Wii U vs. Xbox 360 vs. PS3: About Even

Wii U. Better than Wii Wii, I guess.

Nintendo has announced the final name of Project Cafe: Wii U. Just when you thought the Wii name was the strangest console name ever... Wii U. Nintendo introduced the console with some nice accolades from industry executives, some good-looking graphics videos, and plenty of laudatory exposition. Actual details about the hardware were rather scarce. Here's what we know:

• 1080P HD graphics output
• Controller with 6.2 inch screen, dual analog controls, touchscreen, camera, microphone
• Output can be from the Wii U to a TV or to the controller
• Backwards compatible with all current Wii controllers and games
• Games on proprietary optical discs
• 4 USB slots
• Release in 2012

What's missing? Well, you'll notice that what they didn't say is perhaps more important than what they did say. No mention of a hard drive in the console... so you can count the rumors that said there wouldn't be one as confirmed. If they were putting one in there they would have mentioned it. What they will have is some internal flash memory, size unspecified, and the ability to connect an external USB hard drive.

Graphics resolution? No specs at all, just some nice looking video. Which means that the Wii U graphics power will probably be around the level of the Xbox 360 or PS3, perhaps somewhat below. If the graphics output was substantially better in any way (resolution, polygons, texture mapping) you can bet Nintendo would have touted it. They didn't, so I think it's a safe assumption that the Wii U will not be setting any graphics records for home consoles.

The Wii U controller.

Price? No, no mention of that. Again, I think if they were planning to have a substantial price advantage over the Xbox 360 or the PS3 they would have mentioned it. Although, since they are more than six months away from the release date, keeping their options open is a good idea. Microsoft may well decide to drop the Xbox 360 price for the holidays, with the spectre of the Wii U looming for 2012. I'd guess that Nintendo will come in at least at $299, and quite possibly higher.

There was also no mention of digital distribution, any differences in how Nintendo deals with developers, or any of the new things that have been upending the game market like social games, free-to-play, or other new business models. Seems like Nintendo is counting on business as usual; if they were gonna do something different you'd have heard them talking about it.

It's not clear, either, exactly when the Wii U will appear. I'd guess earlier in 2012 rather than later, since this announcement will probably slow Wii sales even further (especially since the Wii U is fully backward compatible).

How does the Wii U stack up against its competition? Lack of a hard drive really cripples its ability to compete with downloadable content, or even streaming content that needs substantial caching. Assuming graphics output to be roughly the same, and the pricing to be about the same or higher, the real differentiation is the controller with the screen. Though Sony may have that covered with the PS Vita, and Microsoft has already shown a connection with Windows Phone 7 devices. The installed base of the Xbox and the PS3 are huge advantages, as are their software libraries. Motion control is no longer a unique feature for Nintendo. I think all the Wii U does is level the playing field; I think Nintendo is going to have to show some unique and compelling software titles for the Wii U to make inroads against the Xbox 360 and the PS3.

Video of Wii 2: Nintendo Fights The Last War

Some interesting video from what's apparently a private developer presentation of Nintendo's new console... you can see the drawing of the controller, and the unit itself sitting on the table. From what this shows it seems the rumors about a controller with a built-in display are true.

The case design may or may not be the actual case design; it's easy enough to mock up a case or change it.Then again, the case design is really about the least important thing for a console. The price is more important, and I think that having a display in the controller is good evidence that the price point on this puppy is going to be north of $300. I suppose Nintendo could make the display controller optional to reduce the price point, but then that reduces the chances for third-party support of the display controller. And if the display controller is a key selling point of the new console, it would seem odd not to put one in the package. So I'm predicting there will be a display controller packed in with the console.

It does make some fiscal sense for Nintendo to leave out a hard drive; it's an expensive component, and requires  more power and other support. Cost is usually a key factor in console design, and especially for Nintendo, who hates to lose money on each console. They don't have the deep pockets of a Microsoft or a Sony to be able to afford a loss leader and hope to make it up on high-margin software later on.

Of course, if they wanted to support a local area network so you could store things on your computer's hard drive and just pass them along to your console, that would be an interesting way around the problem. But not one Nintendo is likely to use, seeing as how that would make piracy even easier. Nintendo spends a lot of time and effort to close down piracy, which makes sense given how high their software prices are.

I still think that Nintendo is building hardware to fight the last war, and creating something that's poorly positioned to fight the next battle in the family room. Nintendo's Wii 2 will be expensive (over $300, maybe $400 or even more) and rely on discs sold in retail stores, and have very limited functionality besides gaming (probably Netflix, maybe a music streaming service). Its main selling points will be graphics horsepower and a controller with a display. There will be some downloadable games available; they'll be small and with development tightly controlled by Nintendo.

Meanwhile, consoles based on smartphone technology (Apple TV and Google TV), and streaming consoles (OnLive) are heading to the family room on or before Nintendo's time frame. These consoles will feature low price points ($100 to $200), games distributed digitally, and a huge array of other media options and app functionality. Development will be wide open, and thousands of apps will be available. App prices will be low (less than $5 to $10) and many will be free, with a variety of monetization models (freemium, subscription, advertising-supported, and others). These consoles will also have the option of using smartphones or tablets as display controllers, as well as more traditional controller options. Motion control will be readily available, too. Social games will flock to these new consoles.

Nintendo may sell some goodly number of their new consoles, but they will be massively outsold by the smartphone-based consoles. Microsoft and Sony had better get some planning done about how they will respond to these events. Sure, they are both making more moves in the right direction than Nintendo, and right now the Xbox 360 and the PS3 are selling better than ever. In the tech business, though, things can change very fast. Look what's happened to RIM and the Blackberry... that can happen to consoles, too.

Wii 2: No Hard Drive

Nintendo needs more fans like these.

Here's an interesting rumor, apparently coming from several sources: The new console from Nintendo (Wii 2?) will not have a hard drive, but instead feature 8 GB of flash memory. Shades of iPhone! Immediately it makes you wonder about storage of downloadable content... clearly Nintendo can't expect to be selling multi-gigabyte games for storage on this unit. I suspect they are planning to ship large games on disc (the disc is rumored to be 25 GB in size for the Wii 2, though probably not an actual BluRay since that would entail paying liceninsg fees to Sony) and reserving the flash memory for small downloadable games and virtual content along with game saves.

It makes sense, I guess, from Nintendo's viewpoint. They have proven their wholehearted resistance to the idea of distributing games digitally, preferring to keep the retail network happy. It is true that downloading multi-gigabyte games is a pain in most parts of the world, for mos users (if not downright impossible for some). This move will probably increase reliability somewhat, although costwise it may not be much of a savings over a small hard drive.

Still, I think in the longer term this may throttle Nintendo's ability to sell downloadable content, which is a vast source of future profits with tremendous growth potential. Then again, I'm not sure that a new console will do very well regardless of the hardware specs; the console era may well be pretty much over, with the survivors battling over shares of a shrinking market. Certainly it's hard to see this right now, and in the hot PR glare coming from E3 the true shape of the future is going to be very hard to discern.

Perhaps if Nintendo were to open up development to a wider array of developers, and get a vast number of low-cost smaller games coming for their console, this could work out well. But that would require a huge change in how Nintendo likes to do business, and they'd give up a great deal of control. I consider that unlikely at best, especially given their previous statements about inexpensive games. There's nothing like diminishing slaes and profits to focus your attention and compel changes of direction though, and Nintendo's seen their profits fall 66% over last year, with sales down by 30%. The lackluster launch of the 3DS, and its abrupt sales slowdown, must be a deep disappointment to Nintendo. Perhaps it may lead them to consider making the deep changes to their business models that I think the changing market demands.

Though even with all these concerns, I'm pretty sure Nintendo will have a better E3 than Sony.

Nintendo Makes It Official: "Wii 2" At E3

No, they're not gonna call it the "Wii Wii". Or Wii 2.

Nintendo has, not surprisingly, made the news official: They will be showing their next-generation console at E3. Launch time is listed as 2012, though not before April. This is all not a big surprise given that Nintendo just announced its year-end results, with a 66% drop in profits and a nearly 30% drop in sales. Nintendo claimed the 3DS sold 3.6 million units, which didn't exactly jibe with the numbers reported in different areas, but we'll chalk that up to sell-in rather than sell-thru. Any way you look at it, though, Nintendo failed to make their stated goal of 4 million units for the 3DS.

Nintendo is still playing coy, though Iwata-san did promise "a new approach" to consoles with the new unit. He also admitted that 3D display is not a key feature of the new console, though given that it's fairly easy (and inexpensive) to implement Nintendo will probably put it in there. Apparently the console will be available for play at E3, though who knows what they might be showing off. Nintendo should probably announce a Zelda title for the new console just to get all the fanboys drooling.

Analysts are already starting to fret over whether this new console makes any sense given the fundamental changes sweeping the game industry. Is this an awkward step, just catching up to the competition and not really making a big leap past them? Hard to say until we know more details, but it's true that taking a big power jump past current consoles would mean a higher cost in materials for Nintendo. Which means they either have to price the console up in the $350 plus range, or accept a lower profit margin (or none at all, selling the hardware at a loss initially). Based on Nintendo's past strategies, I doubt they'll sell hardware at a loss.

Another factor is the development costs for third-party publishers. If this new console is going to push more polygons, a reasonable expectation, that means paying more for artwork to show off those polygons. Add in the extra costs of learning new hardware, and you can see game budgets rising even more. Will third parties really embrace higher development costs whole-heartedly? Or will this only encourage them to invest in less-expensive development of social and mobile games?

If Nintendo ends up pricing this new console at $400, or even $350, we could see PS3/Move bundles and Xbox 360/Kinect bundles substantially undercutting Nintendo on price, perhaps by $100 or $150. Which would put the pressure on Nintendo to make the new console worthy of the premium. If OnLive, Apple TV and Google TV are by then bringing low-cost and free games by the thousands to the family room, where does a high-priced console fit in?

One fact remains that often goes unmentioned: Successive generations of graphics improvement are less and less noticeable by a the vast majority of consumers. Hard-core gamers may be able to spot some differences, but that's only a small part of the potential market these days. Expensive hardware that asks for you to spend several hundred dollars more to get a visual improvement most people won't notice is going to be a hard sell.

If Nintendo is smart, they will think hard about how to incorporate all of the advances in game monetization, distribution, pricing, social networking, and marketing into their new console and its online service. That's the real technology Nintendo has to equal or exceed in order to have a successful new console.

More Wii 2 Rumors: "Stream"?

Concept of a Wii 2 controller... looks expensive.

Nintendo is trying very hard to make sure they are the talk of E3, and in a positive way. Normally they try to release very little prior to the show, in order to maximize the impact of announcements at E3. This year, though, we're already seeing a flood of rumors about the successor to the Wii... and it's still April.

The details concern price, availability, and the name of the so-called Wii 2. Sounds like early 2012 is the release time, which makes sense given how long it takes to develop software (assuming that groups have been working on it for a while already). There's a chance it could hit for holiday 2011, but perhaps only in Japan. It would certainly help create a buzz if they only had a relative handful of units available for Christmas, trying to inspire lots of press and people holding onto Christmas money in order to buy a unit in the first quarter.

Pricing that's being floated now is somewhere in the $350 to $400 retail range, which sounds about right if Nintendo is trying to put together hardware that exceeds the capability of the current competition without losing a boatload of money on the new console. A tricky balancing act, to be sure, and so they will probably hold off as long as possible before attaching a price tag in a public way.

The console would be capable of 1080P output, and probably 3D as well. Supposedly the size is about that of an Xbox 360, with the industrial design resembling a modernized Super Nintendo. (Does this mean we can look forward to purple buttons on the case?) Controllers may include a Wii style remote as well as the aforementioned controller with a 6.2 inch HD screen. I suspect there will be a minimal amount of hardware in the box in order to keep costs down, and you'll likely spend more than $100 extra to get the extra controllers you'd want.

Nintendo's new console will really need some killer software if they hope to generate excitement greater than the 3DS. How about a new version of Zelda, in 1080P? That would get a lot of fanboys drooling. Given the rumored price tag, Nintendo has to find ways to appeal to a higher-end audience, which perhaps is why the rumor is going around that Nintendo is in heavy talks for a Grand Theft Auto 5 for the new console. That would certainly change the tone away from Wii Fit.

The name of Nintendo's new console? Rumor has it a leading contender is "Stream". I guess that's what comes after you take a Wii... sorry, sometimes those puns just sneak out. Perhaps it means they will stream movies, or games, or maybe they are just trying to get a little more online pizzazz going. If Nintendo is really serious about boosting digital distribution, they'll want to include a hard drive or some other sort of mass storage option for downloads. That's a huge limiting factor right now in making the Wii a viable platform for downloadable content sales... there's just not room for much.

Meanwhile, the responses from Sony and Microsoft have been unofficial, but pretty much suggesting that 2014 is the earliest they are looking at for coming out with new hardware. Of course, they may change their tune if Nintendo is eroding their market share with their Stream. Right now there must be a great gnashing of teeth and pondering about how to recapture the news momentum at E3. Sony, at least, has the NGP to talk about, and will probably push that hard so you don't think too much about a new console to replace the PS3. What's Microsoft got? Good question...

Wii 2: Rumor Roundup

I'm pretty sure the new console from Nintendo will not look like this.

An amazing amount of info is now bubbling forth about the new console (the Wii 2? Wii HD? probably some new name entirely) from Nintendo. A suspicious sort of person might wonder if all this isn't appearing with the tacit or even explicit permission of Nintendo, while preserving their complete deniability. It's an old game in the tech business, and it's played masterfully in the gaming business. The combination of numerous press outlets (web sites, these days), and a huge fan base of die-hard gamers make rumors about new games and especially new gaming hardware irresistible. It's an especially convenient way for a company to generate a lot of press, and see what sort of reception proposed products generate, before actually going on the record as planning to produce something.

Big game developers are very good about keeping to their non-disclosure agreements, and generally don't leak very much info at all. If they were to let slip with some info, you can bet Nintendo (or Sony or Microsoft) would punish them... and when you have a chance to ship a launch title for a new platform, which could be an easy path to a million-plus unit seller, you don't want to mess that up. Hence, very little info about new hardware leaks out. Unless the company who created the hardware wants the info leaked... which is when you start seeing the rumors.

In this case, with rumors from multiple sources, it's pretty clear to me that this was orchestrated by Nintendo. It's not a coincidence it comes on the heels of a flawed 3DS launch; this is an excellent way for Nintendo to change the conversation and get some positive buzz before E3. Certainly they've been working on new hardware for years, but probably got serious last year as Wii sales started heading south. Now it's clearly time, or maybe a little past time, to get a new console out there for Nintendo.

What are some of the specifics about the Wii 2? Glad you asked, because I've scoured the web for some data. The Wii 2 will certainly try for feeds and speeds superior to the Xbox 360 and the PS3, though of course there will be plenty of argument about who's fastest at a particular task. The Wii 2 should sport a PowerPC CPU with at least 3 cores, probably a higher clock speed than current consoles, an ATI GPU from the R700 line (one of their latest and greatest). and 512 MB of RAM. The CPU and GPU are probably custom-modified for Nintendo, as has been their practice in the past, to optimize certain functions Nintendo deems important.

The controllers will apparently be a key part of Nintendo's strategy, as they try to innovate here to set themselves apart from other consoles. There will be a 6 inch HD touchscreen on the controller, and the controller will function as a Wii sensor bar for backwards compatibility. The controller will also have a camera, a D-pad, 2 bumpers, 2 triggers... and possibly other functions as well (a microphone is cheap, as are some sensors for orientation... rumble capability, too, I bet). The screen may have touch control, and you could have the ability to stream games to the controller. It's supposed to have better motion control sensing than the Move.

It makes sense to beef up the controller functions, as this is an area where there hasn't been much work for a long time. Certainly the DS design showed the utility of having a second, touch-capable screen handy in game designs. Even handier when you can get information that is kept secret from other players; useful for play-picking in sports games, of course, but there will be other uses, too.

Developers have had units for months, according to the rumors, so these features look to be pretty solid. Of course, Nintendo can feel free to change any or all of these specs since they have not officially said anything yet. I'd expect some changes from these specs before product actually ships. When will that be? It's barely possible they could ship by Christmas, but it seems to be rushing it if they expect to have some really good software available at launch. Perhaps a Japanese launch at Christmas, and then the USA/Europe in springtime might be doable. That's my speculation, but of course actual manufacturing , design schedules and software will affect the timing. Price? This sounds like it will be fairly expensive to me; I wouldn't be too startled to see $499, though $399 is more likely. If Nintendo really wanted to give Microsoft and Sony fits, they'd roll out at $299, but I doubt that will happen.

Speaking of price, the Wii price drop hits a little earlier than expected; major stores like Target and Toys R Us now have the Wii at $169.99. Nintendo has finally joined us in reality, and decided to lower the price of the Wii; the rumor mill says the price will fall to $149.99 in mid-May, in an effort to make E3 even more shiny for Nintendo.

Now we'll have to wait and see how Microsoft and Sony respond. They would really love to avoid putting out a new console, having gotten the current generation to a nice profitability. I expect them to react by cutting prices prior to the holiday season, and perhaps bundling software, and maybe getting more aggressive on pricing for their motion-control hardware Kinect and Move (and the bundles including them). They won't put out a new console until Nintendo really forces their hand. A lot can happen before Nintendo actually gets a new console on the market and it starts taking measurable market share from Sony or Microsoft. Why react too fast? Wait a while to see how things shake out, and meanwhile have the engineers working on new hardware for when you really need to introduce it. Perhaps announce in 2012, and ship in 2013... or 2014... that would be better for Sony or Microsoft. But Nintendo will be trying like hell to force their hands.

It will be an interesting E3...

Wii 2 Rumors Explode

Probably not what the Wii 2 will look like.

It's all over the 'net today: Rumors about Nintendo's successor to the Wii. The Wii 2, Wii HD, or more probably, some other name entirely, has suddenly become a major topic on the game sites. The rumors point to some features: HD graphics output (a total no-brainer of a feature to add), and they are calling it more powerful than the Xbox 360 or the PS3. Which will be quite interesting, if true, since Nintendo has not been the horsepower leader in the marketplace since... well, it must be the N64 days back in the '90s. Raw horsepower can get expensive, though; will Nintendo really be willing to hit a high initial price point?


Supposedly the new console will be announced at E3 for a 2012 shipment, and it's being shown to industry leaders now. The new console is supposed to be backwards-compatible with the current Wii, and there will be a pre-announcement from Nintendo coming before E3. When queried, Nintendo gave its stock "We don't respond to rumors" answer. Check out the sources yourself here, here, and here.


This is NOT a coincidence, folks. Clearly Nintendo is finally letting a little rumor-mongering happen. They're floating a trial balloon, in a totally deniable way, to gauge reactions. It must have finally sunk in that Wii sales (and third-party support) are on an irreversible downward trend. Price cuts will definitely help boost sales, but at the expense of profitability. And even with a price cut to $149 (and eventually to $99) for the Wii coming (rumors say a price cut is coming in May) I don't see third-party support recovering. There are too many other places for publishers to invest their development dollars.

I'd say an E3 announcement of a 2012 release date for a Wii 2 might seem early, but it would be good for Nintendo to get some excitement rolling early. Perhaps they felt this was necessary given the less-than-stellar response to the 3DS in the marketplace. I think they were hoping the 3DS would be such a huge hit they could take their time with a Wii successor. Now that it's clear the 3DS will not, by itself, save Nintendo's profits, they are starting to leak out info about a Wii successor to generate some excitement about Nintendo again.


What are the chances for a Wii successor? It's difficult to really say how well a console might sell before you know little details like price, capabilities, and software... but certainly the Wii is way past its prime. The Xbox 360 and the PS3 are starting to look a bit long in the tooth, but both Sony and Microsoft would love to get a few more years of nice profits out of those consoles before they enter the maelstrom of new hardware again (and all the losses that implies for the manufacturers, plus the pain and suffering of developers trying to figure out how to use the half-baked tools for new consoles... I can hear the screams from here).


If Nintendo is really going for sheer graphics horsepower, it represents a change in their approach. Perhaps they couldn't think of an inexpensive add-on that was as powerful as motion-control has been for the Wii, and with that out of the picture they figured horsepower was the best bet. There are problems with choosing horsepower, though; pushing pixels and polygons gets expensive in terms of silicon. And as the number of polygons gets higher, the differences to consumers are less and less compelling. The difference between 1000 polygons and 10,000 polygons onscreen is huge; the difference between 10,000 and 100,000 is not as readily apparent; and the difference between 100,000 and 1,000,000 is something you have to look at carefully to see, and non-gamers would easily not see it.


In the past Sony would talk about things that weren't polygons to say why new, expensive hardware was worth the money... they used terms like Emotion Engine to say that games could now have emotional content because of the horsepower available. Did we ever see those? No, not really; developers found it far easier to build better graphics than to figure out how to make games more emotional. We are getting games that are more engaging, but it's a slow process. Most of the new horsepower in the latest consoles is devoted to better graphics, displayed faster.


So I think the horsepower route is a risky one for Nintendo, but they are in need of a boost right now. Sales are sagging, the 3DS has not set the world on fire, and their stock price is in the dumper. Perhaps some adroit rumor-mongering can bring it back up for them.

7 Ways Nintendo Can Win

It's possible for your fans to be too devoted.

Nintendo's been around since 1889, so they have seen business cycles a time or two. They have been up, and they have been down, but overall they've continued to thrive. Lately they have been looking a little tired, as the Wii begins to show its age, and the amazing run of the DS line is also beginning to weaken. As far as the world knows, Nintendo is not planning any immediate changes in the Wii product marketing strategy, and appears to be pinning its hopes for 2011 on a successful launch of the 3DS, their new handheld console. They need something to look forward to; profits have dropped 74% since last year, and sales are down significantly in all areas. Nintendo has lost its mojo; can they get it back?

The Wii still has life, but not at $199. The time has come for another price reduction for the Wii; the last time it was reduced was in September of 2009. It should be obvious to anyone that the Wii has not been able to keep its sales numbers up against an Xbox 360 and a PS3 priced $100 more; the 360 outsold the Wii over Christmas, and the PS3 was close. Don't wait around, either. Drop that price now, before the 3DS dominates the story. Renew your commitment to the Wii; make sure the fans know about some killer new games coming for it. At $149, it should see a nice sales boost. Plan to send it into orbit for Christmas 2011 by dropping the price to $99 in September. Let's see Microsoft and Sony go broke trying to match it. Use the higher sales numbers by making a greater effort to attract third-party developers. Revamp your publishing program completely; you want Nintendo to be know as the easiest manufacturer to work with, rather than the most difficult one.

Get creative with the Wii. A price drop is nice, but you need some innovation. Look for a deal with a TV maker to build a Wii into their TV sets. Get the Wii built into minivan entertainment systems for the kids. Make a special bundle for afterschool programs with fitness titles. Create some PR! Get out there and generate some more stories.

The Wii 2 is overdue. You've missed the window for 2011; the clock is ticking for 2012. If you still want to sell a lot of consoles, you're going to need a new one. The Wii is underpowered and not HD capable, and the games are showing it. The Xbox 360 and the PS3 now have motion control options, taking away the Wii's one unique ability. So it's time to change the equation.  Sure, better graphics performance and HD output are a must. Don't try to outmuscle the competition, though. You need to outsmart them. Some spiffy new interface idea would be great, if you've got one tucked away. Improvements to motion control? Other types of sensors? Whatever you can throw in there. Most important, though, is a strong online component, traditionally your area of weakness. This has to change. You need the best online interface, the best environment for players, the best set of downloadable software. And price it all at $299 for the hardware, if not less.

Make the 3DS more than just a game device. You're competing against smartphones with thousands of capabilities. You should at least make it easy to play music and videos. There have been hints you'd like to play 3D movies; get busy and make it happen. I don't see a downside to putting a music and video player on this thing, though I guess storage is the main constraint, but since you have an SD card slot you'll at least be able to put a few GB in there (and it comes with a 2 GB card). While you're at it, open up the eShop to non-game apps, and let developers expand the machine's capability. The whole App Store thing has been instrumental in Apple's iPhone success; why not use that idea yourself?

Reduce the DSi price. Yes, I know you're hoping everyone buys a 3DS, but $249 is too much for many people. Drop the DSi to $99 and watch the sales soar again, especially when you point out they can use the DS games they buy on the 3DS when they get one of those later.

Really leverage your library. Yes, it's cool you can buy old NES games for your Wii... but the pricing is absurd. Why not experiment with prices and see what price point maximizes your revenue? You can always change those digital prices. While you've got the hood open, why not steal Sony's great idea and make your old games available on iOS and Android? It's more revenue; it's great advertising; and it might get people hooked on your iconic characters, whose latest adventures are only available on your proprietary hardware. I know you've been afraid to do this lest you slow sales of your hardware, but that that's not really an issue for old NES and SNES titles, is it?

Innovate. It's really nice that you have a slew of great characters that people love: Mario, Donkey Kong, Link, Kirby, Samus... but when's the last time you created a new one? Sure, keep doing new titles with familiar characters, but take a stab at making some new ones, too. Innovation is not doing a new Mario game, or even coming out with a Wii in a red case instead of white. Come up with something new in your games. More than that, innovate with your business models. Really embrace digital distribution. Try different monetization schemes; have you heard about free-to-play and how much money it's making? Enable in-game purchasing and watch the dollars roll in.  Try licensing some of your characters to an MMO or a PC game... or a theme park or a new animated series.  Hell, just a series of digital comics released on the 3DS... 3D digital comics, that is. Get some buzz going about all the cool stuff Nintendo is doing... which means you have to do some cool stuff. Get busy!

Will Nintendo actually do any of these things? Maybe, but they'll probably do them later rather than sooner. Management seems averse to sudden movement or change. Perhaps continued poor financials will goad them into swifter action, but I'd hate to see it get to that point. If Nintendo can rev up their engine this year, we'll look back on this as just a minor rough patch for them. I hope that's what happens.

Wii at $99? If Only...

Pressure is growing on Nintendo to do something, anything about the Wii. Nintendo seems incapable of admitting there's even a problem, even though the Xbox 360 outsold the Wii handily in November despite the $100 or more price differential. EA's CEO is complaining publicly about the Wii's price point, practically begging for a $99 Wii. Of course, third-party publishers are less than happy with Nintendo's support, which mostly consists of benign neglect.

Check out the chart from Silicon Alley Insider, showing how the Wii's sales have been tanking this year. Analysts are looking for a price cut, or a Wii 2/Wii HD, or something to ignite sales. Nintendo basically shrugged and said "We're happy making our smallest annual profit in six years." It's nice that they're trying to revive the DS line with the 3DS, but that's not going to do anything for the Wii regardless of how well it sells. A price cut is the obvious move while marking time to a new console; at $99 the Wii should zoom to the top of the charts again, and maybe revive some interest among third-party publishers in doing a Wii title or two.

The longer term problem for Nintendo is what exactly a Wii successor would do. Sure, they could add HD output, and a faster processor... but then all you have is a closer competitor to the 360 and the PS3, without any of their advantages (like a hard drive, a robust online service, advanced motion control...). Nintendo will certainly want to have something different up their sleeve, more than just horsepower. Perhaps the delay in creating a Wii successor means Nintendo is having problems coming up with something they think people will like, at an affordable price, that gives them an edge in game development like motion control once did.

I'd like to see innovation in the business model, with a revolutionary jump in their online store, to outpace their rivals and get ready for the Apple TV onslaught. But given Nintendo's track record, they will be slow to innovate on the way they do business.