User:Smuckola/History of Nintendo's online strategies

The history of Nintendo's online strategies spans from the 1986 launch of the Disk Fax kiosk, to the present Internet-based Nintendo Network platform.

Overview
Beginning in the mid 1980s, the term "online" has been applied to Nintendo's system interconnection and data transmission strategies in a variety of ways. These range from the simple narratological sense of cyberspace which is derived from the act of manually-propagated digital distribution along retail supply chain networks in the 1980s, to player-to-player networks in the same room in the 1990s, to modern global Internet networks of the late 1990s and beyond.

Taken in the scope of history, Nintendo has pushed the state of the art in many experimental methods of connectivity, and has also suffered protracted reactions to its high-risk failures. Until the advent of affordable broadband access to the global Internet, and 2012's deployment of the Nintendo Network, the only deployments outside of Japan were done via networks which were significantly under the company's own control. These include local area cabling, wireless, and optical technologies, which were often driven by handheld consoles.

Online development has always existed at Nintendo, but its widespread deployment has been historically very limited. In 2015, former Nintendo executive Dan Adelman explained: "[T]he most senior executives at the company cut their teeth during NES and Super NES days and do not really understand modern gaming, so adopting things like online gaming, account systems, friends lists, as well as understanding the rise of PC gaming has been very slow. Ideas often get shut down prematurely just because some people with the power to veto an idea simply don’t understand it." The executives and even key development teams were said to lack experience and interest in competing online systems.

Though the communication techniques seen in the earliest Famicom era systems do not exhibit a bidirectional or realtime interactive nature, they were nevertheless designed for the manual relay of digital content. In this way, consumers interacted with content distribution devices at retail stores which Nintendo had provisioned via postal mail, floppy disks, and fax machine kiosks. Nintendo's historical dynamic digital distribution methods — even when performed fully manually, as with the low cost Disk Writer Kiosks — are said to be experimental precursors to today's online distribution methods, still offering some innovations to their modern counterparts. Nintendo's online distribution and connectivity methods have yielded historically new genre of games, such as the Satellaview's episodic game content of the 1990s — a format which Nintendo hadn't exhibited again until the announcement of 2015's Star Fox Zero on Wii U.

As Nintendo's first Internet-connected system, the 64DD with its bundled Randnet dialup service were released in December 1999. The Nintendo 64 console, the 64DD peripheral, and 64DD games constitute a robust multimedia Internet appliance and workstation, which was used for the creation and social sharing of rich media and game content directly between users' homes and some educational sites. Nintendo reported a userbase of 15,000 at the time of the announcement of Randnet's discontinuation.

Some of the Nintendo 64 and GameCube interconnection methods do not connect to any wide-area remote resource such as the Internet, but rather between two different systems in the same room. A GameCube or Nintendo 64 host console can connect with a Game Boy serving as a controller, camera, or mobile character development device for its host console system, and this serves the "online" subset as being "under the direct control of another device". Two GameCube systems can connect directly to each other on a LAN, without the Internet.

For its first decades of online strategies, Nintendo had depended upon partnerships with several different outside companies for access to their since-discontinued proprietary networks: the Famicom Modem's connectivity having been provisioned by Nomura Securities, the Satellaview having been provisioned by the now defunct St.GIGA, Microsoft's attempt at networking with MSN, and the Nintendo Wi-Fi Connection having been provisioned by Glu Mobile. The advent of the Internet era has enabled the first online network wholly developed and owned by Nintendo, with November 2012's launch of the Nintendo Network.

1987
Disk Fax is a subtype of Disk Writer kiosk. Players could travel to select stores, bringing supported Famicom Disk System floppy disks, such as Golf Japan Course or F1 Race, and upload their scores to Nintendo for nationwide leaderboards and contests. Scores were synchronized centrally to Nintendo via fax transmission from each Disk Fax kiosk.

Beginning in mid-1987, Nintendo president Hiroshi Yamauchi requested the exploration of a partnership with the Nomura Securities financial company, to create an information network service in Japan based on the Famicom. Nintendo developed the modem hardware, and Nomura Securities developed the client and server software and the information database. Masayuki Uemura of Nintendo Research & Development 2 cautioned that they "weren't confident that they would be able to make network games entertaining" but Yamauchi wanted at least some online multiplayer version of his favorite Japanese classic, Go. With a lifetime total of 130,000 Famicom Modem units shipped, the platform's market presence was always considered "weak" for various reasons: product usability; competition from personal computers and other appliances; and the difficult nature of early adoption by the technologically unsavvy financial customer. Uemura stated that the system's most popular application was ultimately home-based horse race betting, with a peak of 100,000 units used and capturing 35% of the online horse betting market even amongst diverse competition from PCs and from dedicated horse betting network terminal appliances. Five unreleased prototypes of network-enabled games were developed for the system, including Go.

Discontinued in 1991, Masayuki Uemura would later remark that the experience borne from the Famicom Modem had served to inform the design of the Satellaview, launched in 1995.

1989
In June 1989, Nintendo of America's vice president of marketing Peter Main, said that the Famicom was present in 37% of Japan's households and that its interactive game and stock network based upon the Famicom Modem had been running for two years.

In mid-1989, Nintendo began a series of announcements to replicate and expand its existing Japan-based concepts, into America. Nintendo of America openly announced that it was in private talks with AT&T over the prospect of eventually launching an information network service in America. The deal's public progress was pending the federal government's deliberation over the lifting of its historical monopoly ban of 1982 against AT&T's ability to publish information over an electronic network. The deal was expected to add a keyboard and modem to the NES, which reportedly already held 80% of the American video game market and was thought to be present in 20% of all American homes. Reportedly, both companies were expecting to leverage each other's respective strength to accelerate their mutual entries into the young electronic publishing market; Nintendo wanted AT&T's network, and AT&T (cautious from previous disappointments with information service ventures) wanted Nintendo's name recognition and credibility in order to instantly compete with other networks like Prodigy. In July 1989, the government did lift the ban for AT&T, effective in August, with limited criticism from the competition. Nintendo of America initiated a business unit to develop the NES into a network terminal, for use with its planned information network in America. Targeted for launch in 1990, the Associated Press described the proposed system's applications as including "news, home banking, and long-distance video game playing". The business unit's vice president of network products was Jerry Ruttenbur, a senior vice president with Home Box Office's video division.

The partnership between AT&T and Nintendo did not launch. However, AT&T partnered with PF Magic and Sega of America in July 1993, to develop the also unreleased Edge 16 Modem for Genesis and 3DO.

On October 2, Nintendo Co. Ltd. of Japan and Fidelity Investments of Boston announced a partnership to develop, produce, and market a financial services trading system for home users, targeted for a 1990 launch.

1991
Nintendo's sole final application of the Famicom Modem was the 1991 retail kiosk system called Super Mario Club. It was designed for toy shops, where the Famicom was deployed as a networked arcade kiosk, serving consumers with a member-store-created searchable online database of Famicom game reviews. Nintendo performed market research by analyzing users' search behaviors, and directly received user feedback messages. The Famicom Modem platform was thus discontinued along with its requisite proprietary online services in 1991.

1993
In late 1993, LodgeNet launched as an on-demand entertainment service for the hospitality industry, including an exclusive strategic alliance with Nintendo. This alliance yielded the worldwide delivery of Super NES games to hotel guests, via LodgeNet's proprietary building-wide "b-LAN" networks, based on custom servers and custom thin client Super NES game consoles. LodgeNet eventually reported the system having been installed in 200,000 hotel guest rooms by April 1996, and 530,000 guest rooms by mid-1999.

Exploring the possibility of interactive television for the greater home consumer market, Nintendo of America was one of many interested companies who were reticent to commit without the existence of proven open interoperability standards for cable TV networks and set top boxes. Nintendo of America's director of network planning, C. Peter Eck said in 1993, "we've got grooves in front of our building from people coming to talk to us" and "There's a very confused morass of information out there today."

1994
"At this stage, the information superhighway is mainly hype. But even if it comes to pass, Nintendo only stands to gain. We are a content company and, presumably, there will still be lots of people out there in the years to come who will want to play games like Super Mario.  As long as we keep making good games, we'll be OK — regardless of how those games are delivered to the consumer." — Howard Lincoln, chairman of Nintendo of America, June 25, 1994

November 1994 saw the limited test release of XBAND in select cities, the only Nintendo-licensed dialup modem in America. The product and accompanying network were all developed and operated by Catapult, with nothing from Nintendo beyond the product license.

1995
In April 1995, Nintendo launched in Japan the Satellaview satellite peripheral for Super Famicom, powered by partner St.GIGA's Japanese satellite broadcast network. Masayuki Uemura, lead designer of the Famicom Modem at Nintendo Research & Development 2, said: "Our experiences with the Famicom Modem triggered Nintendo’s entrance into the satellite data broadcasting market in April, 1995". In January 1995, Nintendo entered a partnership with GTE Interactive Media, a subsidiary of the now defunct telecom provider GTE Corporation, for the development of arcade games and of online networking. In the same month, they previewed their first title, FX Fighter, at Consumer Electronics Show in Las Vegas.

From 1995 to 2007, Nintendo operated Camp Hyrule, a web-based community, moderated and directed by the staff of Nintendo Power magazine.

The Nintendo-licensed XBAND is launched nationwide in America in May 1995.

1996
By April 1996, LodgeNet reported that its partnership with Nintendo to deliver Super NES games had yielded 200,000 worldwide hotel guest room installations.

In July 1996, Nintendo acted as the organizing hub and majority owner in announcing a 1997 launch of a joint partnership between itself, Microsoft, and Nomura Research Institute. Nintendo had originally hired the NRI as a consultant to optimize the use of its managing share in St.GIGA, which yielded the idea for this potentially revenue-generating partnership. The partnership was intended to provide data and entertainment services to Japan, delivered via the simultaneous combination of St.GIGA's digital satellite network and the Microsoft Network (MSN) dialup system. The service was intended to utilize the satellite as a unidirectional broadband caching medium for offline browsing on personal computers, ancillary to MSN's slower bidirectional dialup. It was a diversification attempt for all involved, serving as Microsoft's introduction to broadband and Nintendo's step beyond video gaming—historically the first partnership between the two. This system was not intended for game consoles whatsoever, with Nintendo President Hiroshi Yamauchi stating that "Entertainment includes many other aspects besides games". Daniel Sloan, of the book Playing to Wiin, considered the effort to have been a failure by 1998.

Nintendo explored the forging of an early online strategy with Netscape, whose founding management had recently come directly from SGI, the company which had designed the core Nintendo 64 hardware. During Shoshinkai of late 1996, Nintendo and several third party game developers preannounced some early details of their online strategies, all based around the 64DD platform. Within its own budding online strategy, Nintendo reportedly considered multiplayer gaming to be of the highest priority, even above that of web browsing. Several third party game developers were developing prominent online gaming features based on 64DD, including Ocean's Mission: Impossible deathmatches and Seta's four-player war simulation which was already being based upon its own modem built directly into its own cartridge. Nintendo would ultimately retain the core impetus of these ideas, but would drastically alter both plans over the following years, in favor of a floppy-based storage technology and the Randnet online software and service partner—although with no multiplayer gaming support whatsoever.

1998
On June 16, 1998, in the fifth year of their strategic alliance, Nintendo and LodgeNet entered a 10-year licensing agreement for an "aggressive" upgrade to add Nintendo 64 support to their existing deployment of 500,000 Super NES equipped guest rooms. LodgeNet says that within the system's previous five years to date, the system had "caused Nintendo to become the most successful new product rollout in the history of the hotel pay-per-view industry". LodgeNet reported that within the middle of 1998 alone, 35 million hotel guests encountered the Nintendo name as an integral amenity of their hospitality experience, and it reported sales of more than 54 million minutes of Nintendo-based gameplay.

In 1998, Canadian company TranDirect Holding announced its project in cooperation with Nintendo of America and Digital Equipment Corporation, having prototyped a proprietary online service for banking and Internet email. Intended for branding by individual banks and designed for the Super NES, the unreleased prototype includes a modem-equipped cartridge with downloadable software updates, and a custom keyboard-based controller.

1999
On June 10, 1999, LodgeNet and Nintendo began implementing 1998's agreement to expand and upgrade their existing Super NES buildout to include Nintendo 64 support. In mid-1999, LodgeNet reported that its 530,000 hotel room installations were increasing at a rate of 11,000 rooms per month.

In December 1999, in Japan, the Randnet dialup Internet service was launched alongside the 64DD peripheral for the Nintendo 64 console. Only ever sold in Japan, the 64DD features a bundled software modem codeveloped by Nexus Telocation Systems, Ltd. and Surf Technology, which is the Nintendo 64's first (and only official) Internet hardware product. The cofounder and former CEO of Surf Technology, Dr. Amnon Gavish, reported that during the development of the Nintendo 64, the companies had considered deploying a software modem directly into the game console, as well as Nintendo having had "the concept of head-to-head games and an online game shop, way before any of their competition".

Coincidentally in late 1999, InterAct, the third party developer of the unlicensed GameShark accessory, announced its American alternative SharkWire Online system; this consisted of a GameShark-based "hacking" cartridge, the Mosaic web browser, and a child-friendly dialup Internet portal.

GameCube
According to IGN in 1999, when discussing the next generation to succeed the Nintendo 64, an unnamed source at Nintendo of America stated that "Networkability is at the top of the list" for the N2000 prototype console which would become Project Dolphin and then GameCube.

2000
June 8, 2000: "We are planning to introduce an Internet business next March or April. The first step will be online sales of a brand new type of Pokemon cards." — Nintendo President, Hiroshi Yamauchi

In September 2000, Nintendo and LodgeNet began delivering newly released Nintendo 64 games to hotel rooms at more than 1,000 hotel sites, concurrently with the games' retail releases, demonstrating "the capacity to update [LodgeNet's] interactive digital systems with fresh content virtually overnight".

2001
In February 2001, the 64DD and its accompanying Randnet online service were discontinued. Also in 2001, Nintendo explored gaming on mobile phones, with Japan's number two mobile provider, KDDI.

Nintendo President Satoru Iwata said "Nintendo's not in a situation where it needs online gaming for it to become a viable company", adding that the company wanted to avoid online-only game releases which he believed would "immediately [cut] off about 75 percent" of its users. At the time of the GameCube's launch, Electronic Gaming Monthly said "Nintendo's online plans are too murky to fathom".

2002
My Nintendo was launched in Europe on May 3, 2002.

2003
My Nintendo made its debut launch only in Japan on October 31, 2003.

LodgeNet and Nintendo add GameCube support in the tenth year of their original 1993 strategic alliance, with LodgeNet reporting "more than a billion minutes of game time" sold across more than 875,000 installed hotel rooms at more than 5,000 installed hotels.

2004
By 2004, Nintendo President Satoru Iwata was already known for having said that consumers do not want online games. In response to years of complaints of the lack of network-enabled GameCube games, Iwata reiterated that sentiment and cited Q4 2003's sub-par sales of unnamed network-enabled titles. He described networking as a difficult practice for some consumers, adding his belief that most consumers even see a home Internet subscription as an unwanted expense altogether. He said, "Online technology has its own interesting features, so I don’t rule out the possibility of making use of it for games. ... Game companies now find it difficult to make online game businesses successful, and their enthusiasm for them is cooling".

2005
In October 2005, Mario Kart Arcade GP

On November 14, 2005, the Nintendo Wi-Fi Connection was deployed, having been developed under the direct supervision of company president Satoru Iwata. Nintendo's Takao Ohara lamented that Nintendo's long history of online strategies had each quit due to unexpectedly insufficient userbases, but that the Wi-Fi Connection had in four months garnered 2.9 million connections from over one million unique users. To achieve the goal of a truly sustainable online userbase with the most-used network service in the world, Ohara described a new strategy of identifying and relieving four main barriers. The proposed four barriers are difficult setup procedures, the psychological barrier preventing newcomers from joining in games, the unpleasantness of receiving abuse from other players, and the cost barrier. The company's proposed online strategy at this point was called "simple, safe, free". Nintendo believed that the online platform's success directly propelled the commercial success of the entire Nintendo DS platform. The Nintendo Wi-Fi Connection then served as part of the basis of what would become the Wii.

2008
Of the two-year old Wii platform, Reggie Fils-Aimé said "Nintendo has always had a vision on [online] community. The issue is that we define community differently than our competitors. … Our consumers do want a sense of community, and we’re going to deliver that—but in a way that is unique to Nintendo." President Iwata's longstanding public address statement to the company's investors was amended sometime in 2008 to acknowledge the existence of the Internet. Forbes assumed that in the face of all the competition's increasingly sophisticated online community platforms, and without even a timetable for the eventual announcement of the Nintendo's reintroduction of a coherent or competitive online strategy, the Wii's high level of sales was nevertheless unlikely to suffer in the foreseeable future.

My Nintendo was launched in Australia on April 24, 2008 and on October 2, 2008 in the US.

2010s: Nintendo Network, mobile apps
In 2012, Nintendo announced plans to fundamentally reshape, remodernize, and cohere its online strategy starting with the launch of the Nintendo Network. This network platform is the first step to unify all of its hardware and software platforms, launching a single user account system across the mobile Nintendo 3DS, the home Wii U console, web services, and future mobile applications.

An unnamed developer candidly criticized the development period leading up to the launch of both the Wii U and the Nintendo Network as being extraordinarily difficult. Specifically about the network, this difficulty was reportedly because Nintendo had delivered the prelaunch Wii U with the networking components of its operating system in a completely missing and untestable state. This reportedly left developers to perform guesswork about all of the core online functionality of the Wii U, Nintendo Network, and Miiverse. This strife lasted until they, along with all consumers, received a massive Wii U system update download upon the console's retail launch. The developer said, "We had to code it all in the dark and just hope that it worked." Further, Nintendo's own key senior development groups reportedly had no experience or interest in the long-standing competing online platforms. Nintendo's teams did not obtain access to competing products and services, but rather casually asked third party developers to relay to them a general summary of thoughts. The developer summarized: "My only thought after this call was that [Nintendo was] struggling—badly—with the networking side as it was far more complicated than they anticipated. They were trying to play catch-up with the rival systems, but without the years of experience to back it up."

On June 10, 2014, Nintendo of America filed a patent for a "car area network" (CAN) "to enable communications between various devices in the car", potentially along with a game server.

On March 17, 2016, My Nintendo was launched as the company's new customer loyalty program to replace Club Nintendo.

Reception
Richard Eisenbeis of Kotaku said in 2014 that modern Internet-based game distribution models could "learn from" the innovative nature of Nintendo's first online system, the Disk Fax kiosk from as early as 1986.

Video game historian Daniel Sloan assessed Nintendo's online position as of the early 2000s in his book Playing to Wiin, saying that "online gaming for Nintendo and the industry remained largely an untapped mine, full of potential synergies but onerous to implement and uncertain to yield much." GameSpot said in 2004 that the GameCube's lack of network-enabled games had been a major source of complaints for years. In 2007, Joystiq said that the GameCube's limited selection of online titles hurt the console's market share in the long run.

With 2012's launch of the Nintendo Network, Nintendo has received general criticism for its lack of comprehensive and standardized platform support for all games with regard to leaderboards, online multiplayer matching, video recording, online purchase history, and other features that have been present on competing console platforms for many years. With a summary statement that "Nintendo is hurting itself", Polygon described the company's network account usability issues as being "baffling", "negligent", and "embarassing", whereby the company is "struggling with something that has long been a solved problem" which is "no longer forgivable", and about which there is "little evidence anything is being done". Polygon states that "a good account system and online infrastructure isn't easy or cheap, but it's attainable and damned near mandatory, especially for a company with as many resources as Nintendo". Writing a comprehensive report for Eurogamer, an unnamed third party developer candidly criticized the network's prelaunch development, citing critically absent developer documentation and any core online functionality: "We had to code [our games' online functionality] in the dark and just hope that it worked. ... My only thought ... was that [Nintendo was] struggling—badly—with the networking side as it was far more complicated than they anticipated. [Nintendo was] trying to play catch-up with the rival systems, but without the years of experience to back it up."

Forbes contributing editor Paul Tassi described how the modern competition had spent several years surpassing Nintendo in Internet-based online functionality. He said that Nintendo has for some time lacked the competition's modernized online norms such as a unified account system via which to transfer games between console units. However, he also praised Nintendo's comparative lack of abusive consumer exploitation: "Nintendo resisted putting DLC in their games at all for years, but now that they have, they’ve shown everyone else what substantive, fairly-priced DLC should look like. ... Only Nintendo could take a first crack at something like DLC, and end up knocking it out of the park." NintendoLife said that the March 2015 release of Mario vs. Donkey Kong: Tipping Stars, with its basis upon Internet-shared user-generated content and dual-platform licensing, has served to bring "Nintendo's online experience kicking and screaming into modern times"—at least for that one game. Tassi further criticized Nintendo's uniquely restrictive policies about online video sharing as being based upon "apparent fear and misunderstanding".

Wired magazine called Miiverse "the social network in which you are not allowed to socialize" due to Nintendo's oppressively censoring filters and policies.