"Nintendo hardware goes away, because nobody cares" | A Decade Down the Road
10 years ago this month, consoles were dying and there was no place for Nintendo in the hardware market, depending on who you listened to.
Last month's column on the 10th anniversary of Gamergate was not a fun one to write, even if I did try to offer a bit of optimism about how the industry is better equipped to deal with hate campaigns these days.
And after dunking my head in that particular toilet all over again, I could really use something from the opposite end of the spectrum. For a historical retrospective columnist, there's no better comfort food than someone making a bold proclamation that was, in hindsight, hilariously wrong.
So let's see if we can find something to work with in the news coverage of September 2014...
Oh.
Yes, I think this will do nicely.
Michael Pachter says stuff
In a presentation at the Cloud Gaming USA Conference, Wedbush analyst Michael Pachter recapped the history of the games industry and gave a glimpse of its horrible, horrible future.
He got upset with Activision for not monetizing Call of Duty more ruthlessly. He criticized free-to-play games, saying publishers needed to shove some advertising into them or else it's a "stupid" model where companies accept less money than they should. He said publishers would launch their own cloud gaming services in an attempt to cut console makers out of the revenue loop. (And to his credit, EA and Ubisoft have tried just that, although both decided it was better not to completely cut out the console makers after all.)
But the biggest headlines to come out of the session stemmed from Pachter's predictions around the future of Nintendo:
"There's no place for Nintendo. There's a place for their content, there's no place for a Nintendo device. Nintendo hardware goes away, because nobody cares. The only reason anybody buys Nintendo hardware is because you really want to play their software, and I think they're going to end up having to abandon hardware because they're going to get destroyed on the Wii U – they already have been – and they're going to get destroyed even further on the handhelds.
"Every kid who wanted a DS ten years ago, the 10 and younger kid, today wants a smartphone. As I said, I think consoles go away anyway, so Nintendo suffers even if they hit the right console the next cycle – there won't be a next cycle. Consoles are so much less relevant five years out."
With a decade's worth of hindsight, we know there remains a place for Nintendo hardware.
Nintendo did continue getting destroyed on the Wii U, but the Switch salvaged both the company's handheld and home hardware lines, and ensured that consoles would continue to be relevant for a lot more than five years.
And while I've spent years mocking people who predicted the death of consoles in historical retrospective columns, I also must acknowledge they weren't entirely off base: Consoles today don't mean the same thing as they did 10 years ago.
Microsoft's biggest new Xbox game of the year is coming to PlayStation. Sony publishes MLB: The Show on Xbox and Switch, and is increasingly bringing its first-party exclusives to PC, including DRM-free versions on GOG.com. PlayStation Now and Xbox Game Pass mean you don't need first-party hardware or even a gaming PC in order to enjoy a library of first-party console games.
The traditional console market is so vastly different these days that I went to my local Toys R Us over the summer and discovered that the physical video game section had been completely replaced in favor of a more commercially relevant market for the retailer: Records.
And honestly, the console business, like much of the games industry more broadly, is not in rude health these days.
Microsoft could pull the plug on Xbox as a hardware platform any time in the next few years and I don't think I would be too surprised. If Microsoft's biggest games are going to be multiplatform, why bother buying an Xbox when the biggest difference between it and a PlayStation is that it won't have Sony's big-name exclusives?
Meanwhile, Sony seems to be undergoing an existential crisis as the math no longer works as well as it would like on the AAA single-player blockbusters that have carried its fortunes for so long. The fact that PS5 hardware has only gotten more expensive as the generation has gone on is also eyebrow-raising, as is the relative paucity of games that have made compelling arguments that the PS5 was an urgently needed upgrade over the PS4. Throw in the PS5 Pro's incredible premium for nigh-imperceptible improvements (nigh-imperceptible to me, anyway) and even the clear leader in the high-end console space seems unsure as to its next steps.
People have been saying for decades that escalating costs in AAA development are unsustainable, and I think Sony over the past few years is the clearest indication we have about the strain that's putting on the traditional first-party model.
For Nintendo, the path forward is much easier to predict, for once. (Yes, when I write sentences like that in columns like this, I often have visions of how absurd they will sound 10 years later; that's part of the fun.)
Generally speaking, people just want a more powerful Switch, a Switch 2 with full backward compatibility that can handle ports of games Nintendo fans missed out on in the PS4/Xbox One generation, and perhaps provide horsepower that can keep up with the ambitions of Nintendo developers working on a Tears of the Kingdom-like scale.
But Nintendo is Nintendo, and rarely strings "safe" or even "scrutable" choices together for any length of time. So who even knows what the future holds there?
Whatever that future is though, I have to think it will include Nintendo hardware of some sort, because contrary to Pachter's assertion, people absolutely care about Nintendo hardware.
Microsoft puts the "mine" in Minecraft
Microsoft shocked the gaming world by acquiring Mojang, maker of the indie phenomenon Minecraft, for $2.5 billion.
I know that seems quaint by today's acquisition standards – just one-fifth a Zynga, or a mere half-Scopely – but it was stunning at the time. It hadn't been that long since Disney bought Marvel and Star Wars for $4 billion each, and a five-year-old indie game was suddenly almost two-thirds as valuable as these incredible cultural staples? And the key creator behind the phenomenon didn't seem to want anything to do with it going forward?
"He's decided that he doesn't want the responsibility of owning a company of such global significance," Mojang's Owen Hill said of founder Markus "notch" Persson in announcing the deal. "Over the past few years he's made attempts to work on smaller projects, but the pressure of owning Minecraft became too much for him to handle. The only option was to sell Mojang."
(We'll keep the focus on Mojang and Minecraft here, but if you want to read a bit about Persson's sad trajectory since the deal – and the parallels to fellow celebrated-founder-who-sold-the-shop-in-2014-then-made-a-far-right-turn Palmer Luckey – I wrote about that a few months back.)
Public reaction to the deal was pretty positive, all things considered. Persson was understandably cashing out, and he even tried to take care of his employees in the process, with a $300,000 bonus being paid out to anyone who stuck around for six months after the acquisition. (Persson said half the bonus was unconditional, and all of it paid out of his own pocket.)
Analysts were generally approving of the deal as well. Pachter himself said that Minecraft could be expected to generate revenue for Microsoft for the next 10 years, and it has definitely ticked that box.
As for the press, a GamesIndustry.biz roundtable had the staff noting some of the concerns – Persson's departure, how might Microsoft change the product, etc. – and then dismissing them to talk about how great the deal could turn out to be.
There was also another one of those bold proclamations that were, in hindsight, hilariously wrong, which you would think I would be overjoyed at, unless you've already guessed that I was the one making it:
"I'll go ahead and play the wet blanket here, as I don't see this deal having a tremendous amount of upside for Microsoft. What this basically comes down to for me is a skepticism in Minecraft as a truly evergreen property. If Minecraft is as culturally relevant 10 or 20 years from now, then this deal is a no-brainer, no matter the money involved. But that's a sizeable 'if.'
"...Today's phenomenon is tomorrow's fad, and Minecraft strikes me less as the sort of permanent cultural fixture worth $2.5 billion, and more like lightning in a bottle, the perfect game in the perfect place at the perfect time. On top of that, Minecraft is a property whose success I don't think anyone truly understands other than to gesture vaguely in the direction of community and creativity. And when you start tinkering with something you don't fully understand, there's a good chance you'll upset whatever special balance of qualities Minecraft has that made it so successful in the first place."
Yeah, that qualifies as a Bad Call. Speaking of which...
Good Call, Bad Call
BAD CALL: In an interview with me just a stone's throw away from the hallowed Hockey Hall of Fame, eSports League CEO Ralf Reichert commited a minor blasphemy, predicting that esports would be a Top 5 sport in the world and saying it should be ahead of ice hockey and the NHL.
Somehow I managed restraint and we didn't have to find out if his fight strap was tied down, but fast forward a decade and esports is... Well, it's fine. But it's not the Next Big Thing advocates had promised us.
The esports mainstream breakthrough moment – Activision's Overwatch League – came and went. One of the biggest success stories of the space– League of Legends esports – has been a worthwhile marketing vehicle for Riot's game, but remains unprofitable for the company. Judging from the company's comments on recent changes to the business model, profitability isn't just around the corner, either.
Even with interest in gaming skyrocketing during the pandemic, Newzoo was putting the esports business at $1.38 billion worldwide in 2022. Meanwhile, the NHL is bringing in about $6.2 billion this year.
I reached out to Newzoo to ask for an updated figure, but it turns out 2022 was the last report the firm did on the subject, and has since ended all esports market coverage. Is that a good sign?
BAD CALL: After the Apple Watch debuted as the "one more thing" at the end of Apple's iPhone 6 unveiling, EA Mobile boss Frank Gibeau said EA got "real excited" by the watch.
"Wearables could be the future gaming platforms," Gibeau said. "Look at Oculus, Google Glass, Apple Watch, Samsung's [GearVR] announcement last week. There are unique functions and ways to interact with these devices that open up a new platform."
The Apple Watch didn't really take off as a gaming platform, Glass is dead and gone, GearVR was dropped after a few years, and Meta is keeping Oculus around but losing billions on its VR/AR efforts every quarter.
Wearables still could be a big future gaming platform, but 10 years down the line, that future somehow looks farther away.
UNEXPECTED CALL: When Activision Blizzard was sued by former Panamanian dictator Manuel Noriega for using his likeness in Call of Duty without permission, the company turned to one of the keenest legal minds in the world.
As fun as it is to have yet another disreputable right-winger tied up in the Activision Blizzard corporate history, my favorite part came from this video the company released of Giuliani talking about the case. The video itself is painstakingly edited and cut together in what looks like a desperate attempt to piece together a full, coherent sentence from Giuliani, but the real kicker is that this guy says he's offended by someone suing a company like Activision Blizzard, which he says is "good" and "decent" because it has a large staff and "made a game that pits good against evil, and has good come out as the winner."
As we would later discover (but probably always suspected), Giuliani had a vested interest in setting the bar for goodness and decency as low as humanly possible. While I won't get too far into his disbarment, election denialism and general dirtbaggery, I will point out he was caught on tape sharing his theories about the genitalia of various ethnicities and saying he would "never think of a girl being smart."
Despite Giuliani's involvement, Activision Blizzard won the case in a matter of weeks. However, its goodness and decency is a subject of some debate.
GOOD CALL: At the Oculus Connect conference, Oculus CEO Brendan Iribe said the recently acquired Facebook subsidiary would "be remembered as the dorky looking goggles that people were putting on in the beginning."
BAD CALL: Oculus CEO Brendan Iribe, saying moments later that "A lot of what will be remembered most in VR is going to be content," the same way we remember Doom or Quake but not the VoodooFX graphics cards that powered many early 3D first-person shooter games.
With apologies to Beat Saber and its ilk, one of the biggest disappointments of this wave of VR is how the progress of headsets and hardware have far overshadowed the actual experiences this technology is supposed to facilitate.
BAD CALL: Microsoft announced it would be skipping Windows 9 and going straight to Windows 10. In hindsight, that decisions sounds fairly normal, at least compared to Microsoft corporate VP Joe Belfiore's stated ambitions for the new OS: "We want all these Windows 7 users to have the sentiment that yesterday they were driving a first-generation Prius... and now with Windows 10 it's like a Tesla."
You mean the thing that's constantly getting recalled, traps users for no reason, and is shockingly easy to completely brick in ways its "less advanced" predecessors never had to worry about? That's your goal for your new OS?
GOOD CALL: Zenimax Online Studios laid off a bunch of people several months after the launch of The Elder Scrolls Online, saying basically, "Hey, this is just how stuff normally works."
They had a point. 10 years later, Microsoft owns Bethesda and layoffs are so normalized that the company doesn't even need to launch anything to have them every few months.
The rest of September 2014
● Future blockchain enthusiast Square Enix announced its prequel bid to destroy the planet, a subsidiary with the entirely-too-on-the-nose name of Shinra Technologies. Yes, Shinra was the evil megacorp the ecoterrorist heroes of Final Fantasy 7 were fighting. But this Shinra wasn't a business that made money by generating power. This Shinra was a business that... well, it didn't make money at all, actually.
But in theory, it would have made money consuming power with the wasteful-yet-convenient technology of cloud streaming, and it promised that this extra power of the cloud would produce heretofore impossible types of gameplay experiences. Much like with Stadia or Improbable or the Xbox One, those gameplay experiences would never materialize.
Square Enix would run Shinra for a little over a year before pulling the plug, citing a lack of investor interest.
● Sony announced it was shutting down PlayStation Home. Next to Second Life, Home was the single most obvious thing to point to a few years back when that wave of sketchy hustlers/tech billionaires was talking up the potential of "The Metaverse." It's been done. Some people really liked it, but not enough to keep it around.
No matter how much we may resent our decaying and doomed corporeal forms, we can't forsake them in favor of some incessantly monetized World o' Brands. Stop trying to outrun your mortality and direct those efforts to doing something beneficial with it instead.
● Amazon completed its acquisition of Twitch, signaling an end to the startup era of unchecked misogyny and racism at the streaming platform and the beginning of a more corporate era of unchecked misogyny and racism.
● Seven years after first revealing the game's existence, Blizzard cancelled Titan, its MMO follow-up to World of Warcraft.
It wasn't all bad news, as Titan's cancellation led to the development of Overwatch in a few ways, and Overwatch was a hit. Perhaps bits of Blizzard's scrapped survival game IP, cancelled this year alongside a round of deep cuts after the Microsoft acquisition, could similarly see the light of day at some point.
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