Pretty much everyone agrees that the Big N is in critical state at the time of E3 2016. Sales are on the wane, Sony is gaining ground quickly in the Japanese market, publishers are turning their back on them and gamers are not listening anymore.
Nintendo’s revenues were down significantly (-8%) in 2015-2016. The 4m Splatoon and the 3.5m Mario Maker were not enough to keep them flat, which speaks a lot on how bad the rest of the line-up did. Xenoblade Chronicles X sold average at best : the “proper JRPG” like they say, with only 140K units sold in Japan and a little more than 200K in the US, didn’t live up to the first Xenoblade, which had made JRPG history. It’s clear that Monolith’s latest title had something unappealing about it, and lacked the necessary qualities to be a long seller. Xenoblade Chronicles X doesn’t play in the same league as Bloodborne or Dark Souls III despite the abnormally high marks it got. There’s hoping those arrogant fools refrain from proclaiming themselves kings of JRPG next time, as they have only a tiny fraction of them. The Yokai didn’t set the West on fire, one trump card lost… WiiU has been steady at its low level (around 3m system shipped), but 3DS shipments are down 22% compared to last year, as well as software. With the decreasing interest of third parties, the lack of originality of first party games, the outdated hardware and Miitomo’s short-timed success, the manufacturer is running out of options.
But in the end, its accounts give some leeway. Profitability is still good, as the operating result went up 33% to 32 billions of yens. Nintendo is still fighting to reduce producing and marketing costs : -15% this year again. The weaker net profit (divided by 2.5) is caused by unfavorable parity between the yen and Western currencies, which caused a loss this time instead of a gain last year. When it comes to its core business, Nintendo undoubtedly succeeds in rationalizing its financial structure. The balance sheet hasn’t changed at all, being still excellent. We do notice that even in difficulty, the manufacturer doesn’t lose any money.
But saving money is not a long-term solution and of course Nintendo makes plans to improve revenues. It played its last trump card during this E3 by giving a first look of the new Zelda game, called Breath of the Wild. We can come to worry given the disastrous downgrade compared to the technical demo of two years ago. Of what Treehouse showed on Tuesday night, it looks like Assassin’s Creed 1 with cel-shading to hide the poor texturing. The world is absolutely barren and its density is close to Oregon plains… The two mini-dungeons were completed within five minutes : 5 minutes of puzzle every 2 or 3 kilometers, it that the promise of gameplay of a Zelda game? The happy members of Treehouse reach a summit from time to time in order to show the view. Futile effort, the game isn’t displaying anything as good-looking as Xenoblade Chronicles X released a year before. By showing Zelda’s open world next to the one in Watchdogs 2, Nintendo gives the final proof it is lagging five years behind the rest of the industry. If like Aonuma says, the experience is the same on NX, this new Zelda could be its last breath as it won’t compete with the PS4 games of 2017.
Nintendo had two new games for this E3. Ever Oasis, an uninspired RPG with character design as poor as Codename STEAM (announced in similar circumstances), and Mario Party Star Rush, which is another worthless rehash. No wonder they didn’t do a direct… The rest of the line-up was far from bad, including Dragon Quest VII, Tokyo Mirage Sessions #FE, Ace Attorney 6 Spirit of Justice and above all Pokemon Sun/Moon which is going to be a huge success in the holidays. Game Freak’s IP has never weakened in 20 years. As much as those games are interesting and Pokemon strong, they can’t make Nintendo stand out, make the buzz or fill internet forums. The WiiU/3DS news quickly drown in the continuous waves of PS4/PSVita/Xbox games. Without NX, Nintendo is forced to live in the shadows.
The most interesting point of view on NX is Ubisoft’s. The French publisher announced the next Just Dance for NX and stated that Nintendo’s next console “has potential to recapture the Wii audience”. Let’s stop one minute here to fully understand the meaning of this : Ubisoft is porting Just Dance on NX, but doesn’t do the same for Ghost Recon Wildlands, Watchdogs 2 or any other core gamer title. Aside of that, it says NX is perfect for casual gamers. What if NX were a system made specifically for a mainstream audience and Nintendo long-term fans, without even trying to compete with Sony and Microsoft? That would make sense after Emily Rogers’s (famous Nintendo insider) sources said that NX “was closer to an XboxOne than a PS4 in terms of power” and that “it wouldn’t blow away current gen systems”. If true, NX would be nearly immediately blown away by the PS4 Neo and the XboxOne Scorpio, both strengthened versions of the existing systems. Reggie all but confirmed this in a recent interview when saying that Nintendo was focusing on content rather than raw power.
Whatever it may be, the very fact that NX is not at E3 means that nothing is ready yet. No game can be shown : the development might be harder than they thought (Nintendo is currently learning what most publishers have learned those past 10 years or so), the hardware might need some tweaking to be functional or maybe they just lack third party support. The March 2017 release make us think to a financial deadline, as the company would need the launch revenues by the end of the fiscal term, even if they have to rush the games and risk launch hiccups. Impossible to give a clear prediction, Nintendo’s future has never been that foggy.