Nintendo is finally going online - well, they've actually been online in sporadic, unsuccessful spurts for years, but now the company is clearly taking the idea of a full-fledged network seriously, as described by CEO Satoru Iwata last week. Much like PSN, the Nintendo Network will be Nintendo's all encompassing online service across all its hardware. This has been long overdue, but now that Nintendo is pushing ahead, will it succeed? IndustryGamers chatted with several leading analysts on the topic. Here's what they had to say.
Billy Pidgeon, M2 Research
Mr. Iwata's comments regarding Nintendo Network during Nintendo's recent Q3 briefing were guarded, as usual, but indicate that Nintendo now considers a strong online network component crucial to the company's success. Iwata's strategic commercial guidelines for Nintendo Network are expansive: adding value to game purchases with add-on paid or free content transactions rather than exploiting customer relationships with pay to play schemes while maintaining open business models for third party publishers. However, his remarks on timing and alienating consumers without Internet connections are not forward thinking. Iwata said Nintendo "will make a bold attempt when the time is ripe." Perhaps Nintendo isn't yet ready, but the time has been ripe for some five years now, and the company is late to the party.
Citing concerns about safeguarding children online, which are reasonable, and doubts that online software transactions had sufficient potential for substantial returns on investment, which are unfounded, the company has acted far too slowly to expand their consoles' and handhelds' online game networks and marketplaces. 3DS' connectivity features are somewhat promising, but the experience is not nearly as satisfying as connecting with friends and other gamers on Xbox Live and PSN, which is an easier and more open process.
Nintendo Network should not only compete with Xbox Live and PSN, but should also create a unique platform that adds another dimension to the dedicated gaming hardware experience. A successful online network will keep gamers active on Nintendo hardware more frequently, for longer sessions with real potential to increase software attach rates as well as paid downloads of standalone or add-on content. I'd like to see Nintendo move more quickly to build out online network features to better connect gamers on 3DS and give Nintendo Network a running start in advance of Wii U's launch.
"Nintendo may have to think outside of the box on how to message the value add that DLC can provide." - Jesse Divnich
Jesse Divnich, EEDAR
Nintendo faces many challenges with creating a value-added and robust online network. They certainly are far less down the experience curve than Microsoft or Sony, but I believe the network will be well received among gamers.
The question remains, however, can Nintendo transition the non-hobbyist Wii consumer into a digital atmosphere? I don't foresee any issues within the core gaming community, but the casual gamers may need a little push. We've seen with Kinect consumers--who are the Wii consumer--that DLC wasn't an appealing feature. If these "casual" consumers are unwilling to download DLC, even on what most consider the "best" online digital network, Nintendo may have to think outside of the box on how to message the value add that DLC can provide.
That being said, among core gamers, I don't see DLC or online activity being a problem for Nintendo.
David Cole, DFC Intelligence
Having watched Nintendo going online over many years I would say they have been very focused on a slow and steady pace to build an online presence and for them I think that makes sense.
Ten years ago when Microsoft was building Xbox Live DFC predicted that other manufacturers would eventually follow suit with wanting to have their own network that they controlled versus having an open network. The thing is that is easier said than done. Problems that we have seen pop-up on both PSN and Xbox Live show the challenges.
For Nintendo they had their own selling points for their products that made it less urgent to focus on an online network. The Wii and DS allowed for online game play and downloadable content, it just wasn't under a full-fledged "Nintendo Network." Also this is a way to make it sound like they are really just starting. So now they will hopefully take all the lessons they learned from various experiences and apply them to a fully featured network.
I would also note that Nintendo did not really have a great need to focus on an online network until now. I do not think the Wii and DS lifecycle would have been greatly impacted by Nintendo having more robust online offerings. But launching a new system in 2012 consumers expect a solid online experience and really it is Apple to blame, not Xbox Live or PSN.
Michael Pachter, Wedbush Securities
I absolutely think they are doing the right thing, and think they will eventually get it right. No, I don’t think they will be able to compete with XBL and PSN until they go through the same growing pains that the others went through. It took XBL at least 3 years to be great, and took PSN even longer. I think Nintendo will succeed, but not for at least two years after launch, and by then, the others will be bigger and will have created greater barriers to entry.
