State of the Game: What 2012 Holds for Nintendo, Sony and More

Nintendo worldwide president Satoru Iwata pledged to create ‘deeper game experiences’ at the company’s E3 presentation. The struggle between traditional games and 99-cent mobile games will be a key battle of 2012.
Photo: Jon Snyder/Wired.com

The next generation of videogames is finally coming, although it isn’t arriving all at once. Instead of mounting a shock-and-awe campaign, next-gen gaming is sneaking up on us. 2012 is likely to see an industry still taking baby steps forward.

With last year’s weaker-than-expected launch of Nintendo 3DS and the quick drop-off in sales of PlayStation Vita in Japan, dedicated portable game systems are fighting an uphill battle, though not necessarily an unwinnable one. Nintendo is releasing Wii U this year, which will be the first of the next generation of home consoles — but from all appearances it will only draw up to the Xbox 360 and PlayStation 3 in terms of processing power, not surpass them significantly.

So 2012 may not be a transformative year, just another step down the road that the gaming industry has already set itself on. Here’s where the industry stands, as I see it, at the dawn of 2012 and where it’s likely to go over the next year.

As the leading maker of traditional game hardware, Nintendo has found itself under the most pressure to compete against … well, whatever it is Nintendo believes itself to be competing against. It continues to insist that it is not actually in competition with mobile games and that the rise of 99-cent iPhone games is not really impacting its portable-game business.

Well, something impacted it. Nintendo made no bones about the fact that sales of 3DS were more sluggish than it expected, which led to a massive price drop only a few months after launch. That, coupled with the one-two punch of Mario 3D Land and Mario Kart, stimulated sales quite a bit over the holidays. It also put Nintendo on track to what would be its first-ever annual loss.

Was the $ 250 price tag the only thing holding 3DS back, or were its holiday sales just given a temporary boost by the more attractive price and major titles? That’s what we’ll find out in 2012. Look for Nintendo to continually improve its downloadable games and other connected services, especially as packaged retail games are likely to remain slow to arrive on shelves. In Japan, Nintendo has dropped demo versions of retail games onto the eShop, big titles like Resident Evil: Revelations and Theatrhythm Final Fantasy.

Sony will unleash the PlayStation Vita in the U.S. and Europe this February. Sales of the machine in Japan have dropped off significantly since it launched in December.
Photo: Jon Snyder/Wired.com

Speaking of downloadable games, PlayStation Vita is out in Japan, and I’ve been playing with my launch-day unit. I purchased one cartridge game (Uncharted) but don’t see why I’d ever want to do that again. Having to carry around a case full of games is old and busted, and having all of your games saved to a memory card is the new hotness. So the fact that every PlayStation Vita game will be available via the digital store is music to my ears.

Here’s the potential flipside of that. By splitting up retail games (about $ 40 each) and downloadable ones (about $ 3-8 each), Nintendo has established a system in which downloadable games are sold at something of an impulse-buy price point. Not as cheap as 99-cent iPhone games, but still.

Sony’s Vita game library, currently, is mostly filled with downloadable games that cost upwards of $ 40, about the same as the retail cartridges. That is very much not an impulse-buy price. I’m curious as to how Vita’s downloadable game library will change and grow over the next year: Will there be a race to the bottom, price-wise, as we saw on the App Store?

I’ll write more about Vita later, but the thesis of any such piece will likely be something to the effect of: Vita is a really neat portable game platform, but who needs it? It was extremely forward-thinking of Sony to put a Blu-ray player into every PlayStation 3, which saved it from a fate worse than the bad fate it ended up with. But Vita doesn’t really have anything similar: It’s just a game machine, and right now it doesn’t exactly have a killer app on the level of Nintendo’s pair of Mario games. PSP never found one after 5 years on sale. Can Vita? And if 3DS tanked at $ 250, why wouldn’t Vita? The Kindle Fire at $ 200 is a serious competitor.

Meanwhile, Angry Birds sold 6.5 million copies on Christmas Day alone. There’s no reason to believe that the games market on iOS, Android and other such devices won’t continue to explode in 2012. One of the big questions is, will the attractiveness and depth of the games on offer continue to entice more and more hard-core gamers away from spending money on 3DS and Vita software (if not even home consoles, too)?

Razer’s “Project Fiona,” announced at CES this week, may look like a ridiculous boondoggle, but it’s also an attempt at addressing the double-edged sword that is tablet gaming: The simple touch interface has drawn in many new players, but perhaps there is only so much you can do without buttons and sticks. Exclusive software aside, this is the last real advantage that Nintendo and Sony have. What if someone finally manages to erase it, somehow?

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