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Nintendo Is Back! - New Blood

Tatsunoko Vs Capcom - Wii Hardware
Tatsunoko Vs Capcom - Wii Hardware
The continuing move towards an established means to get consumer content into amusement has been exclusively revealed to be coming from Nintendo! Building on their experience with the consumer Wii Shop Channel, Virtual Console and Wii Points – the leading console game hardware and software houses takes another bite out of amusement. But fundamentally this new development represents the 'second' video amusement application of a subscription (monetorization) model, and so changes our whole world! Alongside this, there is breaking news that SEGA has added their weight behind the latest console arcade hybrid!


All of a sudden console manufacturers show an interest in diversifying into the public-space (amusement) model - so, for the second time in this New Year, The Stinger Report breaks news of a new arcade / console proposal! The sudden changes in the viability of console game development was impacted by the economic downturn - the console game industry of the last few years has surpassed the combined profits of the music and movie industry, but has seen major trauma in its infrastructure as the market evolves.

The great success story in the console game scene has been Nintendo - started in 1889 as a card game before going on to become a toy manufacturer. The company entered the video amusement scene in 1978 (with 'Computer Othello'), becoming a powerhouse in establishing the Japanese amusement scene and cemented by the phenomenal success of 'Donkey Kong' in 1981. But it would be the Nintendo Entertainment System (NES) of 1985 console fame that would steer the path for the company in this emerging market of home gaming. In the recent Next-Gen console market, having struck gold yet again with the Nintendo Wii console, the Japanese corporation has still kept an eye on any opportunity to maximize its position and re-enter the public-space entertainment sector. Previous interest included, in 2006, the development of the Pokemon Park experience (see #455), and a Korean project for a game kiosk in 2003 (see #216).

The Stinger Report was one of the first to break the story, in our AM Show'08 coverage (Stinger #664), that the Capcom 'Tatsunoko Vs Capcom Cross Generation of Heroes' (Wii Hardware) release was in fact powered by a Nintendo Wii chip-set. This was a second bite of the cherry for Nintendo, enabling them to establish their console hardware as an low-cost arcade architecture, after the hit-and-miss 'TriForce Hardware'. The Stinger, in breaking this news, received information that this move was not just a Nintendo sideline for their console - but was part of a comprehensive new plan for Nintendo to redefine public-space entertainment.

What has been revealed is a plan to produce a comprehensive infrastructure and delivery root for operators - initially in Japan - to get their hands on a steady supply of low-cost game content, but also for developers to have a simple root to market for their games. The proposal revealed is that the new amusement hardware, based on the Wii, will sit into a brand new sector of the Japanese amusement market. Using the connectivity of the original board, Nintendo's team has the amusement cab act as a downloadable content system - operators pay a set fee to download content, for a soft-upgrade of their machine; this removes the need for physical hardware swap-out.

This connectivity will support both complete software updates, along with a player network service that will allow machine-to-machine tournament playing. However, more than just networking cabinets to a general player network, the Nintendo proposal has players buying top-up smartcards, from which they pay for network gaming, so offering a third revenue stream; the players paying for the connectivity. Building off of lessons learned from Nintendo's Wii online 'Virtual Console' network for the console platform (part of the Wii Shop Channel), the same methodology is now being applied to the amusement sector. An interchangeable low-cost amusement platform will take on the Taito 'Type-X' and secret low-cost Bandai Namco project. But the Wii system will also be a direct competitor against the Xbox360 amusement system ('Game Gate VU').

As covered in the Stinger report last year - the need to monetorize the amusement scene to make it viable is fundamental in the thinking by Nintendo and their initial partners. The platform offers direct and indirect links to the operators' cashbox - first via the levying of an operator upgrade / subscription fee, but also in the top-up revenue from the players (again borrowing from the Wii Point's scheme (Nintendo Points)); the players will buy IC Cards that will be loaded with credits via the online site. Initially, the only confirmed supporter of the Nintendo platform is Capcom - jumping from their own 'CP System III (CPS3)' platform, first to the SEGA 'A-Wave' and then Taito 'Type-X'; the company has been desperate to strike a happy medium of low-cost amusement fielding and console game development. The name of other factories signing up to license content on this platform has been shielded in secrecy, as Nintendo gets things ready for launch.

At this point, not even the official platforms name or full game release schedule has been leaked. Sources do say that a high-level partnership with an AM venue operator is in the works, the importance in the Japanese market of aligning a system of this kind with a major operator is essential to the marketing strategy. A source close to the development suggested that negotiation is being considered for a deployment plan through the Nintendo retail operation (including the flagship Nintendo World Store - as covered in the coming Stinger New York visit).

There are a number of troubling changes for the consumer game retail distribution sector in a number of territories (part by economic conditions and part by online distribution); a growing number of retail operations are now considering the inclusion of a public-space player entertainment element. This has been seen with in-store CyberCafe developments that include online gaming aspects. More information on this move by Nintendo back into amusement is expected during the AOU'09 show - though some sources suggest that Nintendo will be running a very tight ship regarding involvement in this project, and that initially they may only open the door a chink on their full plans for market dominance!

What Could this all Mean:

Much of what has been revealed about the Nintendo project focuses on the public-space scene - this is far removed from the conventional amusement game scene of the Japanese and International market. As described by the Stinger as the 'VenderTainment' scene, the placement of games in environments within hospitality and retail centers. How the conventional amusement scene in Japan will take to this development will prove interesting. Nintendo is known to have had previous friction with the Asian amusement trade, and the development of this new strategy could be a very concerning move – especially if the console game giant decides to completely circumvent the Japanese Amusement Machine Manufacturers Association (JAMMA) infrastructure, and go direct!

Breaking Stinger News - The big guns started to line up to support the entrance of console content into amusement. As the Stinger revealed, SEGA Amusement Europe has signed a unique agreement with the team behind the 'Game Gate VU' (Xbox360 Hardware) to have rights to distribute the platform in Europe. This move will see a considerable number of the systems on display on the SEGA booth at ATEI'09. The interest in the system following its re-packaging and appearance last year has been momentous, with a number of major signings including SEGA. One aspect in the penetration of this public-space game system based on consumer content is that a major Japanese appearance at AOU'09 is in the planning stage - just at the same time that Nintendo is expected to release news of their system; 2009 is looking very interesting indeed!

News Story with thanks to Kevin Williams. Please visit www.thestingerreport.com for others.


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