I struggled writing the title for this piece due to one major factor: I personally really like Mr. Iwata. I haven’t met the man, but from what we have seen publicly he is just very likable. He’s a CEO that cut his own pay when sales dipped. He’s very honest in an industry where many talk out their ass. He does developer interviews in Iwata Asks and spurred the Nintendo Directs – both of which I thoroughly enjoy and have been nice additions for the fans.

However, in many ways Iwata has a bit too much of Miyamoto in him. He’s a fine idea man with some nice concepts, but too often he finds himself apologizing for mistakes he has made. Grant it, he is pretty good at rectifying his own mistakes over time, but the fact he has continually made them is certainly a problem.

This isn’t a doom and gloom piece as some may fear. This goes well beyond the last two fiscal years of losses. This isn’t going to sit here and paint Iwata to be a bad person and I certainly am not about to throw him under the bus either. He has, time and time again, taken responsibility for Nintendo’s downfalls.

Rather, it’s just time to admit that Iwata isn’t a good CEO. He shouldn’t leave Nintendo entirely, but he definitely needs to be more in a role that has to do with designing games versus designing market strategy. In many ways, this is why Miyamoto wouldn’t be a good CEO. He’s got too much of that creative mind going, and often times you need someone to temper people like that in order to find your market.

Iwata took over as President and CEO in 2002, roughly 7 months into the launch of the GameCube. We all know the GameCube era just wasn’t good, but there are a few factors that lead to a future of consistent problems.

As an example, here is what Iwata said in 2007 about game droughts that ultimately killed the GameCube:

“When we launched GameCube, the initial sales were good, and all the hardware we manufactured at that time were sold through. However, after this period, we could not provide the market with strong software titles in a timely fashion. As a result we could not leverage the initial launch time momentum, and sales of GameCube slowed down. To avoid repeating this with Wii, we have been intensifying the software development, both internally at Nintendo and at developers outside the company, in order to prepare aggressive software lineup for Wii at and after the launch.” says Iwata.  He then says,”We believe it is important to provide the market with strong software without a long interval in order to keep the launch time momentum.”

He pointed out that one of the biggest flaws with the market for the GameCube was the lack of consistent software releases. He vowed to correct this with the Wii. However, in the Wii’s 6 years on the market, it was often plagued with several software droughts.

Iwata of course recognized this was a problem with the Wii and the even the DS, so as the 3DS approached he said this:

“It’s important that you be able to supply software with no pause,” said Iwata. “With the DS and Wii, following the titles that were released at launch, the momentum dropped when there was a gap in software releases. We’re making plans so that this type of thing won’t happen.”

Of course, the 3DS came and went, and we got a very lackluster launch and practically no consistent support for the handheld, especially out west. Enter the Wii U:

“As we learned a bitter lesson with the launch of the Nintendo 3DS, we are trying to take every possible measure so that the Wii U will have a successful launch.”
“The company was unable to launch much-anticipated first-party titles for the Wii nor for the Nintendo 3DS in a timely fashion in the first half of the term. In the game platform business, creating momentum is very important, but the momentum was once lost, and it has had a large negative effect on our sales and profits.”

Since the Wii U’s launch, Iwata has been mostly apologizing all of 2013 for the software droughts in the Wii U’s lineup. Even with some solid releases last month, there still isn’t a clear idea of what we can look forward to in coming months. Especially in terms of games that weren’t previously released.

So, for four straight platform releases we have seen Iwata identify a game drought problem, promise it won’t happen again, only for it to happen again… just like clockwork. You can have a plan to avoid things and feel bad about it when it doesn’t work out the way you want, but after a while you need to realize that maybe, just maybe, it’s not working out.

3DS is Selling Well in Japan, So Reggie Should be Canned Right?

Like Iwata, Reggie is also a pretty likable character. He burst onto the scene talking about making games, kicking ass, and telling us how ready his body was. The western audience immediately became endeared to him.

Previously, I’ve briefly brought up points where I feel Nintendo of America’s marketing strategy is, in effect, misguided, but it may not entirely be Reggie’s fault. Inherently, to market something, you actually need something to market for.

Iwata has stated on several occasions that the 3DS and Wii U sales should be higher in North America because the market there is vastly bigger than in Japan – except the sales aren’t. Often times he has actually pointed out how NoE and NoA need to do a better job in conjunction with the low sales. In fact, here is Reggie’s reaction when he heard about such a remark in the middle of the night:

“When he said that, I had a sharp pain in my neck. It was in the middle of the night, and I viscerally reacted to it. The fact of the matter is that Japan is doing better than the North American marketplace. That is a factually true statement. It’s driven by the strong level of support that they’ve had from Japanese third-party publishers. There’s been a number of games like Monster Hunter that did big numbers.”said Fils-Aime.

What you can take away from that remark is that, essentially, the 3DS is doing well in Japan because it has consistent support from Japanese developers. The 3DS isn’t doing well in North America because it doesn’t have consistent support from western developers. It really is that simple. Reggie can only play with the cards he is dealt.

Wii U isn’t a Blue Ocean Console, but it’s Not a Gamer Machine Either

Reggie and Iwata stressed at E3 2011 how important 3rd party support is for the Wii U in the west. They even went as far as to say that if you own a Wii U, you really don’t need another gaming console. Bold words, but far from the truth of the matter.

We have heard several times now that the Wii U is a gamer’s machine – the same gamers who play on Xbox 360’s, PC’s, and PS3’s. The problem with this concept is that A. They already own those machines, and newer, more powerful, versions are coming out this year. In addition, much of what makes the Wii U unique is technically doable by the competing brands – even if it’s not directly or inherently built in.

However, setting that aside, let’s stick with what Nintendo is telling us. This is a console for U, the gamer. Yet, their marketing is directly aimed at the Wii crowd. There have been more ads for Nintendo Land and SiNG then for games like Call of Duty, Assassin’s Creed, or even Wii U exclusive ZombiU. Nintendo themselves have been trying a blue ocean strategy with marketing for a console that doesn’t appeal to that consumer base.

Why doesn’t it appeal? It’s not the price that’s necessarily the problem, but rather the controller. The Wii’s success was founded on a few basic principles. For starters, eliminate the complexity of a traditional controller. Add in a control function (motion controls) that feels natural and can be easily seen (Wii Sports). Lastly, create a console that is affordable and adaptable, even going as far as to admit that it’s a complimentary console to the 360 or PS3, rather than a console meant to be the only gaming machine you own.

That was Nintendo’s strategy. That was Iwata’s strategy. In many ways, it was a beautiful strategy and hardly anyone has anything negative to say about it. Nintendo had a nice four year period of massive success, and we can’t simply criticize Iwata and not recognize he hit the jackpot on a blue ocean strategy.

He hasn’t done that with the Wii U. They say it’s a gamer’s console, yet have only given gamers rereleased products of older systems where Nintendo admitted that Wii owners probably own one of those consoles already. It’s not really a Blue Ocean console like their advertising suggests, because it’s their most complex controller ever built. Think about it.

Full traditional button interface. Touch Screen interface. Gyroscope and motion controllers, camera, microphone built in, speakers, and heck the thing comes with a STAND to charge it. It’s a complex controller that will likely never appeal to the casual audience.

The Wii U lacks a true direction. It’s not powerful enough to garner western support, and it’s too complex to garner casual blue ocean consumers. Worried about software droughts now? Might as well get use to them.

Time for Change

I really appreciate Iwata for where he came from and all he has done at Nintendo. However, he himself may step down at the end of this fiscal year and really; it’s probably the best thing that can happen for the whole company. I hope Nintendo finds a way to retain him in a lesser “Miyamoto” style role, but Nintendo needs help to buck the current trends it keeps repeating.

The lack of software in the west is a direct relation to having consoles that don’t appeal to western developers. The constant promises to fix the issues have only gone on to create the exact same problem time and time again. Worst of all, Nintendo is now worth less now than truly at any point in their gaming history.

While Iwata enjoyed 4 years of can’t do wrong success thanks to a very successful blue ocean strategy that he deserves a lot of credit for, those four years of success simply aren’t enough to ignore the ongoing issues with Nintendo’s hardware. I sincerely hope they stay in the hardware business, but for that to be a reality they finally need to decide who they are targeting.  Mr. Iwata – I have much love and respect for you, but it’s time to go.

This article is entirely based upon a much deeper look at Iwata’s career at NotEnoughShaders. I highly suggest you head over there for more information on Mr. Iwata and yes, even more reasons he’s a bad CEO. It’s a fantastic read. We criticize because we care, Nintendo.

Tagged With: satoru iwata nintendo