Transition From Switch Will Be 'Significant Challenge,' Ex-Nintendo Head Says

A few months before everything shut down in March 2020, one of the last VIPs I saw in person was former Nintendo of America President Reggie Fils-Aimé. We shook hands at the New York Game Awards, an award show put on by a charity organization that helps students in The Bronx learn about game design. Fils-Aimé, better known as Reggie to his fans, is a Bronx native and on the charity's board of directors. 

Disrupting The Game, his new book released in May, covers his years at Nintendo as well as his path from the Bronx to a life in business and marketing. I've connected with Fils-Aimé many times throughout his time at Nintendo and spoke to him again recently about the book, Nintendo's past and the future of gaming.

You can watch the full video interview, but I've also excerpted key comments from our conversation below. 

On his post-Nintendo life

In my form of retirement, it really is finding ways to share the benefits of my experiences, my personal learnings and journey, and to share it with as many people as possible. That has brought me to the Bronx physically, it's brought me to do a number of video- based events, with the variety of different folks that the New York Video Game Critic Circle mentors. In fact, I have another session in a couple of weeks, with our good mutual friend, Harold Goldberg. So that's been a key part of how I have given back. I've also made a number of trips to Cornell University where I went to school, I was actually just up there a few weeks ago. 

On life during the pandemic

On the positive side, the lockdowns enabled me to write this book in a pretty expeditious fashion -- from start to finish, it was about 18 months. Because I wasn't traveling, I was able to write and edit just about every day. Like everyone else, it's created new opportunities for me to engage with folks through screen. 

On growing up in the Bronx and in Brentwood, Long Island

The Bronx is, today and back then, a pretty tough neighborhood. It's shocking when I tell people that the Bronx has some of the poorest congressional districts across the United States. It encompasses a congressional district that has the highest amount of food insecurity. And that very much was consistent with my early days in the Bronx. I was in a five-story walk-up tenement building, with mice and cockroaches. It was a tough place to grow up. My father worked two jobs for us in order to afford that small house in Brentwood.

About three years after we moved to Brentwood [on Long Island, NY], we made a trip back to the Bronx; we still had family in the area. We drove by that tenement building that we had left only two, three years prior: Windows were blown out, the building had suffered a fire. It was just shocking to see how quickly that neighborhood had continued to degenerate. In doing work with the Dreamyard [school in The Bronx], I drove past my old tenement building, and now it's back and looks good. The neighborhood looks good. The area continues to go through ongoing renewal.

Brentwood, when I moved out there in the late '60s, was very much middle class, very much where both parents worked. It was not a very ethnically diverse neighborhood at the time. But I was fortunate that the Brentwood school district had some great teachers, a number of advanced and honors programs. 

On the Nintendo DS

When I first saw the Nintendo DS, we showcased an early Mario experience, we showcased a very early experience for Nintendogs. I was able to imagine what games could be. I was able to imagine what this product could do. DS was the first major consumer electronics [device] to make use of a touchscreen. Before that, it was really personal digital assistants that had a touchscreen. And the ability to do precise movements, use it for targeting, really opened one's mind to what could be done. 

But at that first E3, meeting with journalists like yourself, there was a fair amount of questioning and pushback and wondering what this product could be, especially when the Sony PSP was at that same E3, and the PSP was very much a linear progression of technology. A beautiful device -- almost too beautiful, it would leave smudges on that big old screen that it had. But Nintendo DS was doing something completely different.

On the Wii and its evolution of motion gaming

The system went on to sell over 100 million units of hardware, almost a billion pieces of software. A massively successful device. Over its legacy, different games were created that took advantage of different elements of what that system brought to bear. Certainly, from a communication and marketing perspective, that early focus was on the remote, on motion controlled gaming. But later on, different types of games, different experiences, came to bear. 

Nintendo brought massive Metroid experiences to that platform. Super Mario Galaxy was on that platform: It had some motion elements, but really was just a reimagining of what a Super Mario game could be. That is typical. In every console generation, those first games will leverage part of a system. But later in the life cycle of the system, the full capabilities are brought to bear.

On Nintendo pioneering fitness gaming: How does Reggie feel about Fitbit's James Park being inspired by Nintendo Wii?

Nintendo was doing a lot of different experimentation. A Pokemon game experimented with a step tracker that enabled different things to happen within the game. And that is one of the beauties of Nintendo. They've got all of the wonderful intellectual property that players love, like Mario, Zelda, Donkey Kong, but their ability to marry the IP with technology, especially technology that's accessible? I think that's a critical part of what the company does. I've forgotten how it was right after the Wii Fit that some of the dedicated motion trackers started to emerge. That's really interesting to hear directly from individuals who worked in that space, how the Wii was a bit of an inspiration.

What happened to the Wii Vitality Sensor?

Nintendo's history is to do a lot of experimentation, to play around with different concepts. And at the time that the Vitality Sensor was being explored, Nintendo was really focused on expanding the gaming population, having as many different people experience gaming. They were being very thoughtful around what was going on within overall culture: issues around sleep, issues around anxiety. The company really saw a potential opportunity to gamify in this area, and do something that would not only have benefits back to the player, but would potentially expand the gaming population. A key insight about Nintendo is no idea ever truly dies. Ideas are constantly played with. 

Just as an example: We launched the Wii. And we talked about how the concept of Miis had actually been played around with by Mr. Miyamoto years and years before. It's an idea that just needs to percolate until the technology is there, the game is there to bring it all to life. I don't know this to be true, and I'm sure it'll drive rampant speculation as I say this, but it wouldn't surprise me if there are developers continuing to just experiment with the idea and in this space. And when they come up with an interesting idea that really wows the consumer. They'll bring it back. That's the nature of a company that is always focused on innovation and doing things on their own schedule for the benefit of the player.

On virtual reality and augmented reality

As Nintendo was experimenting with Virtual Boy, and as they were experimenting with what would become the N64, they were thinking about how to bring a 3D experience to the consumer. Virtual Boy didn't live up to its hopes, but N64, with that Super Mario 64 experience, heralded the beginning of 3D immersive experiences within games. It is interesting to see where Nintendo 3DS brought those games back in a glasses-free 3D environment. 

In terms of the future, I continue to be a strong advocate for AR. I believe AR experiences, lightweight goggles, inherently they're more social. I believe that the consumer sees value in interacting with the physical world with a gamified experience through some sort of lens. 

Obviously, there are just so many examples of success with Pokemon Go, as well as the early experiences that Nintendo 3DS brought to bear with the AR cards and some of the games. I do believe that that has more immediate potential than VR. I think VR in the business context and for specific industries, is phenomenal. There's a ton of training being done with the use of VR, whether it's in the law enforcement community, for surgeries and things of that nature. And I think the business application of VR is truly limitless. 

What's been difficult so far, as you well know: Movement in a VR space is tough. In terms of as a player, how do you move through an environment and to do it in a way that doesn't create that nausea, or that sense of kind of losing your space... that part continues to be a development challenge. But I do believe in AR, I believe those experiences are going to come soon. And I think the potential is quite strong.

On Nintendo Labo

Labo, I thought that was going to be such a home run. Not only from a pure consumer gamer perspective: I saw a huge potential with Labo in classrooms, and as a STEM education type of product. Globally, it did well, but certainly not to the expectations that the company had. Similarly, the VR experiences [of Labo VR] -- such fun, and really immersive, quite different than a typical VR experience. 

I thought maybe that was going to be the breakthrough, to help push it over the edge, but it didn't work out that way. But I'm confident that the company is just continuing to experiment. It is its nature, to experiment with these types of technologies, and to try and figure out how to make it fun. As an experience, parents with kids teaching some STEM and STEAM related skills, there's clearly an opportunity.

On the Wii U being a stepping stone toward the Switch

Wii U was experimenting with this big screen experience as well as a small screen experience, and the ability to have the player interact with both of those in one device. Clearly, that comes through in the Nintendo Switch. The challenges that the company faced with Wii U, as I highlight in the book -- first, the games were not launching as quickly as the company needed to maintain sales momentum, and in particular the company had high hopes for NintendoLand to be Wii U's equivalent to Wii Sports. Unfortunately, it didn't happen. The key game that was available at launch didn't have the same magic, and the ongoing pace of games was a bit too slow to maintain momentum. 

Second, the development tools really did not enable the broad-based support from big third party developers or the independent developer community to come on board. That was clearly addressed by making sure Unreal Engine was available for the Switch, and then shortly thereafter, Unity. Now there's this vibrant indie scene going on with the Switch, as well as good third party support. Those were some core lessons that the company learned. And now you see some of those great games that were part of the Wii U library being remastered and launched on Switch and doing well. As I like to say, with the Wii U the company was able to fail forward with the Nintendo Switch.

On the NES Classic, SNES Classic and whether mini consoles will come back

Those initiatives were a critical moment in time, as the Wii U was suffering in the market, the Switch wasn't ready to launch. They were some stopgap initiatives that the company saw that could fill a need from a business perspective. They also helped the company think through how to deliver some of this great legacy content in a way that consumers could enjoy. It also formed a bit of foundational thinking for the Nintendo Online experience, and providing that legacy content to the consumer.

Will it come back? Will there be other physical boxes with legacy content? I don't think so. If I were back at Nintendo for a day, I would be much more focused on: How does the company leverage all of its great content, deliver it to the consumer through that Nintendo online experience? Which they are doing… they're putting out some N64 content, they're working with other platform holders to bring out some of that legacy content. But that's where the opportunity is. Nintendo still has more N64 content to leverage. They've got GameCube content to leverage, They've got Wii content. I see this future of digitally delivered content to you, the consumer, as just this burgeoning opportunity that I would want to keep taking advantage of.

On the Steam Deck and Panic Playdate

The Playdate for me is one that I struggle with, in part because the design choice around the crank and the visual presentation. That's a lot to overcome. The Steam Deck I think is really interesting, Their challenge, I believe, for what it is, it's a bit overpriced. But the core concept, a handheld player that gives me access to PC quality games? Sign me up, that's something that I'm interested in. But how you deliver that, in a way that has a broad audience, is what that team is trying to figure out.

On the next Nintendo console

Nintendo says that their view is that the Switch is still only halfway through its life. If that is true, then clearly the company is thinking about what they will need to do over the next five years to continue giving that system momentum. All you can do is look at past examples, whether it's from Nintendo or from other players in the industry. Mid-cycle upgrades have been a part of the path; changing the value equation in some way has been part of the path. These have to be different things that the company is considering. 

Now you need to layer in other challenges like chip shortages and supply-chain disruption and all these other elements. But certainly, the company has to be thinking about how to keep momentum for the Switch in order for it to be a vibrant platform for another five years.

[Nintendo] also touched on recently, in their financial announcements, thinking deeply about how they transition from the Switch to whatever the next platform needs to be, and how that has to be a well-considered series of decisions. Going from a highly successful platform to the next highly successful platform… you can make the argument that it's only been done a handful of times in the video game industry. Sony, from the original PlayStation to PlayStation 2, clearly went from strength to strength. Nintendo, from the Gameboy family of systems to the Nintendo DS. It hasn't been done since, as I look at the industry. For Nintendo to go successfully from the Switch to whatever comes next is going to be a significant challenge that they've already said they're thinking deeply about.

On the future of gaming: streaming, the metaverse, blockchain

The gaming industry today is a $200 billion industry, the largest form of entertainment. When I joined the industry as an executive, about 3 out of every 10 people were playing video games -- when you look at the US and Europe and Japan [today?], it's closer to eight out of ten are playing video games. You have burgeoning interest in the video game space in places like Africa, and in core areas of the Middle East. Big markets, like India, have a tremendous runway for the video game space. I see a future that's going to continue to have lots of innovation, lots of disruption. I think the innovation and disruption are going to come from content. 

Great case in point, the battle royale games are only about five, six years old, [and] started with the first executions of PUBG. You look at where innovative content can go in the future, and I see a huge amount of opportunity.

I do see a future where [cloud] game streaming is the dominant form of the industry, and therefore you don't need a dedicated console at home. That's going to come with improvements of in-home Wi-Fi. Here in my house, I've got great internet speed into my home. But if I try and play an experience just connected through Wi-Fi, I still get lag. So that last bit of speed in the home needs to be there for truly cloud-based gaming to be the predominant form, because you and I know when we're playing a game, whether it's a racing game or what have you, we don't want any lag, it ruins the experience. But I do see there's going to be improvements in that capability. It's probably at least five years out, but it's coming -- you probably know better than I do. With that, I do believe we will be in a cloud-based, non-console based form of gaming. 

I've been on record, and folks have not liked my statement in this, but I do believe blockchain as a foundational piece of technology could be really interesting. And what I find interesting about it is, with blockchain contracts, is the ability for me to own something forever, versus it being tied to a particular console or particular manufacturer. As a gamer, I find that tremendously interesting and tremendously compelling. With smart contracts and other foundational elements of blockchain, I do think it can lead to differentiated experiences. I see a very bright future for the gaming industry. And I do see it evolving, both from a content perspective as well as from a technology perspective.

On disrupting the games industry

The first is, I would say, in the area of culture and inclusion. What I mean by that is, as this industry is the dominant form of entertainment, how do the industry players act with that level of impact around hiring practices, promotion practices and really living a mentality that a broad, diverse group of employees will bring the best ideas and the best solutions to bear? Candidly, the industry is not acting that way, in terms of culture and behavior.

Another area of diversity is just diverse voices and content creation, diverse types of content. This tends to be an industry that, when there's some success in a particular type of genre, people rush to that genre. Mark my words, in the next two years there are going to be a ton of Elden Ring clones. There needs to be a diversity of ideas and execution, and again, as an industry, there aren't many positive examples of that when you look over the long term.

The next area I see the opportunity for disruption is in taking risks -- prudent risks, but more risk-taking across types of initiatives. Clearly, there are a number of consolidations that are happening within the industry, whether you look at Take-Two and Zynga, Sony and Bungie, Activision and Microsoft. I believe that'll actually give rise to a birth of highly skilled double A or indie type of studios, because I believe a number of these content creators aren't going to want to be part of that bigger organization, they're going to want to go strike out on their own. I look forward to another golden age of high-quality content being made by smaller studios that are going to take more risks, and do things that are more interesting.