╬ MNS ╬: 05/01/2006

It is cherry-blossom time in Kyoto, Japan, and I am dancing the hula for Shigeru Miyamoto. It's not easy to get into the hula spirit in a hushed conference room in a restricted area of the gleaming white global headquarters of Nintendo, with several high-ranking, business-suited Japanese executives watching my every (undulating) move. But I'm doing my best. I'm trying out an electronic device that the Nintendo brass devoutly believes, or at least fervently hopes, is the future of entertainment. Outside, drifting pink petals remind us of the impermanence of all things.

You may not have heard of Shigeru Miyamoto, but I guarantee you, you know his work. Miyamoto is probably the most successful video-game designer of all time. Maybe you've heard of a little guy named Mario? Italian plumber, likes jumping? A big angry ape by the name of ... Donkey Kong? The Legend of Zelda? All Miyamoto. To gamers, Miyamoto is like all four Beatles rolled into one jolly, twinkly-eyed, weak-chinned Japanese man. At age 53, he still makes video games, but he also serves as general manager of Nintendo's entertainment analysis and development division. It is an honor to hula for him.

But Nintendo is no longer the global leader in games that it was during Miyamoto's salad days. Not that it has fallen on hard times exactly, but in the vastly profitable home-entertainment-console market, Nintendo's GameCube sits an ignominious third, behind both Sony's PlayStation 2 and even upstart Microsoft, which entered the market for the first time with the Xbox only five years ago. Miyamoto and Nintendo president Satoru Iwata are going to try to change that. But they're going to do it in the weirdest, riskiest way you could think of.

All three machinesPlayStation 2, Xbox and GameCube--are showing their age, and a new generation of game hardware is aborning. Microsoft launched its next-gen Xbox 360 in November of last year; Nintendo and Sony will launch their new machines this fall. Those changeovers, which happen every four or five years, are moments of opportunity in the gaming industry, when the guard changes and the underdog has its day. Nintendo--a company that is, for better or for worse, addicted to risk taking--will attempt to steal a march on its competitors with a bizarre wireless device that senses a player's movements and uses them to control video games. Even more bizarre is the fact that it might work.

Video games are an unusual medium in that they carry a heavy stigma among nongamers. Not everybody likes ballet, but most nonballet fans don't accuse ballet of leading to violent crime and mental backwardness. Video games aren't so lucky. There's a sharp divide between gamers and nongamers, and the result is a market that, while large and devoted--last year video-game software and hardware brought in $27 billion--is also deeply stagnant. Its borders are sharply defined, and they're not expanding.

And even within that core market, the industry is deeply troubled. Fewer innovative games are being published, and gamers are getting bored. Games have become so expensive to create that companies won't risk money on fresh ideas, and the result is a plague of sequels and movie spin-offs. "Take Tetris, for example," says Iwata, 46, a well-dressed man who radiates good-humored intelligence. "If someone were to take Tetris to a video-game publisher today, what would happen? The publisher would say, 'These graphics look kind of cheap. And this is a fun little mechanic, but you need more game modes in there. Maybe you can throw in some CG movies to make it a little bit flashier? And maybe we can tie it in with some kind of movie license?'" Voilà: a good game ruined.

What to do? Here's Microsoft's plan for the Xbox 360: faster chips and better online service. And here's Sony's plan for the Playstation 3: faster chips and better online service. But Iwata thinks that with a sufficiently innovative approach, Nintendo can reinvent gaming and in the process turn nongamers into gamers.

"The one topic we've considered and debated at Nintendo for a very long time is, Why do people who don't play video games not play them?" Iwata has been asking himself, and his employees, that question for the past five years. And what Iwata has noticed is something that most gamers have long ago forgotten: to nongamers, video games are really hard. Like hard as in homework. The standard video-game controller is a kind of Siamese-twin affair, two joysticks fused together and studded with buttons, two triggers and a four-way toggle switch called a d-pad. In a game like Halo, players have to manipulate both joysticks simultaneously while working both triggers and pounding half a dozen buttons at the same time. The learning curve is steep.
That presents a problem of what engineers call interface design: How do you make it easier for players to tell the machine what they want it to do? "During the past five years, we were always telling them we have to do something new, something very different," Miyamoto says (like Iwata, he speaks through an interpreter). "And the game interface has to be the key. Without changing the interface we could not attract nongamers."

So they changed it. Nintendo threw away the controller-as-we-know-it and replaced it with something that nobody in his right mind would recognize as video-game hardware at all: a short, stubby, wireless wand that resembles nothing so much as a TV remote control. Humble as it looks on the outside, it's packed full of gadgetry: it's part laser pointer and part motion sensor, so it knows where you're aiming it, when and how fast you move it and how far it is from the TV screen. There's a strong whiff of voodoo about it. If you want your character on the screen to swing a sword, you just swing the controller. If you want to aim your gun, you just aim the wand and pull the trigger.

Nintendo gave TIME the first look at its new controller--but before I pick it up, Miyamoto suggests that I remove my jacket. That turns out to be a good idea. The first game I try--Miyamoto walks me through it, which to a gamer is the rough equivalent of getting to trade bons mots with Jerry Seinfeld--is a Warioware title (Wario being Mario's shorter, fatter evil twin). It consists of dozens of manic five-second mini games in a row. They're geared to the Japanese gaming sensibility, which has a zany, cartoonish, game-show bent. In one hot minute, I use the controller to swat a fly, do squat-thrusts as a weight lifter, turn a key in a lock, catch a fish, drive a car, sauté some vegetables, balance a broom on my outstretched hand, color in a circle and fence with a foil. And yes, dance the hula. Since very few people outside Nintendo have seen the new hardware, the room is watching me closely.

It's a remarkable experience. Instead of passively playing the games, with the new controller you physically perform them. You act them out. It's almost like theater: the fourth wall between game and player dissolves. The sense of immersion--the illusion that you, personally, are projected into the game world--is powerful. And there's an instant party atmosphere in the room. One advantage of the new controller is that it not only is fun, it looks fun. When you play with an old-style controller, you look like a loser, a blank-eyed joystick fondler. But when you're jumping around and shaking your hulamaker, everybody's having a good time.

After Warioware, we play scenes from the upcoming Legend of Zelda title, Twilight Princess, a moody, dark (by Nintendo's Disneyesque standards) fantasy adventure. Now I'm Errol Flynn, sword fighting with the controller, then aiming a bow and arrow, then using it as a fishing rod, reeling in a stubborn virtual fish. The third game, and probably the most fun, is also the simplest: tennis. The controller becomes a racket, and I'm smacking forehands and stroking backhands. The sensors are fine enough that you can scoop under the ball to lob it, or slice it for spin. At the end, I don't so much put the controller down as have it pried from my hands.
John Schappert, a senior vice president at Electronic Arts, is overseeing a version of the venerable Madden football series for Nintendo's new hardware. He sees the controller from the auteur's perspective, as an opportunity but also a huge challenge. "Our engineers now have to decipher what the user is doing," he says. "'Is that a throw gesture? Is it a juke? A stiff arm?' Everyone knows how to make a throwing motion, but we all have our own unique way of throwing." But consider the upside: you're basically playing football in your living room. "To snap the ball, you 'snap' the remote back toward your body, which hikes the ball," Schappert says. "No buttons to press, just gesture a hiking motion, and the ball's in the hands of the QB. To pass the ball, you gesture a throwing motion. Hard, fast gestures result in bullet passes. Slower, less forceful, gestures result in loftier, slower lob passes. It truly plays like nothing you've ever experienced."

Of course, hardware is only half the picture. The other half is the games themselves. "We created a task force internally at Nintendo," Iwata says, "whose objective was to come up with games that would attract people who don't play games." Last year they set out to design a game for the elderly. Amazingly, they succeeded. Brain Age is a set of electronic puzzles (including Sudoku) that purports to keep aging minds nimble. It was released for one of Nintendo's portable platforms, the Nintendo DS, last year. So far, it has sold 2 million copies, many of them to people who had never bought a game before.

The real demographic grail for any game publisher is, of course, girls. And although females have historically been largely impervious to the charms of video gaming, Nintendo has made inroads even there, with products so offbeat that they barely qualify as games at all. In Nintendogs, the object is to raise and train a cute puppy. Electroplankton can only be described as a game about farming tiny singing microbes (surely every woman's dream?). In Animal Crossing, you take up residence in a tiny cartoon town where you plant flowers and go fishing and design shirts. You can visit other players' towns and trade shirts with them. The reaction from traditional gamers tends to be 'Fine, but who do I shoot at?' But Animal Crossing is a hit, and Nintendogs has sold 6 million copies. (Incidentally, Miyamoto points out that Animal Crossing wasn't originally designed for girls. "Many female schoolchildren are purchasing and enjoying it," he says, cracking himself up. "Also ladies in their 20s. But the fact of the matter is, this game was developed by middle-aged guys in their 30s and 40s. They just wanted to create something to play themselves.")

It has always been Nintendo's habit, maybe even its compulsion, to bet its big franchises from time to time. That's one reason it has been able to transform itself so completely over the years; it began life in the late 19th century as a playing-card manufacturer. It's also the main reason the company keeps really large reserves of cash handy, in case things go awry. Look at the disastrous Virtual Boy, a 3-D game system that was released in 1995 and retired, unmourned and largely unsold, in 1996. Look at the name they come up with for their new console. For years it was known by the predictable but perfectly serviceable code name Revolution. It has now been rechristened the Nintendo Wii, an unreadable, unintelligible (that daunting double-i!) syllable. (For the record, it's pronounced "we," and the i's are supposed to represent the new controller ... never mind.)

But the name Wii not wii-thstanding, Nintendo has grasped two important notions that have eluded its competitors. The first is, Don't listen to your customers. The hard-core gaming community is extremely vocal--they blog a lot--but if Nintendo kept listening to them, hard-core gamers would be the only audience it ever had. "[Wii] was unimaginable for them," Iwata says. "And because it was unimaginable, they could not say that they wanted it. If you are simply listening to requests from the customer, you can satisfy their needs, but you can never surprise them. Sony and Microsoft make daily-necessity kinds of things. They have to listen to the needs of the customers and try to comply with their requests. That kind of approach has been deeply ingrained in their minds."

And here's the second notion: Cutting-edge design has become more important than cutting-edge technology. There is a persistent belief among engineers that consumers want more power and more features. That is incorrect. Look at Apple's iPod, a device that didn't and doesn't do much more than the competition. It won because it's easier, and sexier, to use. In many ways, Nintendo is the Apple of the gaming world, and it's betting its future on the same wisdom. The race is not to him who hulas fastest, it's to him who looks hottest doing it.

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