Nintendo Admits Failure

Nintendo actually owns up to their lameness in WiiWare and DSIWare, their online stores for digital distribution.
 They admit they haven't done a very good job, and plan to do better in some unspecified fashion, at some point int the future. Of course, no mention of this was made at E3, but then again E3 is all about the traditional retail channel and you wouldn't want to piss those guys off by talking about digital distribution.

What could Nintendo do better? Well, offering demos for all of the titles would be a good start. Allowing a wider range of titles would be nice. How about allowing all sorts of price points? Or maybe even making it easier for developers to put titles into the store? Free-to-play titles?

I'm afraid that the high-growth areas in the game industry, like social games and free-to-play games, are just not going to be in the classic manufacturer's strategy plans. They are too cautious about alienating the current retail channel, especially after Sony got hammered for the PSPGo (which attempted to make digital distribution the only way to get games). Of course, the PSPGo had other problems, like a high price point and insufficient flexibility compared to an iPod Touch.

Nintendo has traditionally been slow to adopt any changes in their business model, even as they like to innovate on the hardware side. Of course, their innovations always tend to be very cost-effective; they never push the envelope on losing money on their hardware sales. Nintendo resisted the move to CD-ROM for a long time, preferring cartridges that gave them a better control (and profit margin), even though in the end that let Sony pull way ahead with the Playstation. The Wii didn't offer much of a horsepower advantage over the Gamecube, and no HD support; what it did have was an innovative control option (which Sony and Microsoft are finally getting around to imitating, in a much more expensive way).

I don't think that Nintendo will be a good place for small independent developers to invest resources. The Flash game market, the downloadable PC game market, the Facebook game market, and the iPhone/Android markets are all easier to get into and less expensive to develop for. Marketing is a problem for all of them, but that's pretty much true these days for any game market. You have to develop a brand name and an audience.

I just don't think Nintendo is going to offer any help to developers, whatever changes they make. They have never cared much about third party developers, except as a source of licensing fees. (Kind of like Apple.) Don't expect that to change.