We store cookies, you can get more info from our privacy policy.
3DSDSWiiWiiU

Nintendo's Third Pillar: How Nintendo Plans to Improve Your Quality of Life

Why a New Platform?

by James Jones - February 5, 2014, 9:32 pm EST

Nintendo already has two platforms. Why do they need a third for their Quality of Life plans?

This is the second article in the series exploring Nintendo's recently announced "Quality of Life" platform. For an explanation of what they have announced see the previous article in the series.

At an investor briefing where everyone was expecting Nintendo to explain how they were going to turn their current business around, announcing a an entirely new front, a whole new strategic initiative, could be seen as counter-productive. Quality of Life software has been successful for Nintendo on both the Nintendo DS and Wii. Brain Age, for example, sold 12 million units worldwide. It would be logical to conclude that this newfound focus on Quality of Life would be best served on Wii U and Nintendo 3DS, allowing them to both tap this market and stabilize their current platforms. This is not what Nintendo appears to have opted to do, and the question is why.

The reasons Nintendo won't produce Quality of Life software for existing hardware fall into two groupings: market considerations and functional limitations. Market considerations go beyond the lack of reach of Wii U as a platform, but it is a good example. They include any kind of strategic decision that come down to "we can do X, but Y has more potential." Functional limitations are physical characteristics of the existing Nintendo platforms that limit their capacity to perform the tasks Nintendo plans for their Quality of Life platform. Nintendo has likely concluded that they either can't easily transfer this new business model to their existing platforms, or that doing so does not make economic sense. Their decision has to fall into one of those camps because investing in the development of a new "platform" wouldn't make economic sense. Research and development is an extremely costly investment, one they would seemingly want to avoid if at all possible.

There are numerous reasons why Nintendo might feel like it's a smarter investment to produce a new platform, even if their existing hardware offerings are capable of providing the experiences they envision for their Quality of Life platform. The most obvious is they feel the long-term health of the Wii U would be an anchor on the success of this new initiative that it would be more cost effective to "go it alone." It's also possible that the cost of producing the hardware component of this new business model is sufficiently low that trying to shoehorn it into their current, more expensive, hardware is not smart business.  

It's no secret that the Wii U's sales have been less than Nintendo hoped. A string of revisions to their sales targets are telling as it means Nintendo isn't even hitting the targets they've set after adjusting for slow sales.  The 3DS is doing significantly better, but perhaps Nintendo has grander visions. 42 million units seems a tall order for any device to match, but this is not a video game system. Consumer electronics are a different industry and Nintendo may have optimistic vision for the future of their Quality of Life platform.

It's also important to remember that both the 3DS and Wii U are expensive devices. While alternate versions of existing hardware, such as 2DS, both the Wii U and 3DS are full of dedicated hardware for playing and displaying games. Without getting too far into speculating about Nintendo's plans for the Quality of Life platform, it stands to reason much of this would be underutilized, if not completely unused. Removing some of the expensive components from the Quality of Life hardware  Nintendo has planned drives down production cost (with understanding that spinning up a new production line and new R&D has its own costs) and, as a result, allows for a more consumer-friendly price.

To be clear, whatever hardware Nintendo releases for their Quality of Life platform is merely a gateway. Much is written about Nintendo's overriding desire to make money on hardware sales, but that's oversold - what company wants to sell products at a loss? Every video game system Nintendo has ever sold, right down to the Pokemon Mini, is a gateway for selling software. Software sales produce much higher profit margin than a console: it costs much less to make a disc in a plastic box than a plastic box full of electronics. Additionally, there's little reason to expect the hardware component of this Quality of Life platform will use physical software. With digital distribution Nintendo doesn't have to give a cut of the software profits to the retailers and, with no disc or plastic case to produce andship, nearly 100% of the amount paid by the consumer ends up in Nintendo's pocket.

It's also important to consider the environment in which the video game hardware business operates. These are devices that go through long lifecycles, but rarely see any major revisions. Most consumer electronics don't operate this way, they are on the market for a year or two and are replaced with subsequent revisions. Additionally, video games tend to find themselves segregated away from general merchandise, often in secured locations. If Nintendo does NOT view this product as a video game, and their own words say as such, then it makes sense they would much prefer to see it categorized with products targeting its vision, improving Quality of Life. You're never going to find a 3DS by the workout equipment, but a small device dedicated to wellness could easily find its display among similarly themed products and in front of consumers who have already indicated they're interested in the subject.

On an even more basic level, perhaps Nintendo feels the best way to let this new segment of their business grow is to simply give it the freedom to act independently. It may well be Nintendo feels a combination of all those issues stifle experimental and innovative thinking, and ultimately will undermine the quality of their Quality of Life offerings. It may be the business model they are targeting is wholly different from their business model since 1983, and as such it needs to grow and evolve on its own.

While there are many business reasons Nintendo may have decided to do a full split of divisions between Entertainment and Quality of Life, it's possible their hardware offers - the physical manifestations of their entertainment division - are not compatible with their vision.

To be clear, there is a hardware component to this new initiative. Since the last article in this series went live, Nintendo has released the translated question and answer session that followed Iwata's briefing with investors. While acknowledging that the field of fitness is broadly competitive, Iwata sees Nintendo having a strategic advantage in that they are "one of the few [companies] that make both hardware and software, offer and deliver propositions to people throughout the world..." while providing the kind of experience that keep consumers engaged.

Being more than a bit coy, Iwata dropped a "hint" that their Quality of Life plans are not only "something that will be used in the living room." There are two potential ways to read such a statement - this is either a dedicated device that is highly portable or a device you would use somewhere else. Portability is very nearly assured; if one of their initiatives is health it would make little sense for it to be a large and immobile. Similarly, if fitness is the first step in Quality of Life products, as Nintendo claims, it wouldn't be logical to produce a device for exclusive use in the gym.

So if the device is to be portable, why can't the 3DS be the hardware for which they develop this Quality of Life software? Indeed, much software has been delivered to the 3DS already that could fall under this banner, even more so the Touch Generations software for Nintendo DS. The 3DS, and even the 2DS, have very particular form factors and hardware dedicated to gaming. And again, there was assuredly some interplay between hardware and business considerations when they decided to divorce this from their gaming initiatives.

Perhaps the hardware component is being a bit oversold. While there is assuredly a hardware component, perhaps that's just a part. During the Q & A Iwata pointed to Nintendo's history of turning "something ordinary" into a successful product by adding an application. He pointed to devices such as the Tamagotchi-like Pokemon Pikachu (a "pedometer" with an "application") and the Wii Fit Balance Board (a "scale" with an "application"). Perhaps this was another coy hint as to what Nintendo has planned.

The biggest question of all remains "what is Nintendo planning?" The reason for spinning Quality of Life off to its own division can be explained, but it can't be fully understood without knowing what they hope to achieve with this new focus. That will be the subject for the third, and final, article in this series.

Thanks to Andrew Brown for creating the "Mystery Nintendo Product" box image

Images

Talkback

BlackNMild2k1February 03, 2014

Nintendo, as usual is late to the party, but better late than never.

They should have jumped on this back in 2009 when Wii Fit, Wii Sports & Wii Play were sweeping the nation and hospitals, rehab institutes & retirement communities were snapping up Wii's specifically for this software, which is what led to people buying this for their parents and grand parents which now meant everyone was truly playing video games together.
Starting this QoL at the tail end if that craze would have been the perfect time to start this new venture, but like I said better late than never.

CericFebruary 03, 2014

Wii Fit Gym.

I thought of this why reading the article it makes since.

So you have an ID going into a Gym.  Lets say for ease its RFID.  You setup a profile.  Get your vital stats loaded and then you work out.  A custom exercise plan specified to your requirements is made.  I Wii Fit trainer is their to help you digitally.  They recommend you start with the Bike.  You hop on the bike and the bike knows what you should be doing so it sets itself up for you and you start you work out.  Now your done with the bike.  The trainer gives you encouragement then hops to your next workout location.  They go over what you should be doing.

In the end a True digital Personal Trainer that has all the equipment to do its job well.  All ran by a set of interconnected devices.

BlackNMild2k1February 03, 2014

Nintendo had a patent for a bike pedal device.

they have the balance board.

It would be awesome if they opened a prototype gym NintendGym with a bunch of interconnected hardware (stair climbers, treadmills, elypticals, weight machines, etc etc) that worked with a RFID worn in a "smart" watch that would double as a pedometer and vitality sensor.
It carries your info with you from machine to machine, displaying your "Personal" trainer on the screen attached to each set of equipment who is watching you using cameras also attached to the equipment. It would be a Gym of the future that could sync with your @home version of NintenGym software for those that want to do more at home.

EnnerFebruary 03, 2014

Interesting article. Looking forward to future ones.

Ian SaneFebruary 03, 2014

My fear is that this is no third pillar at all but is Nintendo giving up, like I felt they did with the Wii.  The Gamecube was supposed to be their comeback from the N64 but they flubbed it terribly.  That was when I realized that Nintendo was not some brilliant company that had made one big mistake but that they were legitimately incompetent and out-of-touch and had no idea why the N64 had the problems it did.  Their reaction to the Gamecube's failure was to quit.  They would give up on the traditional gaming audience and focus on a new one.  They saw the situation as hopeless, instead of stepping back and looking at what THEY did to turn off core gamers.

Well now the casuals have lost interest as well and the Wii pretty much poisoned the core market for good and they're failing again and don't understand why again (or are in denial) so they're quitting again.  They can't cut it on consoles and don't realize why (or won't admit why) but they know that Wii Fit was successful so maybe they can find a new audience again with health stuff.  Nintendo doesn't admit mistakes or make any real effort to correct them.  No, they just give up when their stupid ideas bite them in the ass and search for a new audience.  And eventually it won't work and they'll have to finally shape up, after 18 years and counting of running away from their problems, or DIE.

BlackNMild2k1February 03, 2014

Wu Tang Financial says "You got to diversify your portfolio"

That is exactly what Nintendo is doing, and they should have done it sooner.
The Health, Fitness and Physical activity craze that made the Wii successful should have rang their dinner bell sooner. There was a whole wide market out there that got involved because it allowed then to be physically involved. Nintendo didn't do enough to keep them engaged when they were attentive, so the Wii fad died.
This is Nintendo going back to 2009 to do now what they should have done then, and that was branch off into a different market that will give that same casual "blue ocean" audience a home with Nintendo and in-roads back to the core business of videogames.

I don't know exactly where Iwata plans to go with the idea, but I think trying to build up to something like that NintendGym is a good place to start.
I know lots of people (myself included) that would love to work out more, and anything that made it fun, interactive and/or competitive only helps to get you started and stick with it.
I think there is definitely a market out there for what Iwata wants, I just hope he knows how to go after it properly.

broodwarsFebruary 03, 2014

Look, so long as Nintendo gets their head in the game (so to speak) and starts really pushing for new ideas; new franchises; & the establishment of new studios with fresh talent in the gaming space...they can do all the stupid peripheral fitness stuff they want. I really don't know what to make of this "Quality of Life" stuff, but so long as it doesn't interfere with my games the way motion controls did on the Wii, whatever.

pandaradoxFebruary 03, 2014

Dear God, please let this be a Net Navi. Bring on Summer Wars!

HyawattaFebruary 03, 2014

Can anyone list out each of the games associated with Health, Education, and Lifestyle on the Interaction With Games slide?

ShyGuyFebruary 03, 2014

Quote from: Hyawatta

Can anyone list out each of the games associated with Health, Education, and Lifestyle on the Interaction With Games slide?

From what I can see...

Row 1, Health: Wii Fit U, Brain Training, and not sure

Row 2, Education: Wii Music, Art Academy, and not sure

Row 3, Lifestyle: not sure, not sure and Personal Trainer Cooking

One of the not sure titles is probably the Flash Focus vision title.

DonkeyBilly KongFebruary 03, 2014

What sprang to mind was a device similar in size to the 2DS that would have software with a personality that evolves with you... a device that you could build a connection with.  Checking in with it daily would allow you to input stats such as weight, as well as wirelessly pairing with devices like the vitality sensor.  It would get to know your habits and make observations or recommendations about diet, exercise, sun exposure, etc.  It might also surprise you with a digital gift when you are feeling sad or uninspired, or suggest that you check in on someone else in your circle who is struggling.  I could see a device like that catching on with a wide range of people.


An area that could be really interesting for Nintendo to get into would be toys.  They did some cool stuff historically, and I wonder what they might come up with.

Quote from: ShyGuy

Quote from: Hyawatta

Can anyone list out each of the games associated with Health, Education, and Lifestyle on the Interaction With Games slide?

From what I can see...

Row 1, Health: Wii Fit U, Brain Training, and not sure

Row 2, Education: Wii Music, Art Academy, and not sure

Row 3, Lifestyle: not sure, not sure and Personal Trainer Cooking

One of the not sure titles is probably the Flash Focus vision title.

I believe an English version of the slide had Personal Trainer Walking on it.

syn4aptikDave Mellert, Associate EditorFebruary 04, 2014

Anecdote, n=1, just IMHO, etc. but...


I am a very active person and would work out and run whether I have a device or not. But I got a Misfit Shine for Christmas and love this thing more than I should. I think it's because I am a scientist. The ability to graph my own personal data and follow my own activity and sleep habits is just too compelling.


On the other hand, I have some friends that were not active, then they got into Fitocracy (game-ified exercise social network). Now they are workout fanatics to the point where I am more than a little tired of seeing shirtless pictures of my friend on Facebook.


If Nintendo gets into this game, I am sure they'll make some money on it. It's a thing :)

OblivionFebruary 04, 2014

I love Fitocracy.

Black JackalFebruary 05, 2014

Imagine if they began this venture at the peak of the wii and wii fit craze. It would only make sense to have software support for this on the wii u and 3ds to help move units.

Black JackalFebruary 05, 2014

Quote from: broodwars

Look, so long as Nintendo gets their head in the game (so to speak) and starts really pushing for new ideas; new franchises; & the establishment of new studios with fresh talent in the gaming space...they can do all the stupid peripheral fitness stuff they want. I really don't know what to make of this "Quality of Life" stuff, but so long as it doesn't interfere with my games the way motion controls did on the Wii, whatever.

It would be interesting and beneficial to us but Nintendo is so conservative they are hesitant to put out a game with a new character ie: putting kirby as the main character in Kirby's epic yarn. It was originally going to star a character called Fluff.

smallsharkbigbiteFebruary 06, 2014

I know I'm in the minority here, but I wonder if the physical component of this will be a tablet that interacts with a Wii Fit board, Wii U pro controller, Wii Fit Meter, and other fitness devices.  They sell the tablet under the QOL marketing and connect the eshop and some of the Wii U accessories to it to allow for gaming.  Then if it's a success, they pull out of consoles and focus on this.  Remember the DS was the third pillar to the GBA?  It wasn't, it was a replacement?  Oh, well I guess that third pillar talk doesn't really mean anything.

smallsharkbigbiteFebruary 06, 2014

Sorry a continuation of that thought. Nintendo operates under a fatally flawed software model for consoles. By that I mean sony/microsoft have thousands of titles in their libraries. Without better 3rd part support (which Nintendo won't commit to) there is no way nintendo can bring that many games to market even with acquisitions. I think acquisitions nintendo would consider would be eithet ebook software providers or emovie providers. That to me seems to be the biggest gap for nintendo if they were to develop a tablet. They could even use it under their QOL umbrella since exercising the mind and relaxing are important.

Ian SaneFebruary 06, 2014

I agree that "third pillar" could be just their way of not damaging an existing brand if the Quality of Life thing flops.  Clearly there was never any real intention of having the DS co-exist as a third product line with the GBA and Gamecube.  They just called it a third pillar so that if it failed it did not damage the Game Boy brand.

Though in this case a product that just focuses on health apps does have a clear separate purpose and target market so it would make sense to be a third pillar.  The DS was far too similar to the GBA to come across as a unique product line.

pandaradoxFebruary 06, 2014

If you give everyone a far more personal Mii (themed, something you'd be proud to show off), then this could be insane... like Tamagotchi+pokemon level.  Literally like Oz from Summer Wars.  Streetpass is still relatively successful and having this avatar serve as a liason between all your systems (The rumored NFC application for WiiU, Streetpass-esque connectivity of 3DS, and wifi spots everywhere). 


Nintendo sees their devices as toys, why not embrace that in a way that Sony and Microsoft couldn't?  You make it classy enough to catch the adults and young adults but fun enough to catch the kids too and this could provide an amazing segue into Nintendo gaming.  Everyone just wave their QoL device over the gamepad to log their character in.  Having your 3DS sync with the device allows for a more personalized experience while providing a possible "Key" to accessing your 3DS.  It's a perfect time for it to pair with Smash Brothers too.  Much like what the wiimote was supposed to do. 


Maybe it's time for the VMU to return.  :p

smallsharkbigbiteFebruary 06, 2014

@Ian - I agree I could be wrong.  I just think some of the ques they've given is they either have no solution for video games or think it's not profitable enough.  The video games discussion was basically status quo small adjustments.... but QOL will make everyone happy and alot of money so everyone should be excited.


I'd be really surprised if the Wii Fit board and Wii Fit meter didn't interact with the new hardware in some fashion and the eshop under the new unified O/S approach.  As such, I don't think it would be that tough to allow the Wii U pro controller to work with it.  Now that the Wii U has a touchscreen, I'd be surprised if they ever dropped touchscreens from future hardware.  I just think, depending on how they bring it out, the hardware will probably not be altogether that different than the Wii U.  Tablet that interacts with a TV and has a bunch of blutooth accessory compatibility.  Nintendo knows they still have to sell Mario, which they could do in QOL setting under the marketing of engaging the mind, playing with others, and relaxation from other fitness activities.  I think all future hardware Nintendo develops will have Mario games in some fashion. 

Black JackalFebruary 06, 2014

Quote from: pandaradox

If you give everyone a far more personal Mii (themed, something you'd be proud to show off), then this could be insane... like Tamagotchi+pokemon level.  Literally like Oz from Summer Wars.  Streetpass is still relatively successful and having this avatar serve as a liason between all your systems (The rumored NFC application for WiiU, Streetpass-esque connectivity of 3DS, and wifi spots everywhere). 


Nintendo sees their devices as toys, why not embrace that in a way that Sony and Microsoft couldn't?  You make it classy enough to catch the adults and young adults but fun enough to catch the kids too and this could provide an amazing segue into Nintendo gaming.  Everyone just wave their QoL device over the gamepad to log their character in.  Having your 3DS sync with the device allows for a more personalized experience while providing a possible "Key" to accessing your 3DS.  It's a perfect time for it to pair with Smash Brothers too.  Much like what the wiimote was supposed to do. 


Maybe it's time for the VMU to return.  :p

You are brilliant. The Avatar and being able to have it interact with your devices. Imagine being able to take your saves and controller settings to your friends house to play smash bros seamlessly. I can tell you there wouldnt be a person at a smash bros tournament without one.

Got a news tip? Send it in!
Advertisement
Advertisement