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.'"

Comments

Microsoft breaking even?

[Abcd1234]

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.

Re:I find that amusing

[DariaM84]

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.

Re:Mor interested in the xbox snipit

[Abcd1234]

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.

Re:Is Wii fun?

[cananian]

That's all the money that these companies are going to get from me, because from here on out, all I'm going to be buying is games.

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.

Re:I find that amusing

[Overly Critical Guy]

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.