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The Pressures on the Next Nintendo Console
With the launch of Nintendo's next-gen offering a little more than two months away, the importance that Nintendo is placing on this console is finally becoming apparent. Dyed-in-the-wool Nintendo loyalists and haters alike have both come to the same conclusion: if Nintendo is to stay a force in the non-portable console market, this system has to succeed. Along those lines, WhatEntertainment offers an editorial entitled Failure is not an Option. It explores the reality that Nintendo's failure would have repercussions on the industry as a whole. "Most of all I'm worried what this might do to the industry if it's a failure. In a landscape already filled with the carcasses of those that dared to try something new, and publishers more afraid than ever to try something a little different, the high-profile failure of a system that tried to put innovation and fun before graphics could be the final nail in the coffin of creativity." Meanwhile, GameInformer has a piece entitled Will Wii be Dissapointed Again? Billy Berghammer says what he doesn't want to say: the Wii could be another flop for Nintendo. From that article: "The launch price is low enough (outside of the $60 for controller costs) to avoid damaging my wallet the same way the purchase of a Xbox 360 or PlayStation 3 will, and the possibilities and promises from Nintendo somehow still keep me hoping for a bright future. But for now, the future is made up of many of the same promises and hopes I had when the N64 and GameCube were announced. I just hope I don't end up being disappointed once again."
Uh... what? So basically, losing $2b on each generation of your console and not being able to get any decent foothold in japan is "a stable place" now?
God, and there I thought that earning money meant you were in a stable position. The times, they are a-changing.
"The way we can tell it's C# instead of Haskell is because it's nine lines instead of two." -- wadler
I agree it would be a terrible thing for the industry if the console were to fail, but it would be OK with me.
I had an N64 and it was my favorite console of that generation by far. Some people say it "failed" because it didn't put The Big N back on top. I really enjoyed the thing, and I'm glad I bought it.
I have a 'Cube and many people say it failed (or is close). I've bought FAR more games for the 'cube than my XBox and PS2. It was a great little system. I don't regret buying it at all.
If the Wii fails, so what. I can afford to lose $250 on a console that that will only have a bunch of great games during it's life (Marios, Zeldas, Pikmins, Smash Brothers, etc.). That's OK with me. It will be sad, but I'll still love the games.
Let's not forget that even if Nintendo's grand experiment fails (the controller) everyone could always use the "classic" controller for the rest of the console's life-span (not unlike the NES Zapper was basically forgotten about). The Wiimote can still be used for fun with light-gun games (and is worth it for me for that fact alone).
The PS3 is $600. I'm not buying that until I'm dead sure there are tons of games I want for it. Even with the price drop that will have to happen by the time I buy it.
The 360 is $400. It's not as worrying as the PS3 but that's still a fair amount of money.
The Wii is $250, and worse case scenerio I can use it as a replacement 'Cube and have a few new fun games.
The Wii may "fail" because it doesn't take over the industry or ends up in 3rd place, but I bet I'll still love it anyway.
All that said, who do we think... objectivly... is the most likely to fail? The cheap one with the "gimmick", the expensive one that is more of the same, or the obscenely expensive one that currently seems like more of the same?
Comment forecast: Bits of genius surrounded by a sea of mediocrity.
Well, I didn't read the article, but the the implication I get is not that Nintendo needs this to be a hit financially, as much as in the public opinion arena, to be a true contender in the console market in the future.
I don't think anyone in their right mind could justify saying Nintendo is going to be in trouble (as a company) if the Wii disappoints. However, it is likely that if it doesn't sell well, and people generally don't adopt it well, that Nintendo may start to be seen as "the" handheld company, and not the "video game" company it is currently. Does that make sense? I just think it's deeper than financial. Sony's not going to fail if the PS3 fails. But it's games division, SCE, will be rocky. But Nintendo, as stated, will make a profit on each unit, ensuring Nintendo isn't going anywhere soon.
But it may not be on people's radar unless they make Wii stick with gamers.
I don't know how you figure that out. Unlike the Xbox versus Xbox 360 you can directly compare the performance/power of the Wii against the Game Cube. The GC was only barely less powerful than the Xbox and certainly more powerful than the PS2. The Wii is pretty much a GC with 3x the clock speed on both CPU and graphics while being fully backwards compatible so it will be able to perfectly play GC games many of which are very good so there is a large library of available games to buy and be reissued.
No-one is going to argue that the raw compute power of the Wii is pretty far behind the 360 and PS3 but it really doesn't matter if none of the games really do much new. The 360 and PS3 are nothing but the evolution of the NES, nothing new, just more power. Nintendo defined the current controller structure and the Wii redefines it.
Judging by the number of people queuing up to pre-order the Wii this last weekend I think it is going to be very successful.
"I have the attention span of a strobe lit goldfish, please get to the point quickly!"
A few weeks won't really be enough time to tell, because Nintendo won't be able to ship out the systems fast enough in that time frame. Every console launch is like that (except the xbox in Japan).
The DS sold well at launch and was hard to find, even though there weren't that many great games available for it for a while. It was only months later, when better games started coming out, that the system really gained momentum. And then the DS lite made things even crazier.
The Wii might be a smash hit right out of the gate, beyond all the fanboys picking it up. But I wouldn't be surprised if in general it starts out a little slow, but then ramps up as more interesting games get released. Especially if Nintendo is really going after the non-gamer market. They aren't going to buy a system based on hype, but eventually they'll see something at a Wii kiosk at Target that will catch their eye, and maybe try it and enjoy it enough to purchase one.
One time I threw a brick at a duck.
I am a 40 year old programmer, been on computers since I was 15, never owned a game console, and have three kids.
My youngest is out at his friends, he has played them all, XBox 360, Xbox, PS2, Gamecube, and N64. For playability, he likes the N64 the best.
For the first time in my life, I am very tempted to put a game console under the chrismas tree. That would end up being a Wii as a family gift and a game for each of the kids.
I am sure many less tech savy folks than me will go, "Oh, I know my kid has their heart set on an XBox360, but at $400.00, I can get this $250.00 Nintendo system, buy some games for it, and still come out with an Xbox 360. I am sure the kids will like the Wii."
vi +
I just think it's deeper than financial. Sony's not going to fail if the PS3 fails. But it's games division, SCE, will be rocky Huh? The only division in Sony that actually makes money is the Games division. The fact that every division in Sony is throwing their products onto the PS3 only shows that the PS3 is their only hope. Pioneer forced Sony out of plasmas pretty much by themselves, and Sharp is killing them in LCDs. Throw in the fact that the PS3 is incurring massive costs for Sony and you'll see that if the PS3 legitimately fails, Sony will be in big shit.
I suspect the surgeon general disagrees with your comment.
"Thanks for all the money you paid to us. We've used it to buy off ISO among other things" -Microsoft
Interesting game, professor. The only way to win is not to play.
Interested in a Flash-based MAME front end? Visit mame.danzbb.com
Where has this guy been? Nintendo isn't in any serious financial crisis. If any game company is in serious trouble its Sony. The Gamecube wasn't a failure nor was it a money looser for Nintendo. They had their niche market and it made them money, and the DS is outselling the PSP by the truckloads. Also, the Wii was cheaper to manufacture than both the XBox 360 and PS3.
No, Nintendo is nowhere near being in dire straits. What planet are you from!?
Michael "TheZorch" Haney
thezorch@gmail.com
http://thezorch.googlepages.com/home
Still waiting for an all new Pixar rendered CGI Mickey Mouse motion picture... ;)
From what I played at E3, Wii Sports is just a bucket of parlor tricks. Of course I only played the tennis game, but in that tennis game you can't even control where your characters move. I thought the swinging of the wiimote would emulate a racket, but it isn't like that at all. It is like you swing it, and it presses the hit button. If you twist as you swing, it presses the drop shot button. It isn't like you twist hard and it does a more severe drop shot, it is just gesture recognition. I was completely let down with the whole experience. I hope with time more people can do better with the controller, but I'm seriously doubting it.
When everyone saw the controller they thought of sword games. From seeing how Red Steel has implemented sword play I am extremely depressed. It is about the equivalent of what you would get with a DS sword game (e.g. you literally draw gestures on the screen).
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WHO ATE MY BREAKFAST PANTS?
Microsoft only reports shipped numbers, Nintendo only reports sold numbers. As of the release of the Xbox 360, Microsoft has stopped shipping original Xboxen. That shipped number will never increase. Nintendo, on the other hand, still ships the Gamecube, because the Wii has not shipped yet. They continual to outsell the original Xbox by 1000 to 1 in every region (and until March of this year, were outselling the 360 as well, but that was mainly due to production issues on Microsoft's part). By the time the Wii releases, chances are the number of GC units sold vs the number of Xbox units sold will be almost exactly the same.
just some guy
Hey there. It's me, the guy that fixes stuff at your local technology store here, to talk to you about why you shouldn't buy a Sony anything any time soon.
From the designs of their products, you can see that Sony has no interest whatsoever in making products that last beyond the warranty period. Their laptops have no latch securing the screen to the lapboard of the computer. When you put a Vaio in its sales floor box, with the hinge down, it literally falls open and cannot be closed. (I've even seen the new Blu-Ray equipped Vaios do this.) All the holding power that's supposed to keep the screen and the computer together when closed is in the hinge. Bad design.
Even better, Vaio laptops have the thinnest screen enclosures on the market. The enclosure has no ridge on the outer edge (like the ones you see on most other laptops, Apples and HPs to start) that redirects pressure to the outside of the enclosure and protects the screen. Instead, all the pressure goes directly on the screen. Maybe this is why all Vaios come back from repair with a note saying, "Your Vaio is designed for maximum durability. However, please refrain from putting pressure on the screen enclosure."
Sony cameras are probably worse. From their Handycams, that look and operate like relics from the late 90s but retail at futuristic prices, to their CyberShot cameras with touch screens on the back. One model has nothing but a power button and shutter on top and a touch screen covering the entire back of the camera, which controls everything else. It makes me wonder if Sony has an entire department dedicated to Putting Large LCDS on Things That Go In Pockets. Oh yes, and the batteries are proprietary, too.
Sony isn't doing too badly in audio equipment--their stuff seems to be on par with everyone elses. And their optical drives are decent but you wont see one in any non-Sony OEM machines. Not to mention their drives are more expensive.
For almost every technology thing you can name, Sony makes a souped-up, talked-up, marked-up version of their own. 99% of the time, it's just not worth the extra money.
But Nintendo, as stated, will make a profit on each unit
This is a misconception. Just because the console isn't sold at a loss doesn't mean that Nintendo will "make a profit" on each unit.
Sure, each unit sold makes a positive contribution to the financials of the Wii project, but in order to determine whether Nintendo makes a profit on the console, you must factor in R&D, marketing, and a number of other support expenses. The amount of money that Nintendo brings in on each console (and accessories and licenses, etc.) must offset a certain fixed cost of overhead in order for the operation to be profitable. You can calculate this as an additional cost added to each console that scales with the number of consoles sold.
Consider this situation: Nintendo sells a total of 10 Wiis. Assuming the unit costs $249 and the unit costs $189 to manufacture (I just made that number up), they bring in $60. $60 x 10 = $600. But R&D + other costs were somewhere in the millions. If R&D, etc. total $10 million (again, just making numbers up), and only 10 are sold, the true cost of each unit is $1,000,189. Nintendo would make profit on no consoles, even though they weren't selling them at a loss.
Of course, it's a lot easier to cover those initial expenses and start making a profit when you're actually bringing in money with each sale...
The really key thing for Nintendo is how they handle their third party publishers. Nintendo are the evilest of them all when it comes to the business side of things. They'll crunch everybody's margin (except their own) as hard as they can and play hard politics with release schedules, distribution deals and manufacturing lead times. In terms of support, they'll do the barest minimum - even if they're distributing your product. These are the main reasons why they lost a lot of key third party support on the N64 and GC. With Wii, Nintendo have already begun to project a strong, third-party-friendly image - much fuss has been made of Ubisoft's Red Steel, for example. However, the back-end stuff is *probably* as brutal for Wii as it was for the GC and N64. As an example, my client are producing a DS title that needs a bigger save chip than normal. This has pushed the production lead time from a fortnight to nine weeks, because the carts now have to be manufactured in Asia instead of Europe. This also adds additional shipping costs which, of course, my client pays for rather than Nintendo. These days, the GBA is even worth touching unless you can guarantee a top 10 place. The margins in place are so tight that it's really not worth the investment. Because of this, there's hundreds of great Japanese titles that'll never get localised for a larger, appreciative audience. It's a real crime against gaming - especially for a format that should be dirt cheap to publish on by now! Nintendo are so rich that they don't care who can or cannot afford their practices and demands and, more crucially, honestly believe that they don't need anyone who isn't prepared to play by their dictatorial rules. This might well be their undoing and the Wii will end up like the DS - home to a small collection of great first-party titles, but very few third party notables. Not to mention the RSI and injury claims, but that's another matter!