The new Nintendo Network ID system that debuted on the Wii U is a sign of progress for a company that has, historically, not shown a lot of savvy in setting up its online systems. The Wii U lets users connect up to 12 separate Nintendo Network IDs to a single system and use those IDs to easily connect with online friends and strangers. The new Wii U eShop includes many retail games for download on the same day they reach stores, and does away with the "Wii Points" virtual currency that characterized Nintendo's previous console. The company has even promised to roll out a cloud save feature sometime next year.

Given all of these improvements, it's a bit baffling that Nintendo is still caught in the past when it comes to the extremely limiting digital rights management system that ties downloaded game and content purchases to a single console.

As Nintendo's Wii U FAQ makes clear, "a Nintendo Network Account can only be used on the console where it was created." Thus, any games tied to that unique online ID will only work on the first system they're purchased and downloaded to. This is in essence the same setup that Nintendo used to protect downloaded Virtual Console and WiiWare games on the first Wii, a setup that not only utterly failed to stop piracy on the system but also caused headaches for many early Wii owners with faulty systems.

Tying downloaded games to a single system means there's no way for a user to access those games at a friend's house short of lugging the entire system along (yes, the Wii is a lot smaller and lighter than other contemporary systems, but still...). It also means a game downloaded to the Wii U in the living room won't be playable on a second system in the kids' room, even if the same password-protected Nintendo Network ID was used on both systems.

It also means that if your system breaks down, you can't just go buy a new one (or borrow one from a friend) and immediately recover your content using your account. Instead, you have to go through Nintendo's official repair process, waiting up to two weeks for the system to be returned just to maintain the system-locked license data—a caveat I learned about first hand recently. And in the extreme case your Wii U is stolen, it seems there's no way to recover your purchased games (Nintendo has refused numerous requests for comment on its DRM scheme). Sure, you can back up purchases to a USB hard drive, but thanks to this licensing scheme, those backups are no more portable than the actual bits stored on the Wii U's internal storage.

This DRM scheme was already retrograde when Nintendo was still getting its online feet wet with the Wii, but it's really backward in late 2012, when every other major game platform has figured out ways to protect downloaded content while also making it accessible across devices. Microsoft allows downloaded Xbox 360 games to be played on secondary systems as long as you're actively logged in with your Gamertag, and it allows users to transfer an entire library to a new system using a "Gamertag recovery" feature. Sony only lets you download purchased content onto two systems at a time (disappointingly down from a limit of five before last November) but at least the company lets you use an online deactivation tool to remove a broken or lost system from that count. Most games on Steam can be downloaded and installed on any number of machines using the same Steam account, and iOS and Android apps can be easily synced across multiple devices with an online account.

I understand that Nintendo is worried about piracy, but its not like Microsoft, Sony, Valve, Apple and Google aren't. Yet those companies have all found their own ways to balance protection for their online stores with the ability for users to access that content in their own way.

Nintendo can still follow their lead—it would be trivial to push out an online system update that removed the one-system-per-download limit for the Wii U eShop (while we're at it, they could do the same thing for the 3DS). I doubt letting the same Nintendo Network ID play games on a handful of systems is going to lead to Wii U account sharing rings to split purchase costs. Opening legitimate purchases up for more than one console will also have absolutely no effect on the determined hackers that are already trying to open the system up to homebrew and pirated software.

What it would do is make the process of downloading games more attractive and easier to use to the benefit of both users and sales for Nintendo's newly expanded eShop. It's well past time for Nintendo to catch up to the competition in this regard.