Daring Fireball responds to Garrett Murray’s thoughts on the 2DS:

The biggest WTF aspect is the price — it’s only $40 cheaper than the regular 3DS.

Yeah, WTF? No other company would create very obvious upsell positioning for its products!

A pity Daring Fireball and various others seem to have decided balance is a bad thing regarding Nintendo, given Lukas Mathis’s Nintendo piece continuing to grow with more insight and facts. If you missed it, I also chimed in yesterday on why Nintendo should not start making iOS games—yet.

Update: For anyone arguing that the gap is bigger—the iPod touch upsell is $70, not $40—do bear in mind the iPod touch costs almost twice as much as Nintendo’s console.

Nintendo has unveiled the 2DS. The console is essentially a cheap version of the 3DS, lacking the 3D capabilities and the hinge. From a design perspective, it’s not the prettiest device in the world (the screen alignment is particularly grim), and the clamshell was one of the best things about the DS hardware, protecting the screen and also making it more portable. By contrast, the 2DS looks unwieldy.

That said, I find it curious people are using the 2DS as some kind of proof Nintendo is doomed. Apple pundit John Gruber said on his blog:

It’s $129. I say they should just give in and start making iOS games. They’re not going to win this battle.

This is a nonsensical argument, especially from someone who has a habit of publicly slamming people who’d say anything remotely similar about Apple. I might think the 2DS is ugly and might not be that nice to hold, but that doesn’t make it a dumb idea. It’s cheap and very obviously positioned for holiday sales. It’s $100 cheaper than the cheapest iPod touch (i.e. about half the price), which immediately places it in a totally different market. And it’s pretty clearly a stop-gap—Nintendo doing its usual thing of wringing out the last drops of income from a hardware line before a refresh. We saw the same thing with the Game Boy Advance—although I’d argue the Micro was a smarter-looking device than the 2DS.

After presumably getting some stick online, Gruber elaborated further:

“Isn’t this like telling Apple to give up on hardware and license Mac OS to other PC makers?” numerous readers have asked. Maybe a little, but it’s a bad comparison. The main thing is it never seemed to me — never — that Apple was incapable of producing excellent industry-leading hardware. They just needed focus and better execution. Nintendo, to me, looks incapable of producing handheld hardware that can compete with the iPhone or iPod Touch.

The question is whether Nintendo wants to compete and whether it needs to. Anecdotally, I hear an awful lot of people telling me their kids no longer bother with Nintendo hardware, and instead use iOS devices; similarly, many teen and adult gamers have ditched Nintendo handhelds for smartphones and tablets. Also, Nintendo’s financials of late haven’t looked nearly as rosy as in the past. Still, I also hear from various parties that the 3DS line has sold very well, and that Nintendo is starting to get the message regarding working with indies and pricing games more sensibly. Last year, I figured that rather than leap to iOS, Nintendo really needed to place more emphasis on digital, embrace more devs, and link with the wider world; I still believe that.

Gruber instead made a more common argument for what Nintendo should do:

I think they’re out of the game and might never get back into it. If they can do it, great — where by “do it” I mean produce a device that’s a better buy for $250 or so than an iPod Touch. But I don’t think they can do it. And if they can’t do it, their next best bet is is to expand to making iOS games. I’m not saying drop the DS line and jump to iOS in one fell swoop. But a couple of $9.99 iPhone/iPad games to test the water wouldn’t hurt.

There’s certainly a possibility that with the new iOS games controller APIs, Nintendo could create a custom controller for iOS, giving relevant iOS Nintendo titles the precision that they’d need to not end up being somewhat unplayable on the platform. I still question this as anything but an absolute last resort. For some reason, Gruber either ignores or dismisses that Nintendo is the Apple of the gaming world—it has succeeded through controlling everything, not just through the games it creates. To say Nintendo should create games for iOS is little different from suggesting a less fortunate Apple should rapidly get iLife and iWork on to other platforms. Even testing the water would be an admission of failure, which would damage the brand.

Perhaps Nintendo’s long-term future is as another Sega, crafting games for hardware that it doesn’t make itself. But the 2DS certainly doesn’t make the case this should happen now. Really, it’s what happens next that will seal Nintendo’s fate. What follows the DS line and the Wii U will be critical for the company, and although plenty (including, at times, me) have largely written off the company, Nintendo has also shown in the past how it has the ability to create something new and innovative seemingly from nowhere, thereby securing its survival and success. This sounds rather like a certain other tech company, and is why certain pundits should know better than to entirely dismiss Nintendo’s future chances.

Further reading: Nintendo, by Lukas Mathis.

In an earlier post today, I suggest Nintendo could be another Sega fairly soon, offering its IP on the App Store. Tap! deputy editor Matthew Bolton (who knows more than a bit about gaming), countered on Twitter:

I’m not so sure about Mario on [the] App Store. Nintendo’s technical meticulousness in Mario is unparalleled outside of racers… the controls’ responsiveness is tuned to perfection, and touchscreens are laggy. It’s an Apple situation

I agree. Touchscreens are fantastic for certain types of gaming, but not Mario-style platformers. (That’s not to say there aren’t decent 2D platformers for iOS, but they certainly don’t match Super Mario in terms of, as Matt put it, ‘technical meticulousness’.) But there is a solution: a third-party controller.

It’s not like such a thing is without precedent: I’ve written about iOS games controllers before, and although they’re something of a niche, Nintendo has the hardware savvy to produce such a thing, and the IP clout to encourage plenty of people to buy it. Of course, the company would lose control elsewhere, notably in terms of device hardware. But if Nintendo’s forced into a Sega-like position, its games on the App Store and a Nintendo controller doesn’t seem like the worst alternative.

I’ve written about Nintendo before. I used to be a huge fan of Nintendo in mobile, from the original Game Boy through to the DS. However, from the GBA onwards, I noticed a pattern, in that I’d increasingly end up noodling about with homebrew and emulators, through first-party games slowing to a trickle of recycled content, and third-party games largely being expensive crap. iOS then spoiled me. In just a few years, Apple’s hardware went from being quite interesting to utterly essential for anyone with a genuine interest in gaming. It reinvigorated the indie space on mobile, forced innovation through its lack of traditional controls, and although there was a gatekeeper, it was one that was far more likely to fling you the keys to the store than Nintendo or Sony.

Every quarter, we now hear some kind of bad news from Nintendo: its hardware isn’t selling as well as it hoped, and the profits the company is making aren’t high enough (or, in some cases, don’t exist at all). Marco Arment recently covered the various options for Nintendo, and his conclusion was much the same as what I said last summer: Nintendo cannot or will not deal with the challenges required to truly compete in the existing mobile marketplace, and there’s a good chance we’ll see the company exit hardware and become another Sega.

Arment’s final words, however, were particularly interesting:

I don’t think Nintendo has a bright future. I see them staying in the shrinking hardware business until the bitter end, and then becoming roughly like Sega today: a shell of the former company, probably acquired for relatively little by someone big, endlessly whoring out their old franchises in mostly mediocre games that will leave their old fans longing for the good old days.

To some extent, “endlessly whoring out their old franchises” is precisely what Nintendo’s business model on mobile has been for years. New console? Quick: crank out another Mario Bros. platformer that’s almost identical to the last! Rinse and repeat. Still, as the company responsible for so much innovation to mobile gaming with the DS, I’d like to think Nintendo has something brewing—something amazing that will kickstart its fortunes on mobile again. However, I’m not going to be shocked if we see an official Super Mario for iPhone on the App Store for $9.99 in a year or two.

Kotaku editor Stephen Totilo has published an interview with Satoru Iwata, president of Nintendo. I’ve written quite a bit about Nintendo on this blog, and prior to the iPhone’s appearance, most of my gaming was on Nintendo handhelds. I particularly loved the DS, but I also own various Game Boys, and they all sit sadly unloved in a chest of drawers in my office.

Despite this, I’m not of the opinion Nintendo should throw in its lot with Apple and other third parties, effectively becoming another Sega—yet. This is because Nintendo still has the potential to out-Apple Apple in the gaming space, through making games and hardware. This, note, is what Apple proponents rightly say sets Apple apart from much of the competition—it makes devices and operating systems, and so can mesh those things together far better than other companies. But Apple doesn’t do this in gaming.

What Apple does do in gaming, however, is provide a number of lessons that I still believe Nintendo must learn from:

• More of an emphasis on digital downloads, with the immediacy and better value  those things can provide.
• A better way of dealing with indies—perhaps not quite a iOS-style free-for-all, but there must be a happy medium where bedroom coders are encouraged to bring further innovation to the platform.
• More linkage with the wider world, through the use of non-gaming apps. Again, Nintendo shouldn’t follow Apple in this regard—a Nintendo device doesn’t need a half-million apps. But it does need to keep the device in someone’s hands, so they don’t stray. So: stronger social, browsing and video apps are a must, for a start.

The main focus of a Nintendo device must remain games, but that shouldn’t be the only focus, otherwise Nintendo runs the risk of its devices becoming increasingly niche, which in itself is a danger in that such things will appeal to people with very specific demands. The success of Nintendo handhelds has often hinged on their accessible and widespread nature, not them only finding favour with the select few.

The Kotaku interview is interesting in that instead of being bullish—Nintendo’s tactic of the past—Iwata is seemingly very aware of the changes in the market and yet has a belief Nintendo can continue to succeed. Again, there’s evidence here from Apple’s history—when the products are good enough, the company has been massively profitable with a minority share. Nintendo therefore must ensure its products are good enough—’magical’, to use Apple’s rather naff terminology—and not merely OK.

One way of doing this is in creating unique experiences, argues Iwata:

I think that if we are able to provide experiences on handheld devices that consumers cannot get on another device, then we will continue creating software and hardware going forward…

Strong first-party games married with intuitive and preferably innovative control mechanisms are the way to do this. But Nintendo has of late too often wavered and retreated to its default position of “release the same hardware in different colours and at different sizes”, which leads to Iwata’s flip-side of the coin:

… and if it comes to a point when we’re not able to do that, I think, yeah, you will see portable handheld gaming devices go the way of the Dodo

Curiously, though, Iwata also isn’t blind to its rivals, nor seemingly scared by them, as the Kotaku piece notes:

The entirety of what you might need to know about how Satoru Iwata feels about the supposed threat of Apple and iOS gaming is that, during our interview last week, Iwata read 3DS sales figures to me off of a MacBook Air, which was plugged into a white iPhone, presumably his. When a gaming reporter goes to a showcase for, say, a Wii game or an Xbox game, Nintendo and Microsoft show their games on non-Sony TVs. They don’t let you see hardware from supposed rivals. But there was Iwata, sitting around the corner of a table from me, laptop flipped open, Apple icon presented toward me.

This to my mind shows a confidence in Nintendo’s products, and also an admission that other companies exist, and that their products are also worth using. Additionally, Totilo also got an interesting response from Iwata about the thorny issue of convergence:

[In] the day of the GBA our challenge was to provide experiences you could not have on a cellphone at that time. In the same way, we have to look at the Nintendo 3DS and other platforms in our future as being able to do the same thing in terms of what smartphones can provide as well.

However, Totilo makes a statement that’s almost a counterpoint and that rings very true:

[The interview] was eye-opening, because it did not conform with the critique from some quarters that Nintendo’s head is in the sand and that it does not appreciate the threat of cheap, downloadable iOS and Android games. But it was also short on specifics of how Nintendo would set itself apart in a world that seems more gaga over the next iPhone than over, say, the 3DS’ glass-free 3D.

This appears to be the challenge for Nintendo now: not in realising the market has changed, but responding to that. I’m going to be very interested to see what’s next from the company. Another DS with a gimmick is clearly not going to be enough. I wouldn’t be shocked to see the Game Boy brand back, but as a much stronger device in terms of being multifunctional, but also with innovations for gaming that no-one else had thought of. If not and we just get the 3DSMax-o-tron II, I think Nintendo could find itself in a much worse situation.

Still, even if the worst comes to the worst and Nintendo did have to do a Sega, imagine if its games ended up officially on iOS: Angry Birds would be ousted from the top of the charts by Mario and chums, probably forever. As a worse-case scenario, that’s not too bad a prospect, and you could bet even a gaming-ambivalent Apple would sit up and take notice if it got an email from Iwata mentioning that Nintendo’s games were soon coming to the iPhone and iPad.