What They Play has heard from multiple sources in the game development
and publishing community that Nintendo is currently showing early
presentations of its next home console hardware. Apparently set to hit
the market “by 2011” the new device is said to be the true “next
generation” Nintendo console, and far more than a simple refresh of
the current hardware. Unlike previous console transitions from
Nintendo, the new system will be presented as a true successor to the
Wii, and is being dubbed by those that have seen the presentation as
“Wii HD.” There is no indication if this will be its eventual name,
but the nature of the transition has been characterized as similar to
“the shift from Game Boy to Game Boy Advance,” where familiar, key
elements were left intact while the core hardware was made more
powerful. It is expected by all those that we have spoken to on the
subject that the new device will retain the Wii name in part.
While our sources are reluctant to be too specific about “Wii HD,”
they have been able to divulge some (albeit predictable)
generalizations. High definition visuals are assured, as is a greater
emphasis on digitally distributed and backwardly compatible content,
indicating that the new system will feature some form of local storage
medium such as a hard drive or large flash memory solution. It has
also been indicated that Nintendo’s emphasis is again on what the
consumer will hold in their hands and interact with, rather than the
“console” itself.
Nintendo has proven it can be extremely successful by leveraging
processor technology that is not on the bleeding edge, and be more
profitable and more innovative as a result. In a 2006 interview with
Business Week, Nintendo visionary Shigeru Miyamoto stated, “The
consensus [at Nintendo] was that power isn't everything for a console.
Too many powerful consoles can't coexist. It's like having only
ferocious dinosaurs. They might fight and hasten their own
extinction.” Based on our conversations about “Wii HD” this attitude
would seem to still prevail.
But why should you believe this? Everything stated so far could easily
have been the result of educated guesswork or speculation. While a
Nintendo representative provided the expected response that, “Nintendo
does not comment on speculation or rumor,” there is additional
evidence, outside this commentary, to suggest that something is going
on.
In 2003, Nintendo declared that $34 million was spent on R&D. This
figure steadily climbed to $103 million in 2006 and the following year
bumped dramatically to $370 million.
Based on figures from Nintendo’s annual financial reports, the company
is currently spending more than ten times as much on research and
development as it was five years ago, and since the Wii was launched
in 2006, R&D spending has more than tripled. While this could be
attributed to any number of additional projects, the level of spending
suggests that a large project is in the works. In 2003, Nintendo
declared that $34 million was spent on R&D. This figure steadily
climbed to $103 million in 2006 (the year that the Wii launched) and
the following year bumped dramatically to $370 million. When asked to
explain the escalated spending, Nintendo representatives were unable
to provide comment.
The current Wii hardware is based upon processors and graphics
technology supplied by IBM and AMD. These two companies have a joint
development agreement together, which is described by AMD as being
focused “on delivering a range of integrated platforms to serve key
markets, including … gaming and media computing.”
The joint development agreement between IBM and AMD expires on
December 31, 2011 but “may be extended further by the mutual agreement
of the parties.” This suggests that Nintendo will be leveraging
research and development from the partnership in time to ensure that
it’s new hardware will be compatible with the Wii’s current
“Hollywood” and “Broadway” processors. As Microsoft learned in the
transition from Xbox to Xbox 360, switching hardware vendors can make
running older games on a new system a much more difficult proposition.
The dramatic bump in spending at Nintendo may also be reflective of
Nintendo’s work on a rumored new DS, said to feature a camera and
music player. Iterating on the DS in 2009 would certainly shake up the
market, though given the incredible monthly sales of the device it
hardly needs reinvigorating for the time being. When the Nintendo DS
was launched in 2004, the worldwide installed base of the Game Boy
Advance was 53 million (on top of the Game Boy’s incredibly huge 118
million.) So far, 80 million Nintendo DS units have been sold
worldwide, and demand shows no sign of slowing.
It is unlikely that any official acknowledgement of Nintendo’s new
hardware will come until at least 2009, however company president
Satoru Iwata will be delivering his annual fall presentation this
Wednesday.