Nintendo's Wii and the Long Tail of games

I worked with Nintendo a bit before the launch of the Wii, helping them think through how to build a marketplace for the Long Tail of videogames. Because the console, like all others from this current generation, is designed from the ground up to be connected online, it's a natural delivery platform for small, independent and older games, to say nothing of additional levels, characters and other downloadable assets supported by micropayments. Although I wasn't privy to the details at the time, I wasn't surprised to see the machine launch with a "virtual console" that made it backwards compatible with Nintendo's entire back catalog, many of which can be purchased from Nintendo's Wii store.

Now the machine has been out there long enough to see the results. From Nintendo's earning report, released today:

• Nearly 1.4 million Wii hardware systems have connected to the Internet worldwide (as of 1/24/07)
• Approximately 1.5 million Virtual Console games have been downloaded and sold to customers worldwide (as of 1/24/07)

So that's more than one game from the back catalog sold per connected Wii. At an average of $7 per game, that's more than $10 million in Long Tail sales for the Wii's first month, which isn't bad at all.

[UPDATE: Many of you have noted that there are very few titles currently available so far and all of those are hits such as Mario 64 and Zelda. Two responses:

1. Yesterday's hits are today's niches. Most back catalog sales in any medium are former hits. They reason they still qualify as Long Tail content is they're typically unavailable through the traditional distribution channel, whether that means out of print or just no longer stocked by retailers.
2. Nintendo is going to release loads more games through its online store, as well as all the other microcontent I described above. What you're seeing today is just a glimpse of what's to come.

Comments

[parminder]

yeah thats respectable figure.
and it's a really smart business strategy.

parm
http://bhangraworld.blogspot.com

[Eric]

Meh, Nintendo is still missing the mark though, by failing to make their *entire* back catalog available. If they stick to this release schedule of 10/month to the virtual console, it'll be five years before the entire NES catalog (500+ games) is available, to say nothing of SNES/N64 titles.

Sure, they're hitting the big ones - Zelda/Mario/Metroid etc. But they're missing out on their own long tail market of more obscure games by releasing them as they are.

What Nintendo should have done, IMHO, was make the ENTIRE back catalog available as soon as possible, and make available some dev kits to encourage the development of NEW games for the NES and SNES and such. The beauty of those systems is that it doesn't take a multi-million dollar budget to create one... I could easily see college students creating new hits for the NES.

Or even if Nintendo itself did that. Who wouldn't pay for Super Mario Bros 4?

[Dean Hedges]

i often go to garage sales ... and see tons & tons of books for sale ... i wonder what books or if all books will make it to the internet ... like the Nintendo's entire back catalog ... will it all become available on the net ... and would it matter ? ... the ultimate LT effect is a religous experience were past present and future all sort of collide and coaless into a point of being one with all the universe and yet knowing there is something even beyond that which can not be described ... so will all of "the accumulated knowledge of the entire human race" make it onto the net ... i would like to think so ... will the Nintendo's entire back catalog really matter ... probably not as most of the games are the expression of a tweleve yr old mania ... however it is interesting to note ... Donkey Kong maker brings you…the News ... The news business is getting tougher and tougher. Now even the maker of games about giant monkeys and space warriors is getting into the act. Sort of.

Nintendo’s Wii game console will this weekend add a news channel to its online system, with information provided by the Associated Press. The free service, for users of the hit Wii with a broadband connection, lets them swash and sway their way across the on-screen globe to read AP news, using the Wii’s wireless remote.

“What Wii has done for video gaming, we hope it will also accomplish for news,” says Nintendo of America President Reggie Fils-Aime. “Just by pointing at your TV screen, you become your own interactive editor, instantly accessing the latest headline stories, whether they originate in Kansas City or Ky .... .... yes ... the LT effect is a religious experience ... *smile* ... " ... has begun providing access to the accumulated knowledge of the entire human race for people everywhere, without distinction. It is apparent that the decades immediately ahead will see the integration of telephone, television, and computer technologies into a single, unified system of communication and information, whose inexpensive appliances will be available on a mass scale. It would be difficult to exaggerate ... "

[Jeffrey Parsons]

How can you consider the Virtual Console "Long Tail" sales when there are such a limited amount of titles available? Many of the purchases are either nostalgia, or of the "let's see how this works" variety. The fact that it seems to be 1 to 1 with consoles sold bears this out in my mind.

I'd also like to see what the breakdown of titles purchased has been. Castlevania, Mario 64, and Zelda are the very definition of "hits". Now, if there's been thousands of downloads of Urban Champion you may have a point, but I doubt that's the case.

Until many more titles are available, I don't see how any VC sales fall into the Long Tail.

[Caling Cards]

i agree with jeffrey..

I don't see how any VC sales fall into the Long Tail.

[Zak Kinion]

Yes!!! I was thinking the same thing a few days ago. It amazed me to see this article as the most recent in your blog. There's a large demand for "old" games, most of which are only available in "quasi-illegal" ROMs and emulators. The emulators are readily available, such as zSnes, but the ROMs are normally in p2p, only distributed as warez. Alot of people who are college age or higher grew up playing these old games and there's this gargantuan sense of nostalgia by playing them. By using the console as a distribution model, Nintendo can recreate a market that was previously dead (Nintendo wasn't making money off of garage sales/warez of roms).

I also read that they benefit from releasing into the virtual console in terms of DMCA to try to "combat emulation". http://en.wikipedia.org/wiki/Super_Nintendo#Emulation_and_controversies This is could be another reason in addition to recreating the market.

[blooflame]

Another thing the Virtual Console might enable is to help monetize the "homebrew" game market - there are probably quite a few evening/garage developers that would let Nintendo take a cut for world-wide distribution of their creations.

I also think Nintendo should do one more thing: start shipping an easy-as-pie language and IDE for games. Kids would buy them and build their own games, schlocky or not, to show off to their friends; Nintendo could benefit by discovering future developers that would sell games.

[Jeffrey Parsons]

I see your point, but I still don't entirely agree. Nintendo doesn't release such figures but I think it's pretty safe to assume that Mario 64 and Zelda have been the two best selling VC games. Both games are readily available as either DS or GBA titles. The VC purchases are more about trying something cool and new, and less about digging up gems that may have been otherwise unavailable. I know, I purchased Zelda despite having access to a version I could be playing for free.

I'm not saying that what Nintendo is doing with its Virtual Console isn't exciting, I just don't feel it comfortably fits into how you've defined Long Tail economics. It feels a bit square peg - round hole-ish to me.

[Dexter]

While some of the comments have complained about Marios and Zeldas, Nintendo has taken a back seat with the releases, allowing its key partners Sega and HudsonSoft to release content for their Genesis/Megadrive and TG-16 machines. Outside of the the hardcore, most consumers today would have had very little exposure to these games and the casual market at large may only have cursory knowledge of the 16-bit era. The content will be new to them.

Yes, it is about reliving nostalgia, but when todays gamers were kids, they likely either owned a Genesis or a SuperNintendo, and having hits from those consoles available allow gamers to explore the systems they missed out on.

Ultimately, more 3rd parties such as Konami, Capcom, Midway, Activision and EA have to step up to the plate and release their back catalogs on the Virtual Console. I do agree however that the pace of releases can be sped up. Perhaps 30 games a month, one for each day, is reasonable.

[gpriceshop10]

Four games made for Nintendo systems placed in the top 10 U.S. best-sellers for November, representing the diversity of people who play Nintendo games. These included Wii Play (for casual and lapsed players) at No. 3 with more than 796,000 sold, Wii Fit (for new gamers) at No. 4 with more than 697,000 sold, Mario Kart Wii (for both core and casual payers) at No. 5 with nearly 637,000 sold and Wii Music (for everyone) placed at No. 9 with more than 297,000 sold, following its long-tail trend.

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