In 1983, the video game industry in America was collapsing. Due to the relative simplicity of game development and design at the time, the market was over-saturated with low-quality games made to cash in on the Atari craze. Consumers abandoned the market with wild abandon, causing the industry to crash and many companies to go bankrupt. Industry giants like Atari faded into irrelevance, never to return to their former glory. Legends even tell of a landfill in the deserts of New Mexico, filled with unsold copies of the Atari 2600 adaptation of E.T.: The Extra-Terrestrial.

Meanwhile, in Japan, a relatively obscure company was preparing to launch its first home game console. Founded in 1889 as a playing card company, Nintendo had been dabbling in video gaming since the mid-1970’s. They had acquired the rights to distribute the Magnavox Odyssey in Japan and achieved some success in 1981 with the release of Donkey Kong, an arcade game designed by rookie game designer Shigeru Miyamoto. In 1983, the company debuted the Famicom (short for Family Computer), an 8-bit video game console with two rectangular controllers and a striking red-and-gold color scheme. While early sales were slow and the first models had to be recalled due to hardware issues, it went on to be Japan’s best-selling console in 1984.

Naturally, Nintendo wanted to replicate the Famicom’s success across the globe. Achieving this feat in America, however, proved to be an uphill battle. Americans had become greatly disillusioned with the industry as a whole following the crash of 1983, and Nintendo needed to convince people that their system was worth consumers’ money. Initial negotiations with Atari to bring the system to America fell through when Atari discovered that Nintendo had released Donkey Kong on the ColecoVision, so Nintendo decided to localize the system itself.

To differentiate the system from other consoles of the era, Nintendo made the American version of the console use larger cartridges that loaded into the system from the front horizontally, reminding consumers more of a VCR than of previous game consoles. They also dropped the red-and-gold color scheme of the Japanese console in favor of a more subdued combination of grey and black with a touch of red. To reduce the abundance of poor quality games and prevent another crash, Nintendo required developers to acquire a license to release software for the system. After debuting the redesigned system at the 1985 Consumer Electronics Show and selling it in test markets in New York, Nintendo launched the American version of the Famicom – now rebranded as the Nintendo Entertainment System – in February 1986. The NES went on to revitalize the American gaming industry and become a legend.

Today, Nintendo is the only console manufacturer of the 1980s to still be in the hardware business. Both of its primary competitors, Microsoft and Sony, are technology giants who entered the gaming industry as a side business (indeed, Sony’s PlayStation was born of a failed partnership between Sony and Nintendo to produce a CD-ROM add-on for the Super Nintendo). While both of those companies are working to evolve the game console into an all-encompassing media center for the living room, Nintendo remains committed to proving a simple, no-frills video gaming experience.

The difference in these companies’ approaches can be seen in the systems they have on the market. Both Microsoft’s Xbox 360 and Sony’s PlayStation 3 launched with top-of-the-line CPUs and graphics processors, built-in hard drives, and a wide variety of multimedia support. Today they have even larger hard drives and digital download stores for movies, music, and TV shows. Nintendo’s Wii has none of these things. Instead, Nintendo decided to bring innovation to the video game industry with a new motion-sensing controller styled after a television remote and focus solely on the system’s gaming experience.

This old-fashioned approach to designing the Wii came with advantages and disadvantages. Because they based the core hardware of the system on their older GameCube platform, they could produce their system for a fraction of the price of its competition and sell it at a profit while the other systems were still selling at a loss. Developers who had developed for the GameCube did not have to learn an entirely new platform. Their new controller provided an easy-to-market gimmick that could appeal to people who would not normally play video games, or fans of games from Nintendo’s early days who no longer played games. Thanks to all of these strengths, the Wii became this generation’s best-selling console.

The drawbacks, however, are numerous, and have only become more pronounced as the system has aged. Because the system is so dramatically underpowered compared to its competition, developers making games for those platforms cannot easily put their game on the Wii without drastically reducing the game’s features and graphics or essentially making an entirely new game. The Wii’s lack of support for high-definition televisions and dated GPU means that games look significantly worse than those on competing platforms. A lack of third-party developer support means that gamers often have to rely on Nintendo’s own software for new content, sometimes leading to game droughts.

Possibly the most frustrating consequence of Nintendo’s dated perception of the industry is its laughably poor support for online services. Nintendo debuted its service, known as Nintendo Wi-Fi Connection, on the Nintendo DS with the launch of Mario Kart DS in 2005. Even then, players were annoyed with the game’s system of connecting with friends, called “friend codes”. To play with people they know online, players have to give their friends long, randomly-generated codes to register into their DS. To make matters worse, each game requires a different friend code, rather than having a single code system-wide.

This system carried over to the Wii, where it only seems even more archaic next to competing services like Xbox Live and PlayStation Network. On these services, users can create unique, memorable usernames. The entire system has a unified friends list, not tied to one game. Users can send messages, voice chat, and video chat with each other. They can send game invitations to tell their friends what they want to play. Developers can use the online network to send players patches to their games to fix bugs and add features. Both services have vast stores offering free game demos, paid game addons, music, movies, and TV shows.

Even for something simple as sending a text message, Nintendo requires yet another long, random code to distribute to friends. Voice chat is not integrated into the system, works in only a handful of games, and requires a relatively obscure peripheral that is still less desirable than a simple headset microphone. Video chat is nonexistent. Developers have to hack in their own methods of patching their games, and few bother to do so. The Wii Shop Channel, while housing a fairly expansive collection of classic games, offers very few modern downloadable titles, no game addons, and a mere Netflix channel for multimedia.

With the upcoming launch of the Wii U, which is designed to compete more with the Xbox 360 and PlayStation 3 on those systems’ terms, Nintendo absolutely must address the major shortcomings of their online infrastructure. Worryingly, they’ve been nearly silent on the issue. The current rumor is that developers will basically be expected to create their own online systems, which is in no way a solution to their present problems. Other rumors have said that Nintendo is in talks with Valve and Electronic Arts to use either the former’s Steam or the latter’s Origin service as the Wii U’s official online platform, a move that sounds extremely unlikely considering Nintendo’s history of being highly unreliant on third parties.

If Nintendo wants to compete with Xbox Live and PSN, they have to develop an in-house network with a feature set that can match or even best what those two have to offer. They need system-wide user accounts, easy social features, patching for developers, and a robust store offering at least demos, games, and downloadable addon content. The Wii managed to succeed despite its shortcomings, but if they want that lighting to strike twice, they must move forward from their 1980s mindset and embrace the digital age.