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Third Place Is Fine By Nintendo
anaesthetica writes "The New Yorker writes that Nintendo is fine with third place. Between Sony and Microsoft both trying to build the most comprehensively next-generation console, and barely breaking even in their efforts [Zonk: Though that's changing for Microsoft], Nintendo has decided to go a different route. Wii doesn't have all the bells and whistles, but it focuses on simple fun playing games — a strategy which turns out to be much better for Nintendo's bottom line and stock prices. From the article: 'A recent survey of the evidence on market share... found that companies that adopt what they call "competitor-oriented objectives" actually end up hurting their own profitability. In other words, the more a company focuses on beating its competitors, rather than on the bottom line, the worse it is likely to do.'"
That's funny. I opened up the link Zonk posted, and the article said this:
"To be clear, we have said that in fiscal 08, entertainment and devices makes money. That's not exactly Xbox. We don't break profit down by business. And there are parts of entertainment and devices that make money. Xbox doesn't. Xbox has to make significant progress to enable E&D to get there. We feel we are on track"
That doesn't necessarily mean the XBox division will start making money. It could (and probably does) mean that they plan to try and hemorrhage less, so that the overall E&D division can finally get in the black.
Had my first experience with the Wii from about 1PM yesterday until 6:30AM this morning. Freakin' sweet. I most assuredly like the Wii more than the 360. Better games, and the Wiimote is way better than I thought it would be when I first saw the design.
They see the XBox starting to MAKE money in the next 2 years,
Actually, this isn't what the article says. It only claims that the E&D division *as a whole* will be in the black. It seems likely that the Xbox divion will continue to lose money, but at a slower rate, offset by improvements in other areas.
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I think I saw this on CNBC the other day -- a Nintendo representative said they expect the Wii lifespan to be around 5-6 years.
I believe you. I sold my xbox360 for $350 and bought a jacked up price Wii for $350 and I seem to be having more fun with the wii than I ever did with the xbox360. The control scheme is nice (it is about time someone made this standard on a game system). The Wii sports that ships with it is amazingly fun to play. It seems to me that since the graphics are not as high res as the 360, The software developers might be able to concentrate a little more on actual gameplay and controls than wasting time putting realistic skin on a player model. All I know is that for me I like it better than my previous system (xbox 360).
Surely you know that most of the money the console manufacturers make is from per-game licensing fees? The console isn't sold at much of a profit (if any). So it is, in fact, crucial that the console manufacturer ensure that good games for their platform keep being produced, and that you in fact continue to buy new games for the platform.
Ah, true for PS3 and xBox360. In fact, PS3 loses anywhere from $240 to $306 on each PS3 sold.
But not true for Nintendo - they make money on both the GameCube and the Wii.
Which is one reason why Wii games are cheaper, IMHO.
-- Tigger warning: This post may contain tiggers! --
Beating competitors is what Microsoft is all about. It's not "we'll have the best search engine," it's "we'll be better than Google". I guess we see the results: years of no browser updates, few significant OS updates and, now, a crappy music player...
Penny - plain text accounting
And vice versa if you look around such as this one which was referenced in What Analysts Will Be Buying For Christmas
Both the PS3 and the Wii have sold out all available units, with the Wii actually having a slightly longer average shelf life than the PS3 (probably due to supply rather than actual demand).
This again is based on misleading information. No previously high priced console had a marketed predecessor let alone a market dominant one, which should only be seen to mean that there is a price ceiling for entry into the console market, which is why no respectable analyst has mentioned the price ceiling issue. Second in real/relative cost the PS3 is cheaper than any of the examples commonly used to illustrate the price ceiling.
Or the average person looks at High Definition Video players and sees $1000 price tag, then looks next door and sees $500 or $600, plus gets the ability to play the most extensive line up of video games currently available.
The HDTV market share is rising and a significant rate and will continue to do so until it is the dominant format. There is no doubt in anyones mind that HDTV will eventually be the dominant format. As the HDTV market share increases so will the desire for peripherals capable of High Definition output. Secondly the difference between "true gamers" and casual gamers shrinks every year, but that is just an opinion (from a casual gamer) so take it how ever you like.
If you consider selling 1 million more units a failure, or if you prefer 8% less in world wide sales, let alone the fact that the PSP is the 36th and 40th best seller in Amazon's computer & video games category (all be it well behind the DS, but certainly not a failure). The Idea that the PSP is a failure is yet another fallacy which is commonly passed.
Beyond my previous comments, which fairly debunk the argument, I would like someone to give me examples of a $72 Billion in revenue company (30th world wide), or even close, that has failed catastrophically without the involvement of illegal activity. I mean look how bad the Valdez global catastrophe did to Exxon (#1 rank, $370 billion in revenue company).
It's nice to think that a company we don't like is going to fail or if our preferred manufacture and products ar
What's funny is that if you take into account Nintendo's portables, they are already the #1 console manufacturer. This is something game journalists ignore. The DS is outselling the PS3 in Japan, and DS games dominate the top-sellers list.
Nintendo is attempting another DS with the Wii, and it looks like they're on their way. At least 4 million are expected to be sold by the end of the year alone. Imagine how many will be sold next year when availability is even higher and more games are out (both for the Wii and on the Virtual Console). It's amazing, but Nintendo really might top Microsoft and Sony in non-portable consoles.
"Sufferin' succotash."
Oh there's a few more - Grand Tourismo, The Getaway, Katamari, F1 (which is one I'm waiting for - not getting the system until it comes out, but the demo actually made me flinch from the realistic collisions and pile-ups). Of course there's always the NEW games - which is really the point of the matter - that could become exclusives, at least initially. GTA fell into that column on the PS2 initially, who knows what's next.
LA Noir looks freaking sweet, and although there's been reports pro and con on whether it will be exclusive, it's being developed on the PS3 and looks very interesting indeed. The music particularly. Having period 1948 jazz by masters like Charlie Parker is a nice change of pace from the usual techno / hip-hop fare.
Lastly you've got brand retention. Current reports (msnbc / Next-Gen) indicate 60% at current. That's certainly more than half - so I think it's a race for second place. But really, who cares. Get the system that plays your games. I've got a Wii (Zelda alone should tide me over until - um - May?), and will get the PS3 when something comes out on the must-have list. Unless you need "Halo" or "Pinata", there's really a dearth of exclusives for the 360 at the moment.