Cheap Games a Risk To the Industry, Says Nintendo President

Recent comments from Nintendo president Reggie Fils-Aime indicate that the company is worried about the effect of inexpensive mobile games on the industry. "'Angry Birds is a great piece of experience,' he said, 'but that is one compared to thousands of other pieces of content that for one or two dollars I think create a mentality for the consumer that a piece of gaming content should only be $2.' Taking one last dig at the mobile competition, Fils-Aime added that he 'think[s] some of those games are actually overpriced at $1 or $2, but that's a different story.'" While low-priced mobile games might not be good for Nintendo, it can still work out well for indie developers. 2DBoy, makers of World of Goo, released some statistics about launching the iPad version of the game.

Comments

Competition

[bbqsrc]

It's hard to compete with value for money, isn't it Nintendo?

Re:Competition

[Lilith's Heart-shape]

Nintendo knows a thing or three about the gaming industry, including that they remember the great video game crash of '84, and more importantly what caused it.

Then why do they keep slapping their seal of approval on blatant shovelware? Oh, that's right: it makes them money.

More like

[Anonymous Coward]

Cheap games a risk to nintendo profits.

I'm so so so so so tired of being fed this crap by rich people that we need to prop them up in order to support industry and economies.

Sounds familiar....

[SuricouRaven]

In related news, youtube is a threat to the television industry, and people who are so insolent as to make and release their own music for free are a threat to the music industry.

Marketing / planning is a threat to people.

[unity100]

Planning/marketing departments of corporations are filled with mba grads who have been taught to shove a product to public from the maximum price they think they can pay. and hence, depending on their self-judgment, they decide what the selling price of any product should be. since all corporations employ the same mindset, all look to each other, adopt similar price points, and then start thinking that that is a correct price point.

products are produced/sold up to that point. more products are not produced and sold, because that would decrease the 'optimum' point. naturally, as a result, as you can understand too, the 'mass production/competition aspects of capitalism, goes out of the door.

what we are seeing here, is the retort of a corporate man, who is used to corporations determining the price points (even unknowingly) instead of public. had there not been internet, this industry would - if we take gaming for example - just continue forcing a 'reality' which says that a 'decent' game should be worth $40-60. thanks to internet, even if the industry doesnt want to, competition enters the scene. corporate world, naturally, is unable to understand or stomach the situation and is threatened.

however, while gamers can get competition thanks to internet, the situation is to the contrary in almost all other sectors, ranging from auto industry to healthcare. corporations are determining what gets sold from what price range, and because majority of the corps do it, after a time it becomes the 'industry norm'.

Re:Marketing / planning is a threat to people.

[dkleinsc]

Another way of describing the same problem: Assuming no government interference, when there are only a few sellers in a market, prices become artificially high, and when there's only 1 seller in the market in question, prices become higher still. This is fairly well-established microeconomics, read all about oligopoly and monopoly to learn the details. An example of this is that an major factor in the cost of an airplane ticket to a particular location is how many other airlines fly to the same airport (or in some cases close enough to the same airport to be easily reachable by ground transportation).

Similarly, if there's only a few or only 1 buyer in a market, the prices end up artificially low. This condition is oligopsony or monopsony. A common place where this happens is the US corn market, where most industrial farmers only have a couple of places they can sell their crop, so the price ends up artificially low, so many of them depend on agricultural subsidies to make ends meet.

The basic issue in those kinds of markets is that the established players will do everything they can to prevent another entrant into the marketplace (because that will lower their profit margin), and are effectively in a tacit agreement that having a price higher or lower than it should really be is more profitable than actually competing for market share based on price.

Re:Marketing / planning is a threat to people.

[Eil]

Planning/marketing departments of corporations are filled with mba grads who have been taught to shove a product to public from the maximum price they think they can pay. and hence, depending on their self-judgment, they decide what the selling price of any product should be.

So companies do their homework to evaluate market conditions and develop a product strategy before selling something. And that's bad, how?

since all corporations employ the same mindset

There's a factually incorrect statement if I ever saw one. Yes, *many* corporations tend to organize, manage, and run themselves using similar methodologies but ultimately no two companies are exactly alike. (And by the way, not all businesses are corporations.) Would you say Apple and Dell employ the same mindset? As corporations, they're structured similarly and they both make money the same way. They operate in the same markets, probably even have similar suppliers, partners, and business relationships. But you can't deny that their "mindsets" (strategies) are remarkably different.

all look to each other, adopt similar price points, and then start thinking that that is a correct price point.

There is no such thing as a "correct" price point. The price *paid* for a given item is whatever the buyer decides the item is worth to them. The power ultimately lies with the consumer to decide whether or not he or she will buy said item for the offered price. Sometimes negotiation is possible, sometimes not. Granted, there are things in civilized society that we must pay for and have little say in its price (gasoline to get to work, electricity and gas for heating our homes). But if you want to grumble about that $60 video game, it does no good to be doing it whilst handing your credit card to the cashier.

products are produced/sold up to that point. more products are not produced and sold, because that would decrease the 'optimum' point. naturally, as a result, as you can understand too, the 'mass production/competition aspects of capitalism, goes out of the door.

No, it is not anti-capitalist or anti-competitive for a company to control its own supply chain.

what we are seeing here, is the retort of a corporate man, who is used to corporations determining the price points (even unknowingly) instead of public. had there not been internet, this industry would - if we take gaming for example - just continue forcing a 'reality' which says that a 'decent' game should be worth $40-60. thanks to internet, even if the industry doesnt want to, competition enters the scene. corporate world, naturally, is unable to understand or stomach the situation and is threatened.

Yeah, Fils-Aime is being a douchebag here. But consumers still bought enough games to make the video game industry grow to overtake Hollywood in terms of revenue. What's interesting is that when I was a gamer (mid 90's, 16-bit era), new games were $40-$60 then too. So the current generation of gamers is paying something like 37% less than I was, and still whining about it.

Translation

[Opportunist]

We cannot compete with that! 2 bucks doesn't even cover the overhead for our beancounter and legal department that the games have to pull besides their own weight! Plus, state of the art graphics and animations are expensive, and since our games are hardly innovative in any way (seriously, usually we just improve graphics and increase the version counter), we cannot compete with games that rely on innovative gameplay and new, fresh ideas which are cheap but risky!

Is there some way we can outlaw those cheapskates?

Re:Translation

[Anonymous Coward]

If this were Sony or Microsoft you might have a point, but this is about Nintendo. And if there's one thing Nintendo does that Sony and Microsoft don't, it's continue to innovate. So while Sony and Microsoft gamers have Final Femboy XIII 2 to look forward to, Nintendo gets innovative games like Lost Shadow and Fluidity.

And, sure, Nintendo likes to reuse their characters, but they throw them into new settings and provide new gaming experiences. Kirby's Epic Yarn may star Kirby, but it's not a rehash of previous Kirby games, it's a completely different and innovative experience.

Plus, Nintendo themselves releases downloadable games for $2. They're short and simple games, just like Angry Birds.

The issue is that people apparently see iPhone games for $1 and think "oh, games are cheap, why would I spend $40 on a Nintendo game then?"

Simple: the Nintendo game will have well over 40 times the content and 40 times the replay value.

Now Sony and Microsoft are probably fucked, because that certainly doesn't hold true for Generic Space Marine FPS and Final Repeat XIII Versus 2 - and definitely not at $60 or more. But Nintendo makes a good point that for whatever reason Americans see "cheap" and then think even quality products should be that cheap. See: Walmart.

Re:Translation

[popo]

Oh come on. I'll admit that complaining about cheap competition is lame, and their CEO deserves to be laughed out of the room.

But if there's one thing Nintendo deserves compliments on its 'innovation'. They're one of the few innovative companies in the gaming space. The Wii was pronounced dead before it launched, and then it surprised everyone by kicking so much ass. The Nintendo 3DS is going to do the same. Yes, Nintendo suffers from the same over-bloated ills of every large company -- but lack of innovation isn't one of their problems.

Re:Translation

[Verunks]

you are kind of wrong, the problem here is that nintendo is in the same casual gamer market as cheap games, most wii and ds titles have graphics and animations from 10 years ago, so they're actually the same or worse than these 2$ games.
So these cheap games won't hurt sales of the elder scroll skyrim or battlefield 3 but it will be a problem for nintendogs, petz and shit like that

Re:Translation

[smash]

You're trolling, right? Most nintendo consoles are sold on the strength of super mario XXIV. Nintendo is no more or less guilty of sequel-itis and no more or less innovative than sony or microsoft. At least sony/microsoft have traditionally been a fuckload more open to third party developers actually being granted development licenses for their hardware.

Headline was misleading

[uofitorn]

When I read the headline I thought "Hmm good. Nintendo might be doing something about all the bad shovelware they grant a license to. Browse your local game store. For every Twilight Princess, Dead Space, and Super Mario Galaxy 2, there are dozens more cheap movie knock-offs littering the shelves like "Hannah Montana The Movie", "Pimp My Ride", and "Big Momma's House 2 -- Even Larger" Guess I was wrong.

Boohoo, competition.

[Arancaytar]

For being so staunchly capitalist, big corporations sure hate the free market. Huh.

Re:Boohoo, competition.

[the_womble]

To paraphrase Adam Smith, businesses want a free market for everyone except themselves.

Re:This is good

[nEoN nOoDlE]

I don't know if you've seen what's on the app store, but it's not games which take risks. There's a 1000 variations on Angry Birds, Doodle Jump and Bejeweled. I wouldn't call something like Fruit Ninja a risky proposition in terms of game design. Fact is, you need a fairly decent budget in order to make some really compelling content. iPhone games are fun for anywhere from a few minutes to a couple hours, but I've played a lot of iPhone games and none have come close to being a truly great gaming experience. Low budgets and really low priced games just mean that people will be making short arcade games that can be played for 30 seconds at a time and will have a limited number of characters, backgrounds and animations because that looks to be the golden ratio of where it's worth it for a developer to make a $.99 game and for it to sell enough copies to people who want a game to play on the toilet.

if good games are $2

[smash]

... then you're going to need to provide something actually special for the cost of a console game aren't you? I have no problems paying a decent sum of money for something that will keep me entertained for say $2-5/hr.

However if your sole justification for charging 50-100 bucks per game is "oooh look at teh shiny!" and nothing else then kindly fucking die already.

cheers
gamers everywhere

$40 worth of risk

[RoverDaddy]

Even if it's true that the console game will give 40 times the value of the $1 mobile game, that can be seen as an enormous leap of faith to ask the consumer to make. What if I decide in the first 30 minutes I don't like the game? Can I take it back to Gamestop and get my money back? Fat chance. If I download a $1 game and decide I don't like it, then meh.
Considering how many $40 or $50 Wii games my kids have that never get played again, I can see how people can become leery of that model.

He's right.

[DavidDM]

Slashdot honestly doesn't seem to get content creation or business sometimes. By constantly lowering prices and conditioning customers to accept them, you actually stifle innovation and drive out businesses. In the bricks and mortar world this is what Wal-mart does, and they've managed to destroy and dominate markets while offering less overall quality and selection. For media, there is less barrier to entry, but the sheer number of crapware games competing at artificially low pricepoints are eventually going to start killing a lot of midrange developers as they simply can't make enough money in a reasonable timeframe. What the low price does is benefit AGGREGATORS not developers, who take a long tail approach and try and get tremendous amounts of content to make pennies on over time. And, of course there are no end of eager lemmings to help push themselves off the cliff. The low price points may make Apple and Steam rich, but not devs.