October 21st 2002
Where's the third-party support?
Even before the e-Reader hit retail stores last September, gamers have had
questions about the device's future. What are Nintendo's plans? What can we
expect in terms of e-Card applications? But most of all: When will we see
third-party developers and publishers get in on the action?
Regarding that last question, Nintendo has remained silent. Pokémon
trading cards and NES games on e-Cards are very nice, but gamers who have
already bought the e-Reader are anxiously waiting for more. No one can deny
the fact that third-party efforts will play an important role in fulfilling
the e-Reader's potential as a gaming medium, so what's the hold up?
To understand the current situation, we have to look at it from Nintendo's
perspective. As a gaming medium, the e-Reader (or to be more precise, the
"dot code" technology used for e-Cards) is very new, and as such, is quite
unproven from a marketing standpoint. The japanese model of the e-Reader has
been out in Japan for quite a while, and still, there seems to have been no
third-party interest in the peripheral. This is easely explained by the fact
that it has no Link Cable port, and it was primarely developed to fuel the
Pokémon hype.
Nintendo soon realized that their card-reading device needed to be enhanced in
order to achieve its full potential, and so they developed a second model. But
they couldn't release it in Japan less than a year after the release of the
first model, so they decided to use the US market as a testing ground. The US
model of the e-Reader, with its Link Cable capabilities and its built-in NES
emulator, has been able to attract some mass-market attention, and third-party
developers are beginning to acknowledge the potential of the device, both as a
standalone platform and as a Game Cube peripheral. So it would seem that
Nintendo has played its cards right, up until now.
Gamers, however, being impatient consumers by nature, are already complaining
about the trickle of e-Cards games being produced. Five NES classics, a series
of Pokémon cards, and a few promotional offerings like Air Hockey-e are
certainly not enough to keep gamers interested for very long. And all we have
to look forward to until next Christmas are 66 Animal Crossing e-Cards and
five more NES games? What gives?
Patience, my friends, patience. These first series of e-Cards are being
released by Nintendo to demonstrate the commercial viability of the e-Reader,
and nothing more. This is evidently Nintendo's short-term marketing strategy
for 2002, and "phase 2" of this venture is already being carefully prepared
for 2003. Even without having any real evidence to show, I can safely say that
discussions between Nintendo and third-parties are currently under way behind
closed doors. But there are many complex issues that Nintendo needs to resolve
in order to ensure the commercial success of the e-Reader/e-Card medium.
One of the major problems Nintendo has to deal with is the current
north-american trading card retail context. I had a short talk with a few
trading card shop owners in my city, and they all said that they weren't
interested in selling e-Card packs, aside from the Pokémon
Expedition series. Their reason is simple: To them, e-Cards are video
game oddities and not trading cards in the traditional sense. Right now, they
will only sell e-Cards if they have big licenses attached to them, like
Pokémon, Magic the Gathering or Yu-Gi-Oh. So you'll probably have a
hard time finding Animal Crossing e-Cards in those specialty shops. On the
other hand, while video game boutiques are already selling the e-Reader and
most of the e-Card series, a lot of them are not really into the trading card
business, and they are currently adopting a wait-and-see attitude towards
e-Cards. Meanwhile, big chains like Wal-Mart see e-Cards as just another
product they can sell, but they require all e-Card packs to be sealed in
cardboard/plastic packaging, mostly to discourage shoplifting. So right now,
Nintendo needs to build a niche for e-Cards in the trading card market, and
this is something that requires time and a solid marketing strategy.
Another problem is the manufacturing of e-Cards. While developing mini-games
(or other types of data) and encoding them on e-Cards is relatively easy, the
mass-production of e-Cards is another matter altogether. If the fabrication
facilities used by Nintendo to manufacture e-Cards have a limited production
capacity, it means that only one series of e-Cards can be produced at a time:
While the Animal Crossing e-Cards are being mass-produced, the second series
of NES e-Cards must wait. With this kind of situation, it's not surprising to
see new e-Cards series being released so far apart from one another.
Evidently, in order for e-Cards to become mainstream products, Nintendo needs
to extend its munufacturing capacities by establishing partnerships with other
trading card manufacturers, such as Upper Deck and Topps, in
addition to its existing partnership with Wizards of the Coast. This is
easier said than done, as business negotiations can get pretty complex, with
licensing agreements and exclusivity clauses. And then they have to figure out
what kind of data they'll be putting on the e-Card data strips: Stats?
Mini-games? Data to be uploaded to a Game Cube game? There are lots and lots
of possibilities, but no matter what they decide to do, it takes weeks to
figure out all the legal mumbo jumbo, and turning an idea into an e-Card
application requires a lot of money, energy and time.
There is yet another issue to take into account: The "dot code" technology,
developed by Olympus Optical Corporation. Nintendo surely doesn't want the
market flooded with unauthorized third-party e-Cards, mostly because they
created the e-Reader to make money off the e-Card sales. The best way to keep
this from happening is to keep the dot code technology a company secret as
much as possible, just like Coca-Cola has kept the Coke recipee a secret for
decades. This makes intellectual property rights easier to defend (and
licensing agreements easier to negotiate), but it complicates things for
third-party developers who need technical documentation to fully harness the
capabilities of the e-Reader, because to understand how the e-Reader works,
you have to have at least some knowledge of how the dot coding works. Nintendo
probably has this issue figured out already, so it will be interesting to see
what kind of dev kit they will supply to third-party e-Card application
developers.
All the issues described above, along with other issues that consumers like
you and me may not be aware of, tend to explain why software support for the
e-Reader has been (and will keep on being) so sporadic. As far as third-party
development is concerned, the next logical step for Nintendo will be to
arrange a partnership with Konami towards the creation of a new series of
Yu-Gi-Oh trading cards equiped with e-Reader data strips. This will be of
significant value to Nintendo because it should open the door to future
e-Card projects with Upper Deck (Upper Deck and Konami are already partners
for the existing Yu-Gi-Oh trading cards). That's my prediction, anyway.
Nintendo should also direct some of their efforts towards promotional
offerings, such as e-Cards in cereal boxes and video game magazines (most
notably Nintendo Power). It's a good short-term strategy.
The future of the e-Reader is promissing, but it depends largely on third-party
support. There is no doubt in my mind that the decision-makers at Nintendo HQ
understand this very well, and they will work to get third-parties involved.
But this will take time, and all we can do is wait patiently. Hopefully, 2003
will be a great year for the e-Reader.
