We mentioned that the DFC looked at Nintendo's WiFi in their latest report, and their review of it was pretty positive. Similar to what they said about Xbox Live and the 360's Marketplace, DFC champions the ease of use for the DS. I can attest to its ease, having hooked it up in my own primitive, janky, WiFi-less apartment abode. DFC Intelligence points to the out-of-the-box connectivity as the separation between it and any other console's online capability out of the box. Their analogy: "The PSP we would compare to programming a VCR to record, the DS is more like turning on the television set and playing a movie."

In my own impressions, I found Nintendo WiFi to be a pretty incredible, streamlined system of playing games online. If it's as DFC Intelligence speculates, some of the seamless WiFi of the Nintendo DS' integration may also be reflected in the Revolution's architecture. It's funny to think now, but the company that was so far behind last gen with online play, might rapidly be moving toward the front of the pack with it this generation.

The complete DFC Intelligence Nintendo WiFi report and the conclusions they drew from the 360 and NiWifi are included after the jump [Warning, it's lengthy].

DFC Intelligence Recons the 360
Nintendo WiFi Impressions

The Nintendo DS Revolution

Compared with the Xbox 360 launch, the release of Nintendo's Wi-Fi Connection service was a quiet revolution. Nintendo launched the free Nintendo Wi-Fi Connection with Mario Kart DS the first title to make use of the new functionality. Playing a racing game online is not exactly a news flash. However, DS Wi-Fi connectivity is notable for its incredible ease of use. The Wi-Fi Internet portions of the game are seamlessly integrated into Mario Kart DS. Set up takes approximately 30 seconds in most cases.

There are several ways users can connect to the Wi-Fi service and play others online: 1) users that already have a home wireless network can simply turn on their DS and start playing others online; 2) home users with a broadband connection can buy a Nintendo Wi-Fi USB Connector ($40) and connect it to their home PC; 3) on the road users can connect their DS to Wi-Fi hotspots. As part of the launch, Nintendo also partnered with Wayport and McDonald's to create 6,000 DS compatible Wi-Fi hotspots at McDonald's across the U.S. They made similar deals in Canada and Europe. Of course, users can also play at their local coffee shop if it offers Wi-Fi.

What separates the DS's online functionality from the PSP's or any console is its out-of-the-box, simple wireless connectivity. The interface is streamlined and standardized so that an 8 year old (or even an 80 year old) can get on in seconds. Taken together, Nintendo's take on online gaming is to bring purity and simplicity to what has always been a somewhat confusing process for mass market consumers. We think it really has the potential to reach a whole new audience. The PSP we would compare to programming a VCR to record, the DS is more like turning on the television set and playing a movie.

In December Nintendo will launch Animal Crossing Wild World for the DS. Animal Crossing is basically the Sims for kids. The original version, released for the GameCube in 2002, actually was a precursor of some digital distribution ideas. Animal Crossing could link up to the GBA for item trading and scanning in new items from the e-Reader attachment and card packs bought at retail (very close to the prepaid card/virtual item trading concept). Animal Crossing for the DS will allow users to trade items and chat with up to 32 friends through Wi-Fi Connection.

It is clear that Nintendo plans to carry on many of its Wi-Fi ideas to the Revolution, even if exact details are scarce. Nintendo has said that the Revolution will focus on Wi-Fi online connectivity. At the 2005 E3 it was revealed that the Revolution would offer a digital distribution service for classic Nintendo products that would make the system a "virtual console" that would allow users to download games. Early in November, Jim Merrick, Nintendo Senior VP of Marketing for Europe, hinted at a possible user-friendly digital rights management (DRM) solution that could work for downloading multiple types of media, probably to flash memory storage. If the DS Wi-Fi service is any indication, ease of use could be the ace up Nintendo's sleeve.

Conclusion

Online connectivity for console systems is still very much in its infancy. Both a wired and a wireless connection have their challenges. The Xbox 360 will connect to wired Ethernet connection out of the box. Unfortunately, many television sets are not located anywhere near a wired connection and running cable costs hundreds of dollars. A wireless adaptor for the Xbox 360 costs about $100 (it appears wireless will be built into the Revolution). However, wireless is not without its problems and is very prone to inconsistent service, deadspots and higher latency. Furthermore, wireless standards are constantly changing.

Another big question that could be looming in the future is will console systems become easily hackable with online connectivity. As any PC user knows, the Internet has created a whole new challenge with anti-virus, spyware and firewall software. Are we heading towards a day when console systems face spam and virus attacks? Consumers are not likely to be very tolerant of this activity when it comes to console systems.

Xbox 360 and Nintendo DS owners probably did not purchase their consoles for their digital distribution capabilities, or even for online game play. There is no doubt, however, that in the future online capabilities will increasingly factor into many gamers' decisions. As many PC game developers have discovered over the years, online-play cannot be ignored. This is starting to be true for console games as well. What remains to be seen is whether the next generation of consoles will be used not just for online play, but also for digital distribution and payment. If one or more of the three consoles can unite those three components in a user-friendly and compelling package, we might be looking at a very different interactive entertainment industry value-chain by the time the next next-gen consoles roll around.

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