Nintendo's Challenge To HD

Nintendo is set to become the third, and the last, of the major game console makers to offer on-demand video, with the proposed March launch of the Wii Video Channel in Japan. An overseas rollout will follow if the initial outing is a success.

Japanese mega-agency Dentsu, an ad agency, media buyer and also a respected producer of TV shows, has been brought on board to develop the content and sell advertising. Nintendo may be last to market but it is promising something new: 100% original programming, developed especially for the Wii.

Sony launched PlayTV in Europe last September, giving the PlayStation 3 personal video recording features. Around the same time, Microsoft's Xbox 360, which has long offered on-demand films and TV shows from major studios such as Fox, Paramount and Warner Bros., teamed up with online film rental service Netflix to let US users stream videos directly to their TV.

Reports have suggested the content for the Wii Video Channel will largely consist of cartoons, a Dentsu speciality, and other family-oriented entertainment. Cartoons in particular make sense for the Wii. Its standard definition screen quality, part and parcel of its physically involving games but less appropriate for premium video content (where Xbox’s and PlayStation's HD capabilities come into their own), is less of an issue in animation.

Battle for the future of media
Nintendo's announcement marks an interesting development in the current battle for eyeballs, one that could determine the future of media. On one side, broadcasters and operators are pinning their hopes on super-sharp picture quality and huge TV screens, investing in HD content and rolling out HD channels that they hope people will pay for.

However, as YouTube successfully demonstrates, people are spending more time viewing content on their PCs, happy to trade off a drop in screen quality when they can watch for free.

It's not yet clear how Nintendo sees its video channel developing, currently looking at a mix of ad-supported free shows and others that people will have to pay to see. However, success in building an audience around original content in standard definition will provide a serious alternative to the HD dreams (and business models) of traditional media companies.

Advertising potential
Nintendo leads the global video game market, having sold over 40 million Wii consoles to date, including nearly 10 million in Japan. The Wii demographic breaks the tradition of the male-oriented games console, being more a family device skewed towards women. With over 18 million Wii users connected to the net, advertisers and agencies are interested. But whether they will follow through is another matter.

“It’s likely to open up target segments that are difficult to reach via TV, such as kids and women,” says Scott Neville, COO of Japanese interactive ad agency Sozon. “But it’s hard to say how many people will really plug in and watch this.”

“Targeting families with family content in theory could provide opportunities for advertisers,” says Julia Lucas, associate director at media agency MEC Japan. “It could be highly targeted and measurable, but we are yet to hear whether these attributes have been considered. We are interested to see how this plays out, and to see if there is relevance for our clients.”

Nintendo could entice its legions of fans by drawing on its huge video game library and make cartoons based on iconic creations such as Mario and Zelda, making a strong case to advertisers of the channel’s worth. Nintendo has already proven once that SD is no barrier to success in a high-tech age. It may be about to do it again.

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