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GDC 11: Iwata isolated as iPad 2 signals Apple intent

Monday, 7th March 2011 12:11 GMT By Patrick Garratt

GDC 11 showed Nintendo lacking with the impending 3DS as Apple dropped any pretence about its intentions on the gaming space.

The Iwata keynote

Here’s the entire Iwata speech from GDC this year. The comments about mobile development are in the final section.

GDC is the best barometer we have of the future of videogames. The San Franciscan event is the first of its type in the games trade’s annual roadshow, setting the mood for the year and, through its arena of developer pontification, giving a clear indication of emerging trends in the creation space.

Last year, the headline was Move, prepping an end-year motion run-off between Microsoft and Sony which was to dominate the console market in 2010. In 2009, the darkhorse story was the announcement of cloud service OnLive, and in 2008 we saw Gears of War 2 announced with a Lancer in Microsoft’s keynote.

This year was different, and nothing encapsulated GDC 11’s message better than an eyebrow-raising quote from Satoru Iwata in his front-show address.

“The value of videogame software does not matter to them,” he said, speaking in badly-veiled terms about Apple. His speech was immediately followed by this year’s major headline, and a clear indication that the “videogames trade” you think you know is now morphing at lightspeed: the announcement of iPad 2.

Bitter, needy, outdated

The tone of Iwata’s keynote was in stark contrast to that of his 2009 delivery, which brimmed with optimism. The president rounded out his talk two years ago – which was full of Miyamoto’s genius, Wii updates and a first showing of Zelda: Spirit Tracks for DS – with the following: “The future of videogames is in your hands, and I cannot wait for you to show us your surprises.”

In 2011, though, Iwata’s message had changed drastically. He started by quoting developers as saying they were worried about the future, and rounded out with an unprecedented attack on app store culture and the stunning rise of the smartphone and “social networks” as gaming platforms. Iwata said that mobile development could threaten game developers’ ability to earn a living, and that software craftsmanship was vanishing thanks to phone manufacturers offering a route to market for small, cheap games.

“Games development is drowning,” he said, noting that “tens of thousands” of game are now available through the “big app stores”.

In retrospect, the Nintendo president looked bitter, needy and outdated. By his own admission, he was speaking to a crowd of which the “majority” were mobile developers of some sort. He offered no solution to his problem. And let’s be clear: Apple really is his problem.

Let’s do some napkin maths. DS has sold in excess of 150 million units since its launch in 2004. Apple, speaking immediately after Iwata’s GDC speech, said that it’s shipped over 100 million iPhones since 2007, and 15 million iPads since early 2010. Apple has the most popular online content delivery system in existence in the App Store: Nintendo is essentially nowhere in terms of digital distribution, although it will begin to offer eShop services to 3DS in May, as confirmed in Iwata’s keynote.

Apple is able to iterate hardware and software quickly and significantly: Nintendo is not. Apple has a window through top tier market positions into mobile, tablet and desktop spaces: Nintendo does not.

A survey just before GDC showed that over a third of all UK and US adults have played a mobile game in the past month, and that 83 percent of mobile phone gamers who own a smartphone said they’d played in the past week.

Underlying Iwata’s GDC address this year was the reality that Nintendo’s dream of owning the mobile gaming space has been destroyed by Apple and Google, and it’s a situation 3DS is highly unlikely to reverse, what with its £40 games and lack of anywhere connectivity.

This elephant in the room set the tone for the entire show. Videogames are not changing. They’ve changed. And Nintendo is suddenly looking as though it simply hasn’t changed with them.

”Nobody knows what’s going on”

If you’re in any doubt as to the importance of Apple’s iPad 2 announcement, ask Mark Rein. Rein heads up business development for Epic’s Unreal Engine, irrefutably the most successful catch-all middleware solution in the games industry as a whole. Unreal Engine forms the basis of a huge amount of major 3D games, and it would be difficult to name another platform as influential to games development period. Rein made sure his face was seen at the Nintendo keynote, right? Of course not: he was at the iPad 2 conference.

“It’s fantastic for gaming,” Rein said of the announcement, noting the fact the machine’s graphics capabilities are nine times faster than the original iPad. Rein said later in the week that 3DS couldn’t “deliver” tech specs to run UE3, and that Chair’s Infinity Blade, an iOS-only release, has outsold XBLA arcade favourite Shadow Complex, developed by the same studio.

iPad 2 is not just the release of a new Apple “thing”: it is the solidification of a mainstream gaming platform emerging at a pace that companies like Nintendo are essentially helpless to check, as Messieurs Iwata and Rein are very well aware.

If GDC said one thing this year, it’s that power is rapidly shifting in videogames development, and the days of Nintendo being able to stand up in front of the creative community and seriously claim to be in control appear to be over.

Epic motormouth Cliff Bleszinski, speaking to Eurogamer at the show, summed it up well: “It’s like the fucking wild, wild west again right now. Nobody knows what’s going on. There’s so many platforms, between mobile, between social, between motion controls, hardcore, PC; I mean, online, MMOs; it’s just everywhere. I don’t have the answer for it, but the person that figures out how to tie most of it together is going to be the one that wins.”

See if you can work out that puzzle for yourself.

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29 Comments

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  1. Blerk

    A great read! Iwata really did seem worried, and so he should be. Do I need to say again that I suspect the age of dedicated handheld gaming devices may well be pretty much over? I’ll be amazed if the 3DS and PSP2 do even half as well as their predecessors.

    #1 3 years ago
  2. Crysis

    He can’t promote his own products well enough so he instead slanders others.

    #2 3 years ago
  3. tenthousandgothsonacid

    Wise words pat.

    #3 3 years ago
  4. Goffee

    Hmmm, do you think Sony – with its NGP connectivity (even if there are two versions – WiFi and WiFi/3G) – done enough to mitigate the Apple threat? The PSN store is hardly awash with original mini content, but it does have potential.

    Ipad 2 vs. NGP (http://bit.ly/g5TJyU) could be a very interesting battle, but as long as “the kids” are still buying Nintendo, will it really threaten big N that much?

    #4 3 years ago
  5. FredEffinChopin

    Wow, this just goes to show that no matter how entrenched in the industry one is, one can still be completely out of touch with gamers and their needs.

    The I-Pad2 isn’t going to replace anybody’s DS, 3DS, or PSP-x. With the original cheap line going at $500 a pop, and sporting an interface that doesn’t accommodate traditional (controller-based) video games well, it’s safe to say that people aren’t going to forego a Nintendo or Sony handheld for the sake of picking one up. People are buying an IPad for an IPad, not for a DS replacement. The fact that people buy games on IPads and smartphones doesn’t equal lost potential sales for anyone else, or not too many anyway. These are people with money burning a hole in their pockets, who want to use their shiny new toys that they upgrade every18 months. Games are cheap and plentiful on the Apple store, so they sell very well. That doesn’t mean these people would otherwise be plunking down $40 for this season’s Mario title. The Ipad2 is no more of a threat to Nintendo than Maxim Magazine is to last year’s Hugo award winner. They’re two different things.

    If anyone at Nintendo was that worried about remaining competitive they should have directed resources into making sure their hardware wouldn’t look dated in 2012, rather than adding 3D functionality that the majority of the users are going to ignore most of the time. Or, do neither of those things and keep the price of the hardware competitive. They’ve made their bed, now it’s time to make with the Marios and Zeldas like the fans expect.

    #5 3 years ago
  6. Blerk

    The iPad2 might not be much of a threat, but the iPhone is. Specifically to Nintendo, too – that ‘soccer mom’ audience that they so expertly hoovered up with the DS? I suspect they won’t be buying a 3DS.

    #6 3 years ago
  7. FredEffinChopin

    @4

    I see netbooks and tablet PCs as the IPad’s only form of competition. NGP is a gaming machine, people will be choosing between that and the 3DS (or getting both) if they’re in the market for a handheld gaming device. As far as Apple goes, there really is no single competitor. They will thrive on the IPad 2, as with most of their products since their infomercial days. Anyone struggling to decide between an NGP or an IPad is seriously confused about their needs.

    #7 3 years ago
  8. Mike

    I agree with Iwata. Mobile one-trick pony gaming is full of utter shite.

    I want my games on a screen that’s more than 7/9″. I want production, story, creativity, invention. I don’t want invite your friends share shit shite. I don’t want to buy yetanotherpuzzlegame, I don’t want something to be addictive. I want it to be good, have decent support and to take me to another world.

    Until games like Mass Effect, Witcher 2, Halo, Fable, Heavy Rain, even adventure games (Gemini Rue) are on my phone will I ‘consider’ them.

    I hope mobile gaming fucks off, tbh. Not just from a developer’s point of view (competition, ad-space, wasted time, Apple pulling out not giving a reaosn etc.), but from a gamer’s. Anyone who thought the Wii was anti-gaming, should stop fucking playing their word-game based on tetris, based on peggle, based on geo wars, on the bus to work, and opt out.

    :)

    #8 3 years ago
  9. frostquake

    Unless Apple Changes its Pricing Strategy it will NEVER win over console gamers and portable gamers. Consoles/portables, over time come down in price, while Apple products tend to stay the same price here in the US, until they simply sell out.

    Apple tends to release new products, every 6 months, Uh, just look at iPad 1 just came out April 2010, and now were getting iPad 2 in just a year. That is a “computer upgrade” mentality not a console/portable mentality that tends to be a 5-10 year cycle. Who wants to spend $700 US on an iPad to just have it become “outdated” in a year. The PSP came out in 2005 and has had a 6-7 year cycle, and the DS came out in 2004, with minor upgrades, having about a 7 year cycle.

    95% of the population in the US, can’t afford to upgrade every year for a gaming iPad, so Apple will really have to change to the gaming culture and not the phone culture to get it right. That is why “social” gaming and simple games are “exploding” in the US right now. People can buy a Netbook for $199 and play Social Games and simple little games with little investment, and that brings up another point.

    Is anyone really willing to buy an iPad 2 and pay $59.99 for a game like Call of Duty 12 or whatever, on a $700 device that will be outdated in a year, and have Call of Duty 13 come out for iPad 3??

    A few maybe, but a majority won’t.

    If Apple falls in though with the business model of the major 3, instead of doing only what they want, and listening to their customers( We all know how well Apple listens to its customers) then they may have a chance.

    #9 3 years ago
  10. Mike

    @5 Good point. iPad is going to have to have some amazing games, seriously amazing to make me want to pick one up. It’s also going to have to not update every fucking year with a more powerful processor, res, etc. As then consumers are just going to get raped as all of a sudden, a ‘better’ game comes out that their current machine isn’t capable of less than a year after they’ve forked out £500 for it.

    Aplle really can do one is this iPad yearly release window sticks.

    #10 3 years ago
  11. RockTwist

    I bought an Ipod Touch, granted not particularly ‘top of the range’, and I was enjoying it. That is until under 6months later I got a nice message on the App Store that I couldn’t play a game everyone was raving about because my device was outdated. So yeah, i’ll stick to gaming machines ta.

    #11 3 years ago
  12. Crysis

    I would imagine PC tablets having a slow start but eventually replacing notebooks.

    #12 3 years ago
  13. typeface

    I’ve got to say I agree with @5.

    In all honesty, it’s like saying youtube has replaced commercial cinema. If a respected film-maker releases a film on youtube or another free video streaming service, yes it will get hits and people will watch it. But does it replace the same film-makers proper budgeted big screen cinema or home cinema? Not the least likely. I remember there was a time when most film-makers were confused about distribution (it’s a lot safer now but still chaotic). What really happened is that revenue streams got affected and budgets got confused with where the output goes. Not for the major studios but for the little guys.

    What should most likely happen here is that apps and smaller games will not seriously affect a dedicated handheld console because they are two different markets with an intersection. Iwata had a few points but he wasn’t really be clear. What the gaming industry needs is quality but they also need to get their budgets sorted. iTunes games are going to be the low-budget games, they are going to be the games for shorter breaks, the dedicated handhelds for longer breaks. The crux for the dedicated handhelds is of course battery-life. Both Sony and Nintendo need to address this better. Try playing Dead Space on your iPhone for all of your breaks, it’s pretty much dead after a few. Now speak practically do you want people to call you and make texts or do you want to keep playing the game on the iPhone. Most people would choose to get phone calls, Apple isn’t really going to change what they do. It’s good for them. Low power games are fine on the iPhones and Androids but try playing Infinity Blade for an hour your battery runs down from 90% to 30%. Now am I going to continue playing that game before I get home? Not really.

    A low power app like GameDevStory can run for 4 hours on the other hand without a major issue.

    iPads on the other hand are a different market, not everyone buys it to play games of course. Though that’s a good thing.

    The 3DS and NGP are dedicated handhelds where you don’t have to worry about things like am I running low on battery and will that pretty much isolate me from my friends and contacts for the next few hours. As long as that issue runs in the back of a person’s mind there’s no way a Phone will be the dominant games device. Not to mention the biggest issue in gaming is copying vertical integration from the film industry. Studios just need to realise that there should be different budgets for games and thereby different price points which should help them to compete on all levels. A few studios have, but not all.

    Of course there’s also the cost of these devices without a contract.

    #13 3 years ago
  14. walkingfiend

    again another predicting doom of Nintendo?

    #14 3 years ago
  15. Dannybuoy

    I guess he’s worried because smart phones et al have eschewed in a new era of games that cost very little and incremental updates are very cheap or even free. Nintendo has been charging full price for incremental updates to games for years ;-)

    #15 3 years ago
  16. datamonkey

    @14 – Yes this site seems to like pointing out negative stories about Nintendo!

    Personally I can’t wait for 3DS & NGP. iPad is cool but playing games on it sucks pretty bad imo unless you just want a brief 2 minute gaming session with no depth…

    The amount of apps I have downloaded that I only played for 5 minutes is ridiculous. These were highly rated games too. I just can’t get on with gaming on ios devices so now I don’t bother at all and surely I’m not the only one…

    #16 3 years ago
  17. walkingfiend

    @5

    that was a long comment.

    agree with most of the first paragraph.

    First I don’t know based on what info you are claiming that 3D is something that people aren’t going to use. Reviewers and users are stating completely the contrary. 3DS is causing problems for some people, like the Kotaku reviewer, sure, but even the man at Kotaku didn’t say that he didn’t want 3D, it was just causing him trouble (and he is among a few who have experienced this type of problem – CVG people actually bashed him and said they didn’t have any problem whatsoever). You can check with reviews at places like Eurogamer and CVG, and there are LOTS of user feedback at GAF. Saying that 3D is gimmicky or isn’t used by people is something that is totally contrary to the facts currently present. Maybe in cases such as DOA that frame rate changes so much from 3D to 2D, some people prefer to turn it off, but thats just about it.

    it’s like saying that change of TV and movies from B&W to color has been something gimmicky that doesn’t people won’t care in long time.

    and about 3DS being dated. Actually 3D was something that was added to the system later, it’s pretty marketable and makes its being in focus understandable. But that’s not just it. 3DS has spotpass and streetpass which are phenomenal in terms of connectivity, specially streetpass. AR games are hugely popular, evident from lots of videos being uploaded to youtube and fan reactions. Coin systems is a very nice addition that paid off in Pokemon and now it maybe used by other games. It’s the first console, whether home or portable, that has this much advanced and practical multi-tasking . It has a universal friend code and friend lists which both are huge advances compared to wii and DS. And in terms of power if it is enough powerful to run games like Resident Evil Mercenaries in an almost lunch time window, which is a HUGE leap compared to DS, it is actually more advanced compared to Wii when it comes to lighting and shaders. And the 3D is definitely going to be used for watching movies or video clips. It has so many new features that motions sensing capabilities barely came to my mind.

    The only area that IPad is more advanced is graphical processing power, and NGP has the plus benefit of an undeniably much more sophisticated control system.

    3DS is anything but a dated portable console.

    #17 3 years ago
  18. Erthazus

    you should stop these ipad2, 3DS and NGP holy wars.

    the reason is simple: we can’t predict a shit until all of these devices will hit the shelves.

    You should turn off Michael Pachter mode.

    #18 3 years ago
  19. walkingfiend

    @Erthazus

    lol at Pachter mode, that was nice!

    #19 3 years ago
  20. horse

    iWata

    #20 3 years ago
  21. RockTwist

    *groans*

    #21 3 years ago
  22. xino

    why should he be worried!??
    come on people…this is a PHONE we are talking about!
    Everyone is bound to have mobile phones, everyone in a house hold except for kids under the age of 12 will not have mobile phones.
    Even old people have mobile phones.

    So of course iPhone was meant to sell 100million in 2007 because it’s a damn phone! Why did it sell? because of it’s gimmick touch screen and apps. Why is iPhone outselling Black Berry, BB is more of a smart phone to casual friendly phones. people only use BB for the free BB messaging services.

    I love Iwata’s keynote and it’s something every dev to take in mind. “Content is king”. Meaning User Sharing Content will be the future and will over take Multiplayer now! User Created Content is more lasting than Multiplayers.

    Why should iWata be scared? 100,000 is reported for UK 3DS preorders, all 400,000k limited units in Japan are sold out! Nintendo are going to pull the “Wii shortage strategy” thing again with 3DS, Sony tried to do this with the ps3:/

    Why should you try and compete with a company that offers a device people cannot live without!?

    It’s like you are a Computer company that creates PC systems and you are trying to compete against a food company that sells food. Of course the food company will outsell your pc system because food is what people need everyday!

    #22 3 years ago
  23. hitnrun

    The headline is nice. I forgot who Iwata was for a minute and was imagining an Apple exec holed up in a hotel penthouse, hiding from the media trying to pump him for info about the iPad 2.

    I have no idea what Iwata is so excited about. Is it some kind of shortsighted business culture thing; he’s bristling at competition? I’d say it’s a Japanese competitive thing, but that’s not really fair because a lot of big shot western balloon-heads are the same way.

    This standoffish view misapprehends the nature of business. The point of business is to make as much money as possible, not to make more money than anyone in particular. Competition comes from fighting for the same dineros, not from empty pride or spite. Coca-Cola competes with Pepsi because people always buy either one or the other; they don’t compete with the beer companies or milk because that would be wasteful.

    Iwata is right, of course: mobile games are mostly garbage, and maybe he’s just blowing off steam at all the Farmville makers whom he perceives are swamping his industry. But for the moment, their garbage is mostly harmless garbage to him. The DS hasn’t lost ten cents to Apple so far. I think Nintendo should wait until their handheld fails to outsell all other consoles combined before they start grousing publicly about it.

    #23 3 years ago
  24. brotherhoodofthewolf

    talk about inflammatory reporting. go sit in the corner.

    iwata is right in many ways. there is so much free and low-priced crap out there, it is tainting the market.

    #24 3 years ago
  25. elronathon

    I’m an Indie developer and I agreed with much of Iwata’s statement. The value of our product is being undermined by a rush-to-volume trend. I aspire to making bigger games that I can take longer to make, for now I make small, very small games with less financial risk. My hope is to build up my own resources to the point where I can afford food for the time it’ll take me to make a bigger game. In the current climate I worry if that’ll ever happen.

    There do seem to be some parallels with the crash of the early 80s. And beyond that we are in danger of creating a financial bubble – underselling and creating dangerously low margins.

    I agree that Ninty have a vested interest in knocking the competition but to rule out everything said by him as just hot air might not be beneficial either.

    #25 3 years ago
  26. FredEffinChopin

    @18
    That wouldn’t be predicting then, would it? It would be waiting to see the results. What’s the problem with a little bit of prediction and discussion? You know you aren’t obligated to comment on every single story, right? Move on if you don’t care about it.

    #26 3 years ago
  27. FredEffinChopin

    @17
    First off, I’d like to point out that your post is double the length of mine. Second, you seem to be seriously misunderstanding what I said there. I never called the 3DS a dated console, but visually it’s going to look that way before long compared to the IPad2. Do I or other gamers care about that? It doesn’t matter. The reason I bring it up is because Iwata is comparing the two products, and that’s the one and only department where the IPad might have the upper hand in terms of games. What I was saying basically, was if you’re worried about that IPad dethroning anyone in the portable gaming market, then why not challenge them on their own strength? And if not, then stop bitching about it, and carry yourself with some dignity. This is Nintendo for Christ’s sake.

    As far as how many people will use the 3D, I guess time will tell. I’ve seen a lot of mixed reviews, but a good deal of indifference about it, or outright dislike in some cases. I know in NY a lot of people like to play portables on the subway and bus, and from what I’m hearing about the sweet spot on the 3DS, it doesn’t sound too practical to use in that environment. We’ll see though, I may well be mistaken.

    #27 3 years ago
  28. FredEffinChopin

    Oh, and as far as people accusing the site of inflammatory journalism, give it a rest. This is totally legit, Iwata was up there making this sound at least dramatic as the article does, there was no slant put on this. The headline could’ve been a lot worse considering the way this guy was going on.

    #28 3 years ago
  29. OlderGamer

    I agree 100% with Blerk. I been saying it for a long time.

    If 3DS and PSP2 undersell it will not be because of Apple. It will be because those game systems are too expensive. Their games are too expensive. And the scope of things they offer is too narrow.

    Can they play and store and interface with a PC to easily use music/movies/tv, and apps? Can users create on them? Can they be used as fully functional PDAs? Can they make phone calls? Can they network, anywhere? Can they video conference? Are they small enough for a front pocket fit in your jeans? Can they charge battery with a plug it in anywhere usb-usbmini? How long does the battery life last?

    For the most part the 3DS and PSP2 only aim to play games on the go. That is what I mean by narrow. There is nothing wrong with that for many. Esp young kids.

    But the features that what they offer at the price point there isn’t much to get excited about for the average person on the street.

    In todays world Cell Phones, iTouches/Pads are going to be king.

    You have to be able to understand what the everyday person wants and cover those things. Thats is where the JP idea of handhelds are failing.

    That being said I figure this round of handhelds will sell well enough. I feel that 3DS will greatly outsell the PSP2. But while every adult PSP2/3DS owner will have a cell phone, not every adult cell phone owner will have a 3DS/PSP2.

    If that is threatening to iwata, then he should feel very threatened.

    #29 3 years ago