I hear you’ve had some problems recently. The 3DS didn’t sell at your asking price, and third party devs are cancelling and and delaying games until they’re sure the release will pay off. You’ve had to slash the price until you’re subsidizing each console like a common gaijin. Somewhere along the way your stock kinda lost 20% of its value, and now your investors want you selling games on the App Store. I’m no professional analyst, but I’m pretty sure that means they want you to close your hardware divisions and follow Sega into the echo chamber. Even I’ve had doubts. I customarily give you a year to argue your latest INSANE idea, because you’ve pulled it off so often. This time though? 3D? The desperation play that movie studios make every time they have a midlife crisis? Add that to the sales, the uncharacteristically steep and early price cut, and the stock price, and everyone can smell your blood in the Blue Ocean.
I figure this is the closest you’ll ever come to a teachable moment, so I hope you’ll read this letter through. Everybody says Apple is eating your lunch. This much is true. They also say it’s because video games cost $1 now. That part is bullshit. Let me explain.
You built your earlier dominance on the Blue Ocean strategy. It was a crazy idea that everyone would like games if they weren’t so expensive and hard to play. This part worked and worked well for both consoles and portables. In fact, when Apple decided to integrate a digital distribution platform into their iThings, gaming was finally mainstream enough to explode. Tap twice and pay a buck? I’ll try that. Maybe Apple planned it that way and maybe they were lucky, but they certainly capitalized on the phenomenon.
Developers and publishers both saw easy money in the app store and started developing for it. Right around the same time, Satoru Iwata was shooting his mouth off about how Nintendo doesn’t WANT “garage” devs. And so all the talent that’s driving the bazillions in digital income went to the App Store. And Steam. And PSN. And (god help them) XBLIG.
When Apple swam into your blue ocean, they didn’t steal the fish; they stole the algae and the krill. Your ecosystem is losing producers, and the the whole thing will collapse if you don’t get them back. Nobody is talking about you because everybody is talking about Angry Birds, or Infinity Blade, or Ms. Splosion Man.
So you need to do two things. First you need a digital store for the 3DS that actually works. It needs to be shockingly easy to find, buy, and talk about games. That crazy user interface team that made the Wii? Find their software equivalent, and set them working on a way to make the store amazing. Don’t say no when they suggest that you tie game purchases to some sort of account. Building the infrastructure will be difficult, costly, and dangerous, but you can’t really get around it. I mean, unless they come up with some INSANE idea that does the job.
Second, you need to choke on your hubris for a minute and start courting some smaller developers. They make small scale and relatively inexpensive projects that are perfect for digital distribution. There are a lot of small developers who share your outlook that premium game content is worth paying for, and they make projects to match. Most of the successful developers I’ve met make their games cheaply and fast, which is the pace you’ll need to get the ball rolling. Best of all, indie developers know the digital market, which is a place where you sorely need some pointers.
Most of the indies I’ve met make games that would be perfect for you. Both Brainpipe and Aaaaaa!! were practically made for 3D. Osmos is a perfect touch game. Whatever happened between you and Team Meat, maybe you can fix it. If it helps, I have Dejobaan on the record saying they’d love to port Aaaaaa!! to 3DS. Those are just the games from successful developers; right now somewhere there’s an indie team that would sacrifice a goat for a little promotion and a platform with some name recognition.
You don’t need to swallow your pride with the hubris, though. Put the young hopefuls through the QA ringer until they meet your quality standards. Negotiate with the freelance pros. Do the work to make a store where it’s easy to buy the best games on the market, and you’ll find that the customers and eventually the big name third parties will come with it. Regardless of what you do, try to remember that you sell a console with its games. So get some games on the 3DS before it vanishes into irrelevance. There’s still a holiday season before the console really strikes out, you can do this.