Iwata: Wii U Planning Started Immediately After Wii Release

[In an interview with Gamasutra editor-at-large Chris Morris, Nintendo's Satoru Iwata says his company began thinking about the Wii U right after the Wii's launch, and outlines the firm's home console and software pricing strategies.] Hindsight's a funny thing. Given the staggering out-of-the-gate success Nintendo saw with the Wii, you might have expected the company to push back its next generation planning for a year or two to focus on ensuring third-party partners understood how best to succeed on the Wii, ultimately extending its appeal in the market. But while consumers camped out for the then-white-hot gaming system and partners struggled to find a way to capitalize on it, Nintendo was already at work on the Wii U. In fact, it was as early as 2007 that the company knew it wanted to add a second screen to its next system, says global president and CEO Satoru Iwata. The biggest debate, actually, was where that screen should go. Initially, the Wii U's second screen was a separate device that was to be placed on a table, not attached to the controller. Also, the screen was much smaller, due to the higher costs of LCDs at the time. "Considering how expensive screens were then, it did not make sense to have this big-sized LCD," he says. "We would not have been able to come up with a reasonable price point. … We had not decided when we were going to launch the new console [at that point], but we knew we needed to be flexible." Just as contentious internally was whether the new system would, in fact, be a portable gaming system or a home console device – or both. "During the roundtable discussions there were such arguments about should we make it capable of being a standalone system or should we make it work only with the [base console] system," says Iwata. "We came to the conclusion that this controller is only going to show the images generated and processed by this hardware unit – and sent from the hardware unit wirelessly. That means sharper graphics. A battery couldn't do that." Now that the Wi U has been unveiled, the company seems to be all but abandoning the Wii. (Quick. Name an anticipated title – first or third party - beyond The Legend of Zelda: Skyward Sword. You can't, can you?) That's something consumers are noting, too. Even with a $50 price cut in May, Wii sales came up short compared to the May 2009 numbers. But Iwata says the focus on Wii U doesn't mean the company is planning to sunset the Wii when its successor arrives, as it did with the GameCube. "When we consider the people who are first to purchase Wii U and the people who are going to purchase the Wii, I don't think there will be a great overlap between the two," he says. "I believe that those who are waiting to purchase the Wii now are the so-called 'late adopters' and the people waiting to purchase the Wii U are early adopters. So for the time after the Wii U [arrives in stores], I believe both systems will be on the market for some time." Mindful that the lack of dedicated third-party support in the U.S. hurt the Wii, Nintendo broke tradition and began showing Wii U hardware to developers here before formally announcing it to the world. That resulted in some of the leaks that preceded the system's unveiling, but for the company, it was a calculated risk. If publishers were willing to put their "A" teams on Wii U games – something that rarely happened with Wii titles - that could make the system more attractive to core audiences. "In the U.S., people are very attracted by the sports and the shooter games - and the quality of those graphics are very important," says Iwata. "As a result, it was not necessarily the case to have the software [for the Wii] developed by the top developers of the software companies. And, as a result of that, Wii software was not able to succeed to the extent that third parties wanted [it] to. For this time around, we are able to expect the top [developers] for the top third parties to make games for the Wii U." Top development talent costs money, though. And so do high definition graphics. While Nintendo's certainly not ready to talk pricing for the system hardware, Iwata was willing to give his thoughts on whether Nintendo can keep software prices in the $50 range – versus the $60 that is common for Xbox 360 and PS3 titles. While he concedes that some top franchises are likely to cost more, he notes that he doesn't think that will be the case with all games. "I think there is already some indication that the [current pricing] trend is going to stay here," he says. "When you consider some of the most popular franchise – such as Call of Duty or Madden - the publishers can afford to affix a rather expensive price tag on that because the franchise has a premium value. On the other hand, … without an established franchise, they cannot afford to keep that expensive price tag. I believe there will be a wider price range."