Analyst speculates that Nintendo NX could be the first ‘social VR’ platform

Nintendo has not been shy in downplaying virtual reality’s social credentials – but perhaps this is exactly the reason why its new NX console WILL be a VR machine.

That’s the conclusion drawn by financial analyst Digi-Capital, which reckons that either virtual reality or augmented reality could be the next ‘blue ocean’ open market that Nintendo can claim as its own.

Nintendo’s American boss Reggie Fils-Aime said of VR in June that: "What we believe is that, in order for this technology to move forward, you need to make it fun and you need to make it social. I haven’t walked the floor, so I can’t say in terms of what’s on the floor today, but at least based on what I’ve seen to date, it’s not fun, and it’s not social. It’s just tech."

Shigeru Miyamoto echoed the sentiment later that same month: "The current types of virtual reality aren’t really a good fit for Nintendo’s philosophy of trying to create entertainment that people can play together in the living room. We’re constantly looking at different technology and experimenting with different elements of it, but we’re not feeling virtual reality is currently in a place where it’s ready to be released – as a product that fits with our philosophy of fitting in the living room."

Digi-Capital acknowledges both of these statements, while also acknowledging the late Satoru Iwata’s claims that the NX will be offered through a Nintendo-like solution”.

However, what would a non-VR machine leave for Nintendo, it argues? Android has been ruled out (rightly, it says – just look at Ouya’s failure) and the flop that was the Wii U rules out the idea of another low end traditional console with a controller/screen twist”. Plus, why would Nintendo want to compete with the powerhouses that are PS4 and Xbox One?

The same argument applies to VR, of course, with major players such as Facebook, Steam and Sony already preparing to fight for bragging rights in that sector.

Where Digi-Capital differs from other onlookers, however, is in its interpretation of Nintendo’s previous comments about VR. It reckons that rather than dismissing VR entirely, it was instead criticising VR’s current implementation.

It’s conclusion? The NX could be centred about social virtual reality of augmented reality games.

It speculates that Nintendo’s solution could involve a low cost dedicated games console with a spec equal to or lower than PS4 and Xbox One that has been optimised for VR/AR. This would be accompanied by a low cast headset, possibly following the template laid out by the likes of Samsung’s Gear VR – which, of course, would tie into Nintendo’s smartphone aspirations.

It also believes this would be accompanied by an accessible controller designed to do for VR what the WiiRemote did for console gaming

This looks a bit like the original Wii strategy applied to the AR/VR market in the context of smartphones, and could enable Nintendo to leverage its IP to again ‘disrupt an entire industry, and in a good way’,” it added.

Incorporating smartphone HMD holders could split processing between a central console and multiple smartphones, enabling social gameplay by lowering total system costs to the user. This might be achieved with a low cost console for co-ordination amongst players, position tracking, controller interactions etc, with additional AR/VR processing handled by CPUs/GPUs in smartphones in HMD holders and/or dedicated HMDs.

This approach could also allow iOS/Android game developers to leverage existing skills and IP with a dedicated SDK (i.e. lower game development costs and earlier commercial viability). High quality positional tracking integrated with HMDs/controllers could further enable Immersive VR like the Vive and Oculus, but at a much lower price point. Lastly, the DeNA partnership could be leveraged to incorporate the now dominant free-to-play (or free-to-start” as Iwata described it) business model.”