Nintendo "not there yet" on Wii successor

• by John Davison
• March 10, 2010 11:28 AM PST

In an interview with Forbes today, Nintendo of America President and COO Reggie Fils-Aimé downplayed the threat posed to the DSi by the iPhone, and says "we're not there yet" with regard to a Wii successor.

With the iPhone building momentum with games developers at the Game Developers Conference this year, Nintendo's dominance in the games market, and particularly the mobile space is arguably under more of a threat than ever. In an interview with Forbes today, Nintendo of America President and COO Reggie Fils-Aimé stated that "there's been no data to suggest an encroachment on our business. The iPhone has been out on the marketplace for just a couple of years. In the last two years we've set two records on our DS business, last year selling over 11.2 million units. So there's been no evidence that we've lost any business to that competitor."

When quizzed on a Nintendo response to Microsoft's Natal and Sony's motion-control system, or to the need for Nintendo to innovate further in the hardware space, Fils-Aimé stated, "we pride ourselves on the big innovative jump, typically in the area of the consumer experience. The way we approach that innovation, because we have hardware developers working side by side with software developers, is that when the software developer comes forward with an idea that can't be executed on the current platform, that's when we start thinking seriously about the next system. We're not there yet, from a Wii perspective."

He also downplayed the potential threat from cloud-based gaming services like OnLive or in-browser social games. "There are still new experiences that can best be brought to a consumer with a controller, coupled with a piece of hardware, coupled with a compelling piece of software," he said. "Yes, the world is moving more and more digital -- and so are we. We've got great WiiWare content, and we've done a fantastic business with our Virtual Console. But fundamentally, for those big games, for those experiences that are truly innovative, we do think a controller coupled with software, coupled with hardware is necessary to bring it to life."

Fils-Aimé also downplayed the significance of the new economic models that are being discussed so much at GDC this year. Of the virtual goods market -- something that is generating more than $1 million a day for social games company Zynga -- File-Aimé stated, "We don't think it's an idea that creates value for the consumer. Consumers love to make Mii's and that has been core to the Wii experience. We don't believe selling clothes or hats is something that the consumers will find valuable. And candidly, if you really challenge the competitors who are playing in this space, I think they would be hard-pressed to show any true value from a consumer standpoint. What we think is important is providing real experiences. So the content drives that. We think that providing information through the Wii and through the DS and DSi is going to be a critical opportunity for us. We're doing that now through the Nintendo Channel, we're doing that through a self-produced video segment called "Nintendo Week." So we think those initiatives provide a lot more consumer value rather than trying to sell 'wearables' and action items for your avatar."

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