A pimp is nothing if not resourceful. I would argue that they are masters at minimizing expense while simultaneously maximizing profit. Dismiss the negative connotation for just a moment and consider a pimp’s role in business. Pimps, or Madams if you want to be politically correct, are expert recruiters. They find the best talent in their sphere of influence and ‘encourage’ them to work for their enterprise. Pimps and Madams are quite possibly one of the most prominent examples of CEOs that maximize revenue while limiting their output. Their employees carry the brunt of the workload while the Pimps and Madams look for new talent in new regions. To thrive (and to save the struggling Wii U), Nintendo needs to think like a pimp in their approach to business. No, they don’t need to overwork their employees or send them out on the streets to turn tricks. They instead need to look at the gaming industry as a hotbed of opportunity and employ a sense of hustle in the areas their company has begun to atrophy.
Nintendo Partners with Sony
In our most recent Flawed Logic Podcast, my good friend Patrick and I discussed his ideas for a partnership between Nintendo and Sony. You’d think the coming together of two prolific Japanese companies would be a match made in heaven. Over the last 10 years, one of Nintendo’s greatest struggles has been to get new, first-party titles to market in a timely fashion. The Wii U is over a year old and we still don’t have a proper next-gen Zelda, Metroid or Smash Bros. game. Were I in Mr. Iwata’s shoes, I’d begin to think strategically about the performance of future Nintendo IPs. I’d bin my games into three categories:
1. Guaranteed Blockbusters (Think – Wii Sports, Mario Kart, New Super Mario Bros. U)
2. Mid-Range Performers (Think – Donkey Kong Country Returns, Zelda Windwaker HD, Luigi Games)
3. Casual/Experimental Titles (Think – Pikmin, Animal Crossing)
Why not license all of the Experimental Titles and a significant number of Mid-Range Performers to Sony for development and distribution on their consoles? This would free Nintendo up to focus on developing their Guaranteed Blockbusters. This approach has three major benefits that outweigh all of the obvious challenges.
1. Guaranteed Blockbusters get to market more quickly leading to an increase in Wii U console sales
2. Mid-Range Performers licensed out and kept exclusively also get to market more quickly. This leads to higher software revenue since some of them will launch on four consoles (Wii U, PS3, PS4, Vita) instead of one (Wii U)
3. Casual/Experimental titles gain a greater audience and see increased revenue since they will launch potentially on four consoles (Wii U, PS3, PS4, Vita)
1. More people might be inclined to play The Mid-Range and Casual/Experimental games on Sony machines instead of the Wii U
2. Consumers may begin to lose faith that Nintendo will support the Wii U long-term
A pimp wouldn’t waste a ton of time trying to help an under-skilled or under-performing employee perform better in his or her market. They would instead accept them as they are, collect what revenue they can and focus their attention on their stellar performers. I think the fate of the Wii U is sealed. Current hardware sales are hurting so bad that a potential dip in console sales caused by the partnership with Sony would be negligible when compared with the potential for increased software sales. The Wii U will never be a true competitor for the PS4 or XBO, so it should not attempt to be such. Support the Wii U with your best endeavors to garner favor with your core consumers. Outside of that, let your less stellar performers spread their talents across as many markets as possible to maximize the revenue they can bring to the table.
I don’t care what Nintendo says about mobile, they need to start developing for that platform ASAP. And not just commercials geared at selling their wares on their in-house platforms. I’m not suggesting that Super Mario 3D World belongs on tablets and phones. I’m suggesting that Nintendo use their popular IPs as a launchpad to propel new IPs specifically designed for mobile devices. As Patrick said in our podcast, Super Mario 3D World would suck with touch-screen controls. So why not create the next Angry Birds style game using Nintendo characters? It would sell like gangbusters Mr. Iwata and you know it.
The best pimps in the world know how to grow into new markets. Iceberg Slim, for example, didn’t just work in Chicago. And after finishing his imprisonment, he realized that he could still make money legally off the enterprise by writing about it (he worked to have several books published).
Granted, with the newest Nintendo news about jumping into the health and wellness industry, I wouldn’t accuse them of not trying to diversify. But the mobile option to me is still a no-brainer.
Prepare for the Future
As I stated earlier, Nintendo does not need to abandon the Wii U. However, they do need to start working on a proper next-gen console. Imagine five years from now when PS4 and XBO start to show their age. Nintendo could bring out a true next-gen console with specs that can outclass Sony and Microsoft’s aging boxes. This part is indeed a gamble, but I’m suggesting it based on the fact that I believe PS4 and XBO are Sony and Microsoft’s last consoles. Either way, this approach gives the Wii U five more years to grab as much cash as it can before Nintendo can bring a true competitor to the market. And once they do, many people who purchased Nintendo games on PS4 will be intrigued to see what the publisher can do with true next-gen specs.
Nintendo also needs to also take a page out of Microsoft’s notebook and learn how to build a legitimate online ecosystem. The Nintendo eShop is pretty and well-organized, but if Nintendo really wants to sit at the table in the future, they have to think about collaborative and competitive gaming that is easy for gamers to jump into, find friends and start playing.
The Bottom Line
Nintendo needs to stop relying on the status quo that’s brought them to this point. They always dare to be different. I’m all for that. But, being only for the sake of being different leads you to put out two inferior consoles over a 10 year period that tank either in software sales, hardware sales, or in the case of the Wii U, both.
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