Captain Smoker said:

This "shareholders want to see growth" thing is fine, but it's absolutely not managable in reality, because it's an unpredictable market. If Nintendos shareholders would follow this trend there wouldn't be a Wii or Wii U, because their console hardware sales decreased for 4 consecutive generations. (NES > SNES > N64 > GCN) (GB/C > GBA).

Furthermore, this is a cyclical industry, if the 3DS doesn't achieve a certain amount of sales it doesn't mean that the following handheld won't do it. It also doesn't mean that they can't generate bigger incomes with less hardware sales due to profitability maximation.

Additionally, most of Nintendos shareholders don't even have voting rights.

And I mention the 3DS because it's part of the business, they don't need to achieve NDS - numbers to be successfull in reality, noone is going to ditch Sony because they can't achieve PS2 sales.




That's your assumption.

Why would Sony cut the price of a profitable hardware if it sells anyway? Or why would they cut so much that it's under production price again? Just because they worked like this in the past doesn't mean they have to follow the route. As you can see, a profitable hardware market can bring you a lot of income.

Wouldn't the shareholders tell you that this isn't as profitable? /sarcasm



Of course they are, this is just the natural way of things. People are even moaning about this generation from time to time.

And it's easier to create graphical jumps from this:


Than this:




Well, Sony & Microsoft have more to offer but Nintendo offers already the most important stuff:

• Online Focus (eShop / Indy / Digital / BC)
• Their own social network
• Possibility of every monetazation method
• Online streaming services

There are other things like the hardware-tied downloads which they have to improve of course.



That depends highly on the product itself, we can't say this as we don't know what they are creating, what they earn per unit and how it's going to perform.



They have an online infrastructure, they have friend lists, the UI is fast enough currently and Gaikai isn't even up by Sony (and Nintendo researches this technology too).

While they don't have live streaming they have their own social network, something that Sony & Microsoft don't offer.



Again, this refers to the current generation, it doesn't mean that they have to follow the same route in the future.



First of all, you compare the first year sales of NSMBU with the lifetime sales of NSMB Wii. I don't see the logic, even if NSMBU won't reach those numbers.

And furthermore, while you talk about opportuniy cost, you also ignore the synergy effects.

What if one copy of New Super Mario Bros. can sell one hardware unit which leads to more software purchases, more digital purchases, more accessory purchases and so on?


And Nintendo sells their software for usually 50$. Retailer cut is around 15$ + 5$ production cost. That's what they pay currently. On the eShop they earn 100% of this.

If you distribute it on other systems you have to consider additional 5$ to 7$ of licencing fees + fees for the online distribution, they have to sell more units per game anyway.

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