Yup, Nintendo Is Still Stuck in the Past

Nintendo's Wii U sales have been lagging. Image source: Nintendo.

Nintendo (NASDAQOTH: NTDOY  ) is a dinosaur. The iconic game maker has fallen behind the times, in part because it remains strategically stuck in the past. Nintendo held its ground in refusing to bring its popular franchises to mobile platforms, which was a costly mistake, as the company could have easily topped the charts.

Its strategy of only making software for its own hardware had worked for decades, but things have changed. Only now is the company preparing to offer smartphone apps, but they will merely be companion "service" apps as opposed to standalone games. CEO Satoru Iwata outlined the plan to investors in January.

No itch to Twitch
Well, there's a new example of Nintendo's failure to adapt. According to Polygon, Nintendo will not integrate Twitch into the Wii U. Nintendo of America President Reggie Fils-Aime says that the company "[doesn't] think streaming 30 minutes of gameplay by itself is a lot of fun."

Instead, Nintendo prefers to selectively use Twitch to broadcast curated experiences. Nintendo has used Twitch to broadcast specific events, such as Nintendo Treehouse Live at E3, but the company simply doesn't believe that average gamers bring much to the table as far as entertainment value goes.

Over 45 million people disagree
By the end of 2013, Twitch was bringing 45 million unique viewers to its site each month. That's just one of a handful of impressive stats for a service that was launched just three years ago.

Metric

2012

2013

Unique viewers per month

20 million

45 million

Partnered channels

3,386

5,100+

Minutes watched per user per day

85+

106

Unique broadcasters

300,000

900,000+

Minutes watched per month

6 billion

12 billion

These are all very big numbers that Nintendo should not be ignoring. Source: Twitch.

We're now halfway through 2014, so these metrics have probably risen even further. In fact, the site has grown so quickly that Google's YouTube is reportedly looking to acquire it for $1 billion. That rumored price tag would be an absolute steal for the advertising potential. We're talking about a hyper-engaged audience that spends nearly two hours per day on the site, which is a lot more than the average YouTuber who watches a three-minute cat video and wanders off into cyberspace.

Twitch streaming on Xbox One. Image source: Twitch.

Twitch has become so popular that both Microsoft  (NASDAQ: MSFT  )  and Sony  (NYSE: SNE  )  integrated the service into their respective next-gen consoles. It was so important to Microsoft to include Twitch integration that it made sure Twitch was available on Titanfall's launch day. On that day, 30% of Twitch's broadcasting was coming from Xbox One. When the PlayStation 4 launched last year with Twitch integration, the console comprised 10% of Twitch's traffic.

A different kind of mistake
Neglecting such a highly complementary service is a clear mistake for Nintendo. Not only does Twitch increase engagement within the current installed base, but Twitch streams can also effectively serve as free advertising. Furthermore, the rising number of unique broadcasters shows that gamers value the ability to broadcast, and those gamers won't be buying a Wii U anytime soon.

Perhaps more peculiar is that Nintendo offers a Mario Kart TV service for Mario Kart 8. The service allows gamers to upload clips directly to YouTube. That seems to conflict with Nintendo's reasoning that watching other average gamers isn't fun, since it is facilitating exactly that for the popular racing game.

Despite having launched a year earlier, the Wii U continues to lag both the Xbox One and PlayStation 4 in unit sales. Last month, Nintendo reported its third consecutive annual operating loss, in part due to the Wii U's underperformance. Unit sales were down 20% year over year. You'd think that Nintendo would have learned its lesson by now.

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Read/Post Comments (18) | Recommend This Article (10)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On June 14, 2014, at 12:25 PM, odori wrote:

    I like all the doom and gloom in the last paragraph despite Wii U sales being up 400% in North America.

    I'm just shocked that you didn't feel the need to mention that.

    Oh wait... It's The Motley Fool, one of the worst clickbait sites on the internet.

  • Report this Comment On June 14, 2014, at 12:31 PM, WiiUPS4Gamer wrote:

    @Evan Niu Awww are you all butthurt?

    Looks like WIi U is not so dead after all..Hummm and Nintendo won E3 this year well i quess you got owned this time sony fanboy ..Better luck next year..lol

  • Report this Comment On June 14, 2014, at 12:35 PM, BM wrote:

    Nintendo's past is my past and those memories will forever last. I seem to recall that Nintendo started the whole mobile platform thing with a big clunky gray box called the gameboy. That was as mobile as you could get back then. It is a sound strategy for Nintendo to keep their games away from rival mobile companies because if you want to play nintendo you have to buy Nintendo.

  • Report this Comment On June 14, 2014, at 1:17 PM, blueshadow716 wrote:

    Oh right, Nintendo is doomed because they won't put their games on the mobile market. Yeah ok, let me know when Call of Duty, Titanfall and The Last of Us are all available on my android phone as standalone games, instead of just little add-on apps to games. Yes I understand things have changed, but not every game is meant to be played on a phone. Some games would absolutely suck on a mobile device, especially a FPS.

    Must be nothing but XBOX and Playstation fanboys & fangirls here all glued to their smartphones. Every article I've read basically makes Nintendo sound like it's gonna die off the earth forever starting tomorrow. They'll come back from their setbacks. This isn't their first rodeo and it won't be their last. I'm a fan of Xbox and Playstation as much as anyone else, but I've also been a Nintendo fan for as long as I can remember, and I have faith they'll bounce back.

    As for mobile gaming, I'll take a PC or a console any day of the year. It will be YEARS before you can get as powerful of a gaming experience on a phone or tablet as you can get on a PC or console.

  • Report this Comment On June 14, 2014, at 1:32 PM, JJ82 wrote:

    Mobile is one market, the console market is another. Not being in Mobile does not effect the console market. Just as not making motorcycles does not mean a car maker is failing.

    Stop acting as if the mobile market is going to replace console gaming...or the PC/laptop market, it isn't, different markets, different consumers and the products are not used in the same way nor can they be.

  • Report this Comment On June 14, 2014, at 3:07 PM, laethyn wrote:

    Oh no! I won't be able to use Twitch? For shame! Nintendo may as well just shut their doors now!

    I have to say, another "zomg Nintendo is dead!" article on The Fool .. I'm shocked. SHOCKED I say!

  • Report this Comment On June 14, 2014, at 3:57 PM, Tesvixen wrote:

    Despite the author of this article assuming that everyone wants Twitch, loves Twitch, etc... personally I could not care any less about it.

    I'm a gamer of well over 25 years, cut my teeth on Atari/NES systems - I love gaming. But sitting around watching videos of other people playing games is something that interests me about as much as paint drying.

    Also, @the author of this article: Mario Kart 8 sold well over a million copies in less than 72 hours, and accordingly Wii U has had a massive increase in sales as result of its release. Its holding its own against the other 2 consoles, even outselling them in some regions.

    So yeah, get your facts straight before you waste peoples' time with biased/inaccurate 'reporting'.

  • Report this Comment On June 14, 2014, at 4:03 PM, EmSurfer wrote:

    Everyone said that 10-15 years ago when my computers had the PowerPC chip, they said that about Apple. I've had the Wii U since January 2013. Nintendo will be fine. BTW, I bought stock in Apple during those doom and gloom days. I used to read Motley Fool consistently but stopped almost a decade ago. I saw their article about Nintendo so decided to see what foolishness they were going to spread.

  • Report this Comment On June 14, 2014, at 5:29 PM, RDash5000 wrote:

    I've been on Twitch a couple times, and the general consensus is that if you don't already have an established audience, you are basically wasting your time broadcasting. It's essentially an easier alternative to YouTube since you can stream a clip to it on more devices than you can to YouTube. The average falls into the shuffle, a lot like with YouTube.

    I'm honestly glad that instead of wasting time worrying about streaming services (Nintendo gets nothing but 'free advertising' on Twitch, and Nintendo doesn't need help advertising) Nintendo has decided to work on the strongest game line-up in 2015. I can honestly say I'm excited for almost every game announced by Nintendo, yet nothing new was stated about PS4 or Xbox One games. At least my PS4 can stream to Twitch! So that's pretty cool, right?

  • Report this Comment On June 14, 2014, at 6:28 PM, Imyourbuddy wrote:

    Putting Nintendo games in the mobile market is highly irrelevant and won't even affect Nintendo positively. I even think it would hurt them more than help them.

  • Report this Comment On June 14, 2014, at 7:30 PM, Burstedbladder wrote:

    "Yup, Nintendo Is Still Stuck in the Past"

    Nintendo never should have abandoned the N64 and GameCube systems and continued creating games for those that feel in love with those two systems.

    I had a Wii and took ot back. Didn't like it one bit and it was way overpriced for a cheap toy that you cannot play a dvd on music cd on.

    I still have my N64 and Game Cube, and will never buy another Nintendo product unless they make a system that uses joystick controllers with them. Not all old school Nintendo players want to be swinging their arms around in their home to play a game.

  • Report this Comment On June 14, 2014, at 8:10 PM, DisplayName wrote:

    The Wii U probably can't run the encoding on the fly and uploading, I don't see this as a bad thing though. Doesn't mean people cant use capture software and stream on twitch, as I type this, Mario Kart 8 is higher up on the list than any other non pc game (as a lot of the multiplats are streamed from pc).

  • Report this Comment On June 14, 2014, at 11:27 PM, ElectricEric wrote:

    I'm so happy about this article. I needed an article about biased news stories on the internet from non-credible sources and this hit everything I needed. Thank you for having everything in one article I needed to complete this assignment and keep up the bad work.

  • Report this Comment On June 15, 2014, at 5:56 AM, PollyBonanzas wrote:

    Yeah, right! I haven't bought any of the next generation consoles yet, but when I do, the first one I get will be the Wii U. You're just a biased gamer who feels that it's necessary to point out "facts" no one really cares about. Nintendo finally went HD by releasing the Wii U, so I really don't care if you don't like it, I'm gonna get it and you can suck on my schween. Twitch doesn't interest me anyway. I'll stick to YouTube.

  • Report this Comment On June 15, 2014, at 9:49 AM, ekdikeo wrote:

    All the detractors of the article here, are being fanboys, and kind of missing the point:

    Nintendo's execution, compared to their competition, is failing them.

    They will most likely learn some lessons, but if they do not, or they do not adequately make up for it, it will be a very long, very hard, slide into oblivion.

    Just because you like the Wii U, or just because Wii U unit sales are up 400% over the prior year, doesn't mean the Wii U is a successful platform, nor that Nintendo is going to survive on it.

    Personally, I'm a long time gamer(2600 to present), but the only Nintendo console I've ever owned was the Wii. And other than the games that came with it, I don't think I've ever used the motion controls.

  • Report this Comment On June 15, 2014, at 4:58 PM, Bishop9800 wrote:

    Wow! Another "Nintendo is Doomed" article by Monty Fool. Nintendo had the best showing at E3. Their games, news and everything. What did MS have? NOTHING!! (Notice that the Monty Fool has stocks in MS. Maybe they are on their payroll?) Sony had a pretty show, but Ninny showed their A,B, and C game. Plus that "fact' about XB1 out selling the Wii U is false. Wii U sells are higher the XB1. So how about stopping all the hate and doom on Ninny. I'm beginning to see why the word "fool" is in you guy's name. Cause only a fool would believe this crap you are spewing!

  • Report this Comment On June 15, 2014, at 7:11 PM, targeyone wrote:

    Mattera and Noonan were writing so many Nintendoom articles, even Motley Fool readers were catching on. Had to switch it up a little to get the comments.

  • Report this Comment On June 18, 2014, at 6:19 PM, SuntanIronMan wrote:

    The problem with Nintendo is that they are specifically not stuck in the past. If they were stuck in the past, they would have just released a more traditional console experience like Sony and Microsoft did rather than trying something new with the GamePad.

    People don't want new things. They want the same things they played before... 7 or 8 times. Even with the original Wii (which was certainly a departure from other consoles), the best-selling (not bundled with the console) game on the system was Mario Kart 7.

    I like new things. But game sales numbers have consistently show that people like me are in the minority. Nintendo should have realized this themselves a long time ago.

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