20 Reasons Why Nintendo Should Consider Investing In Their Own Sports Studio

Oct 17, 2013 at 8:14 pm/ Author:

Sports banner copy

 

As a long term investment, I think it would be wise if Nintendo created a new western studio dedicated to the licensed sports genre. I’m not strictly talking about improving the sports situation for the Wii U and 3DS. I’m talking about improving the sports situation for all future Nintendo platforms. If you’re a hardcore gamer with zero interest in sports games, you probably don’t see it the same way. I ask that you look at this from a business perspective instead of your own personal interests and tastes in games.

Nintendo has to maintain their popularity in North America and Europe, and almost every single Nintendo executive has stated their desire to expand Nintendo’s audience beyond just Mario/Zelda fans. I believe if Nintendo were to invest money and effort into the sports genre, it would persuade more non-Nintendo fans to buy Nintendo platforms.

The perfect location for a Nintendo sports studio would have to be California. If you want to recruit developer talent with sports experience, you need to open your studio where all of that talent is located. Visual Concepts, the company that develops sports games for 2K Sports, is located in California. SCE San Diego Studio, the developer of Sony’s NBA and MLB franchises, is located in San Diego, California. The main headquarters of Electronic Arts is also located in California. Thankfully, Nintendo of America’s sales and marketing division is located in Redwood City, California, so Nintendo does operate in some capacity in that state.

Without further delay, here are my 20 reasons on why a western sports studio is a great long term investment for Nintendo.

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1)  Nielsen says avid sports fans are 33% more likely to buy a game console than non-sports fans

In February, Nielsen published a research study revealing some interesting information. Avid sport fans are 33% more likely to buy a game console than people who aren’t sport fans. Considering how many people bought a Wii for Wii Sports or all of the Europeans who buy a PS3 just to play FIFA, this statistic isn’t all that surprising. In the same study, Nielsen also found out that sports fans are 52% more likely to buy a tablet than people who don’t watch sports.

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2) 65 percent of “super sports fans” are the first consumers to buy the newest high-tech gadgets.

As it turns out, sports fans are usually the first people to line up for the latest technology.

The Consumer Electronics Association (CEA) conducted a study on people who describe themselves as “super sports fans”. The CEA found out that 65% of these people are early technology adopters who buy new technology within the first year of release. When it comes to non-sports fans, only 36 percent describe themselves as early adopters of technology. This could explain why Microsoft was obsessed with reaching the sports crowd during their Xbox One conference earlier this year.

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3) North America is Nintendo’s most important market to build a worldwide install base.  Sports are important in North America.

Throughout history, North America has always been the most important area of Nintendo’s worldwide install bases. The two most popular Nintendo consoles in North America were the NES and the Wii. The NES had a massive lineup of sports titles published by Nintendo and third parties.  The Wii also had large number of sports titles for consumers to choose from. For example, Nintendo published Wii Sports, Wii Sports Resort, Punchout Wii, and Mario Strikers. On top of that, the Wii received a wide variety of licensed sports titles from Electronic Arts, 2K Sports, and even Konami.

The two consoles (NES and Wii) that emphasized the sports genre became the two most popular Nintendo consoles in North America.  This is no coincidence.

install base

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4) Sports games are the easiest way to explain the innovation behind Nintendo’s unique controllers and interfaces

The sports genre helps Nintendo do a better job explaining why their controllers or interfaces are innovative. Most consumers, even those who hate sports, understand how sports work. It’s easier for consumers to understand something unfamiliar when it’s associated with something they can relate to.

sports controllers

Remember at E3 2008 when Nintendo explained how you could use the Wii Fit Balance Board to snowboard down mountains in Shaun White Snowboarding? Remember E3 2011 when Nintendo showed how you could use the GamePad like a catcher’s mitt, or hitting the golf ball off the sand on your GamePad?  These ideas click with people because people understand sports. When I showed non-gamers the idea of drawing plays on the GamePad in Madden NFL Football, they instantly understood the appeal of the GamePad.

Nintendo Land had the opposite effect of Wii Sports because Nintendo Land relies too much on Nintendo’s history. If consumers aren’t familiar with past Nintendo franchises like Metroid or Balloon Fight, they won’t find any nostalgic value. No matter how popular Nintendo’s franchises become, Balloon Trip will never have more universal appeal than baseball, tennis, golf, or bowling.

Bottom line: If Nintendo wants to continue creating innovative controllers or unique interfaces, then sports titles are the best ways to explain their overall appeal.

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5) Electronic Arts and Take Two Interactive are unreliable

NBA-2K14

The sports market has become narrow with fewer publishers making sports titles. Nintendo is now under the mercy of third party publishers like Electronic Arts and Take-Two Interactive (2K Sports) to provide sports games on Nintendo platforms. Unfortunately, those publishers have proven to be unreliable for Nintendo. Even if EA and Take-Two came crawling back to Nintendo with sports titles for Wii U, there is no guarantee these publishers won’t stab Nintendo in the back again with future consoles. Unlike Microsoft, Nintendo doesn’t have the kind of money to throw at every third party publisher to keep them happy,

Nintendo’s biggest mistake was their over-reliance on third parties to create western content. Nintendo should always strive for third party support, but never forget that third parties are in the business for their own self-interests. Give third parties too much power over your platforms, and you could end up walking away empty handed if the relationship goes sour. Nintendo’s weakness in certain genres gave third parties leverage to use against Nintendo during negotiations. The entire licensed sports genre is being held hostage by two publishers (Take Two and EA) because they know Nintendo is too much of a penny-pincher to develop their own non-Wii Sports/Mario sports games.

This isn’t the first time that Electronic Arts and Nintendo have had a rocky relationship.  Who can forget when EA Sports staff wanted to walk off because they weren’t interested in developing Wii games.

During the 16-bit era, Electronic Arts always gave Sega the superior versions of their sports titles. When Nintendo 64 was getting ready to launch, EA wasn’t willing to commit support for the console until Howard Lincoln spent weeks negotiating with them. During the GameCube era, Electronic Arts was getting ready to ditch Nintendo.  To stop EA from ditching the GameCube, Miyamoto gave them permission to use Nintendo’s characters in EA Sports titles like NBA Street Volume 3, SSX 3, and Fight Night.

It’s great if Nintendo continues working with EA and 2K Sports, but Nintendo should have a “Plan-B” in case things don’t work out with their partners.  I think that ‘Plan-B’ should involve Nintendo investing in a studio that specializes in creating licensed sports titles. Instead of putting themselves under the mercy of third parties, it’s time for Nintendo rely on themselves. Especially when the game industry has become increasingly political behind the scenes.

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6) Sony’s MLB series is proof that console exclusive sports games can outsell multi-platform sports franchises from EA Sports and 2K Sports

Gamasutra did an interesting piece describing how sales for the sports market has changed over the years. Sony’s MLB franchise dominates the MLB 2K series, and it’s more successful than EA’s MVP series ever was.  Sony’s MLB series is proof that Nintendo can create a first party sports title and become more successful than third party multi-platform sports games.

baseball

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7) Sports games were the third best selling genre in 2011 and 2012

How popular are sports games in North America? In both 2011 and 2012, NPD reported that sports games ranked as the 3rd best-selling genre below action and shooters.

Based on the picture below, sports games sold better than role-playing games, racing games, and strategy games combined. The sports genre even ranks higher than the “adventure” and “fighting” genres.

ESA

 

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8) Nintendo has a long history developing and publishing their own licensed sports titles

Nintendo was once a company that could rely on itself because it knew how to diversify its portfolio of games. If they needed sports games, they had Rare (Ken Griffey Jr Baseball), Left Field (NBA Courtside/Excitebike 64), HAL Laboratory (NCAA Basketball), or EAD/NST (1080 Snowboarding/Wave Race). Let’s not forget that Retro Studios was developing an American football game at one point. Nintendo also had Pennant Chase Baseball developed for GameCube, but it was never released after completion. I don’t believe this gibberish about Nintendo not being experienced enough to create sports games. We’re talking about Satoru Iwata, the same Nintendo president who was one of the main programmers on NCAA Basketball (SNES) and NES Open Tournament Golf.

The old Nintendo understood how to rely on their own resources so third party publishers couldn’t push them around with threats of dropping support. Today, Nintendo’s internal studios choose not to cover all of their genres and audiences.  Instead, Nintendo doubles down on family/Japanese games, and they tell third parties to fill in the blanks on the genres that Nintendo won’t do.

Nintendo should remind themselves that they created four generations worth of non-Mario sports titles — many of them being licensed by professional leagues.

 

non-mario sports

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9)  Lack of popularity for soccer on Nintendo platforms hurts Nintendo’s popularity in Europe

2012′s top three best selling games in Europe were all FIFA games. None of the three versions were for Nintendo platforms. This chart comes directly from Nintendo (via CVG) who shared this information with their shareholders.  I think we can all agree that ignoring the most popular sport in the world would not be a good decision for any game company. It’s one thing not to have FIFA or Pro Evolution Soccer, but it’s even worse when Nintendo isn’t making an attempt to compensate with their own licensed soccer franchise.

Europe 2012

Image provided by Computerandvideogames.com

 

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10)  Sports are popular with kids; Nintendo wants to be popular with kids

According to an ESPN study, 60% of boys and 47% of girls are already on a sports team by the age of 6 years old. Between the ages of 6 and 17, there will be 21.5 million people who have participated in a sports activity. Between third to fifth grade, 89 percent of boys (and 81% of girls) in suburban neighborhoods have participated in a sports activity.

With violent video games flooding the market, sports games are trusted by parents who are shopping for kid friendly games. Since most sports games are rated E for everyone, it’s a genre that is perfectly aligned with Nintendo’s family friendly image.

Sports Chart ESPN

ESPN Sports chart

 

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11)  There won’t be a sports audience for third parties unless Nintendo builds it with first party licensed sports titles.

Remember that old movie quote, “If you build it, they will come” from the film “Field of Dreams”?  That sums up Nintendo’s situation right now.

There won’t be a sports audience (for third parties) unless Nintendo builds it with first party licensed sports titles. Once Nintendo builds that audience with their own first party titles, third parties will have an easier time selling their games. If anyone can convince Nintendo fans to buy licensed sports games, it would probably be Nintendo’s first party/second party output.

According to IGN, EA’s Tiger Woods PGA Tour 10 for the Wii outsold the Xbox 360 and PlayStation 3 versions, and even ended up outselling Nintendo’s own software. The success of that Tiger Woods Wii game would not have happened if Nintendo didn’t invest money into the sports market with games like Wii Sports and Wii Sports Resort.

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12)   Opportunity to resurrect “Wave Race” and “1080 Snowboarding”

1080 copy

NST (Nintendo Software Technology) started off as a promising studio. After Project H.A.M.M.E.R was cancelled, NST stopped developing large scale projects, and they slowly diminished into a place where DigiPen graduates work on virtual console emulators, Web Framework, and Mario vs Donkey Kong sequels. The original Wave Race and 1080 Snowboarding were developed for the Nintendo 64 by EAD, but the sequels were developed by NST.

Today we can’t rely on studios like Left Field, NST, or Rareware for new sequels to 1080 Snowboarding and Wave Race. These days it seems like EAD and Retro Studios don’t want “B-projects” to distract them away from bigger franchises.

Opening a new studio to work on smaller franchises might be the best course of action.

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13)  Popularity of the NBA (National Basketball League) is rapidly growing in Asia

Slam Dunk

The popularity of the National Basketball League (NBA) is rapidly growing in Asia. China is the biggest NBA market outside of North America, and the NBA’s popularity has exploded all over the Philippines. Nowadays, you’ll find plenty of kids in China and the Philippines playing basketball with their friends. For example, the Philippines are one of the biggest fanbases for the Miami Heat. They treat the Heat’s coach Erik Spoelstra as a hero to their country. The Sun-Sentinel reports that the popularity of the NBA in Israel and Japan is skyrocketing due to the Miami Heat’s popularity. At this past summer’s NBA Finals, there were over 300 international members of the media reporting at the event, making it one of the most internationally watched NBA Finals in history.

Another cool fact: Slam Dunk, a manga about basketball, was the 2nd most popular manga in Japan in 2012. It beats out Dragon Ball, Naruto, and Full Metal Alchemist in popularity. This is according to a study conducted by research company Goo. This manga’s popularity has increased interest in basketball throughout Japan.

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14)  Nintendo promotes their products at sports events (including a team they own)

mariners fan network

In early 2008, Nintendo promoted the Wii with six interactive units at four different PGA Golf events. Those interactive units demonstrated Wii Sports Golf and Tiger Woods PGA Tour ’08.  The four PGA events were the Buick Open in San Diego, the FBR Open in Phoenix, the Aliianz Championship in Boca Raton, Florida, and The ACE Group Classic in Naples, Florida.

They also promoted all of their products at different ballparks in the Phoenix, Arizona area such as Peoria Sports Complex, Surprise Stadium, and Hohokam Park.

During 2008′s IndyCar Series Indianapolis 500 and the NASCAR Sprint Cup Series Coca-Cola 600, Nintendo titled two of the team’s entries that competed in those events. Nintendo also launched a Wii TV campaign that aired during major sports events such as the Champions League and FA Cup finals, which Nintendo has typically never been a major TV advertiser of. Nintendo of Canada has also been getting into the act of sponsoring sporting events. They became a multi-year sponsor of Canadian Freestyle Skiers Chris Wong, Kristi Richards, and Sylvia Kerfoot.

But why should we only talk about Nintendo sponsoring sporting events when the company owns 55 percent of the Seattle Mariners. It sends mixed messages when Nintendo advertises their products at Safeco Field, but they don’t have any Major League Baseball games available on Wii U or 3DS.  I understand the reasoning behind why Hiroshi Yamauchi bought the Mariners in the early 90′s, but it’s still strange for the company to promote Nintendo products to MLB fans when they don’t get more involved with MLB video games. For example, Sony doesn’t even own an MLB team, and they have tons of third party support, but they still publish their own first party MLB series.  Few years ago, Nintendo was at Safeco Field for FanFest to show off the Nintendo Fan Network. This is a free downloadable application that allows Mariner fans to access baseball content on Nintendo DS systems such as live video feeds, player stats, team standings, trivia, and scores from other currently-in-progress MLB games. Nintendo would later team up with ESPN to enhance the service so Mariner fans could receive updated sports news, fantasy sports news, and professional baseball columns.  Not only that, but the service provides fans with the ability to order food and beverages to their seat straight from their Nintendo DS system.

Fast forward to 2010, Nintendo became an official sponsor of the U.S. Tennis Association for the SmashZone Mobile Tour.  Nintendo is also a big fan of rugby. Nintendo UK had signed a one-year partnership with the Rugby Football Union (RFU) to launch marketing campaigns in Twickenham Stadium.

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15)  Nintendo made money from selling their products in sporting good stores

sportsauthority

Can you remember when Nintendo sold the Wii in Sports Authority stores – one of the largest sporting good chains in the United States? Selling game consoles next to the Fitness department seemed like a strange move, but it paid off brilliantly. The success with Sports Authority was more proof that the most important kind of non-gamers are the ones interested in sports, athletics, or fitness.  As I mentioned earlier in this article, many studies have indicated that sports fans (or athletic people) are more likely to be early adopters of new technology.

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16)  Sports games benefit from Twitter buzz more than other game genres

Twitter-Bird

Deloitte LLP conducted a study on how Twitter buzz improves video games sales. What they discovered is that positive tweets were 5x more effective in boosting sales of shooter game than conventional advertising. Out of all the genres, sports games seem to benefit the most. Positive tweets are 9 times more effective in boosting sales for sports games in comparison to other genres of games.

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17)  IBISWorld says 33 million Americans play Fantasy Sports

IBISWorld says 33 million Americans play Fantasy Sports, and it will bring in $1.2 billion in advertising for just this year alone.

It shows how much time people dedicate to their sports hobby outside of just watching sports on television. If that many people play Fantasy Sports each year, then perhaps Nintendo could tap into that market, and find a way to turn some of those fantasy sports players into video game players. For example, EA Sports is adding Fantasy Sports features into their Madden games to attract a larger market.

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18)  National Hockey League (NHL) wants to expand into mobile gaming

The National Hockey League wants to expand their business operations into the gaming market (specifically mobile games). This could be an opportunity for Nintendo to talk with the NHL about a possible licensing agreement. Wouldn’t it be wonderful to see the publisher of Ice Hockey (NES) and Stanley Cup (SNES) finally return to the genre after all of these years?

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19)  Nintendo could implement Nintendo TVii features into their sports games

Nintendo TVii gamepad

Nintendo has been known to implement Miiverse features into various games.  Wouldn’t it be interesting if some of TVii’s sports features were implemented into sports games?  It sure would make Nintendo TVii much more useful than it is right now.

For Nintendo TVii, Nintendo partnered with a company called STATS who covers more than 230 sports leagues and 55,000+ sports events around the world. All of Nintendo TVii’s game scores, player stats, and previews are provided by STATS in real time. When STATS is providing so much detailed information on so many sports leagues, it seems like a missed opportunity not to incorporate that technology into some sports titles. And there’s no one who would do a better job implementing Nintendo TVii into sports titles than Nintendo’s own first party sports titles.

Imagine if Nintendo’s sports titles could use Nintendo TVii to make games feel more realistic? For example, if it’s raining at a football stadium in real life, it would also be raining at the same Football stadium in a Nintendo game. Nintendo TVii could also incorporate updated player statistics and scenarios from real-life games into Nintendo’s sports games.

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20)  Sports games have “pick-up-and-play” gameplay like the best selling Nintendo titles

Gaming enthusiasts don’t understand why some people buy sports titles every year, and each year those sports titles top the sales charts selling millions of copies.

The reason is simple:  Sports titles have pick-up-and-play gameplay that appeal to both casual and hardcore gamers. You can play a quick, casual 20 minute game of football or basketball. Compare this to other games (like RPGs) that ask you to dedicate substantial amounts of time from your schedule. This can be difficult when you’re an adult with important priorities like family, work, or college.

The pick-up-and-play nature of sports titles completely fits with Nintendo’s philosophy. Nintendo believes that players should be able to jump into the gameplay without being bogged down by unskippable cutscenes and tutorials. It explains why franchises like Mario Kart, Wii Sports, Wii Sports Resort, and New Super Mario Bros continue to remain popular after so many years.


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