NFC could be a game changer for Nintendo’s Wii U

Nintendo is a funny old company. Just when you think it is out of ideas, it has a habit of springing innovation on the market that changes things forever. The Wii brought us motion gaming, and the 3DS saw the mass market arrival of glasses-free 3D tech. Now the Wii U may revolutionize digital sales on home consoles, using communication technology that can  link real world items with video games.

In his third quarter financial briefing, Nintendo President Saturo Iwata revealed that the Wii U will include Near Field Communication (NFC) technology, which could be used to link games with real world items and support simple, instantaneous, micropayments. If implemented successfully, the ability for Wii U owners to instantly purchase in-game items or Wii U apps, without needing to share credit card details, could give the newly confirmed ‘Nintendo Network’ an edge over Xbox Live and the Playstation Network.

NFC technology allows smartphones and other devices to communicate, simply by touching them together, or bringing them in close proximity. Unlike Bluetooth, NFC does not require devices to ‘pair’ before communicating, with connections being established in less than 100 milliseconds. Communication is also possible between an NFC device and an unpowered NFC chip, which can be embedded in a card, sticker, figure, or other real world object.

Speaking of the inclusion of NFC functionality in the tablet-like Wii U controller, Iwata said the following:

“As many of you know, NFC is the acronym for Near Field Communication, which is a set of standards to establish radio communication in close proximity. The NFC I’m referring to here is the noncontact NFC standard that is compatible with FeliCa and MIFARE, and is expected to be widely used around the world in the near future.

By installing this functionality, it will become possible to create cards and figurines that can electronically read and write data via noncontact NFC and to expand the new play format in the video game world. Adoption of this functionality will enable various other possibilities such as using it as a means of making micropayments.”

NFC tech is widely used in Japan to pay for anything from a train ticket to a can of soda, with consumers simply ‘bumping’ their NFC enabled smartphone in order to make an instant transaction. Mastercard Paypass is now making inroads with this tech in the US, and it has been suggested that NFC will become a standard smartphone feature by 2015, creating a commerce opportunity of $800 billion.

By enabling NFC transactions on its Wii U controller, Nintendo could open the door to impulse purchases of in-game content and Wii U apps from the comfort of the sofa, without even needing to access the TV. Many consumers are cautious about sharing their credit card information with Xbox Live and the PlayStation Network, with both services having experienced security concerns in the past year. By implementing a secure and instantaneous payment system, Nintendo could overcome some of the difficulties associated with getting consumers to embrace digital distribution on consoles.

From a gaming point of view, the inclusion of NFC is exciting, for the possibilities associated with linking real world items with video games. Activision Blizzard’s Skylanders game has recently shown the potential of merging real life toys with a console, giving players the ability to change character by putting a new action figure on a peripheral, called the ‘portal of power’. Players are encouraged to purchase new action figures to use in the game, which all have their own attributes and powers.

Nintendo is a company that has always seen a strong connection between toys and games, as demonstrated by the phenomenally successful Pokemon series. Looking at the Skylanders model, it is not hard to envision a Wii U Pokemon title, where real life Pokemon cards include NFC tech, and bring Pokemon straight from the foil pack to a TV screen. The purchase of action figures or cards could be used to unlock characters, levels, or special abilities in any game, and the potential appeal of such items to gamers is undeniable. This concept could open up valuable new sales channels for Nintendo, as well as third-party developers.

Nintendo has accepted that its previous online efforts could have been better. The Wii friend codes needed for online gaming were cumbersome, and the Wii Store was clunky and unwelcoming. With the implementation of NFC tech though, and the promise of a user-friendly Nintendo Network service, the company’s online future suddenly looks a lot brighter.