Nintendo and its ingenious plan to gimp online gaming

Infendo

Online gamingNintendo and its approach to online gaming has been pretty perplexing to guys like us, huh? Friend Codes head us off at every pass like some small town sheriff drunk with power; servers groan and creak when we attempt to Brawl with friends and strangers alike; and don’t get us started on trying to chat in-game, right?

Most of us are optimists, I’d like to think, and deep down we give Nintendo the benefit of the doubt. Soon, we say, soon they’ll get it right and we’ll be seamlessly battling it out online tossing taunts at friends while the latest Wii Connect 24 update downloads in the background, complete with an “adults only” Friend Code nullifier that essentially makes the annoying online gatekeeper a thing of the past.

But I’m not an optimist. I don’t believe any of that. Two different things happened this week that lead me to believe none of it will ever happen. This has been Nintendo’s plan all along. The ironic thing about it all? It’s going to work.

The Internet is infamous for creating tremendous amounts of drama around niche products, games or persons to the point where even intelligent, well-educated individuals start to believe their own bullshit because everyone around them is a yes-man.

At the pinnacle of these phenomena, bystanders looking on from the outside can be forgiven for thinking they’re missing out on the next big thing, for such is the intensity of the fervor surrounding them that it would be all but impossible not to think such things. On the other hand, those on the inside of the Internet maelstrom, who are actively reading every blog post and forum post and commenting themselves, could also be forgiven for thinking that they are experts on the subject. That’s because they are so immersed in a particular thing; they have researched and become one with every perceivable bit of information about it, that they could not possibly be wrong. Their opinion on a subject has become fact, bolstered in it authenticity by nothing more than the opinions of similarly-minded people.

But then we peel things away. Ron Paul turns out to have little to no support; the Assassin’s Creed marketing hype train turns out to be bigger and more robust than its game play; and online gaming’s true importance is discovered to be the gaming afterthought, tacked on at the end as a feature to appease the vocal minority.

The Online Gaming Momentum Myth
You are an echo chamber.

The first evidence that presented itself this week was a study from the oft-cited NPD Group. The big news from the report was that 72% of Americans said they were playing video games. It was a 9% increase year-over-year. That’s awesome. Especially for a Nintendo blog, but I won’t beat the “who I think did the lion’s share of expansion” drum needlessly here. What really caught my eye was what else the report discovered: the amount of people playing online was much lower than expected. Only 42% of people said they play games online. Forty-two percent is quite a lot, but the thing about %’s is they don’t really matter by themselves–you have to look at trends over time to see how they really stack up. According to NPD, the number was only a 2% increase from last year. A 2% increase, year-over-year, for a market that saw its biggest numbers in more than a decade during 2007. A year that saw such online greats as Halo 3 and Call of Duty 4.

Now, the 42% number is impressive, but what if I told you they were all PC players? They are: 90% of those who said they play online do so through their PCs. Only 19% play on a game console or portable. Again, 19% is respectable, sure, but not when year-over-year the overall growth was just 2%, and it’s 19% of 42% of the whole.

On a related note Infinity Ward recently boasted that 1.3 million people were playing COD4 every day. News outlets, predictably, were quick to heap praise on that number (which was only Xbox Live players, PSN numbers were “not available,” probably because they were significantly lower). The point here is I think we just found out where that 19% resides. All in one place and all for the roughly the same kind of game.

This isn’t to say I hate online gaming. While my critics will say that’s exactly what I’m trying to accomplish here, (in addition to yet another Jack penned Nintendo-related Infendogasm) it’s not — I just really, really hate Internet echo chambers. They suffocate progress and turn people off to things outside the bubble. Poopski to that any day of the week.

“Despite the buzz in the industry regarding online gaming, it is still relatively small compared to offline gaming,” said Anita Frazier, an industry analyst for the NPD Group. “There is still a large, untapped market for gaming in general and online gaming in particular.” Untapped market. Potential for growth. That’s excellent.

Young players are growing up with online gaming in their blood. Gamers 2 to 12 hold more than 25% of the online gaming market; those aged 18 to 24 have 10%. There’s a huge growth opportunity there, but the current echo chamber model that exists around online gaming makes it impossible for the Xbox Live strategy to expand much beyond the 19% it presently commands.

Why? Where’s the proof in that besides you being a ranting biased fan-man? Well, I said there were two items this week, so let’s look at exhibit #2.

The Obnoxious Online Gamer
Sowing the seeds of his own self-defeat.

Gamasutra, by way of Kotaku, has a fascinating interview up this week with former Microsoft game user research head Bill Fulton. The topic? Creating online games that don’t turn off new-to-the-fold gamers with bigoted hate speech, juvenile voice chat conversations and smutty text chat/player handle pics.

From the ex-MS himself: “The online behavior of our customers is dramatically reducing our sales, and continues to stunt the growth of our industry. Non-gamers simply don’t love games enough to put up with the crap they get online. The reason they would consider playing online is to have fun with other people — and right now, playing games online with strangers rarely delivers that for anyone outside the hardcore demographic.”

He never says “Xbox Live” in the interview, but as Kotaku notes, a former Xbox man talking about the trials and tribulations of online gaming doesn’t really have to.

So here we have it. A vocal minority of gamers who think online gaming is the mecca of gaming because all they do is hang around inside an echo chamber that produces stories, facts and numbers that bolster their opinion. An opinion that really only adds up to 19% of an industry comprised of hundreds of millions of people. A vocal minority that, given the margin of error for a typical report is — what, +-3%? — has not grown at all year over year. And it’s a vocal minority that will not grow given the fact that MS itself realizes the super successful Xbox Live online system has maxed out and is anathema to non-traditional gamers who are flooding the channel en masse this year and beyond.

And yet, according to NPD, there is incredible growth potential for console online gaming. What is an industry to do? I think that’s a perfect point in time to start talking about Nintendo’s strategy, don’t you?

Nintendo’s Gimped Online Strategy: Sly like a Star Fox
An industry with 20% playing online demands a 20% effort.

To date, Nintendo has been more than happy to throw everyone into an online gaming environment that’s akin to freezing cold bathwater. The experience has been distinctly un-fun, unwelcoming, and if you’re a real online gaming fanatic, you noticed that the frigid temps did much to quell the raging hardon you get when you log online to dish out headshots and snarky voice chat insults to kids who should probably be doing their homework.

For many inside the online echo chamber, Nintendo’s approach to online has been maddening. I’ll done my hypothetical disgruntled player hat for this one… “Friend Codes? Jigga please. Annoying as all hell and completely worthless because I want to play with my friends without interruption. No voice chat? OK, that I can understand because it’s early and the little kids and all — but no text chat either?! And how about those Friend Codes — did I mention those yet!?!?”

Anyway, I hope you’ll see by now that complaining about online to Nintendo is like talking to a wall. They knew what NPD was going to report before NPD did because they did their homework.

If I can go back to the bathtub analogy for a moment, Nintendo’s strategy all along has been to warm things very slowly. They had to, because non-traditional gamers have no idea how to swim.

Motion controls, developer prices, and the hardware itself are all part of this same interconnected strategy. As for online, it’s a cog in the wheel too, but to do as the minority demands, and make it a bigger cog than all the rest would doom Nintendo Wi-Fi to Xbox Live’s fate. A niche populated by niches. There’s no growth potential in that. In this regard, I think it’s pretty safe to say that Nintendo, at least with its online efforts, has been exactly in line with the industry trends–you’d agree that they’ve been exuding about 20% of their effort on online, wouldn’t you? That 20% is pretty substantial for completely new gamers, who would probably find it fascinating that the random Joe they’re battling in Brawl is somewhere halfway across the country–but they don’t want to talk to them. That comes later.

As a company that exists to make money, Nintendo has sought to remake gaming in its image. Eventually, this will include online play. But as I said, it will come later. That sounds extremely arrogant to some, even to me at times, and will probably have a few older gamers tripping flashbacks to the 1990’s. However, if your strategy is to bring new people into the gaming world it makes perfect sense. To keep video games fresh and away from a 1980s-era crash, it is also imperative. That’s because these new cas-core people are the ones who in the past would have otherwise been content to laugh gaming off and move on. This is what the overwhelming majority of people have done for the past decade.

What this means is Nintendo is going to have to be slow, methodical and at times incredibly mean to its established base. To their credit, Nintendo has managed to play the abusive husband perfectly. They’ll cut off the spigot just long enough to start hearing the complaints, and then they’ll throw a Super Smash Bros. Brawl sized bone into the fray to get the whirlwind started up again. They’ll even delay it a few months to tweak the online components a little while ultimately delivering a gimped online product. Bait and switch.

In the end, the second shoe will drop, and we’ll get something entirely new and different from Nintendo in the online space. You’re seeing the beginnings of it now, roughshod and gritty, but that’s what’s been necessary for the strategy to succeed. As gaming shifts incessantly towards an online model (distribution, playing, socializing, etc), Nintendo will slowly but surely introduce its new crop of gamers to it in a way that’s guaranteed not to scare them away or leave any bad taste in their mouth whatsoever. The bathwater will warm, I assure you. Some will see that as a Disneyfication of online gaming, but if you look at the FACTS and the NUMBERS, it’s what the majority of people really want anyway.