Nintendo's Wii-U misunderstands what made the Wii a success
In 2006, Sony and Microsoft had dominated the gaming market by producing consoles with games targeted at grown-up, self-identifying 'gamers'. Nintendo's offering, the GameCube, had mostly fallen by the wayside, and lost support of most 3rd party developers, leaving the console to rely on Nintendo's 1st party franchises like Mario and Zelda.
However, in catering to the hardcore 'gamer' demographic, the Xbox and Playstation alienated more casual users, with complex control schemes and a high learning curve. This gap was an opportunity for Nintendo, since their brand never resonated in the same way with hardcore 'serious' gamer types. Their next console, the Wii, was targeted at people who were put off by the learning curve of the Xbox and Playstation. The key innovation was the 'Wii Remote': a gesture-driven controller simple enough that an adult could use it: Just pick it up and start swinging/pointing/dancing.
The Wii was a smash hit, as it served a different Job-to-be-Done to Microsoft and Sony. The Xbox/Playstation 2's primary job was was to provide single-player escapism into graphically rich, detailed worlds. The games for these consoles were challenging and rewarded mastery. Nintendo competed asymmetrically by lowering the barrier to entry and entertaining groups of people (often families) with inclusive 'fun' games that anyone could pick-up and play. As a result, Nintendo sold to a large number of people who had never bought a console before.
The Jobs-to-be-Done of console games
We can define these two key jobs as such:
- Hardcore gaming: provide escapism into rich worlds, mostly single player or online competition. Skills and mastery are rewarded, and players relish the opportunity to spend hours learning the intricacies of the game.
- Casual party gaming: Provide entertainment for groups of people (often not peers) where enjoyment is not dependent on mastery.
The success of this targeting of the casual party job can be seen in the list of best selling Wii games. Of the top 10 selling games, only Super Mario Galaxy lacks a comprehensive local multiplayer mode, and most games on the list rely on a Wii Remote gesture control scheme most people can pick up very quickly.
Because the job the Wii was hired for was distinct, both Sony and Microsoft also enjoyed profitable next generations, catering to the same hardcore, serious gamer job which served them previously.
The Wii-U's job fitness regression
The Wii-U, Nintendo's follow-up to the Wii, was released in 2012, with a frankly slightly confusing value proposition. Instead of capitalising on the success of the intuitive and user-friendly Wii Remotes, the Wii-U's primary feature is that the controller has a 6.2" touch-screen display built into it.
What isn't clear is what types of jobs this controller-with-screen was designed to excel at. Surprisingly, the controller that surrounds the display is closer to the ample-buttoned offerings of the Xbox and Playstation (except quite a bit wider and heavier). Perhaps Nintendo were hoping that the display would be used similarly to the touch-screen on their 3DS handheld. The problem is, 2.5 years into the console's life, we haven't really seen any innovative uses of the display. 3rd party developers have mostly tacked on touch-screen gimmicks, and even Nintendo's 1st party games have pretty much ignored it (case in point, Smash Bros. and Mario Kart 8 - probably the biggest games on the Wii-U - make almost no use of the display at all).
The Wii-U's hardware actually seems to be a regression in fitness for the casual job: the controller adds more buttons and a display, increasing the learning curve, and, most bafflingly of all, due to the bandwidth required to power this display, doesn't support the use of multiple gamepads at all. Granted, you can continue to use Wii Remotes from the previous generation with the new Wii-U, but that rather undermines the point of the new console.
How the landscape has changed
However, perhaps Nintendo's unwillingness to better cater to the casual job of the Wii is not entirely unexpected. Since 2007 the games market has felt the impact of the smartphone. Smartphone gaming is big business, and serves the same demographic of 'non-gamers' with easy to play games. This is problematic for Nintendo, since everyone has a smartphone, and mobile games are typically a fraction of the price of console games (Free-$3 vs ~$60 for Wii-U games). It might seem that Nintendo is now stuck between two extremes: The lowest-common-denominator, everyone's invited, casual gamer is now being served by cheap mobile games, while Microsoft and Sony continue to serve the dedicated gamer market.
Mobile disruption might be oversold
However, the smartphone games industry is once again asymmetric to the existing market dynamics. While it does appear initially to cater to the same inclusive, casual job as the Wii, there are some key differences. The contexts that smartphone games are hired in are very different: Due to their omnipresence, mobile games are often hired to kill idle time, like commutes, waiting for appointments etc. Console games, in your living room, on your TV, are much more of a destination experience, chosen for the quality of the entertainment, not just the convenience. And despite their connectedness, smartphones aren't very good at social gaming. Gathering people in front of a big screen in a living room to play together is an experience that smartphones can't match.
What the Wii-U could have done differently
This makes the Wii-U's regression for social gaming all the more disappointing. The job of casual, social gaming is a valid one as demonstrated by the Wii's top selling games, and, although similarly casual, I don't believe that mobile games are serving the same job (I'd be more worried about Nintendo's handheld 3DS console). Unfortunately, the Wii-U has not done well for Nintendo. It's their slowest selling console ever. It should be noted that the general marketing for the Wii-U has been pretty bad (and that name certainly didn't help, I suspect most people didn't know it was a different console from the Wii). But I think the reason the messaging has been weak is because the Wii-U simply doesn't seem to know what it wants to be.
What could Nintendo have done differently? Well, it's worth remembering what Nintendo is really good at. Despite the drawbacks, I still bought a Wii-U, because it's the only place to play Nintendo's 1st party games like Mario Kart and Super Smash Bros. Although you could potentially criticise them for sticking to a formula a little too often, Nintendo have consistently made great games for decades, and Nintendo consoles are the only place to enjoy them. Nothing about the multi-button, touchscreen Gamepad improves on the experience of these games. I would rather have seen Nintendo continue to iterate on the Wii Remote form factor. The Wii Remote was the reason for the Wii's success: super intuitive and simple. However, it also had space for improvement. Although novel, the sensors weren't highly accurate, meaning they couldn't capture detailed movements, and this limited the depth of games which relied on gestures. A 'Wii Remote 2' with better sensors could have added the potential for 'mastery' without adding to the learning curve.
Wii Remotes also make it easier for people to have those great multi-player destination experiences that mobile games can't provide. Multi-player gaming is the most fun I've had with my Wii-U, and it improves almost linearly as the number of players increases. While the Wii-U is unable to provide enough bandwidth to drive multiple gamepads, it can easily power 7 Wii Remotes.
Finally, Wii Remotes are cheap, retailing at ~$35. That price hasn't changed since 2008, so it presumably includes a healthy margin. Nintendo could have packaged the Wii-U with two Wii Remotes and still have had plenty of change left over relative to the $140 replacement cost of a single Gamepad. This would have helped to position the console closer to that multiplayer job niche.
What next for Nintendo?
The Wii-U has a strong 1st party line-up which proves that Nintendo still has the skills to produce great games. However, the missteps of the Wii-U makes it increasingly unclear what value they're adding by manufacturing their own hardware. Nintendo is finally starting to explore working on other companies platforms, and they're already working on their next generation successor to the Wii-U, codenamed NX, but competition is only going to get fiercer. There's a good chance the next few years will see smartphone manufacturers make a play for the TV (Apple looks to be gearing up to finally do something with Apple TV), and it's likely gaming could feature in their plans. It will be interesting to see what 'NX' brings to the table, and how long Nintendo can hold onto a meaningful niche.