Why Nintendo is betting on eSports, and not VR

June 24, 2015, 8:53 PM UTC
Nintendo World Championships 2015
Photograph by Jonathan Leibson — Getty Images for Nintendo of America

eSports and VR are two of the biggest trends in technology right now—and Nintendo is 25 years ahead of the game.

Nintendo (NTDOY) was one of the first major game companies to embrace eSports—long before eSports was a thing—with the 1990 Nintendo World Championships. And in 1995, Nintendo was well ahead of the current virtual reality craze with Virtual Boy, the first console virtual reality headset.

In both cases, Nintendo abandoned eSports and virtual reality in favor of creating console and portable games around iconic characters like Mario, Donkey Kong, and Link. But Nintendo is still keeping an eye on both markets.

“We have a long and deep history with VR with Virtual Boy, and we also have a history with augmented reality because there’s AR in Nintendo 3DS,” Reggie Fils-Aime, president of Nintendo of America, says. “We know the tech and we know how the tech has evolved. For Nintendo, we always go beyond the tech to make sure that the experiences we do are fun and they’re social, and I think those are the two key opportunities today on the VR/AR space. Are they both fun and social? I don’t think that’s there yet. So we’re going to continue to stay close to the technology. We’re going to continue to do our own internal experiments, but we don’t believe it’s ready for prime time yet.”

But what is ready for prime time is eSports. Nintendo stepped back into that arena last year at E3 with the Super Smash Bros. Invitational and this year brought back the Nintendo World Championships to kick off E3 2015.

“We saw success last year with the Smash Bros. Invitational, and Smash Bros. has always been a game in the eSports community,” Fils-Aime says. “What we’re really gratified to see is that the community has now embraced Super Smash Bros. for Wii U because it has the speed and customization they like. We’re also seeing them embrace Mario Kart 8, as well as Splatoon, in a competitive environment. We’ve always been close to the eSports space and will continue to be.”

Fils-Aime says the Nintendo World Championships, which was brought back to celebrate the 25th Anniversary of the original event, was viewed over 5 million times in the first four days. He notes that viewership continued to be quite strong even as the E3 show wound to a close, which means it could have a “nice long tail.”

All of those viewers were able to see brand new Nintendo games such as Splatoon and Super Smash Bros. integrated into the competition, as well as upcoming releases like Blast Ball and Super Mario Maker. In years past, Nintendo held traditional E3 press conferences filled with sales stats and video game presentations—something Sony and Microsoft still do. But eSports allows the company to directly connect with its fans. Even Fils-Aime took the stage to play—and get beat by—a pro Super Smash Bros. player known as Hungrybox.

According to Fils-Aime, eSports is a great way for fans to get hands on time with new games like Mario Kart 8 and Splatoon. While Nintendo hasn’t committed to another World Championships, Fils-Aime says the company learned a lot in executing this tournament and has plenty of experience to create these types of events.

“We’re fortunate that we’ve got the range of content to pull it off in the here and now, and we’re really gratified to see the reactions,” Fils-Aime says. “All of that is going to go into the mix as we think about proper opportunities, future E3s as well as potentially taking the idea outside of E3. So it’s something we’re going to be looking at really hard.”

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