Revolution: The story of Wii
14th Nov 2012 | 11:08
In 1998, a journalist for The New Yorker asked Bill Gates which of Microsoft's competitors he feared the most. "I fear someone in a garage who is devising something completely new," he replied.
Gates's belief was that there is no greater disruptive force than innovation. The biggest business rivals continually smash against each other in a war of attrition, but nothing has more potential to upend the entire system than a bold new invention.
Three years later, just months after Gates handed control of his software empire to Steve Ballmer, one such unknown garage inventor was knocking on the company's door with an idea that would change videogames forever. Microsoft declined his offer.
His name was Tom Quinn, a serial inventor based in California who, in certain obscure corners of the internet, is described as "the man who invented the Wii". That's not an accurate statement, of course, but it's not an entirely false one either.
In September 2001, Nintendo quietly bought a minority stake in Quinn's company, called Gyration. The reason was because the American entrepreneur had a worldwide patent on gyrometer-based motion control technology, and had researched the field for a number of years.
As part of the acquisition, Nintendo was granted licenses to use Quinn's motion control tech, as well as take advantage of his technological know-how. The business partnership, though momentous in retrospect, went largely unnoticed. Only one news outlet appears to have covered it.
Through this deal Nintendo embarked on a new chapter in the company's history - one that would result in unimagined commercial success along with a vitriolic backlash from its core community. But the story of the Wii began, in fact, on one day in the late '80s, when Quinn was flying a Cessna 172 private airplane across America. As his mind wandered while he was miles up in the sky, he began to assess the control systems he was using.
"I got to thinking how a motion controller could create a navigable three-dimensional space that we could use to move aircraft more effectively," he tells CVG in his first ever interview on his involvement with Nintendo.
"It took more than ten years to finally be awarded a patent on my motion control design idea, one that covered any physical motions in the real world that translate to linear motions on a screen. That was in 1999, and when it came through, everything changed."
Though his motion control concept had failed to make an impact in aeronautics, in early 2001 Quinn began to think about computer user interfaces, particularly in the context of videogames. Microsoft, which a year earlier had launched the Xbox, was the first games company Quinn had approached with his new idea.
"Through my business connections, the first games person I got in touch with was Steve Ballmer," he says.
"I pitched this motion control device to him and he loved it. He set me up with the Xbox team in Redmond [Washington] for a second pitch and I remember how incredibly excited I was about it. Things were happening so fast.
"But the meeting went terribly. The attitude I got from them was that if they wanted to do motion control, they would do it themselves and make a better job of it. I mean, they were just rude. In fact, the meeting went so terribly that one of the executives came over to me afterwards and apologised on behalf of others. I remember him saying how this was not how Microsoft should be engaging with potential partners."
Despite Gates's prophetic warnings about garage innovators, and Ballmer's apparent endorsement of Quinn's patented tech, the Xbox team turned down an offer that would have effectively blocked Nintendo from using the very motion control technology that the Wii is built on.
Seven years later, when Nintendo was working around the clock to produce more than 1.8 million Wii consoles per month to meet unprecedented global demand, the Xbox team was put in front of an Israeli inventor who had a different kind of motion control technology patent. That time, the Xbox execs were all ears.
BACK IN 2001, on the long and downhearted journey home from Microsoft HQ in Redmond, Quinn and his business partners remained convinced they could still sell the idea of motion control to a games company. Attentions eventually turned to Japan, and it quickly became clear who was the priority target to pitch the tech to. Sony.
"At the time, Nintendo wasn't doing well at all," Quinn says. "It was rich, but it wasn't generating any good business. There were rumours about the chairman stepping down and other things, so we felt Sony would be a better potential partner for us."
Quinn's company was fortunate enough to have an investor by the name of Larry Yoshida - a Japanese businessman who had strong ties across the entertainment sectors. Yoshida was such a prolific networker that he even personally knew Akio Morita, the distinguished co-founder of Sony, before he passed away in 1999.
"Through his connections, Yoshida got me in touch with a Sony guy that looks after games. So I flew to their offices and was given a meeting with a man called Ken Kutaragi."
Quinn was unaware at the time that Kutaragi was the most influential person in the entire games business. The "father of PlayStation". The man who broke a thirty-year curse and produced two market-leading consoles in succession. A visionary whose self-belief reached a critical mass when creating the PS3; a problematically ambitious and comically expensive machine that many games developers loathed coding for.
"I'll never forget that meeting at Sony," Quinn says. "We were in a tiny little room with a big PC projector and Kutaragi comes in, introduces himself, sits down and - I swear this is true - he closed his eyes the moment I started showing my pitch. He never opened them until I had finished.
"It was awkward, very awkward, but I still asked him for feedback and he said, 'well, can you produce this for 50 cents?' I laughed and explained that would be impossible, so again I left empty handed and, to be honest, that time it got to me. I felt pretty let down. You have to remember that Sony and Microsoft were by far the two biggest console manufacturers. Nintendo wasn't doing well and we hadn't thought much about them."
In the summer of 2001, Quinn was informed that Nintendo's chairman and president, Hiroshi Yamauchi, was preparing to resign after 53 years at the company. Ever since PlayStation entered the fray, Nintendo had failed to reproduce the kind of winning market share that it had become accustomed to. The N64 took second place in a two-man race and the GameCube did worse still, finishing third after the Xbox launched.
But Yamauchi's departure, officially announced a full year later, was not a straight swap. Internally, Nintendo was making radical changes to its management structure. A board of six executives was appointed to take mutual control of all operations.
Atsushi Asada stepped in as new chairman while a man named Satoru Iwata was appointed president. Shigeru Miyamoto was also named one of the six.
This was more than a game of musical chairs; Command within Nintendo's Kyoto headquarters was no longer reserved for a single dictator but spread across a committee of its most senior staff. The biggest decisions would now be explored from six different perspectives, in theory allowing more radical ideas to be considered.
Quinn is one of the few people who has personally seen how this committee operates from the inside.
In another extraordinary spell of luck, his networking partner Yoshida happened to occasionally play golf with Asada before he became chairman. One final meeting was set up in early September 2001, this time with Quinn flying to Kyoto to pitch his motion controller to Nintendo.
"I'll never forget that week. I distinctly remember the company's beautiful board meeting room - a huge cherrywood table and flush carpeting and outstanding ornaments. Asada didn't speak much English, but he had an entourage of about eight executives, engineers and programmers. I didn't know who they were though.
"About twenty minutes into my pitch, which was roughly the same one I gave to Microsoft and Sony, Asada stopped things and asked if he could have a moment to speak with his people. I was thinking, here we go again.
"They started talking and, right in front of me, it was growing into this really heated discussion. I was told by Yoshida, who was also in the room, that some executives were resistant to the idea of motion control, while others were completely sold by it.
"And then, in the middle of this debate that was getting louder and louder, Asada barked something and there was total silence. That was it. He decided to license our patents for motion control, as well as buy some of our company."
THAT DAY ONWARDS, while Nintendo began to internally explore the possibilities of motion control, from the outside there was increasing speculation that the GameCube would suffer the same fate as the Dreamcast.
The games industry tends to adopt ant-like business behaviours. One company's direction will often decide another's. If a publisher starts selling season passes for DLC, and it becomes a success, eventually all of them do. If one joins Steam, all join Steam. It's not so much about indecision as it is about hedging bets.
By 2003, executives at Nintendo began to notice how certain industry patterns were pointing to a grave outcome for the GameCube.
Firstly, the retailer Dixons - the biggest UK seller of console hardware at the time - announced on March 10 of that year that it would no longer stock GameCube systems due to soft demand. It meant the system would not appear in subsidiary stores such as Currys and PC World.
Eight days later, Argos announced it too would pull support. At a time when brick and mortar retailers were a dominant force, the announcements proved to be catastrophic for Nintendo. Not only would the company sell less consoles, but the entire industry was signalled a new path to tread.
Two months later, publisher Acclaim said it would no longer support GameCube. By September, the CEO of Eidos declared the GameCube a "declining business" and said he would cease publishing on the platform too. Other retailers shifted the consoles at rock-bottom prices to free shelf space for Xboxes and PS2s.
In 2002 Capcom announced five major games projects, including
George Harrison was Nintendo of America's head of corporate communications as the GameCube business was thrown into disarray. He left the company in 2007 after a successful sixteen-year stretch and, for the first time, speaks to CVG about the transition from GameCube to Wii.
"With the popularity of the Xbox and PlayStation 2, we realised that we were in a very difficult competitive situation," he says.
"We at Nintendo believed that the GameCube had underperformed. In the US, the market share was about half for PlayStation 2 at the time, with us and Xbox sharing the other half. Considering Nintendo's heritage of having a 60-80 per cent market share back in the eighties, the GameCube's performance was not something that we aspired to."
Total global GameCube sales are believed to have been about 21.7 million, less than the estimated 24 million Xboxes sold and - even more problematically - deep in the shadow of the PS2, which went on to shift more than 153 million units.
Worse still for Nintendo was its own historical trends. The NES sold 62 million units globally, while the SNES shifted 49 million and the N64 shipped 33 million. A long-term downward spiral in sales had become cancerous for the once buoyant games company.
The central problem was that Nintendo had lost the audience it commanded in the '80s, and attempts to draw those gamers back proved futile. Tastes had moved on. PlayStation 2 cemented its position as the mainstream console of choice while the Xbox was the premier core gamer console. There was little breathing space between the two.
Nintendo's solution, or perhaps its only hope, was to abandon the ant-chain. It decided to forget about the audience it lost. With the help of motion control technology, Nintendo took an astounding risk and attempted to create a new market from nothing.
"We knew that direct three-way competition in the hardware space was not going to support Nintendo financially in the future, so something had to change," Harrison says.
"That urgency and anxiety for us to change allowed Nintendo to think outside the box and come up with something completely different. We knew we could probably never get that 80 per cent market share back, but we decided that there was a better chance if we went after a different audience.
"At the time I know there had been many debates in Kyoto about how Nintendo could best attract a wider audience. The games industry seemed to be concentrating more and more on hardcore players, and we realised we needed to break out of that.
"I remember the real question internally was - why aren't more people playing videogames? Why doesn't your wife or daughter or sister play videogames? Why aren't these people our customers?
"We arrived at two fundamental insights. The first, games controllers became far too complicated. Most people felt intimidated by that. And the second thing was that most games were targeted and marketed for hardcore gamers, which again put people off."
From 2004 onwards, Nintendo began to conduct market experiments, both big and small, under the guise of product releases. Games like Mario Party 7 were packaged with microphones while Donkey Kong Jungle Beat was bundled with Bongos.
The test, says Harrison, was not so much about sales statistics but to gauge whether families would enjoy playing games if the user interface was significantly simplified.
But there were huge gambles too. "One of the biggest tests was the Nintendo DS; a console with software like Brain Training and Nintendogs. But the success of those games gave us confidence that we really could address a new audience with home consoles."
For years there has been a myth within the industry that Nintendo began to prototype a motion controller for the GameCube in a bid to improve sales. In 2007, Julian Eggebrecht of games studio Factor 5 told a journalist that Nintendo had provided him with such a prototype motion controller for the GameCube title Star Wars: Rogue Leader.
But this was not true. One developer who worked on the Rogue Leader project told CVG that "it should be noted that Eggebrecht was trying to promote another motion-controlled PS3 game when he made this comment".
"Sorry, we never worked with a motion controller for the GameCube. Take Julian's comments with a pinch of salt," the person said.
Harrison says he never heard of such a plan internally, nor would he have recommended it. "There are many technical hurdles with add-ons. The whole plan was always to start anew. A completely new idea needs a completely new console.
"That was the Wii."
"MY NAME IS Reggie. I'm about kicking ass, I'm about taking names, and we're about making games."
Reggie Fils-Aime was just six months into his new job at Nintendo when he had to stand centre stage at E3 2004 in front of hundreds of weathered journalists and, via internet streams, appear in the glare of millions of gamers from around the world.
The sales and marketing director's first pugnacious words to the industry remain one of his most famous lines. Yet later on in the presentation, when reading the autocue between trailers for Metroid and Nintendogs, Fils-Aime commanded a more subtle form of rhetoric.
The ass-kicking machine was the first person at Nintendo to ever openly discuss plans for the Wii - not a bad start for the new guy - and he did so with the unconventional elegance of a ballerina.
"We are serious about expanding what we do," he began.
"We understand that we're not going to run our company just for hardcore gamers. There are gamers out there who are not as knowledgeable as you, gamers who aren't your age, gamers who don't have your tastes. It's my job, it's Nintendo's job, to satisfy all the gamers."
Thirty minutes later into the press conference, and two-and-a-half years after Tom Quinn flew out of Kyoto with a signed contract in hand, company president Satoru Iwata announced a new home console was in development. It was called Project Revolution.
"Nintendo DS is not the only change in our future," Iwata said.
"The definition of a new machine must be different. Nintendo is working on its next gaming system, and that system will create a gaming revolution. The time when horsepower alone made the difference is over."
E3 press conferences are the annual pantomimes of the games industry. Heroes and villains are made on balance of product announcements, while even the smallest peculiarity spotted within these meticulously rehearsed shows can spiral into crowd-pleasing animated gifs or devastatingly funny YouTube videos.
But in 2004 Nintendo performed flawlessly. Games journalists around the world declared the conference an undisputed, trailblazing success. Fils-Aime revealed a new handheld, Iwata discussed Revolution and Miyamoto confirmed a new Zelda (an executive triumvirate that would go on to define Nintendo's E3 press events in the years that followed).
Had the Wii controller also been revealed, it most certainly would have been one of the most defining hours in E3 history. Then again, it may not have been such a clear-cut success.
"THE FIRST TIME I was shown the Wii was about six or seven months before the E3 2005 show," says Harrison.
"We were flown to Japan and asked to take a look. To be honest, at first I was sceptical. I think a few of us were. You look at that remote, after years of standard controllers, and you don't quite know what it is."
The Wii Remote is one of the most divisive pieces of consumer electronics ever built by games company. This was more than different. It was alien. It was a car without a steering wheel. A three-sided fountain pen.
Following Nintendo's business deal with Quinn in 2001, a design team led by Shigeru Miyamoto began to prototype a number of test controllers. The legendary creator of Mario and Zelda brought into the office many different devices for inspiration, from mobile phones to sat-nav controllers.
There was reportedly internal resistance within the design team on which features the controller should implement. At one stage an analogue stick was considered, while others on the design team believed a touch-screen should be implemented (an idea Nintendo agreed to, several years later, when designing the Wii U).
There was apparent resistance internally on the hardware too, with some employees believing that the console should be HD-ready much like the Xbox 360 and PS3. But that would miss the point. Nintendo wanted to move away from the path its competitors were already leading.
Price was a key issue that determined design. Miyamoto once told a Business Week journalist that he hoped the Wii could be sold for just $100, but that RRP would have resulted in a particularly underpowered device.
He said: "The consensus was that power isn't everything for a console. Too many powerful consoles can't coexist. It's like having only ferocious dinosaurs. They might fight and hasten their own extinction.
"Ultimately, it came down to whether power should be a key element of the console or not. We didn't think it was possible to build a powerful machine for less than $450. Not only would it use a lot of electricity, it would need a fan, which meant it would be noisy. Mothers would rise up against it."
Basic technology for the console was put together in late 2004. By then, the controller's wand shape and the nunchuk add-on were largely complete, as was the motion sensor, infrared pointer and button layout.
It seems unfeasible in retrospect, but Nintendo didn't focus-test its controller. With confidence gained from the success of the DS, the company decided to develop its riskiest console ever without any public feedback.
Nintendo's gutsy faith in its own instincts is a trait shared by very few publicly listed companies, though one of them is Apple. Both firms prove that following market trends can only take a business so far. The lesson is simple: to thrive in a new market you must create something that the public doesn't even know it wants yet.
"So there were lots of NOA [Nintendo of America] people who were sceptical about the controller at first," says Harrison, "but I remember the moment when everyone first started playing a game of Tennis and we were all laughing like kids.
"As soon as that happened, I knew we were onto something special."
Numerous issues with the Wii Remote had delayed its intended reveal beyond E3 2005. Finalising the wireless technology reportedly took two years, while work on the infrared pointer lasted more than twelve months. Countless tweaks and redesigns were made in secret until, on September 15th at the 2005 Tokyo Games Show, Mr Iwata took centre stage and changed the landscape of gaming by raising his fist with a near-final controller in hand.
WHAT FOLLOWED WAS a frenzy. A fever of debate, speculation and unforgettable excitement.
"It was as though the audience didn't know how to react," Mr Iwata said of his Tokyo Game Show reveal, which had knocked the audience silent. Gut-reaction editorials, detailed images and millions of comments were flying across the web at ferocious speed.
While there were significant reservations from certain fans, the sheer mystery of the Wii - while Sony and Xbox went for the safe bets - had captured the imagination of the gaming world.
E3 2006 was one of Phil Harrison's worst days at Sony. One former Edge journalist claims he stormed out of the PlayStation press conference with a memorable look etched across his face. Considering the breadth of nominees, it was hard to judge the company's biggest blunder. Riiiidge Racer? Giant Enemy Crab? Five hundred and ninety nine US dollars?
Another Mr Harrison, however, was living what he regards as one of his best days ever at Nintendo.
"Oh I'll never forget the first day on the show floor at E3. People lined up and as soon as the doors opened, you could see people literally running past the PlayStation 3 stand to get to the Wii stand.
"People were lining up by the hundreds to get their hands on it, and that's when we knew we were onto something. It was also a time of social media too, with things like homemade YouTube videos promoting the Wii - the whole thing took on a life of its own and you really cannot manufacture that through advertising."
"I think we caught Sony by surprise, and they felt they needed to act fast so they created the Sixaxis controller."
The sheer intensity of anticipation for the Wii's release became a plot device in an episode of South Park. Meanwhile, developers and games enthusiasts were discussing the creative possibilities that motion control could bring to games.
It was a rare moment when all the planets had aligned for Nintendo. People were excited about the launch line-up, but even more enthused by the kind of games they imagined could appear on the new console.
And then there was the name: Wii. Another storm of debate. Another moment when people were only talking about one system. Was Nintendo losing its mind?
"Several months before we began to plan E3, Nintendo told us that the name Revolution was going to change to Wii," says Harrison.
"Our initial response was like everyone else's; it seemed really unusual, and even a name that we made fun of. But the theory was that, if we want to target new audiences, why use the names of consoles that people have already decided not to buy?"
Turbulence turned into triumph. The Wii was released on November 19, 2006, to what can only be described as market hysteria.
It took less than a year for Nintendo's biggest ever risk to become the market leader, a position it had not enjoyed since the early nineties, and one it still holds today, six years later. On launch day, some shops had to send Nintendo fans home due to overcrowding.
In the first half of 2007, the Wii outsold the PS3 and Xbox 360 combined.
By early 2008, the Wii outsold lifetime Gamecube sales; a feat achieved in less than fifteen months. Severe shortages were affecting retailers around the globe. From 2006 to 2007, shops reported that new shipments were depleted within an hour of going on sale.
"We were in short supply for more than a year, and that wasn't by design," says Harrison. "Sales exceeded our expectations across Europe, all through the US and in Japan. There was just no way we could keep up with that kind of demand in all three markets."
In 2007, production hit max capacity with 1.8 million consoles created each month yet the demand seemed unstoppable.
"One of the weirdest days in my life was when a US senator phoned me at Christmas," says Quinn.
"He found out I was working with Nintendo and asked whether I could get him a Wii for his kids because it had sold out everywhere."
In fact, global demand was so intense that it had interfered with Nintendo's plans to release the multicolour Wii consoles that it showcased back in 2005.
"We were thinking a lot about multiple colours, but the truth is that we were having such a hard time meeting demand that we stuck with the white in the early years," says Harrison.
"Then over time, having sold tens of millions of them, we realised that consumers really didn't mind black or white."
In October 2012, PlayStation celebrated five million PS3 consoles sales in the UK. The Wii had achieved that feat by the end of 2008.
Meanwhile, physicians claimed that the new console was to blame for a spike in cases of tennis elbow - dubbed 'Wiiitis' - while reports spread of the console being used in numerous residential homes to help keep the elderly more active.
Journalists used stock questions for developers: "Will you be developing games for the Wii?" Developers gave stock responses: "Motion control is something we're very interested in".
By January 31st, 2010, the Wii became the best-selling home games console ever produced by Nintendo, with sales of over 67 million units. On launch day, each console sold at a profit, starting at $13 in Japan, $49 in the United States and $79 in Europe. Those margins continually crept upwards.
From the system's first announcement in 2004 to its holiday sales season in 2008, Nintendo's share price rocketed from $12 to $77. Its silly name became part of social fabric and Xbox and PlayStation spent years designing their own motion controllers.
At the time of writing, the Wii is weeks away from becoming the third ever home console to hit the 100 million sales mark, and is expected to be the first non-Sony console to outsell the original PlayStation, which sold 102 million units globally.
"I was at Nintendo for sixteen years. We had some quirky moments, like the Virtual Boy, but also some phenomenal highs," says Harrison.
"The Wii was most astounding success I've ever been involved with."
WILL THE REVOLUTION ever come again? It nearly never happened in the first place.
Microsoft and Sony were just a handshake away from blocking off Nintendo's access to Quinn's motion control patents.
"Looking back at the whole thing, it's crazy how blind Sony and Microsoft were," Quinn says.
"They were busy beating the crap out of each other and didn't consider Nintendo a strong competitor any more."
Nintendo has an unmatched history of mass producing innovative concepts, from Gunpei Yokoi's D-Pad to Masayuki Uemara's shoulder buttons. Of all the scores of corporations that have been involved in gaming over the past forty years, none have written new drafts of history more than the 123 year-old Kyoto company.
Revolution was a strange, misunderstood console and a commercial phenomenon rolled into one. It carried the hope that core games machines would deliver a new kind of rich and intuitive experience. The Wii has not achieved this - while sales of games such as Wii Fit pushed its share price to new heights, the core gamer audience today uses the term 'motion control' as a largely pejorative one.
But Nintendo had lost that audience back in 2002, having spent more than a decade trying to allure it. At the time of going to press, the company is just days away from launching its Wii U system - a new gamble altogether, one that Nintendo hopes will draw in more core gamers while also praying that its casual market is still interested.
The curse of third-party support still haunts the company. Of the twenty best selling Wii games, seventeen of them were published by Nintendo. Its astounding riches were not something that third parties were able to indulge in. Core games such as Sega's MadWorld and No More Heroes were lauded by critics but commercial failures.
In 2007, Spy Party developer Chris Hecker was the victim of a hate mob after claiming that the Wii was "a piece of shit" for games studios. But behind the headlines and outrage there was a salient philosophy that an underpowered machine like the Wii might give developers fewer options when compared to rival systems. As each year passed, his comment appeared to be more and more revelatory than inflammatory.
But Harrison believes the Wii had nevertheless taught the entire development community new and important lessons.
"Motion control may not be the buzzword that it used to be, but the industry is now always thinking about how to make its games as accessible as possible. That's the true legacy of the Wii."
Bill Gates's famous line about garage inventors perfectly encapsulates how all industries will continually reinvent themselves. There is another, less famous, quote from the Microsoft co-founder that nevertheless seems appropriate: "In this business, by the time you realise you're in trouble, it's too late to save yourself. Unless you're running scared all the time, you're gone."
Harrison, now a full-time consultant for start-up businesses, believes Nintendo's natural response to anxiety is invention.
"Nintendo is a creative organisation, they always are going to think of new things, new approaches," he says.
"There are some people at that company who are absolute geniuses; creatives who really understand people and how to make them smile. Nintendo just needs to continue making new things.
"It's what keeps them going."