SNES Classic: Why Nintendo is Making It

Earlier this week, Nintendo announced an SNES. When I saw it, all I thought was, “why?”. Despite the rumors, I didn’t think this product would exist. Why cease production on one product having not meet demand to make a similar product. I believe there is more to this story than Nintendo has let on. So let’s examine why this product exists.

Reasons That Don’t Make Sense

There are a few ideas and thoughts I’ve heard online (and some I thought myself) as for why this product is being made. Before discussing the reason Nintendo made this product, I want to address some reasons I don’t agree with.

The obvious answer is that Nintendo just wants to make lots of money. If money was the sole reasons, then why would Nintendo kill the NES Classic, a product that Nintendo has not meet demand for? Nintendo would be better served more NES Classics than making the SNES version. For references, the NES sold 61.91 million while the SNES sold 49.10 million. If Nintendo was just trying to make money, then it would make more sense to meet demand for the NES Classic before making this.

Alternatively, Nintendo may be making this product because the Switch will be sold out this year. Nintendo wanted some other product to sell. Ignoring the fact that the SNES Classic will be sold out too, I don’t think this is the reason either. Rumors of the SNES Classic came out immediately after the NES Classic was discontinued. Nintendo likely made the decision before the Nintendo Switch was a rousing success.

Why Does the SNES Classic Exist

In 2014, President Iwata stated that Nintendo’s strengths were its IPs

For more than 30 years now, Nintendo has been creating various IP for its game software, and as new iterations of the franchises are introduced, the value of each IP is strengthened. Today, there are many fans for each IP, and each one has different consumers with different lifestyles.

Therefore, it is natural that the best way to communicate our IP to each consumer also differs. We choose the most appropriate method to try to maximize the number of people who encounter Nintendo IP and, as a result, we will further expand the gaming population. This is our basic strategy.

When Nintendo presented this strategy, they presented it in terms of mobile gaming, yet this strategy is not exclusive to mobile. Nintendo later presented that the company would be working with Universal Studios. Additionally, Nintendo has discussed working on movies and animation. The strategy is not exclusive to mobile devices.

In Iwata’s own words, the point is to “choose the most appropriate method to try and maximize the number of people who encounter Nintendo IP.” So, why could this not also related to products like the NES Classic and the SNES Classic? Nintendo’s IPs are their games, so exposing customers to the older games is another method of “encountering” Nintendo IPs.

This theory is supported by comments from Gamestop managers. Before the official announcement, one reporter interviewed various Gamestop managers who had been told of the systems in a behind closed doors event. One comment stuck out. They stated, “With these plug-and-play systems, they want headlines and foot traffic, dude.” The author adds this may be his opinion rather than Nintendo strategy. Nevertheless, his statement coincides with Nintendo’s actions with both the NES Classic and SNES Classic. And boy, there were headlines for this system, including sites like Fox and The Verge.

The Future of the Classics

When looking at any product, it’s easy to look only in terms of profit generation. Companies sell products to reap profits, but Nintendo, like with the mobile games, is using a product to market their IPs. Naturally, Nintendo is going to make the SNES Classic to turn a profit, but profits are not the prime directive of the product. The point is to get Nintendo IPs to as many people as possible so they’ll turn around and buy Nintendo consoles.

All in all, I don’t think this is the last time we’ll see a “Classic” system. Once the NES Classic became a hit, the systems became a dedicated pillar of Nintendo’s IP push. My expectation is that Nintendo will turn the “Classic” products into a consistent mainstay. Nintendo could release a N64 Classic, a Wii Classic or even re-release the NES or SNES Classic. Nevertheless, as long as they generate foot traffic and headlines, we’ll keep seeing plug-and-play systems from Nintendo.

NPD May 2017 Analysis

We’re back with NPD data for the month of May. April was missed as I wanted to get some E3 related articles out. But we’ll press on with May.

From Venturebeat

May Results

  • Total: $542 million (down 11 percent from $610 million in May 2017)
  • Hardware: $147 million (up 7 percent from $138 million)
  • Console software: $271 million (down 20 percent from $339 million)
  • PC software: $12 million (down 48 percent from $23 million)
  • Accessories: $112 million (up 1 percent from $111 million)

“Total video game spending in May 2017, which includes hardware, software and accessories, fell 11 percent versus year ago to $542 million,” NPD analyst Mat Piscatella said in a statement. “Spending growth in hardware and accessories was offset by a decline in software spending driven by a lighter new release slate when compared to May 2016.”

Total spending saw a decline primarily from weaker software sales. The biggest reason seems to be Overwatch which released in May 2016. The game sold significantly well on release and is still selling. According to a press release from Activision Blizzard, the game sold 7 million units by June 2, 2016 (specifically states players). It would be hard to top this.

Software

  1. Injustice 2
  2. Mario Kart 8 Deluxe*
  3. Grand Theft Auto V The
  4. Legend of Zelda: Breath of the Wild*
  5. Prey*
  6. Tom Clancy’s Ghost Recon: Wildlands
  7. Fire Emblem Echoes: Shadow of Valentia*
  8. NBA 2K17
  9. MLB 17: The Show
  10. Overwatch**

“Video game software dollar sales in May 2017 fell 20 percent versus year ago to $271 million,” said Piscatella. “The new release slate of May 2016, led by Uncharted 4: A Thief’s End, Overwatch and Doom proved a challenging comparable.”

As I mentioned above, sales declined due to Overwatch being a huge hit last May. Injustice 2 was the big hit this month, but it couldn’t compete with Overwatch. Venturebeats noted that Injustice 2 beat out Mario Kart 8 Deluxe and was the 9th best selling game of the year. I point this out because Nintendo fans love to cite Mario Kart 8 Deluxe as evidence for more Wii U ports. Mario Kart 8 Deluxe sold so well because Mario Kart always sells so well. Any other Mario Kart would have dominated the charts similar to Overwatch and Grand Theft Auto V (just look at sales of the Wii version). In fact, Mario Kart isn’t in the top 10 best selling games of 2017 (while Zelda is). If anything, it proves the Switch can’t succeed on Wii U ports.

Additionally, in my March NPD analysis I noted how the analyst hyped Horizon: Zero Dawn and Mass Effect. Now, these titles sit at spot 12 and 15 respectively. On the other hand, The Legend of Zelda: Breath of the Wild remains in the top 10 at 4, and Tom Clancy’s Ghost Recon: Wildlands, too, sits at 6. Despite industry hype, these games are fading out.

“The launch of Nintendo’s Fire Emblem Echoes: Shadow of Valentia pushed May portable software spending up 10 percent versus year ago,” said Piscatella.

I’m pointing this out as more an interesting factoid. Nintendo achieved a certain rhythm with Fire Emblem. The fact that the game increased portable spending by 10 percent is impressive.

Hardware

“Hardware spending grew 7 percent compared to May 2016, to $147 million,” said Piscatella. “Nintendo Switch continues to be the primary catalyst for hardware spending gains, as it has since launching in March 2017.”

I’m sure Sony fans are jumping for joy over the PS4 outselling the Switch, but there is more to this story. The NPD analyst confirmed the reason for the increase was due to Switch. Hardware spending grew only $9 million from May 2016. If we assume the additional $9 million was just Switch, that would mean the system only sold 30,000 (9 million divided by the $300 sticker price). For comparison, the Switch sells over 20,000 in Japan every week. Furthermore, the US gaming market exceeds Japan’s, but even if we assume the Switch moved 80,000 units in May, this would account for $24 million in spending. The real number is most likely higher. This means Sony is seeing a decent decline in sales over the prior year. Sony’s victory is due to the Switch’s low supply. The real figures may be bad for Sony.

“On a time-aligned basis over each product’s first 43 months in market, the combined installed base of Sony’s PlayStation 4 and Microsoft’s Xbox One now exceeds the combined installed base of the PlayStation 3 and Xbox 360 by 29 percent,” said Piscatella.

For references, the point of time they are comparing to was around 2009 in the heart of the Great Recession. Hardware spending should be up. I believe this line may be a buffer from bad news about PS4 and XBox One.    

Liked it? Hated it? Please let me know in the comments below. 

Kickstarter Campaign Project Rap Rabbit Failed

Project Rap Rabbit, a Kickstarter Project based on rhythm games like PaRappa the Rapper, failed to make its funding goal. The project only raised 162,000 pounds, only 19 percent of its original funding goal.

From the latest Kickstarter update

Your excitement for Project Rap Rabbit has been wonderful to behold, but today we must sadly accept that our crowd-funding journey must end here. We knew that sourcing funds for a high-quality rhythm-action game would be tough, and though we knew that Project Rap Rabbit would be an incredible game, unfortunately, we weren’t able to do enough to prove that to the wider world.

We sadly are not in the position to be able to fund further production for a future crowd-funding relaunch involving a title deeper in development, and wouldn’t want to scale back our vision. As a result, work on Project Rap Rabbit cannot continue at this time.

There are two things that come to mind with this Kickstarter

1. There was no demand for a PaRappa style game

 

 

Despite the designer’s best intention, perhaps games like PaRappa the Rapper died out because fans didn’t want them anymore. These games had a limited run on the PS1 and were niche games even in their own time. I’m sure there are plenty of fans who would kill for a new rhythm game like this, but the Kickstarter shows these fans are a minority at best.

2.This is the end of Revival Kickstarters

It’s true that a major reason this Kickstarter failed is due to limited demand for this game. Nevertheless, it’s otherwise unheard of for a retro revival Kickstarter to not only fail to meet its funding goal, yet Project Rap Rabbit miss it by a staggering 80 percent. This is in stark contrast to the other retro-style Kickstarters that blast past their initial funding goal.

There is a general fatigue with these kinds of games. Developers promise the world, but rarely do these games deliver. The game’s developers promise the moon and the stars. However, the projects take forever to release and are often inferior to the game they are trying to emulate. The newest indie darling Yooka-Laylee failed to deliver on its promise of a “Rare-vival.” On Metacritic, the game scored an average score 73 from critics and scored even worse with users at 6.6. After so many failed attempts, potential backers are done with these types of projects games.

It may be a long time until we see another revival Kickstarter project if we see one at all.

What The Major Console Manufacturers Need to Do at E3

E3 is finally upon us. It’s finally Christmas, and we wake to all the presents under the tree. Now, most games media focus on who will “Win” E3. The new outlets award an arbitrary trophy to a company for what they show. But at The Video Game Accountant, I’m more interested in who has the best business prospects. Since the goal of E3 is to showcase your products, here is what I think the console manufacturers need to do to profit.

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Goodbye Xbox: Why Microsoft Will Leave the Console Market

Since 2001, the dedicated console market has been the same three players. Sony, Microsoft and Nintendo are the major players duking it out consumers hard earned dollars and glory in the imaginary console war. Overall, the market has been relatively stable, yet historically, the market has seen company enter and exit. Every so many console generations, the market players change. While many internet message board pundits have predicted Nintendo leaving and becoming a third party publisher, Microsoft may instead be the one exiting stage left. Moreover, the company’s exodus from console gaming will come sooner rather than later.

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Sony: Between a Rock and a Hardplace

As I’m sure you all are aware by now, Sony is doing quite well in the current console market. Right now, the PS4 has far and beyond outsold Microsoft’s XBox One (their chief competitor) and Nintendo’s Wii U (which the company killed off recently). So Sony is on top of the world then. There is no problem and we shouldn’t worry, right?

Well, business is about the future, not the present. If we look at the here and now, then sure Sony’s video game endeavors are doing great. However, if we look ahead then we can see Playstation could be in trouble.

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Mark Kern Teach You To Make A Game

The other day, Mark Kern on Twitter described how to get started making video games. If you don’t know who he is, he was a team lead on World of Warcraft, one of the most successful video games ever. His advice was stellar. Since its hard to find a tweet long after it was made, I’m going to post it here for future use. I stress that this is not my work but entirely Mark’s. If you want to follow him on Twitter, you can do it at @Grummz. Without further ado, here is his advice.

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Nintendo’s Blue Ocean Games

From BlueOceanStrategy.com

In 2004, Reggie Fis-Amie, Chief Operating Officer of Nintendo of America, presented the Blue Ocean Strategy to industry insiders. He described it as “focusing on expanding the market boundaries vs singularly being focused on your competition.” The book was published in 2005, so, to many, this was their first time hearing about the strategy. Nintendo applied this to their new system, the Nintendo DS. As a result, the system went on to sell 150 million units and halt Sony’s advances into their handheld market.

With the Wii U and 3DS, Nintendo abandoned these strategies, resulting in a rough 4-year decline. Now Nintendo is back with the Nintendo Switch. The Blue Ocean Strategy has been out for over a decade and memory of it is fading. The pundits no longer associate Nintendo with “Blue Ocean”. But did the concept ever leave the minds of Nintendo? What if I told you that within Nintendo, these concepts are alive and well. What if these concepts influenced the design of two new Nintendo IPs: ARMS and Splatoon?

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