations, but he’s been unable to devote much time to completely new ideas for many years now. How fantastic would it be if NX launched alongside another Miyamoto original?

Another thing to consider is that Shigeru Miyamoto is 62 years old. He’s been the heart and soul of Nintendo for decades, but he won’t be able to have such an active role with the company forever. Miyamoto knows this, and he
told investors last year that he wants to turn over the decision-making processes to people much younger than himself.

“And we also make a point of jointly discussing the next moves we should take. We are making efforts to repeat this process. I am now trying to establish internal systems that can primarily operate by the decisions made by people who are 20 years younger than I am, not just 10 years younger. We are preparing for a bright future.”
— Shigeru Miyamoto

As Nintendo prepares for the future and looks to adapt to a video game market that is very different from even just a few years ago, putting hardware development in different, younger hands is a good move. Nintendo needs new developers to step forward and become the next big idea creators for the company, and it’s those kinds of people (along with business-savvy executives and third-party partners) that should be making the key decisions about products that Nintendo will be relying on for five to six years of sales. To some extent, it looks like that’s what Nintendo is doing.

“The way we approach it is when there’s a game or an approach that we can’t do on the current system, that’s when we begin in earnest to focus on the next system. So what that means is that our developers, a number of them must have certain ideas that will be enabled by the NX. We’re going to have to develop those ideas and get that software ready. And that’s going to drive the timing for when we provide more details on NX.”
— Reggie Fils-Aime

According to Nintendo of America President Reggie Fils-Aime, Nintendo’s development teams have started to come up with exciting new ideas that wouldn’t work on Wii U, and
NX is drawing from those ideas. The torch has been passed. Hopefully the new decision-makers in the realm of hardware can learn from the struggles of 3DS and Wii U and transform their ideas into successful consoles.

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Ben Lamoreux

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