On June 5, 2002, IGNCube asked what Jim Merrick was up to for the past year. He responded?
"The big secret. Well, I'm actually working very closely with Mr. Iwata on a network/Internet game strategy for Nintendo."
- Jim Merrick
Three months after GameCube's Japanese launch, Japanese magazine Famitsu talked to Satoru Iwata about the company's online plans. The company announced it would put considerable resources into research and development on the new network. "However, we realize that games won't immediately sell a million copies simply because they're network compatible," Iwata said in a statement. "The technical hurdle associated with creating console-based online games is high, and it's something Nintendo is pursuing earnestly."
On May 13, 2002, on the first day of the Electronic Entertainment Expo, Nintendo of America unveiled plans for its online gaming initiative for the Nintendo GameCube. The first announced product was Sega's Phantasy Star Online Episode I & II. Nintendo had previously partnered with Conexant to offer a 56-kbit/second, V.90 modem adapter, as well as a broadband adapter for the Nintendo GameCube. Sega's Phantasy Star Online would be the first game to utilize the modem and broadband attachments, priced each at $34.95.
Nintendo's network strategy is built on the philosophy that "online will be most successful if the game play is extremely compelling and highly affordable". Nintendo announced its strategy would consist of a "flexible development program, favorable publisher business model, and support for all consumers whether the player connects by modem or broadband".
As part of an incentive to publishers, Nintendo announced it would not require royalty fees from revenue generated by a publisher's game played online through the GameCube. Nintendo said it is in discussions and providing development kits worldwide to a large number of world-class developers regarding online projects. The intent of the low-risk model, Nintendo says, is to encourage developers to consider new genres of games for online play. Satoru Iwata admitted that several of Nintendo's internal development groups are also researching online projects, however that none would be demonstrated or discussed during the E3 show.
"The profitable part of the online business is very likely several years away. Entering the business because it's the hot topic of the day doesn't make a profitable business nor satisfied customers. That's why it will be a part of Nintendo's strategy, not the mainstay, as other companies are attempting to do. There still are too many barriers for any company to greatly depend on it."
- Satoru Iwata
president, Nintendo Co., Ltd.
On September 10, 2003, Nintendo reached an agreement with America Online by which the Internet provider will become the official preferred ISP for GameCube. Developers who choose to create online games for GameCube will be licensed AOL connectivity software that will enable their games to connect online through AOL. As part of the agreement, many of Nintendo's products will be advertised on key AOL and AOL Time Warner websites. While Nintendo said it has no plans to utilize the model itself, it's looking to provide third-parties with yet another online option.
More Obstacles
Sony's president said the future of the network might include games that can be played against people using other platforms.
"I think our networking plans are much different. However, we realize the importance of online gaming in the PC market. Broadband services such as ADSL have spread quickly because of them. It would require significant resources and pose a technical challenge to unite GameCube and PC players."
- Satoru Iwata
president, Nintendo Co., Ltd.
Ultimately, though, it's the developer in Miyamoto that objects to online gaming. In order to make a title that is captivating to hundreds (or even dozens) of simultaneous players, the developer has to relinquish a lot of control. After all, player interaction is what online gaming is all about. In taking that step back, though, the developer can't dictate the course of the game, meaning it might not be true to their vision.
"Nintendo is not actively pursuing the idea of bringing games into an arena where Nintendo can not guarantee the quality of the game. We want the ideal gaming situation for everyone... Online gaming, like using violence in games, is just one method of introducing gaming to the public. And there are other methods that can be used. There are a lot of people who are not set up to go online.The thing about online is that people are talking about it and bringing it up as this kind of direction for gaming. But the fact of the matter is that many aren't really paying attention to a lot of the hurdles that have to be jumped before online becomes viable. One of the biggest ones, I think is, what's really going to be the penetration for broadband connections around the world? Where is that going to be in a few years? So people are talking about this and seem to focus only on online, but they fail to answer many of the questions surrounding it.
We have a lot of experience in online as I'm sure you're aware. We think very positively about the possibilities. We've done a lot of online experiments in the past. But until these hurdles are met and these problems are solved, I don't think that we should just jump into online because people think there's strength there right now. We're not negative toward the idea of going online. We're just practical."
- Satoru Iwata
president, Nintendo Co., Ltd.
Furthermore, the question of which country to target presents another challenge. Global network gaming is a very complex prospect.
"As a game designer I have an interest in it, but Nintendo isn't thinking of all possible markets in terms of network gaming. Also, we'd like to apply our energies to other realms that our competitors aren't even considering. We don't feel the need to chase the goals of everyone else."
- Satoru Iwata
president, Nintendo Co., Ltd.
No doubt. Sony and Microsoft have other reasons for wanting to get expanded bandwidth into people's homes that have nothing to do with gaming. These companies are attempting to create an avenue so they can help shore up losses by selling additional non-PlayStation 2 and Xbox services and products to wired gamers. They want to acquire full access to your living rooms. While this was once a goal of Nintendo, the company is now more interested in how online can offer new ways to distribute and play video games.
Conclusion
Now that I've rambled off enough names and information to fill an Encyclopedia, where and how can I possibly end this thing? I'm going to end it by revealing to you Nintendo's next-generation plans - or at least my very educated guess.
The iQue is a test, as well a sign of what's to come. It's basically a culmination of Nintendo and more specifically, Yamauchi's goal from the past two decades. No more fuss with cartridges, CDs or DVDs. Nintendo can transfer its games from the developer directly to the user.
During the company's business policy briefing on August 7, 2003, Satoru Iwata mentioned the company's next console would be "entirely different from anything now existing" and something that "anyone can enjoy easily".
Remember what Peter Main said about online games?
"Discovering the appropriate business model for this sector of the business world, I think, is on everyone's lips, and we're all working at it very aggressively."
- Peter Main
former NOA executive VP of sales & marketing
It appears Nintendo may have come upon the answer. What is it exactly? My guess is the iQue is just a test, however, the final product will expand on the idea much more. The announcements Nintendo makes later this year will no doubt involve online in one way or another. Will they specifically involve the downloading of classic Nintendo video games? Or will they instead revolve around accessing the next-generation of 3D games directly from your TV? Further speculation is ultimately up to you, but if the past has shown anything, the path Nintendo follows is on-a-line.
"Not just with the 64DD, but even going back to the 1980s, we've been challenging ourselves for a long time to come up with these systems that use networks. One example is the system we had in the '80s with Nomura Shouken, a securities company, and also using satellites in Japan. We've since decided that initially we didn't do quite enough analyzing of how we'd be making this a sustainable system. And we're really trying to learn from these experiences."
- Satoru Iwata
president, Nintendo Co., Ltd.
The Big Picture
"...But we're more interested in the big picture right now, where our games are heading. I've been working with Mr. Miyamoto for about 17 years, watching him even over at HAL and seeing how Mr. Miyamoto thinks.The one thing about Mr. Miyamoto -- obviously he is very creative -- but that's not his only strong point, it's not just that he comes up with innovations, but really he's able to analyze things and see the big picture as he goes about his game creation. He can see the direction he is moving in. He's really strong at analyzing people when he watches them play; where they're having fun, which parts of the games appeal to them, which don't appeal to them, where they're getting lost, when they're having trouble. He is able to see the moments when people put down the controller and say "that's enough." Or when people say "you've got to play this" and pass the controller to someone else. It's that big picture that we're interested in."
- Satoru Iwata
president, Nintendo Co., Ltd.
Ultimately, Miyamoto says, the excitement over online gaming is really an excitement about communication.
And that, he said, is something the company has long been aware of.