Satoru Iwata made it clear at his first press conference as the new president of Nintendo Co. what he thinks of the broadband strategy of game machine rivals Sony Computer Entertainment Inc. and Microsoft Corp. "Using their game machines, they seek to control the distribution of all types of entertainment."

To counter this push, Nintendo is making a strategic about-face and taking a conciliatory stance toward game software developers. Rather than continuing to go it virtually alone in both hardware and software, the company has now begun seeking the cooperation of game developers. "We want to make games that are interesting. We'd be happy to work with any company that has new ideas for gaming," Iwata proclaimed.

During the mid-1990s, when the most successful game developers moved into the PlayStation 2 camp, Nintendo chose to nurture a small elite group of software titles like "Mario" and "Pokemon." Nintendo's new mood of reconciliation comes as SCE and Microsoft trumpet network gaming and the danger grows that the power of the two companies may corral all the best game developers.

In February, Nintendo formed game development partnerships with Sega Corp. and Namco Ltd., and in March announced it had buried the hatchet with Square Co., which several years ago joined the PlayStation camp and was criticized by Nintendo's former president Hiroshi Yamauchi for having a "different attitude about games."

With these agreements, Nintendo has dramatically improved its relationship with Japan's leading game developers. As a result of the reconciliation, Iwata has declared the highly ambitious goal of shipping 50 million GameCube machines by the end of March 2005, far surpassing the PlayStation 2, which has shipped 30 million units so far.

But Nintendo will not be able to counter the broadband strategies of SCE and Microsoft by simply tying up with software makers. The company has drawn a clear line between itself and the two rival firms. However, if the GameCube fails to sell as well as the PlayStation 2 and Xbox, the game developers will cut their ties with Nintendo.

Microsoft intends to hold a meeting on June 11 to explain its strategy for the Japanese game market. Will Nintendo be able to counter this with concrete examples of Iwata's "new ways of gaming" that do not attach as much emphasis on hardware? Without the charismatic Yamauchi at the wheel, Nintendo needs hit products or it will be sunk by the competition with its much bigger rivals.

(The Nihon Keizai Shimbun Saturday morning edition)

Source: GameCubedlx