What Does This E3 Mean for Nintendo?

Nintendo will head to June's E3 gaming expo with demo kiosks and new games to announce, but it will forego a stage press conference.

May 17, 2014 at 1:30PM

Screen Shot

Source: Nintendo.com

Nintendo (NASDAQOTH:NTDOY) is in the midst of a transitional phase. With the Wii U posting disappointing sales and the 3DS starting to wind down, speculation is feverishly building as to what the company has planned. The June E3 conference should provide a window into what's next for the world's oldest and largest games maker. That said, the company will not be returning to the press conference stage to tout its latest wares, a move that has caused confusion and helped create the erroneous belief that Nintendo will not be at the show at all.

Similar to its presence at last year's show, the company will have a booth where it shows a prerecorded presentation. The Nintendo Digital Event, a mix between Nintendo Direct and a more traditional E3 conference, will also be available directly to consumers. After the company recently delivered a worrying fiscal report, there's a lot of pressure for a positive indicator of the company's future. What does E3 mean for Nintendo?

Does the lack of a press conference matter?
Whether or not Nintendo should have made a return to the press conference stage is debatable. A stage show would invite more direct comparisons with Sony (NYSE:SNE) and Microsoft (NASDAQ:MSFT), something that Nintendo would prefer to avoid, but it could also provide an opportunity to generate added excitement. The company has previously found great success with live conferences, particularly the 2004 unveiling of The Legend of Zelda: Twilight Princess, the official debut of the Wii in 2006, and the showing of the 3DS in 2010. That said, the argument can be made that press conference hype no longer fits with the company's vision and, even if it did, this year is less than ideal for a live show.

What will Nintendo reveal?
Nintendo's E3 presence will heavily feature its current software lineup. The upcoming Smash Bros. games for 3DS and Wii U will receive big focus, with a tournament setup at the Los Angeles Nokia Theater. Aside from Mario Kart 8, Smash Bros. is the biggest game coming to the Wii U this year, and it undoubtedly has a lot of content to show off. The recently announced Pokémon remakes for the 3DS will get a healthy amount of spotlight. Wii U's graphically impressive role-playing game X should be at the show, as should Hyrule Warriors. It's also likely that Nintendo will show footage for the next entry in the Legend of Zelda series. Similar to last year, consumers will be able to try demos of Nintendo's games at their local Best Buy outlets.

Screen Shot

Source: Nintendo.com

Near Field Communication toys and software will be a large part of Nintendo's E3 showing. It's unlikely that the company is ready to unveil next-generation hardware, and the Nintendo Figurine Platform should allow the company to inject some life into the Wii U and 3DS while generating healthy margins on toys.

Will Nintendo fully unveil "Quality of Life" at E3?
Nintendo's yet-to-be-defined Quality of Life business probably won't receive much detailed focus. The QOL platform is not supposed to release until 2015, at the earliest, and E3 is primarily a gaming show. In reference to the company's future plans, President Satoru Iwata has stated that people should no longer think of Nintendo as just a games company. Debuting the company's new wellness business at E3 would be a bit of an odd move.

Sony and Microsoft take it to the stage
With Nintendo once again opting not to put on a live conference, much of the media focus will revolve around comparing Sony and Microsoft's performances. Last year, Sony demonstrated the marketing potential inherent to a good stage show, as it effectively promoted its PlayStation 4 console and took shots at the Xbox One. It was a major mindshare victory. This year, Microsoft looks to be better prepared. The company recently announced that a Kinect-less version of its system will launch on June 9 (for $399), the same day as the company's E3 press conference.

Handhelds don't play well on the big screen
Nintendo's decision not to return to the conference stage is understandable, though not necessarily commendable. Console gaming tends to receive the most attention at E3, and Nintendo is currently in need of some reinvention on that front. If the company plans to unveil a new 3DS revision, a little extra spotlight would be nice, but corresponding software promotion could be rough because handheld games don't usually translate well to massive conference screens.


Source: Nintendo.com

Based on what is known about Nintendo's upcoming E3 presence, encouraging comparisons with companies that have stronger positions in the home console market wouldn't make sense. Nintendo has frequently stated that it is not in direct competition with Sony and Microsoft, though the claim remains somewhat dubious. It may be increasingly true going forward, but Nintendo is still in the early phases of transition.

Is Nintendo done with live E3 shows?
Opting for a prerecorded conference gives Nintendo a greater degree of control and an avenue around the arms-race-style posturing that dominates stage presentations. On the other hand, E3 is a hype game. There is real value in center-stage, crowd-cheered showmanship done right. It's not unreasonable to think that the company will return to the conference stage when it's ready to promote its next big gaming push.

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Keith Noonan has no position in any stocks mentioned. The Motley Fool owns shares of Microsoft. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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