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WiiWare Week: Versus Round

How Nintendo is secretly waging war on XBLA and the PlayStation Store
by Michael French
March 13, 2008

When you cut through all the praise and polemic spouted by studios when it comes to digital distribution there is one point that often gets overlooked: the exact cost benefit gained when it comes to sales of games on any platform, from casual portals to Xbox Live Arcade.

It's no surprise - every publishing deal comes with its own clauses and confidentiality agreement - but as the company courts more support for its WiiWare platform, it seems that Nintendo has been keen to take this point very seriously and extend it 'disrupting development' ethos into the commercial aspect of digital distribution. According to those we spoke with, Nintendo is telling studios behind the scenes that its upcoming service provides a better environment not just to make games in, but also sell them - and in the words of one developer, the company has been so keen to get the word out to developers its actions are akin to "a secret war" against other format holders.

Ask any developer planning games for the service, and they will be of course vague on the specifics due to Nintendo's own water tight NDAs - but most are certain that their efforts making games for the service are sure to turn a profit. Most are cautious, and coy on their financial projections – but it’s clear that hopes are very high.

The director of Blitz Games' Arcade division, Chris Swan, says he's hoping for "a positive impact" on the studio's bottom line after the studio's game(s) for the service are launched and the royalties cheque arrives: "I'm not going to share any kind of projected forecast, but we're very much hoping that WiiWare can establish itself as a fantastic space for proving out innovative game ideas and establish new IPs."


The background for these assumptions are widely-known - namely, the lower cost of Wii game development Nintendo's active attempt to become a more approachable format holder (as we covered here) and a more flexible tack on file sizes coupled with the machine's already-large installed base.

Plus: "The cost of making a game for WiiWare can be significantly less than that of an XBLA or PSN game, firstly because the hardware is a lot cheaper and secondly because the SDK Nintendo provides is very detailed," explains Nic Watt, Nnooo's creative director.

"It should be noted that we can purchase almost two to four Wii development kits for one Xbox 360 or PlayStation 3 one, which as you can appreciate for a small company can affect our budget a lot."

But beyond that most studios, in fact, say that they expect to make a sufficient return on investment which can in turn be reinvested back into production of more games for the service. "For us Pop, our first title as a company, is hopefully going to sell enough to allow us to move onto bigger and more immersive games," adds Watt. "We are a small company purely self-funded by myself. From here we want to use the proceeds Pop generates to fund more WiiWare titles which utilise more of the unique aspects of the machine."


And the timing is perfect. Microsoft's recently slashing the royalty rate of first-party published Xbox Live Arcade title from 70 per cent to 35 per cent (with part of the trade off being that the format-holder now handles some of the localisation and worldwide game rating duties) has angered many studios.

"Nintendo has made it very clear to us that we'll not only be making a better royalty rate from WiiWare games, but we'll also have a better chance of selling games - the service won't be clogged up with the retro titles that have blighted the chances of many independent studios on Xbox Live Arcade," said one studio business development boss, speaking to Develop under conditions of anonymity.

Added another WiiWare developer, who also didn't want to be named: "Frankly, we're not looking at making games for Xbox Live Arcade because the service is full of shit," he said, pointing towards the service's number of retro remakes.

Those making WiiWare games agree that confining old games to the Wii Virtual Console channel will serve them in good stead as time goes on.


"Nintendo will make it quite clear regarding where you can go for new 
software as opposed to VC games," says Jesse Lowther, president of Medaverse. "That alone should do a better job of directing people to the new games."

"I think having a clear delineation between old and new is really important. For us having a dedicated store which promotes all the new content is great. Customers will come to the store for perhaps the new Pokemon game or Crystal Chronicles or even Pop and see all the other great new titles and hopefully purchase them too. If the content was mixed in with the Virtual Console releases it would make it that much harder to find," says Nnooo's Watt.

Gabitasoft's Rel Van Nyen adds that this also plays another part of Nintendo's strategy towards enforcing innovation, saying extracting out retro titles into their own category and leaving new concepts and new IP in their own category "will encourage developers to be more creative about their concepts. Proven classics are great, but games specifically made for WiiWare are better."

However developers will still have to battle against the reputation of established franchises such as Final Fantasy or Pokemon, spin-off launch titles of which are arriving on the service for its Japanese launch.

Skye J.W. Boyes, president of Canadian outfit XGen adds: "With existing IP's such as Dr. Mario, Pokemon, and Final Fantasy slated for WiiWare, a number of titles based on familiar properties will be available soon after launch. I think the success of new concepts will be ultimately determined by whether smaller studios, such as ourselves, can compete with veteran developers and licensed IP."

But Nintendo is all too aware of the increased competition - and is instead letting developers arm themselves further by helping them chose a price for their game from a more flexible pricing structure.

Medaverse's Gravitronix, for instance, will be priced at 500 WiiPoints as "it will be easier for people to take a risk on us".

At GDC, Nintendo was publicly keen to make it clear this was WiiWare's key advantage, with saying the firm's Takashi Aoyama saying that "elasticity" on prices makes WiiWare attractive and a "key business opportunity", adding: "flexible pricing model allows accessible pricing".

Of course, all developers quizzed are up front that in time the WiiWare platform will no doubt mature in terms of the type and variety of content, and the cost of developing games will rise as studios aim to put more ambitious games on the channel.

But overall, WiiWare is so highly regarded already that the simple fact of it if there really is a behind-closed-doors ‘war' between the format holders when it comes to digital distribution, Nintendo is already winning - an impressive feat given that the WiiWare channel hasn't even launched yet, and the European rollout specifics are still not officially known.

"There are still a lot of unknowns about WiiWare but the potential of highly varied sizes of games with proportional prizes is going to make for a varied landscape on the platform," agrees James Brooksby, studio head of Kuju's Doublesix, a team purely focused on digital download channels. "Combine that with the innovative controller and I think you will see some games to play that you would never see on the other digital distribution platforms."

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