That depends what you call "large numbers of gamer" will have discovered online.
right now it's at about 3.5 million NA + LIVE, not counting the fact that a lot of network adaptors were bought because people had no choice and retailers were carrying only the bundle (at least at some Best Buys and Targets).
If this hits 20+ million by the end of 2006, then yeah, maybe Nintendo would have been wise to start this gen, no matter how laggy and buggy games like Mario Kart and Smash Brothers would have been due to the fast-paced gameplay.
I think some games (like Four Swords Adventure and Wario Ware) could have worked on dail-up, some games only on broadband, and some games probably not yet ready due to complexity.
In addition, consumers get confused easily. I work at retail, I see the casual/non-gamer mind at work. Throw in the word online and suddenly half of the casuals think you need online to play the game or think it's not worth buying if you don't have online (look at Pandora Tomorrow and Project Gotham 2 sales) Then there's people buying XBox LIVE thinking they could connect with dailup. Then there's the fact that if you do dailup or broadband-only for some games on PS2, people might be ignorant of the fact. Some people think XBox LIVE kinda acts like an ISP as well. Plus, some people have no idea what sort of setup or ISP is needed to go online. I have to admit sometimes even kids (like 10 years old) come ask me about LIVE, so the interest in playing against other around the world is there, but the know-how of setup and what you need beforehand is still relatively low.
On top of all that, there's the "working out chinks and details" thing.
The truth is, it's probably for the better Nintendo didn't go into online half-prepared (as a response to Microsoft and Sony) and just make a mess of things (the way I see some of the PS2 online situation right now). Consumer confusion has to be a factor when you consider Nintendo is targeting "all age groups" and not just young males. There is a good possibility Nintendo could have alienated a lot of consumers (on top of what the kid-friendly, anti-mature image did) that didn't know the process. There's a reason Sega didn't mention GBA connectivity in the commercial for SA2B, people might have ended up thinking you need the GBA to play the game. Sure the young male demographic reading this board is not that ignorant, but there is a risk that the primary buying audience (probably over 75% of purchases) of parents, casuals, kids, etc. might not know what's going on. I definitely think that's why Pandora Tomorrow and PGR2 didn't do as well. I have a XBox-only friend who only plays military games, and when he hears games are online, he doesn't always immediately distinguish that there are 1p gameplay modes as well.
I mean, the GBA/GBASP ignorance is skyrocket high. Customers think only certain games work with certain versions, that colors make a certain one a better model, that graphics are different, that some games are only SP and some on GBA. I imagine interest in online isn't holding the numbers back, but rather knowledge, cost, and easy-of-setup.
Working out the chinks this gen would probably be more costly than working out the chinks next-gen (even if Microsoft and Sony have it all worked out by then). In addition, "working out he chinks" will probably happen faster than it did more the other two this gen due to improved and cheaper technology, and Nintendo can look at what the other two did and take what they see as fitting their games and what service they want to provide, instead of going in with "experiment" in mind.
For a hardcore young-male demographic that has the means, I do think Nintendo could have brought joy, satisfaction, and fun to this audience. But as a business decision when protecting your brandname is #1 priority, I think the wait-and-see attitude is probably the safest way. Risks are good, but in this case, the cost probably outweighed any potential gain from the risk. XBox LIVE and NA have been modest success. At best, I think Nintendo would have reached a level of "messy, somewhat modest success" this gen with online, and probably not worth the extra 5% in sales you'll get for doing it, because you might be losing those 5% to consumer confusion.
I've switched from a broadband cable subscription to a DSL subscription. After reconfiguring the router for this, I've been able to use the same PS2 network configuration as I was before. The reconfiguration on the router is probably by the same as would probably needed if you connected the PS2 directly to the DSL modem - very easy, only a couple of settings are different.
