Last week, we left our heroes in dire straits. Apple was squirming under the leaden heel of Microsoft in 1997, and Nintendo’s market share continued to dwindle in the face of successive Playstation onslaughts through 2006. Both companies, however, were not equally imperiled. After posting massive losses, Apple faced the real possibility of being forced out of the hardware business, while, outside of a few crackpot rumors, there was never much doubt that Nintendo would continue to design home consoles.
In Part I, Apple led the discussion, having abetted their rival years before Nintendo did. This week, Nintendo kicks off the festivities, as they were first to establish the role of world-class first-party software in sustaining a platform with a low install base, dominating a lucrative portable market years ahead of Apple.
Software: The best party’s the first-party
During their lean years, Apple and Nintendo faced similar problems. For Apple, I consider this period to be from about 1994-1998, with the low point being the $700 million loss they posted in the first quarter of 1997. Nintendo was at its weakest from 2000-2004, when it was clear that both the Nintendo 64 (N64) and Gamecube had been demolished by their respective Sony Playstation rivals. During these times, both companies were shadows of their former, innovative selves, facing respective market shares less than 15% (even less for Apple).
But, although weakened, Nintendo never sank deep into financial despair the way Apple did. While even the most battle hardened Apple fans were disillusioned before the return of the prodigal Steve Jobs, Nintendo never failed to satisfy their hardcore supporters despite leaving the mass market wanting. There are surely many reasons that account for this disparity, among them the handheld issue that I will put aside until later, but perhaps most significant is the difference in first party software development.
It would be difficult to argue that Nintendo is not the best game developer of all time. They’ve been delivering superior games consistently for over 20 years. An easier case could certainly be made against them during the N64 and Gamecube years, but they would still easily be in the running. For those consoles, Nintendo released three astonishingly great Zelda titles, one revolutionary and one very good Mario game, the genre bending (and personal favorite-game-ever candidate) Metroid Prime, and a host of extremely fun but less notable games including two Mario Karts, two Pikmins, Animal Crossing, Starfox 64, and a bunch of Paper Mario games. That’s quite a list, one that no single developer could likely match over the same period (Konami and Square are the only two competitors that spring to mind).
More importantly, these titles put Nintendo miles ahead of any other first-party developer. Virtua Fighter, Gran Turismo and Halo are great, but Sega, Sony, and Microsoft pale in comparison to Nintendo’s all-star developing chops. This means that, even though third-party support was lacking for the N64 and Gamecube, those consoles never suffered a dearth of high-quality exclusives. Nintendo’s first-party development team insured that there was always a reason to buy a Nintendo console, even when companies like Square or Konami refused to deliver triple-A exclusives. Moreover, the wealth of Nintendo games appeased the hardcore Nintendo devotee, keeping their loyalty grafted securely to the Big N.
Compare this to Apple in 1997. Which exclusive software convinced consumers to buy a Mac, or, more importantly, stick with the Mac? Education and graphic design software was prevalent, but most of the essential applications like Photoshop or QuarkXPress had been available on Windows for years. Because of its tiny market share, big software companies were unwilling to develop exclusively for the Mac. During this time Apple lacked third party support, just as Nintendo did.
Unlike Nintendo, Apple, under Gil Amelio’s reign as CEO, did not compensate by enticing potential users with their own first-party apps. The only real piece of major first-party software on the Mac was the Mac OS itself, which had fallen behind Windows 95 in many ways. With little that appealed to new customers, Apple had to rely on their established users, who were only tied to the Mac by tradition or by a few select professions. Due to the lack of great, exclusive software, there was little reason to own the Mac at the end of the Amelio years.
Fortunately, Jobs immediately to recognized the need for a strong first-party development effort on the Mac. If no one was going to write exclusive software for Apple products, Apple needed to do it themselves. This quickly became the case, with OS X surpassing Windows in many important categories and the proliferation of “i” branded software. iTunes, iMovie, iDVD, and the other products that later became the iLife Suite gave the average consumer a reason to consider the Mac again. Along with a strong showing of professional apps like Final Cut Pro, Apple’s first-party, similar to Nintendo’s, guaranteed a solid line-up of exclusive software. Today, Apple is one of the strongest developers in the industry, and the renewed strength of the Mac is proof of this. By taking matters into their own hands, Nintendo and Apple are now able to maintain vitality in small markets.
Portables: A study in simplicity
The other primary reason why Nintendo never hemorrhaged money the way Apple did was, of course, the Gameboy. Released in 1989, the Gameboy and its successors were far-and-away the best selling handheld gaming devices for 15 years, only to be surpassed in 2004 by the first Nintendo handheld to drop the Gameboy moniker, the DS.
Even during the dark N64 years in America, Nintendo was able to stay highly relevant in the games business by releasing Pokemon, a colossal property that insured Nintendo’s financial security for years to come. With money pouring in from huge Gameboy sales, Nintendo was able to maintain a flagship console product that was less profitable but unchallenged. The Gamboy Advance was also a giant success, sustaining Nintendo through the dry Gamecube years.
Of course, Apple’s early line of PDAs, the Newton, was no Gameboy, leaving no fallback during their period of crisis. Again, Steve Jobs realized the potential strength of a smaller, mass-market friendly device detached from a large computer product: the iPod.
The similarities of the iPod and the Gameboy/DS in their respective company’s line-ups are not something I want to explore in detail here. Suffice it to say that both products represent a portable electronics product that appeals to consumers outside the range of a traditional desktop computer or home console, and thus both are extremely popular and profitable.
What I would rather discuss is how the Nintendo handhelds and the iPod continue to massacre technologically superior competitors by virtue of their calculated simplicity. Of all the products either company has released, I find the Gameboy most interesting. In 1989, it may have been reasonably advanced piece of electronics, but it stayed on the market, relatively unchanged, for 12 years without ever having its dominance seriously challenged. These weren’t the early PC years, either, when the Mac changed very little while continuing to succeed, nor were they the early home console years when the NES ruled for six years. From 1989-2001, from when the Gameboy was released to when the Gameboy Advance took the reigns, the videogame industry went through four console generations, progressing from the NES era to the PS2 era.
Perhaps the best way to illustrate how much changed while the Gameboy remained stagnant is to consider the increase in console controller buttons. During the Gameboy’s lifespan, home console controllers evolved from the NES’s two buttons and one directional pad to the Playstation 2’s eight buttons, one directional pad, and two analog sticks (which also act as buttons). The Gameboy, during this evolution, retained two buttons and one D-pad, improving only by becoming smaller and gaining a limited color screen.
How did such a basic product flourish unaltered when the rest of its industry was experiencing such rapid growth? It’s a bit of a trick question; the reality is that the Gameboy succeeded because Nintendo realized that the handheld market was entirely different from the home console market. Fancy graphics and complex controls work in a home setting because players have time to devote their full attention to gaming. The design of the actual system is also relatively unimportant, as it sits on a shelf. With a handheld, simplicity in controls, graphics, and hardware is paramount. Every aspect of the Gameboy was skewed towards the simple, even down to its inspired choice of bundled game: Tetris.
While competitors tried to challenge the Gameboy on technological grounds, such as Sega’s Game Gear with its beautiful, back-lit, full-color screen, they failed to grasp the true point of a handheld system. The Game Gear was huge, and ran through six double-A batteries in a no time flat. The Gameboy was easy to take along anywhere, and its modest screen allowed for impressive battery life. The Gameboy Pocket and Gameboy Color improved slightly on the original design without taking away from the bare bones essence that defined the original. In the face of such focused simplicity, no other manufacturer ever stood a chance against Nintendo in the handheld arena. In Part III, we’ll look at the DS specifically, which continues this trend by wildly outselling the technically superior PSP.
“Focused simplicity” is also the best way to describe the tremendous success of the iPod formula. One wheel and four buttons provide all the functionality anyone needs in a music player. Furthermore, their limited approach allows them to assimilate an incredibly broad range of customers into the iPod universe, just as the Gameboy appealed to the serious and casual gamer alike.
People occasionally express surprise at the iPod’s preeminence in the digital music player market. A general lack of features such as radio, wi-fi, or audio format support are sometimes cited as reasons why the iPod should not rule the mp3 world. These complaints are like saying that the Sega Nomad, with its ability to play 16-bit Genesis games, should have outsold the Gameboy. Yes, on paper there are products superior to the iPod or Gameboy, but nothing compares in terms of actual experience. Anyone can use and enjoy an iPod or Gameboy, something that cannot be said for most of their competitors. In other words, any manufacturer can put out a piece of technology comparable to an iPod or Gameboy, but no one yet has been able to match their simple, inviting user experience.
Next: Corporate philosophy and the future of interface
This week, we’ve seen how Apple’s current success in many ways mirrors the approach that Nintendo has employed for years. A strong first-party compensates for the fact that third parties are hesitant to approach a small market share, and the most important aspect of a dominant portable is simplicity in design. Both companies are currently deploying this strategy to its fullest effect, making money hand over fist and, once again, becoming innovative and influential.
In the final installment, we’ll consider both companies as they exist today. They both employ a fascinating form of arrogant product development that largely ignores user input and have finally returned to their most important work: pioneering computer interaction.