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Nintendo Won't Pull A Sega
AztecL0B0 writes "Nintendo Insider takes a look at the reasons why Nintendo is not leaving the console race anytime soon. From the article: 'To have a successful system, you must not only sell a lot of the system, but make money off it, too. You can sell all the systems you want, but if you don't turn a profit, you'll go down the drain as a company.' This is the second part of a three part series. The first article discusses the background to this round of console fighting."
I never saw a sega saturn in shops as kid, and I only seen one shop with dreamcast around here. Nintendo is nowhere like that currently... I see Gamecube in every shop I goto. And DS have swept the floor with PSP, in both in terms of sales and money earnt...
And I remember when people told me that PSP would kill DS... lovely trolls. Not that i'm against the PSP, I even have considered to buy it too as soon it drop in price.
There were some iffy points in there, but overall a fiarly well written piece. I look forward to the other sections. Regardless of market share, it's known that Nintendo doesn't lose money on hardware and has much loot in the bank. They aren't going anywhere...
It's about the quality of the games, not so much the quantity. They have been steady, and I have been a fanboy since '87 when I got my first NES. They produce great quality games, even though it may be Mario as the main character.
"I cannot think of any need in childhood as strong as the need for a father's protection." -- Sigmund Freud
This is good news for all gamers, not just Nintendo fans. Nintendo will force other gaming companies to keep on their toes and continue to innovate. Though Nintendo hasn't done very well compared to the PS2, they have a strong hold on the portable gaming market.
This is here so you don't ignore the last two lines of my posts.
As long as Nintendo can maintain this "awareness" that the general public has of them as being a major part of video games and entertainment in general, I can't see them fading away.
Oh, yeah, us.
I'm a nintendrone, but I wouldn't use this a defence of the company. They make excellent games, their console is easily the best bang-for-buck and I wouldn't trade my GBA for any other handheld (DS included). But if their profits are that high, shouldn't they be dropping prices? The hardware is cheap but their games are as expensive as the competition - GBA games especially can be ridiculously costly for what is often a ported game.
Nintendo's greatest enemy may be the top-dog attitude they've touted for years. Top sales numbers today mean jack for tomorrow, especially when you're up against companies like MS and PSP who are trying their darndest to not only compete for market share, but actually _innovate_ an drive new technologies. Compare the PSP to the DS and you get an excellent idea of which company is driving new technology. Nintendo proclaims that they won't go the way of Sega... I wonder if Sega ever proclaimed that they wouldn't go the way of Atari.
Wow! This must be a PERSONAL letter, just for me!
Hopefully this article will put to rest that myth that the PS2 was never sold at a loss.
"Derp de derp."
Biased or not, this article is great. Just looking at that profit graph makes me smile.
:)
$$$ for Nintendo = Lots of Nintendo games to come =
"When the atomic bomb goes off there's devastation...but when the atomic bong goes off there's celebraaaaation!"
Bull**** Statistics. All the graphs in that blatantly Nintendo-apologist were "Systems Sold," the point of this being to elucidate that Nintendo outsells Sony and MS on selling systems. The flaw: they include handheld gaming devices in the statistics which neither competitor was a player in during 2004. Console-gaming wise the Nintendo is losing out. Handheld gaming is great and all, and it has kept Nintendo afloat for the last few years, but with the threat of the entrance of Sony into handheld, and perhaps cel-phone type gaming platforms, Nintendo is in serious trouble.
"And even though the announcement at E3 of the Game Boy Micro was greeted with a certain amount of skepticism and curious musing by the game press, from a business strategy standpoint, I expect that it will turn to pure gold.
Without making a significant investment in R&D or manufacturing, Nintendo repackages current technology and resells it at what, I would expect, is a healthy margin. Not only will the Micro put GBA technology in new hands, inevitably large numbers of the units will find their way into the shirt pockets and key chains of many current GBA owners. Not only will Nintendo make money on this new hardware product, it will stimulate additional demand for GBA software.
While Sony and Microsoft spent E3 showing off what billions of dollars of investment can do at their press events, Nintendo was demonstrating how minimal investment can generate cash.
That folks, is called smart business."
The whole article is worth a read.
Of course I don't have those problems now, being that I own my own house and my mom doesn't live with me, but hey, when I go over to her place and she sees I'm tired... ;-)
The "Bull" statistics weren't numbers of systems sold. It was profit margins for the video game divisions of the three big competing video game companies. Sure the graph includes hand-held gaming, but Nintendo has never shown themselves to be weak competitors.
And that, quite frankly, is what matters the most. As long as Nintendo competes they will make new products that other companies will adopt and copy, and we as consumers can win by buying what we like. If you don't like Nintendo's products as much as Sony's, fine. But don't wish for their demise, it helps ensure that video games are made so people have fun.
If you pay attention to what Nintendo has been saying, and you look at their strategy, and you notice that they make big, bold moves, you'll notice that Nintendo tries to make moves to stay in the game. They've even said as much, in many interviews. All this talk of "Nintendo should do what Sega did" has been wishful fanboy flaming and speculation to begin with. It's hardly news, Nintendo knows what it is doing. They're a business, they aren't going to fold so easily, and they have the cash reserves to make moves that Sega couldn't afford.
Now, if Nintendo made two or three consoles that had lukewarm sales and they had to dive into their reserves, I would be deeply concerned. But, they still post profits, so as far as I'm concerned all comparisons to Sega are flamebait.
A lot of people know that the GBA sells nearly as well as the PS2. PS2 fans tend to call that unfair, citing reasons such as the GBA costing way less and providing way less. The article also mentions that Nintendo doesn't have any room for losses, but their handheld franchise at this point is basically the equivelent of Microsoft's XP.
Of course, Nintendo isn't going to "pull a Sega." The first reason being that Sega has been going downhill ever since they pulled a Sega themselves. Sonic Heroes was out for three months before they put it on the Greatest Hits list, which really means that they made way more units than they could sell at 50 dollars. The division that pursued the X-Box has basically fell apart. Secondly, they've got a great collection of handhelds that should easily succeed in the future. Even if you were to term "pulling a Sega" as dropping out of the traditional console-into-TV system market, they're still making a good bit of money on it.
Nintendo is among the strongest of the three, game wise. The article turns this into a counter point, saying that they're more like a third party concerned about their own games rather than the hardware. But it means they've got the talent to produce and rely upon a set of guarenteed revenue streams. When the PS2 was released, the anticipated big hits were Gran Tourismo, Metal Gear and Final Fantasy. They all fared well but at this point, as a franchise they're all in decline. The big games
But they're more than just a game making company. They've proven they know how to make a viable and affordable system over and over. They wouldn't be around otherwise. Take a look at the next round of consoles. They all pretty much look like the Gamecube. Fast RAM, PowerPC chips, expandable modules. I had joked that maybe Nintendo should just rerelease the Cube in a different form and see how few people notice the difference. You can bitch about how much more awesome newer hardware can be (and Nintendo would agree with you), but it takes a hell of a lot of work to make character models and textures, and every step of visual improvement means more of that work. You can't just up the resolution, because the TVs 99 out of 100 people use for this stuff isn't supported. If MS is really serious about being the progenitor of the HD revolution, they'd better include the cables with the system. My guess is that they won't even provide S-Video. They'll talk a good game, but you won't be playing it.
I Browse at +4 Flamebait
Open Source Sysadmin
Hrm, to turn an old slogan around...
Nintendon't what Sega does!
They're forgetting Microsoft has a bottomeless pit of money to use up. They can lose money until both are bankrupt.
They'd have to have like six failed consoles before they've pulled a "Sega". I say this as a proud Dreamcast owner, by the way.
Sega CD: Buggy, crashy, still only 64 colors, looked like crap compared to SNES. Sega USA helped kill it with tons of terrible Full Motion Video games that nobody liked. Sound CPU still sounded like a singing greeting card.
32X: Developed by Sega of America at the same time as the Saturn was being developed in Japan because sega of japan DIDN'T TELL SEGA USA THEY WERE MAKING A NEW CONSOLE. Never well supported, died with a handful of games.
Saturn: not a 3D system, Playstation came out, say goodbye to Saturn. Dual CPU, too hard to develop for due to lack of standard dev tools for SMP programming.
Dreamcast: Good, but too little too late. PS2 helped kill a year in advance by simply lying about how great the PS2 was going to be. Several game batches on release were bad and had to be recalled, sending sega into the hole even further.
I don't know about anyone else, but After the Sega CD, I didn't even consider Sega consoles because I knew they'd be failures. I realize this is a self-fulfilling prophecy, but they really weren't that good, at least until the Dreamcast. I still have my Dreamcast, and I still love it. I miss Sega, but only since the Dreamcast, and for the Genesis, which had some great games.
Nintendo has had some failures, but they were never flagship products, and it seems they cut their losses at the right time, because no one tends to remember the Nintendo failures.
No one wants to see this happen,but as far as I can tell,thats only one of two things keeping them alive,that and handhelds.The modern "thing" these days seems to be "retro love". Everyone keeps obsesing over the past,but as soon as this fad wares out,so will nintendo.Now as far as there handhelds... It's qiute obvious that the only thing that really pulled them through this last year was the handheld market.Now the PSP has pretty much eliminated that market as well.Considering they actually have to start outsourcing to meet the demand over there new handheld,I think it's fair to say sony just nabbed that market. Nintendo is starting to turn into a cute,but annoying company to me,they don't seem to care about bringing anything new,only repackaging the same things in pointless ways (gameboy DS for instance). As such,unless nintendo finally steps up to the plate,it unfortunatly looks like they're going to be knocked out of the ballgame. If they don't sell systems,they can't make ANY money,and there done for.
"Did they look like psychos to you,do psychos EXPLODE when sunlite hits them!?"-"Seth Gecko" (George Clooney)
Nintendo makes a billion dollars of profit compared to Sony's 400 million, and that's a 'bullshit statistic'?
"... but with the threat of the entrance of Sony into handheld, and perhaps cel-phone type gaming platforms, Nintendo is in serious trouble."
You mean like Nintendo was in trouble SNK, Nec, Tiger, Sega (twice), and a bunch of no-name companies entered the market?
This has been pointed out before, but I figure it's worth reminding you again: You're coming from an ignorant point of view.
a.) Nintendo doesn't make money from selling consoles. (Just like Sony and Microsoft don't.) They make it from games, just like Sony and Microsoft do. The big difference is that Nintendo is a FIRST PARTY game developer. In other words, when they release a million+ seller, they reap a shitload of money over it. BTW, they do this quite regularly.
b.) Nintendo didn't 'cheat' by having high portable sales. They're not 'afloat' with portable sales because it's an untapped market. They're making ridiculous profits over it because they're the only company who has demonstrated that they know what they're doing in this market. They've made lightning strike TWICE here. (Original Game Boy, and GBA.) Sega's tried twice and failed. SNK enjoyed a little success, but couldn't keep up. Atari, NEC, and Sega released really powerful portable systems, but that wasn't enough to give them any real market share.
In other words, there's no guarantees that Sony will disrupt Nintendo in the portable market. They may actually manage to get some market share out of it, but there's still the problem that Nintendo is a damn good game developer.
You can cry bullshit all you want, but you really should be mindful that you're narrowing your view way too much to make Nintendo look bad and Sony look good.
"Derp de derp."
The dreamcast really was a great system with some great games.. I wish Capcom's Powerstone had found its away to the other consoles.
What were the nintendo failure products?
Virtual boy is the easy one. umm.. what else?
It is quite clear that Nintendo is doing a great job running a profitiable company. Nintendo is making money on all of its platforms in this generation of games.
It could be argued, however, especially with the difference in the installed user base, that only Nintendo is able to make a meaningful profit out of its Gamecube platform.
Its not enough for Nintendo to be profitiable and backing the Gamecube. They also need to make sure that Capcom, Namco, Sega, Electronic Arts, Konami, Activision, THQ, Midway, and Ubisoft (and all the others I have missed) are also making a healthy profit off of their console. And if the typical consumer is of the belief that only children play the game cube, then only children and Nintendo die hard fans will play that system.
If the financial backbone is Nintendo die hard fans, then only Nintendo will be able to satisfy them. And lets face it, Nintendo makes awesome games, and I dont think there are many other companies out there capable of putting out that calibur of game.
If they can make Revolution easy and cheap enough to develop for that publishers cannot help but make money developing for it, it will be supported.
END COMMUNICATION
Nintendo does make money on the hardware. Obviously, software licenses make more, but Nintendo has not been known to sell any system at a loss.
I dont see why nintendo and Sega dont join forces at this point!! with their combined intellectual properties they could make a killing!!!
before you criticise someone
It goes like this:
The console wars are like highschool. The fanboys and some idustry people spend all their time talking about who's got the most riced out car or who is the better looking. However, they are all failing to look at the result; Who's getting the most pussy? Sure X-Box might be the best looking, and maybe Sony's got the most riced out car. But little ol' Nintendo is where the real action is act.
For all of the effort X-Box is putting into the game, they've only gotten a little pussy in Q4 of last year. Before and after that they haven't even been able to get to third base. Sony does all right getting the pussy, but they're putting a lot of effort into it for what they're getting in return.
Meanwhile Nintendo is getting more pussy than they know what to do with, despite not having as nice a car or being as good looking.
And in the end, that's really the metric we should be looking, who is getting the most pussy? Answer Nintendo. And with a lot less effort than Sony or X-Box.
I think the best thing Microsoft could do would be to have a serious bundle at launch (say Halo 3 included with the system)
You mean a CD of Head Like a Hole by Nine Inch Nails, ready for import into Custom Soundtracks? That's the only Halo 3 that will be out by the holiday season that Microsoft is shooting for. Rumours on the Internets are that the second sequel to Halo: Combat Evolved won't be ready until around the PS3 launch.
I hope nintendo offers some good possibilities with online play. I'm sick of split-screens.
Not all same-screen multiplayer games are split-screen; a lot are shared-screen, where all players interact in a single third-person-omniscient view, such as Bomberman, Smash Bros., or several of the Mario Party minigames. Making games LAN- or online-only by ditching split-screen play would raise the price of a $300 console to $900 in a house with three players.
"So play with people who live elsewhere and have bought their own consoles!" Another problem is that a lot of parents can't afford the extra 360 USD per year for broadband (cable or DSL at $40/mo, if the cable company or telco happens to offer service to your address, vs. Netscape dial-up at $10/mo), and dial-up is too laggy for, say, the rumored Super Smash Bros. Online.
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According to BillG, Halo 3 won't be ready for the Xbox 360 launch but will be present when Sony tries to debut the PS3. You can read about it here: http://www.gamespot.com/news/2005/05/15/news_61245 92.html?part=rss&tag=gs_news&subj=6124592
Rumors place the PS3 launch around Spring 2006. I doubt Halo 3 would really be ready by then, since Halo 2 was just released a couple months ago. But I'm also guessing Sony won't be ready for a Spring 06 launch, especially considering their hardware isn't quite finalized yet, and I don't think developers have gotten dev kits yet. (Otherwise, we might have seen some actual PS3 games on the E3 floor instead of just the videos from their press conference)
My guess is the PS3 launch will be in Fall 06, and that should give Bungie enough time to finish Halo 3 for the Xbox 360. (Maybe they'll even give us an ending this time! *smirk*)
-- jchenx
It shows that, yes, you can still stay around as long as you make money.
OTOH, that's going to change soon. Most companies release terrible, terrible crap games for the GBA because, since it's the only game in town, and the vast majority of GBA game purchasers are ill-informed parents, shit in a cartridge will sell.
The Nintendo DS is reflecting this port-itis: Madagasdar and SW: Ep 3 are both movie tie-in games (which are the biggest % of the GBA library), and both are unchanged from the GBA version with the exception of the 3D minigames which use the touch screen.
If Nokia hadn't pissed off the only demographic who'd have bought their N-Gage, they could've been a contender (if they could get some good games, which they don't currently have -- Pocket Kingdoms is not strong enough to ship units). The PSP could similarly take over, except that right now the PSP seems to be a really expensive way to play Lumines and WipeOut. For its price, it has too many flaws -- but if Sony cut its price and managed to fix the flaws (pixel death is the major factor), it'd sell. Hell, if the damn thing would really be a future walk-man (with easy movie playback capability, and music support [I'm thinking an mplayer port + xmms or similar), it'd sell great even at its current price point.
The thing is, Nintendo is making money now, and that makes me happy, but most of that is coming from licencing shitty-ass games, and the moment the market shifts away from their portable platform, it's going to be like the N64 all over again: the only way it'll make money is because the Hardcores will buy the Nintendo portable and a full library of first-party games. They're generally good, so that's no big deal, but I'm less likely to carry a Nintendo portable as a 2nd console as I am to own a GCN along side everything else in my (much less portable) console collection.
--
Internet Explorer (n): Another bug -- that is, a feature that can't be turned off -- in Windows.
"In other words, when they release a million+ seller, they reap a shitload of money over it. BTW, they do this quite regularly."
MSRP on a 50$ game is like 2-5$ retailer, 15$ Sony/MS/Nintendo, 15$ other guy/gal, 5$ production cost, 10$ overhead (shipper, Nintendo to Wal-mart/EB, etc). For a company like Rockstar to make on GTA what Nintendo makes on Mario Tennis, they'd have to sell it for 20-25$ more than the usual MSRP to cover costs and markup. Are you going to pay 75$ USD for a game? No? Because it's like Nintendo does when you buy a first- (and possibly second-) party title. Sony kinda gets this with their second-party titles, but not to the same effect.
MS lovies Halo for a reason: Halo is the only reason they aren't further in the hole.
--
Internet Explorer (n): Another bug -- that is, a feature that can't be turned off -- in Windows.
whatever that means, hope it doesn't become some new meme..
The only way Nintendo could "Pull a Sega" is if they decided to run Windows CE on the Revolution, then have its copy protection smashed wide open say..three months after launch.
After which all the developers move to other console platforms and they decide to quit the hardware business and stick to producing software.
OSGGFG - Open Source Gamers Guide to Free Games
Nintendo is the only company of the major 3 console makers that is completely a video game company. They reported profits of over 800 million USD this year. Thats far from turning away from consoles, Not only are they making money, they are making a lot of it. Whereas Microsoft has recorded over 1.6 billion in loses from the Xbox. I believe Sony also reported some sort of lose on the PS2 hardware.(I can't confirm that so does anyone know), Nintendo makes a point, they may sell less consoles then the others, but they aren't losing money on it.
I don't believe Nintendo is going anywhere in the hardware market, they're comfortable in their niche. They sell hardware that is accessible by families with lower price points and high quality. At $99 the gamecube has pulled off graphics better than the PS2 on many games. Even at low price points, they make PROFIT, which is more than MS can say. Sure, they don't turn out expensive do-it-all machines, and they don't churn out as many games as the other consoles. When they do churn something out, its a fun, well made product at a good price. They're in it for win-win situations, they profit, and the customer's get good products at a good price point. They still pride themselves on innovation, which I believe will be the key to the next generation as people will get sick of weak sequels and pretty games that are so-so for $300-$400 consoles. People will always buy Nintendo's inexpensive hardware to access family oriented games that are just plain fun, even if they don't have the biggest gross numbers, they still have the best fanbase and profits.
"Computer games don't affect kids; I mean if Pac-Man affected us as kids, we'd all be running around in darkened rooms,