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Nintendo's New Year's resolutions

Reggie Fils-Aime, Nintendo's EVP of sales and marketing, discusses how the Revolution console will beat competition.

Sometime later this year, both Sony and Nintendo will release their next-generation video game consoles, the PlayStation 3 and the Revolution, respectively.

The new machines offer the promise of state-of-the-art graphics and could leave their predecessors, Sony's PlayStation 2 and Nintendo's GameCube, in the dust.

But the two consoles will be launched into a video game atmosphere in which software sales are slowing, and many worry that innovation has been forgotten in lieu of a never-ending flow of sequels. And while franchises like Electronic Arts' "Madden" and Nintendo's "Super Mario Bros." are reliable best sellers, some fear that the industry has lost its enthusiasm for creating brand new titles.

This industry is about entertainment, and in the end, he with the best games wins.

Thus, though the November launch of Microsoft's next-generation console, the Xbox 360 was considered a success, and it's still hard to find one of the machines, there's been a notable lack of excitement over any of the Xbox launch titles. And that's because, though there were a couple of brand-new games for the Microsoft console, most of the 18 that were available for launch were sequels.

For its part, though, Nintendo said it plans to bring a new level of innovation to the table with Revolution. And with that in mind, CNET News.com recently caught up with Reggie Fils-Aime, executive vice president of sales and marketing for Nintendo America, and asked him about the company's plans going forward.

Q: We understand you have some New Year's resolutions for Nintendo. Let's start there.
Fils-Aime: Sure. From my perspective, I have five resolutions for the industry heading into 2006. The first is keeping our eyes on the prize. This industry is about entertainment, and in the end, he with the best games wins. So at Nintendo, we're focused on putting the most entertaining products into the marketplace.

The second resolution is keeping the mass in the mass audience. The world is fragmenting all around us, and many companies are making their products too exclusive and expensive for the general consumer.

For example, for American consumers to get into the Xbox 360 franchise, with games and extra contollers, they had to spend more than $700, not including an HD TV, which is really the only way to positively experience 360. We resolve at Nintendo to remain within reach for the vast majority of our consumers.

How?
Fils-Aime: By first creating gaming-centric systems and consoles, whether it's handhelds or home consoles. That will ensure that for gamers, our products are totally focused on their needs versus products that try to integrate music or other things that, frankly, aren't what great gaming experiences are all about.

Since you mentioned pricing, I assume the Revolution will be accessible to gamers for substantially less than $700?
Fils-Aime: That's correct. The next-generation console from Nintendo, code-named Revolution, will cost less than $300. Our third resolution is to stop turning away new players.

The buzz for the DS is huge and growing, and the most anticipated handheld titles are on our platform, not on Sony's.

This industry has become more and more focused on the niche, and at Nintendo, we've opened our systems to a wide range of consumers. Whether it's consumers older than 35 or female gamers, we've attracted them with "Nintendogs" and "Animal Crossing," so we've resolved to bring as many new consumers into this industry as possible.

And the fourth resolution?
Fils-Aime: It is to turn game development into a democracy of great ideas. Just as the cost of systems seems to be getting out of reach for everyday consumers, the cost of game development is getting out of reach for game publishers. The Revolution will be more affordable for game developers to create for, and that will result in fantastically innovative content.

Let's talk handhelds. Obviously, the Nintendo DS is doing well, with 13 million sold so far. But Sony's PSP seems to have more buzz.
Fils-Aime: I disagree. The DS is outselling PSP across the world. The DS is also generating huge buzz in the blogosphere. The fact is, we have a number of not only worldwide but even U.S.-centric million-unit selling games, and Sony doesn't.

We have games that are successfully expanding the audience for gaming for DS, and that's not true for Sony. The buzz for the DS is huge and growing, and the most anticipated handheld titles are on our platform, not on Sony's.

OK, so what about the fifth resolution?
Fils-Aime: The mythical performance vector for this industry is more processing power and prettier pictures, but what's really driven growth is actually improving the way consumers play and get into the game. It's what we've successfully done with the Nintendo DS and what we're committed to doing with the Revolution and the controller we've unveiled for Revolution.

Tell me about the controller. What makes it noteworthy?
Fils-Aime: It allows you to essentially manipulate the game by pointing at it. The activity that happens in the game is quite responsive with the controller, and we've shown that sports games can be brought to a new level of immersion with the controller.

How so?
Fils-Aime: It allows you to manipulate not only a puck or a football, but also to manipulate the player in a way that's never been done before. So if I'm developing a football game, I can move across the field, focus against a particular receiver with pinpoint accuracy and throw the ball right to that receiver much as a real-life quarterback does.

That level of immersion really has never been done before. We know it's exciting because we have partners like EA and Ubisoft and Activision and THQ excited about developing for the Revolution.

How many launch titles will there be for the Revolution?
Fils-Aime: That question's a bit premature. We'll be showing a lot of titles at this year's E3, and we think that's where consumers will get a flavor for the full range of titles and the full range of activity that we will have for our launch window.

And what is the launch date?
Fils-Aime: We've said 2006.

What else will set the Revolution apart from the Xbox 360 and the PlayStation 3?
Fils-Aime: A number of things. First, our titles. We have the huge luxury of a stable of franchises that's unparalleled in this industry. Also, we're working on new franchises and our first-party lineup will be better than our competition. We're also getting strong third-party support.

Secondly, our virtual console concept, which lets you play your favorite games from the Nintendo 64, Super NES and NES systems, will also be a differentiator. Plus, Revolution will be backwardly compatible with GameCube games.

How do you think Revolution will sell?
Fils-Aime: We will sell more units than Xbox 360 did here in the United States in our launch window. I mean, in December, we sold more GameCubes in the United States than Microsoft sold 360s, and Revolution will do better than that.

How will the DS do head-to-head against the PSP, going forward?
Fils-Aime: We expect a gangbuster year for DS in 2006. I think that's because we've successfully launched the Wi-Fi Connection for Nintendo DS. We've had more than 10 million connections to the servers on a worldwide basis and over half a million unique users in a short seven-week time frame.

We expect a gangbuster year for DS in 2006.

Just for perspective, it took Xbox Live over six months to get to that level, so we're very proud of the way we've grown that business. We're also very confident with DS, given a number of impending launches we've announced, including "Metroid Prime: Hunters."

We've also announced "Tetris DS," which has a total of six different modes of play, including classic Tetris play as well as a number of mechanisms that are playable both in local-area networks and via Wi-Fi. There will also be a new "Super Mario Bros." title in 2006. So just in looking at the tools and packages we have, we're very confident in our success for Nintendo DS this year.

Terrific. Finally, can you tell me how Nintendo will reverse the perception that the console market is Sony and Microsoft and then Nintendo?
Fils-Aime: The fact is this: On a worldwide basis in the home console area, we are the No. 2 player. Here in the United States, if you look at today, we are the No. 3 player, so I understand where the perception comes from that we are not doing as well in the home console market as we are in the handheld business where we dominate worldwide.

Our focus for Nintendo Revolution is to provide real meaningful differentiators versus our competition, and we believe that is what will drive our success. First, focusing on a single-minded gaming device. Second, bringing real innovation to the controller in the way consumers play the game. Third, a value orientation that certainly is not present with our competitors. And fourth, leveraging the power of our library with the virtual consoles.

So that's how we believe our success formula will play out in home consoles, and our focus is on executing that four-point program.