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Nintendo Profits Up Amid GameCube Worries
Thanks to Gamesindustry.biz for their report on Nintendo's announcement of significant first-quarter profits, around $95 million (11.5bn Yen), "buoyed by stellar Game Boy Advance console sales, foreign exchange rate gains in Europe and the well timed re-emergence of the Pokemon brand." However, the article cautions that GameCube's current prospects are "...looking increasingly bleak, with a mere 800,000 units of the underperforming console selling through from April to June. Targets of six million have been set for the end of its financial year, but it's looking unlikely that it will reach this unless it's prepared to heavily discount the console in the run up to Christmas - something Nintendo has traditionally been reluctant to do." What can Nintendo do to get out of this hardware slump? Update: 08/05 20:43 GMT by S : According to this Reuters report, Nintendo sold just 80,000 GameCubes to retailers worldwide, not 800,000.
Nintendo is a niche console. The people who own it will buy the big games no matter what. They don't need market saturation because they have a significant base of loyal fans/customers. These people are a steady, reliable income stream.
See also: Apple Computers.
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End result? The company is on the rocks, the employees get griped at and have hours cut, and the people responsible (game makers for not making games that move systems and retailers for building up unreasonable hype) scratch their heads.
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Deep discounts like the $100 one I bought from Wal-Mart last night that included the Mario game? How much cheaper can they make it? I don't know if this is their new price or my particular Wal-mart just had a sale going on or something. They just had a standard wal-mart price sticked on it that said $100 and no other info.
Yeah, its too bad they are marketing Eternal Darkness (a kickass game IMO), and Resident Evil to 8 year olds
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Nintendo has a major problem with their business strategy: their relationship with their developers. Nintendo still has the mindset of a console superpower and therefore treat third party developers like crap. I have developed for Nintendo before and this could be seen as a rant, but if they want to shape up that should be their focus. The reason PS2 and XBox are doing well is they support and encourage their third party developers (Heck Micro$oft even paid for the development of a lot of projects during the early XBox days) Nintendo on the other hand makes the debug kits and SDK hardware impossible to afford for small companies and the cart and burn fees are much worse than the same fees for Xbox and PS2.
"Xbox and PS2 can break the limit of 1 per household because they can run Linux,"
Come on now, did you really just type that statement? I know many an XBox and PS2 user, many of them nerds, geek, whatever. How many actually run Linux on them? Zero. While fun and interesting to have Linux running on you console, is there really a need? The consoles were designed to do one thing, play games. And that's what most people use them for. To say that the Gamecube is failing to sell because it doesn't support Linux is ridiculous.
PS2 had a massive lead going in. Nobody would ever catch them.
The X-Box has higher sales in US, while the GC has higher sales overseas. Overall, both are about equal, with the GC with a slight edge.
The idea that somehow the GC is far in third-place, is frankly strage. There is a lack of third-party games for it, which is true. (Although, to be honest I don't miss much, at least when it comes to X-Box).
The unwritten rule, I suspect is that third-party companies want to keep out of the way of Nintendo..which one can't really blame them over.
Sony sold 30 million PS2s between April and June? Wow -- what's that bring their total to? Eleventy bajillion?
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When I go to the local EB, I look over the racks of all the systems... (I own a GC and a PS2, as well as a "gaming" PC... no Xbox just yet). What do I see? Under PS2... crap, crap, GTA (also on PC), crap, crap, port, port, port, GTA VC (also on PC), crap, crap... under Xbox, crap, crap, Halo (on PC soon), crap, crap, port, port, port, crap, KoTOR (on PC soon), and Live (not a game, but a selling point). On GC, however, its Mario, Link, Metroid, Mario Golf, Animal Crossing (was that the name of it?), in addition to the other crap and the ports. (I havent gone into games that are "coming soon" like the new StarFox and Fzero and Mario Kart and Mario Tennis...)
The GC doesnt have many games, but the PS2 has alot of games that arent good. The Xbox, I have played and enjoyed, and Live is very appealing, but the games just arent there... I'd rather play Halo on my PC with a mouse than with the joystick, and kotor will be better on the PC as well...
This is my sig. Its pathetic.
...Nintendo, which actually gives away dev kits...
According to Nintendo, a GameCube dev kit costs upwards of $10,000. Not to mention, "Financial stability is expected," which means they don't just loan them out to just-starting developers.
Not that Sony isn't expensive either. And I can't imagine Xbox dev kits being too cheap anymore, either.
How long has Nintendo been in the video game business? Most people I know who had a NES back in the 80s have continued to buy Nintendo products, particularly for the Mario/Zelda/Metroid franchises. Compare this to Sega -- they had Sonic, occasionally Phantasy Star, Lunar, etc. but nothing with the fan appeal that would keep people coming back to the system (the disappointment in the range of games available for a couple of their more expensive platforms no doubt didn't help).
Many Apple users continue to use Apple computers despite the expense and limited software offerings because they perceive value in the platform that has only been reinforced by their experiences. Apple users are something like 10% of the PC market yet software companies are still able to produce Apple-only applications and enjoy success. You might not be buying many applications, but you bought a PowerBook where a less than loyal individual would probably realize the vast price difference between that and a $700 laptop from Dell and perhaps waver a bit.
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"Nintendo on the other hand makes the debug kits and SDK hardware impossible to afford for small companies and the cart and burn fees are much worse than the same fees for Xbox and PS2."
The various fees for producing GCN games were lowered last April. That's why Sega games and other titles from Capcom and Konami are coming out at cheap prices, like 59.99$ CDN or less. Capcom can publish new games at 49.99$ CDN and still earn great profit!
And this is completely ignoring the efforts of Nintendo to work together with 3rd party developers. Miyamoto has made himself available to Capcom, Konami, Sega, and other third-parties, while leaving his titles to mainly be built with his remote supervision. This has led to many great contributions by those companies to the GameCube product library.
Nintendo's changing how they do business, they have been for years. That you're ignorant of it shows you haven't been following it since Hiroshi Yamauchi stepped down.
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Nintendo has improved things so much since the N64. The Gamecube is a really great machine, with a set of killer gamecube specific titles (already mentioned in this thread), that cause people to buy gamecubes just so they can play those titles. I know I did.
However, Sony got so much market share with the PS1, back when all the other console manufacturers had their heads far up their asses, that it's pretty hard to come back and gain ground. Still, I'm sure they have, compare the market share of the N64 to the PS1, and I think you'll see the Gamecube is doing a lot better.
The GBA and the level of integration they offer with it is exceptional. The new Playstation hand held is Sony trying to copy them, and I'm sure it's going to kick ass (I have a PS2 and I'll buy one of the Sony handhelds for sure). None the less I'm already convinced that my Gameboy Advance SP is going to remain my favorite hand held console. I don't need a killer CPU, and larger screen, for my portable player. I don't need portable movies and music (esp. since DRM will make sure I have to pay $15-30 for each disk). I need something small, sexy, long battery life, with great games - that's the gameboy advance SP.
The GBA SP is great also because it plays Gameboy Color and Gameboy games as well. Very smart. Gameboy Player lets you play all those on your TV (Great purchase, strong incentive to buy a cube, GBA games are great and are great to play on a TV. Friends have come over to my house and spent 60+ hours playing Golden Sun on my gameboy player). Unfortunately everything from the N64 and back is lost, but I'm sure the next edition of the GameCube will support GameCube games. Nintendo has recognized how great for Sony it has been that the PS2 plays PS1 games (I love that I can play dance dance revolution PS1 games on my PS2, plus super puzzle fighter).
The one area Nintendo does seem to still mess up on, is their high licensing fees, which discourage development by destroying profit for game makers. I don't know why Nintendo doesn't wake up and halve those. It would work great, games would drop $5 and developer profits would increase $5. Customers and developers both happier, more units sold, maybe less money for Nintendo in the short term but a better chance for market share growth.
The gamecube is the fun family console. If I was buying one console system for my 12-or-under kids I would buy a gamecube probably. They're also a great secondary console for houses that already have a PS2 or XBox and want to get in on Nintendo games. With Cubes being cheap and coming bundled often with killer games like Metroid Prime, Gamecube is in a great position to be that second console. I'm pretty sure that's where the future of the gamecube really lies, being the second console for grownups, and the first console for kids. They won't beat Sony any time soon, but hopefully they'll obtain a growing market share.
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I own all three systems. I'll be compltely honest. Within the past year I've bought more Game Cube games than I have for the PS2/Xbox combined. You can't deny that Nintendo has a pretty good line up of titles. What sets Nintendo apart is the quality of their games. The Nintendo games are in their own class. The other systems have cookie cutter games. They're al the same. Game Cube's games a little more artisc, in one word different.
I'm not sure they really need to do anything.
Is the gamecube slumping? Yes, but it isn't Nintendos cash cow right now anyway, the gameboy is. Most of the people crying for nintendo to improve the gamecube position are analysts outside the company. Sure more profit is always good but nintendo is hardly in any sort of danger right now. No big projects forth coming? Nintendo can be notoriously tight lipped at times, look at the Gameboy advanced SP, no info on it even leaked much earlier than a month before launch. They could be hiding a couple aces, and its not like MS or Sony have killer aps slated for this year either.
The big picture could change though. Sony's Portable is going to give a serious challenge for the mature gamers (18+) but its cost is going to be too high to capture the younger gamers at first. Nintendo is leaning very heavy on that portable leg and if it gets kicked out from under them they are going to be headed down the road Sega just recently hopped along if they don't get their claws into something else. Its hard to say though if this could happen over night. Sony venturing into the portable market is very similar to the launch of the game cube: a superior (in most respects) console against the entrenched behemoth.
Also keep this in mind: Sony's profits were very low last quarter, while their console is doing well, the company as a whole did not perform as well as Sony would have liked. Neither Nintendo or MS is so far behind that they couldn't rise up and close the gap quickly. If the market fragments with the next generation, Sony is the one with the most to lose, to go from 80% to 33% is a huge loss while virtualy any outcome would be better for Nintendo and MS since they together control only about 20-30%
I stop rambling now...
On Wall Street they say "buy low, sell high" On the pad we say, "buy high, sell high" Isn't that somehow better?
Gamecube does... what Grand_Theft_Au_DON'T!
(you're supercool if you get that reference)
Nintendo didn't play the spec game that Sony and MS did. Sony said "97M polygons!" MS said "100M polygons!" and Nintendo said "6-12M polygons." Sony and MS were talking max theoretical, Nintendo was talking real. An i875P chipset has a max theoretical memory bandwidth of 12.8GB/sec. Has anyone seen any bandwidth measurements of even half that?
As someone once said to me about the xBox:
"The Dreamcast was a 75MHz toy, the xBox is a 700MHz machine, people will treat it better!"
Nintendo knows better, I know better, a P90 used to be hot stuff and now it's being used to level a table. Nintendo is the ONLY one of the three that isn't having frequent problems with thier drive units. PS2 drives go out quite often, XBox drives go out so often I tend to question if they're DESIGNED to go bad.
If you think education is expensive, you should try ignorance -- Derek Bok, president of Harvard
Nintendo's profits up. Still selling lot's of the Cube, Sony's profits down 98%, MS cuts staff in Japan, but they just have to point out Nintendo's loss? What IS IT with people to overlook everyone else and just laugh at Nintendo, making wads of cash I would love to make, unlike MS losing every day and Sony in a huge moneypit.
Why is it so important to have a DVD player in your console? The GameCube is $50 cheaper than the PS2. Conveniently, you can buy a real DVD player for $50. One with a real remote that doesn't cost extra. One that plays VCDs and MP3 CDs flawlessly. One that your friends can borrow without borrowing your console.
I don't know why that is, maybe they want to see the "big guy" fail and the underdog come out on top, although no one who's been paying attention at all would think Nintendo has been the "big guy" since the SNES days, and they'd have to be insane to think of Microsoft as the underdog even if they've only just now entered the console biz.
Regardless of how this fucked up perception came about, no amount of pointing out the strengths of the GameCube, real or imagined, and no amount of pointing out the inequality of the treatment will change anything.
A lot of the population is influenced by the media. If this goes on for long enough, people will buy into the idea that the GameCube is toast and sales will go down, and then the media will have something real to hang their predjudices on.
The only way Nintendo can beat this bad rap is to turn things around and do so well that no one can deny that they're beating the XBox. Until they can do that they will always be a failure in the media's eyes.
They need a price cut before christmas, i don't care if they've been reluctant to do that in the past, they need to get over that. Being priced the same as the competition only works if you're percieved as well or better than them. The GameCube price should be $100. As someone else pointed out the $150 with a free game works out to the same value, but Nintendo needs to rub people's faces in it. They can also have the $150 with game version include a $25 mail in rebate. As people on slashdot have complained before, those things are a ripoff, but they do help sales, and at not much cost to the bottom line.
Nintendo needs to beg, borrow, or buy more 3rd party developers. They need to improve their reputation and relations with outside coompanies and get more games on the system.
They need to get more mature games on the system and kick the kiddy image. I know, sex and violence does not make a good game, but it does affect sales. Miyamoto doesn't have to make the games himself, Ninetndo can get 3rd parties to make them, but the games need to get made.
They damn well better be working on the GameCube2 or whatever it's called! It needs to be backwards compatible, and it can't have the usually Nintendo slippage. If they can beat the PS3 and XBox2 to market by a few weeks (this is critical, if they release it too far ahead, Sony and Microsoft will go the "wait a bit longer for better technology" spiel) and have a ton of GameCube games that work on it, they could pull off some major sales and get a head start in the next round.
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Can that number really be right? According to this chart at MagicBox the GameCube sold 4,500 unites the week of May 19th - May 25th. This Dengeki Chart says the GameCube sold 13,000 units in Japan for the week of July 21st through July 27th. So we know that sales have increased since the 4,500 a week amount, so let's say that 4,500 is the average for April - June, which is still probably low.
4,500 units a week over 12 weeks gives 54,000 units. They sold 54,000 units in Japan and only 26,000 in the entire rest of the _world_?
I think Reuters screwed up, and of course no one will read the correction they post later. Just one more bit of evidence for the percieved bias against the GameCube. What do you want to bet that if they'd made the same mistake for XBox someone would have stopped to question such an absurdly low number before the article was printed/put up?
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And because good karma was really keeping me down...
It's not about what games are made. All the systems make games for all types and ages of gamers. Saying that only hints at the real issue.
Image
Sprite saying that image is nothing was merely a sly remark about their own campaign. In all honesty, it is all about image. Image is what makes Apple, a company with 3% market share, seem like a powerhouse in terms of units sold. It's what keeps Linux off the desktops of the masses because it seems like a geek only thing. And image is what is really hurting the sales of the GC.
Does apple really sell all that many units? In the greater view of all computer sales, no. Is linux all that hard to install, not really. Is the GC a kiddie system? Only as much as PS2 or Xbox. The difference is the image portrayed by the console.
If you look at how the various consoles market themselves, you notice that Sony and Microsoft spend a lot of money to make their systems look mature and cool. The serious gamers (like those reading this) will look past that, but the casual gamers on the other hand won't. They'll buy into the hype, and believe what they are told. "PS2 and Xbox are cool, they are what real gamers play. GC is for kids." Then there are the up and coming hard core gamers (read kids). The same group that Nintendo is supposed to be targeting (complete bs in my opinion) sees this and thinks, "i don't want that, I want to be older and cool," so they don't buy GC's either.
Did nintendo do this deliberatly? No. But they also aren't helping matters. The gamecube looks like a kids system. It's big, it's multi-colored, it has a handle. This design could possibly be hard for some casual gamers to accept. Especially in a time when consoles are being made to look like they fit next to a dvd, vcr, tivo and other home electronics equipment.
The most interesting thing is, Nintendo knows how to fix these problems. Look at the GBA. In it's original form, it did alright, it wasn't a flop, but it wasn't anything spectacular. The problem, it didn't appeal to the casual market. It was big, it was multi-colored, it ate batteries. It was just not something casual eople were looking for.
Now look at the GBA SP. They redesigned it to fit the trends of portible devices. Made it smaller, sleaker, sexier. Gave it rechargable batteries like every other portable device. Suddenly, you can't keep them on shelves. Every toy store in America had them on back-order at some point (i had to travel all over town to find one and they had been out for months). It was just a matter of image. It's the same product, essentially. Same games, same basic hardware; just redesigned to be cooler to the mainstream market.
Of course, I could be wrong...
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