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[Nirolak]

This doesn't even begin to explain why the titles that big publishers are putting on Wii are largely lazy half baked ports and spin-offs. Presumably that software is subject to all these same rules, yet it's still released.

I think the most interesting example of this recently is Ghost Recon Wii versus Ghost Recon Predator.

Ghost Recon Predator is a fully featured third person shooter for the PSP, a platform that is completely dead in terms of software sales in the markets where Ghost Recon sells.

Ghost Recon Wii however is a rail shooter, which is a genre that has completely died on the Wii.

I have no idea if an actual third person shooter Ghost Recon game on the Wii would do any better, but it strikes me as bizarre to put out something almost guaranteed to fail, especially when you have a blue-print for a fully featured spin-off and don't seem to be concerned with using really low grade art assets anyway.

I have to assume the relationship between publishers like Ubisoft and Sony is just vastly better than the relationship between publishers and Nintendo to see third parties still willing to support the PSP like this despite its situation, but not be willing to try anything larger on the Wii.

 

[Vorador]

That is pretty interesting, it shows Nintendo has a strict manufacturing policy that minimizes their own costs and risks at the expense of third parties. Reminds me of their draconian NES policies.

 

[Nirolak]

Nintendo is arrogant as hell now, their first party games sell unbelievable amounts, and the 3DS is coming out with support from everywhere. They aren't going to do a damn thing to help third parties.

Actually, the 3DS got support because Nintendo went and supported third parties this time around: http://www.vg247.com/2010/09/29/iwa...support-third-party-publishers-more-with-3ds/

 

[GrotesqueBeauty]

I think the most interesting example of this recently is Ghost Recon Wii versus Ghost Recon Predator.

Ghost Recon Predator is a fully featured third person shooter for the PSP, a platform that is completely dead in terms of software sales in the markets where Ghost Recon sells.

Ghost Recon Wii however is a rail shooter, which is a genre that has completely died on the Wii.

I have no idea if an actual third person shooter Ghost Recon game on the Wii would do any better, but it strikes me as bizarre to put out something almost guaranteed to fail, especially when you have a blue-print for a fully featured spin-off and don't seem to be concerned with using really low grade art assets anyway.

It is pretty bizarre to see the type of support PSP has gotten over the years even in the face of tepid sales vs. the Wii as market leader. I always thought that Wii would have been a better platform for games like Ultimate G'nG and Mega Man Powered Up/Maverick X Hunter personally. I'd think a well executed retro throwback would generate a lot more interest than some of the genres publishers seem intent on pushing regardless of how little sense they make at this point.

 

[Zoe]

It is pretty bizarre to see the type of support PSP has gotten over the years even in the face of tepid sales vs. the Wii as market leader. I always thought that Wii would have been a better platform for games like Ultimate G'nG and Mega Man Powered Up/Maverick X Hunter personally.

All of those games came out before the Wii. And I can't really say that I remember more along that vein since then.

 

[Nirolak]

It is pretty bizarre to see the type of support PSP has gotten over the years even in the face of tepid sales vs. the Wii as market leader. I always thought that Wii would have been a better platform for games like Ultimate G'nG and Mega Man Powered Up/Maverick X Hunter personally. I'd think a well executed retro throwback would generate a lot more interest than some of the genres publishers seem intent on pushing regardless of how little sense they make at this point.

The Wii did actually get some retro games from Konami, though they were all on WiiWare.

However, given the state of WiiWare advertising, I can't imagine they sold much.

 

[Vinci]

I'm not saying it disappeared but I'm saying they should push for this rather than worry about cart manufacturing processes. It's going to take years to get 3DS cart prices low and optimize manufacturing to the degree it is on the current DS regardless. But Nintendo shouldn't be waiting for the audience to change their buying habits because they never will without help and a reason.

DD is the real answer, building more factories or whatever to pump out carts faster is the stop-gap.

You're talking about Nintendo here, right? The company that doesn't appear to know much about internet utility or how to appropriate it into its business model?

Yeah, no. They should change their policies to be as inviting towards 3rd parties as humanly possible. They can only benefit from this in the short and long term. If they want to suddenly go crazy for DD and getting people hip to the new direction, then yes, they can do that but not at the expense of every company that decides to support their console.

 

[Dalthien]

Nintendo seems to mostly care about pleasing companies Capcom and Namco than the smaller ones.

This is why this whole conversation seems kind of odd. When Iwata speaks about wanting to develop better relations with 3rd-parties, I don't think he is speaking about the tiny publishers. He wants improved relations with Capcom, SquareEnix, Konami, Namco, EA, Activision, Take2. I don't think he really gives a rat's ass about publishers like Nippon Ichi or Alchemist.

And honestly, I can't imagine print runs in the hundreds being a sticking point with the big publishers. Not having to pay full manufacturing costs upfront would no doubt be appreciated by the big boys, but again, I don't think it is a major issue for them. These issues are really issues that largely affect the really small publishers, and I'm not sure that there is any reason to believe that Nintendo really has any interest in wanting to foster relationships with the small pubs.

Now there can be a perfectly valid argument and discussion about whether Nintendo should want to go out of their way to help the small boys - but the bulk of this discussion has seemed to take the automatic assumption that Iwata wants to help the Nippon Ichis and Alchemists of the world, and I just don't think that is a valid assumption.

I have no idea if an actual third person shooter Ghost Recon game on the Wii would do any better, but it strikes me as bizarre to put out something almost guaranteed to fail, especially when you have a blue-print for a fully featured spin-off and don't seem to be concerned with using really low grade art assets anyway.

Ehh - it's Ubisoft. Ghost Recon Predator seems destined to fail as well, but they're still making it. Who knows why?

 

[GrotesqueBeauty]

All of those games came out before the Wii. And I can't really say that I remember more along that vein since then.

Didn't realize they were all that early. Still, they represented a much better good faith effort in Capcom's part then their early Wii support imo. Shifting those sorts of efforts to the Wii would have made a hell of a lot more sense than shit like Chop Til You Drop.

The Wii did actually get some retro games from Konami, though they were all on WiiWare.

However, given the state of WiiWare advertising, I can't imagine they sold much.

I think Konami was onto the right idea, but as your post implies the whole Wiiware thing sort of limits the audience (for various reasons). In general I thought Konami put a better foot forward on Wii than most 3rd parties though. I'm sort of sad they didn't follow up on stuff like Elebits, which I thought was well matched for the system and set a good foundation for franchise expansion even if the first one didn't exactly fly off the shelves. I do <3 Elebits DS though.

 

[EvilMario]

I wonder how much shovelware we've missed because of these policies.

 

[FLEABttn]

Nintendo is so lucky to have fans who care more about their profit margins than their lack of progress in third-party relations.

The rest of those who quoted me will sort of fall into my catch all response but I just wanted to point out this one for being incorrect. I don't have any particular affinity towards Nintendo, outside of that I own a very dusty Wii and DS.

good post

My original post was a bit short in regards to explanation, but, I'm not trying to say that because of relative profitability, all of Nintendo's policies are automatically good. I'm suggesting that:

1) Nintendo only values third parties as much as they want them but don't really want to pay for them too much. Hence no marketing money. Publishers may not like that but, as far as Nintendo is concerned, it's working for them more than it's working against them;
2) Paying some part of other publishers marketing might be good for the third parties, but it doesn't necessarily make it good for Sony/MS depending on the situation. I don't want to speak prematurely or incorrectly on that, because I'd want to see the internal spreadsheets for everyone involved. I like numbers.
3) A lack of paying for marketing isn't getting them any additional support, but I see this as more of a symptom of the third party problem rather than the cause. I'm unconvinced that if Nintendo contributed to third party marketing as much as MS or Sony that they'd actually get better games at this point. Nintendo also seems to be doing well with third parties on the DS despite this policy.

I'll distill the above into the tl;dr point, which is, I'm not labeling it a "good" policy anymore than I labeling it a "bad" policy. It's what works well enough for them, and when they feel it stops working in their favor, they'll revise it.

 

[Celine]

Nintendo is arrogant as hell now, their first party games sell unbelievable amounts, and the 3DS is coming out with support from everywhere. They aren't going to do a damn thing to help third parties.

Now?
It's a case of Nintendo being Nintendo actually.

For free?

They earn money on every third party game sold. Those third party games may sell people on 3DS, and may thus result in further sales of Nintendo and/or other third party games.

Nintendo is a stakeholder in ALL these games.

I believe Nintendo see itself as a game publisher with an hardware division ( like there were many in the past as Atari, SNK, Hudson or Sega but all went out business after the the PS1/N64 generation ) so it considers third-party games as a form of additional revenue stream that's not integral to its core business.

They prefer not lose money from publishers unable to pay the order ( point 3 ) than potentially earn more from them.

 

[bernardobri]

I wonder how much shovelware we've missed because of these policies.

Considering Wii's catalog, not so much.

 

[Amir0x]

my second point was, why help them when the support mabe there for a year or two, but after that will dwindle and will still give you crap. I imagine Nintenod helping Alchemist with marketing and after few years, spout the very same complaince against Nintendo and threat them for lesser support.

I mean, that can't be a good business direction for Nintendo can it?

The key is to start building long term relationships. Sure, not all of them will be winners, but some will be, and then those developers may find it easier in the future to provide the sort of support Nintendo desires without any monetary support whatsoever - it'd just be good business, then, because Nintendo has been found easier to work with.

Now, money can't solve every problem, but it is one thing they need to start getting serious about going forward. They are a big success again, filthily wealthy... they need to funnel some of that money into the type of investments that help make their gaming platforms better for games. That's all they do, games, so if they're not trying to improve that end, they might as well let it fester and die, no?

... wow... that is... uhm... brave?!? ......

Not even Jobs has the balls (or idiocy IMHO) to shout to the winds "hey, we heard you like this system a lot so we raised the price we are going to ask you for it!"... (of course Apple does it in practice, but he does not make it a PR point).

Damn haven't seen you post in a while :lol

I've seen some comparably idiotic statements coming from Sony when the PS3 was coming out (get a second job, etc), but it seems all the companies take turns shitting themselves with stupidity once they hit the top :lol

 

[onipex]

Wait things he listed are for new or unproven third party partners with Nintendo right? I mean if you produce a hit game Nintendo does work with you to ease some of those burdons. That is something I that heard before. Nintendo is a company that likes to make up their cost in every part of the business.

In a way I can understand from a business stand point that Nintendo sets a high point for you to enter from the reatil side. I can understand the complaints about having to wait so long to send out a second shipment.

I don't understand why people in this thread expect Nintendo to take a greater riisk on manufacturing cost. Many games don't sell. Even good games don't sell. Game companies that can't cover that cost upfront may not be able to cover it later due to lack of sales. If you have a hit game you have the power to negotiate. You don't have that power if you expect your game to be a hit.


I don't see Nintendo helping with advertising unless they know the game will sell well. Nintendo does not even push most of their own games.

Nintendo third party policies have been easing over the years. Dev kits were made much cheaper at the start of the generation. Third parties are not restricted in the number of titles they can release. Third parties are not cersored anymore (no one allows AO games).

Iwata already knows that they still have a long way to go , but I don't see Nintendo taking a risk of losing a lot of money.

Also the way third parties flooded the Wii and DS with low quality titles from the start you would think that they have no proplems with these policies.

 

[Sadist]

Yeah, #3 is a horrible obstacle.

Still, looking at the current support that the 3DS will receive Nintendo must be doing something to persuade third parties.

 

[Metal Gear?!]

I've seen some comparably idiotic statements coming from Sony when the PS3 was coming out (get a second job, etc), but it seems all the companies take turns shitting themselves with stupidity once they hit the top :lol

There's a reason no one has ever stayed on top for more than 2 generations

 

[Vic]

There's a reason no one has ever stayed on top for more than 2 generations

This hasn't been the case in the handheld market though.

 

[onipex]

There's a reason no one has ever stayed on top for more than 2 generations

You mean two consecutive generations.

 

[charlequin]

Retail and DD will be the same market.

Total nonsense. It's not now, and it won't be on 3DS even if Nintendo has a real online service and not the unacceptable garbage they have on DSi and Wii. Forcing all small developers into DD publishing is a major screwjob and a ludicrously terrible solution to problems with manufacturing and supply.

but the bulk of this discussion has seemed to take the automatic assumption that Iwata wants to help the Nippon Ichis and Alchemists of the world, and I just don't think that is a valid assumption.

I would say that much of the discussion is semi-ignoring whether Iwata wants to help these publishers because if he doesn't want to he is objectively in the wrong and any efforts he makes at producing a healthy third-party ecosystem will be doomed to failure anyway, so it's easier to just assume he actually wants the right things and only needs to figure out how to achieve them.

3) A lack of paying for marketing isn't getting them any additional support, but I see this as more of a symptom of the third party problem rather than the cause. I'm unconvinced that if Nintendo contributed to third party marketing as much as MS or Sony that they'd actually get better games at this point. Nintendo also seems to be doing well with third parties on the DS despite this policy.

I do think this is a very good point. I think there are basically two issues here, for different sized publishers.

For big publishers, I've said before that I think the main benefit of co-marketing is to solve the "first-into-the-pool" problem. On an "unusual" platform, no publisher wants to take on all the risk of finding out if it can be profitable, so everyone stays away. Taking on a big chunk of risk for publishers only at the very beginning can offset that problem and give Nintendo a clean explanation of why they aren't paying everyone to develop on their platform.

For small publishers, I think what's important is just identifying cheap/free ways to market their products. Nintendo Channel is actually a pretty good way of providing a push for things like Etrian Odyssey that are relatively niche and that many people might first hear about from the channel; I think with a better online infrastructure Nintendo could learn from what Microsoft does and find better ways to market small games directly to players on the system (with more prevalent "placement" in the interface, with demos, etc.)

I don't understand why people in this thread expect Nintendo to take a greater riisk on manufacturing cost.

Because it's their job. I don't understand why people who have such a bizarre understanding of the publisher/platform-holder relationship are commenting on Nintendo's extremely unusual behavior as if it's in any way normal or expected.

 

[Dalthien]

I would say that much of the discussion is semi-ignoring whether Iwata wants to help these publishers because if he doesn't want to he is objectively in the wrong and any efforts he makes at producing a healthy third-party ecosystem will be doomed to failure anyway, so it's easier to just assume he actually wants the right things and only needs to figure out how to achieve them.

I'm not disagreeing with you. Just pointing out that there are separate strategies involved between courting the likes of Capcom, Konami, Sega, etc. - or courting the likes of Nippon Ichi, Alchemist, Nihon Falcom, etc. Different issues are important to address when dealing with the two different groups. And I have the feeling that Iwata is currently far more focused on addressing the needs of the first group than the second group.

Edit - I see you referenced some of these very differences right below your response to me. :lol

 

[viciouskillersquirrel]

Of course, when downtime implicit costs are sufficiently high compared to per-unit costs, what a strong and profitable platform-holder does is overprint restock orders, parcel them out in the small ordered amounts, and amortize the cost out over all their development partners, maybe with a "after X time you need to buy back extra overstock at $1/cart" rule or something. If you're Nintendo and stopping to reconfigure the line once costs you more than the actual materials/time cost for a run of 10,000 carts, it's better to look at someone who wants to reorder 500 carts, just pay for a run of 10,000 yourself, and sell them over to them in 500-cart chunks.

So you expect that any manufacturer would adopt such a scheme where for smaller orders, the per unit revenue is less than for larger orders* and big customers effectively subsidise the smaller ones?

Most smaller orders are small for a reason and the unexpected hit is just that - unexpected. To depend on something like that occurring with enough frequency to justify the warehousing and logistical cost of storing thousands of overstock cartridges is taking a huge risk.

* Let's say revenue per ordered cart is something low (and simple) like $10/cart. A run of 10,000 carts would net you $100,000.

Let's also say your minimum run of carts is 10,000 and you let people order in lots of 5,000 with the proviso that after X time has elapsed, the publisher has to buy overstock at $5 per cart.

Thus, revenue on the initial order is $50,000, plus $25,000 after X amount of time, netting you $75,000 over that period, so the opportunity cost of not mandating order sizes of 10,000 is $25,000.

Then you also have to warehouse and keep track of the stock (which isn't free) during the X period of time in addition to the opportunity cost of lost interest on that 50,000 you didn't get at the outset.​

There's just no method of doing this in a rational way (one where the manufacturer maximises profit) regardless of how you juggle the numbers. Yes, concessions must be made with regards to the cash flow of your customers (I agree that this is a flagrant abuse of monopoly powers), but the scheme you're suggesting doesn't work either.

 

[Man God]

Half upfront and re-orderable in smaller amounts (maybe for a slight mark up in the bulk price) sounds like a fair compromise to me.

 

[WillyFive]

Considering Wii's catalog, not so much.

You don't know that.

Just look at Apple's game lineup, or past consoles with shovelware like Atari, PS1 and PS2.

But Nintendo's system isn't keeping out bad quality games, just keeping out small publishers, which is why there is a lot of third party games on WiiWare, which doesn't require these limitations.

 

[Thunderbear]

MS and Sony prop up a Socialist agenda instead of letting the free-market decide!

To side with anyone other then Nintendo is to side with Socialism... are you a Capitalist or Commie?

Socialism is Communism? Holy Sh*t at the ignorance. A big guess you don't even know what Communism actually stand for on top of that.

And I think you missed the point of this thread completely. 3rd party games are failing on Nintendo hardware's compare to Sony's and MS's and it has nothing to do with a free market. OP quoted a developer bringing up issues and only the latest one, which he said was a request, was to get more help with advertising for smaller developers like him.

@ your post, wow. I hope it was some distorted attempt at humor.

 

[Vic]

Socialism is Communism? Holy Sh*t at the ignorance. A big guess you don't even know what Communism actually stand for on top of that.

And I think you missed the point of this thread completely. 3rd party games are failing on Nintendo hardware's compare to Sony's and MS's and it has nothing to do with a free market. OP quoted a developer bringing up issues and only the latest one, which he said was a request, was to get more help with advertising for smaller developers like him.

@ your post, wow. I hope it was some distorted attempt at humor.

...

smh

 

[onipex]

Because it's their job. I don't understand why people who have such a bizarre understanding of the publisher/platform-holder relationship are commenting on Nintendo's extremely unusual behavior as if it's in any way normal or expected.

Are you saying it is their job because Sony and Microsoft do it? Nintendo has been in the business a lot longer as far as they see it the job of the platform holder is to sell the platform. Sony is the one that made everything bizarre when they started taking a risk on the software of third parties. Marketing and taking the hit on manufacturing cost does not work out too well at the rate that games fail to sell.

Nintendo needs to continue to improve ,but I don't see how it the job of the platform holder to take the risk on a publisher's title not selling. It is something they may do more to compete but it is in no way their job.

 

[HK-47]

Socialism is Communism? Holy Sh*t at the ignorance. A big guess you don't even know what Communism actually stand for on top of that.

And I think you missed the point of this thread completely. 3rd party games are failing on Nintendo hardware's compare to Sony's and MS's and it has nothing to do with a free market. OP quoted a developer bringing up issues and only the latest one, which he said was a request, was to get more help with advertising for smaller developers like him.

@ your post, wow. I hope it was some distorted attempt at humor.

-_-

 

[Fimbulvetr]

Socialism is Communism? Holy Sh*t at the ignorance. A big guess you don't even know what Communism actually stand for on top of that.

And I think you missed the point of this thread completely. 3rd party games are failing on Nintendo hardware's compare to Sony's and MS's and it has nothing to do with a free market. OP quoted a developer bringing up issues and only the latest one, which he said was a request, was to get more help with advertising for smaller developers like him.

@ your post, wow. I hope it was some distorted attempt at humor.

You, sir, might be the greatest joke poster of all time.

 

[Unregistered007]

After Iwata's big speech at the 3DS announcement, about how third party games are not selling like Nintendo's, Alchemist's boss got a little infuriated, and posted a blog entry to vent his anger: http://www.alchemist-net.co.jp/nikki/?p=2741

The crux of the matter is that a lot of the issues with 3rd parties on Nintendo hardware are still Nintendo's fault. In particular, the software manufacturing process leaves a lot to be desired. Here are the key points mentioned:

1. Repeat manufacture starts from X thousand units.
Say your game is more popular than you expected (or you were a little too "safe" with first run numbers). If you decide to manufacture more copies, Nintendo says you must start with X thousand (the X is secret because of NDA). Other hardware manufacturers start at 100. There's a massive risk involved for smaller publishers, in particular, here.

2. Manufacture turnaround time is 3-4 weeks.
In the case of DS games, it takes Nintendo 3-4 weeks to manufacture a second run of carts. Other hardware manufacturers have a one week turnaround. When your game is selling like hot cakes, you can understand the need to get extra units out quickly. Nintendo, apparently, doesn't.

3. Manufacturing costs have to be paid 100% upfront
Other hardware manufacturers are not mentioned here, but the example is given that "let's say it costs 1000 yen per unit to manufacture" (actual cost depends on cart size), and if a game is expected to be a big hit and sell 1 million units, that's 1 billion yen that has to be paid upfront. That's a ridiculous amount and causes a bit of a headache as far as company capital goes. He suggests reducing it to 1/3 upfront payment, to ease the problem.

4. Nintendo could try to help with TV advertising
Right now, Nintendo is sponsoring a lot of TV shows via advertising. It would be a good opportunity for Nintendo to sub-let advertising, at a reasonable price (thanks cvxfreak) to third parties during these programmes.

He mentions the last point is really a personal request, but the others are serious issues.

 

[Gospel]

Yeah, #3 is a horrible obstacle.

Still, looking at the current support that the 3DS will receive Nintendo must be doing something to persuade third parties.

Yeah, that's what I hope.

Iwata needs to meet with some major and a few minor 3rd party devs and compile another list of things that Nintendo need to work on.

 

[LCGeek]

Points 1to3 are fair for discussion and should be more friendly to developers, considering the risk to them vs nintendo. As for point 4 I never thought that nintendo should get involved with this aspect. I think it's a joke too considering the last 3 generations of third party ports to nitnendo systems. Hey help us with advertising which costs money if it's to be worthwhile and you can have these crappy ports which are inferior to other platforms and months late. If this subject is about compromise or sweetening the pot how about we have an honest discussion as to why nintendo might be reluctant to support 3rd party titles that have quality control issues.

 

[charlequin]

So you expect that any manufacturer would adopt such a scheme where for smaller orders, the per unit revenue is less than for larger orders* and big customers effectively subsidise the smaller ones?

Nintendo isn't meaningfully a manufacturer in this sense and shouldn't think like one in this context. If they were considering this aspect of their business in those terms, it would certainly explain why they have such ludicrously bad policies in this area, but it's definitely an entirely wrong way to look at it.

Nintendo's business isn't built to profit on the resale of duplicated objects to wholesale purchasers, it's built on profits from sell-through of console/handheld hardware and software to consumers. Nintendo should essentially be providing the duplication services at cost because they're going to take a big chunk of the revenue from each one that sells through and therefore it's in their interest to maximize the potential sellthrough; similarly, they should be providing effective subsidies that cut against economies of scale, in a way that would be irrational for a manufacturer, in order to preserve and improve business relations with small publishers.

The issue with your math here is that the original premise I was responding to was that the effective cost of changing target production was too large to frequently switch out which game is being manufactured. If there are only three alternatives, one of which is the current situation (which is unacceptable), one is hot-swapping production (and incurring large costs each time), and one is pre-banking inventory at each production cycle, then they've gotta figure out which of the latter two is cheaper and just do it.

Are you saying it is their job because Sony and Microsoft do it?

No, I'm saying that it's their job because they've made it their job by positioning themselves as a platform-holder and gatekeeper. Their business has a mutually-symbiotic relationship with other publishers and as long as that's true (and it will be true as long as third-party development is allowed on Nintendo systems) it's their responsibility (to their shareholders, if no one else) to cultivate and maximize the benefits from that symbiotic relationship.

The idea that Sony ruined the business by bringing their dirty money into it is silly. Sony beat Nintendo by fighting Nintendo's suboptimal business practices with better ones, and not even particularly controversial ones -- "maintaining good relationships with business partners" is such a simple principle that I honestly can't believe I have to keep justifying it. There's nothing preventing Nintendo from being equally (more, almost certainly) profitable compared to now while enacting a series of publisher-friendly reforms except their pathological unwillingness to take on financial risk regardless of circumstances, which in itself is a suboptimal business practice and a disservice to their shareholders.

 

[Opiate]

I don't get why it's preposterous either. It's not 'market distorting'. Platform holders have a stake in the success of all games on their platform, on a number of levels. If they wish to invest in marketing for some of those games they think are a good bet, that may be simply good business sense. And it has the nice bonus of strengthening relationships.

Of course it distorts the market. Unless you don't think it distorts the market for intel to subsidize PC manufacturers that exclusively use their products, when clearly they also have a significant stake in the PC Manufacturer's success in very much the same way Sony/MS/Nintendo are engaged with third parties.

That doesn't necessarily make the market distortion illegal (as it does with intel), but it certainly means the distortion exists. However, consumers of these products aren't typically concerned with such matters, and nor are most individual producers in a large market. If we take as a given that Sony and Microsoft are going to engage in this behavior, than Nintendo either does so too or they lose out on support.

And I would mock anyone who argues that Nintendo's reticence in this regard amounts to a noble stand on economic principle. Whatever their reasons, they are entirely business minded.

 

[gofreak]

Yeah, 'market distortion' was the wrong turn of phrase. Of course it influences the market. But I mean to say that it's not, I don't think, an invalid or 'wrong' investment to make. It doesn't create an artificial set of economics, at least no more than various other investments various companies make in various different things that give a product or a whatever a leg-up - investments that may or may not work out. Now with the end-goal of exclusivity, there is I'm sure a line that various competition watch-dogs might carefully watch, but I think it would be difficult for any of Nintendo or Sony or Microsoft to make a complaint since they're probably all equally well capable of competing in this context. And typically anyway these days, absolute exclusivity isn't at stake.

 

[onipex]

No, I'm saying that it's their job because they've made it their job by positioning themselves as a platform-holder and gatekeeper. Their business has a mutually-symbiotic relationship with other publishers and as long as that's true (and it will be true as long as third-party development is allowed on Nintendo systems) it's their responsibility (to their shareholders, if no one else) to cultivate and maximize the benefits from that symbiotic relationship.

The idea that Sony ruined the business by bringing their dirty money into it is silly. Sony beat Nintendo by fighting Nintendo's suboptimal business practices with better ones, and not even particularly controversial ones -- "maintaining good relationships with business partners" is such a simple principle that I honestly can't believe I have to keep justifying it. There's nothing preventing Nintendo from being equally (more, almost certainly) profitable compared to now while enacting a series of publisher-friendly reforms except their pathological unwillingness to take on financial risk regardless of circumstances, which in itself is a suboptimal business practice and a disservice to their shareholders.

The job of the platform holder is to make sure there is a big install base for software to sell to. It is the job of the publisher to sell the software. It is not the job of the platform holder to sell third party software. The third party publisher can be offered incentives for major software or exclusive deals, but that is all.

I didn't say Sony ruined the business. They improved third party relations a lot just by having lower fees and a lot less restrictions than Nintendo and Sega did. I just don't think that taking a risk on the performance of third party published titles is a good business practice. Doing it for major software or an exclusive is fine, but beyond that it is not a good practice. Now publishers almost expect such incentives.

I agree that they can increase profits by continuing to improve their third party policies, but I don't know what to make of your opinion in this discussion anymore when you state that Nintendo is has a

pathological unwillingness to take on financial risk regardless of circumstances

. You have to ignore the past and current history of the company to actually believe something like that. Both the Wii and DS were huge risks for Nintendo. They went almost completely outside the box on the main player inputs to those devices. How is that not a financial risk? They have also done and continue to do co-publishing deals and marketing deals with third parties. Hell when they do any deal for exclusive content most of time it is leaked as not being exclusive before the software even hits stores.

 

[Opiate]

Yeah, 'market distortion' was the wrong turn of phrase. Of course it influences the market. But I mean to say that it's not, I don't think, an invalid or 'wrong' investment to make. It doesn't create an artificial set of economics, at least no more than various other investments various companies make in various different things that give a product or a whatever a leg-up - investments that may or may not work out. Now with the end-goal of exclusivity, there is I'm sure a line that various competition watch-dogs might carefully watch, but I think it would be difficult for any of Nintendo or Sony or Microsoft to make a complaint since they're probably all equally well capable of competing in this context. And typically anyway these days, absolute exclusivity isn't at stake.

I agree. Another way to put the same concept is: this clearly doesn't cross the line in to illegal territory, and as such, it is almost an obligation for any publicly traded company to take advantage of if they believe it gives them a leg up on their competition. Well, I think it's obvious this does give a leg up, and it's fairly clear that no governing body in the world considers it illegal (even the EU, which has the most notoriously strict standards in this regard), so Nintendo better get with it or expect to continue losing out.

 

[JoeyX]

I haven't read through the entire topic, so pardon my ignorance. I will filter through replies later....


One thing that stands out is Nintendo's attitude towards third parties. Nintendo has seen SO much success with its franchises. And this is reflected in their business model. And it works so very well for them.

Look at Sony and MS. They are more fair towards third parties but also need third parties more (different business model, they make money on game sales not hardware).

That might be where one of the beginnings of the differences is.

 

[charlequin]

The job of the platform holder is to make sure there is a big install base for software to sell to. It is the job of the publisher to sell the software.

That's ridiculous. A platform-holder is engaged in a mutually-beneficial business partnership with third party publishers. Their legal responsibility to their shareholders is to maximize the profitability of that arrangement (which is quite literally impossible with as narrowly delineated a "job" as you suggest here) and their non-legal but still manifest and obvious responsibility to their partners in this arrangement is to work as hard as possible to maximize the mutual benefit of all involved parties, not to shrug their shoulders and say "not my problem."*

I just don't think that taking a risk on the performance of third party published titles is a good business practice.

What Nintendo is "taking a risk on" is third party publishing as a whole. Nintendo allows it, but at the moment they are receiving an extraordinarily poor return on the money they invest into it because they are accepting essentially zero risk on the entire field of "third-party publishing" and excluding all risk also excludes all worthwhile investment opportunities. This is manifestly unacceptable as a business practice for a company as successful and cash-rich as Nintendo.

Now publishers almost expect such incentives.

Publishers "expect" incentives because they themselves are consumers in an open market, choosing which competing platform(s) to "buy" their way into releasing on, and that market is sufficiently competitive that courting of this type is the cost said market will bear. Nintendo doesn't just get to choose to be immune to market realities.

Both the Wii and DS were huge risks for Nintendo. They went almost completely outside the box on the main player inputs to those devices. How is that not a financial risk?

Because they took on very little actual financial risk on either. By selling hardware at a profit on day one and offering a selection of guaranteed first-party sellers, both platforms would have produced an overall profit for Nintendo even if the Wii had performed like the Gamecube and the DS had been trounced by the PSP.

This is an admirable strategy for a company like Nintendo to take on core business elements like console releases: since their only business is gaming, they can't rely on other lines of business to prop up a loss-generating failure like Microsoft and Sony can -- but much like investments a balanced portfolio, this needs to be offset by riskier (and higher-reward) expenditures elsewhere: investments that have potential to lose money but also the potential to produce significant success if chosen well. It's the unwillingness to even consider investments like this that seems unique to Nintendo and which is by far the single biggest obstacle to them taking their successes to the next level.

I agree. Another way to put the same concept is: this clearly doesn't cross the line in to illegal territory, and as such, it is almost an obligation for any publicly traded company to take advantage of if they believe it gives them a leg up on their competition. Well, I think it's obvious this does give a leg up, and it's fairly clear that no governing body in the world considers it illegal (even the EU, which has the most notoriously strict standards in this regard), so Nintendo better get with it or expect to continue losing out.

Right. I liken this to loss-leaders and special promotions by stores in retail sales. Yes, these things "distort" the market, create a false impression of value for some products, and have potentially negative consequences. They're also legal and a key marketing element in the competitive world of retail sales. As such, a store with a responsibility to shareholders must either make use of them or find alternate strategies of similar effectiveness with which to replace them; its leadership can't simply claim that they dislike the idea so they won't use them even if that loses them revenue. Similarly, Nintendo's leadership may find wooing publishers distasteful, but they are operating in a competitive market where their competition will woo publishers, meaning their responsibility if publisher support is important to their bottom line (and the Wii proves that it is) is to woo.



*And yes, it's true that there have been many situations where 3PPs have certainly failed this test as well, treating Nintendo with excessive suspicion or mistrust to the point of hurting their own bottom lines. The trouble with untrusting relationships of this sort is that they tend to be iterated prisoner's dilemmas -- everyone benefits if both sides can compromise, but each side gets hurt badly if they become too trusting and get stabbed in the back in the process.

 

[P90]

The DS has very good 3rd party support. The 3DS already is slated for better support than the DS and that being right out of the gate.

So the issues are with the Wii then?

 

[travisbickle]

Whenever I hear Nintendo fans declaring publishers/developers are xenophobic and have an imbedded hatred for Nintendo, I often think it's more likely Nintendo's business strategy that puts them off. Now we have proof of this and Nintendo fans are still delusional!!

 

[professor_t]

1. Nintendo has had a relatively uneven relationship with third parties -- in general -- for about 25 years.
2. Nintendo turns a ludicrous profit regardless of the condition of its third-party support.

Given these two points, I'm having a tough time establishing a legitimate reason why Nintendo will suddenly start altering its business practices.

What's even better are the people who say that NOW is the time that Nintendo needs to retool its relationship with 3rd parties. I thought five years ago was the time? Or was it five years before that? Or even further back? When wasn't it the time? This is one of the longest running and most predictable plot lines in the game industry.

 

[charlequin]

Given these two points, I'm having a tough time establishing a legitimate reason why Nintendo will suddenly start altering its business practices.

Nintendo's business has demonstrably suffered as the direct causal result of a lack of third party releases. The Wii, previously on target to be the highest-selling system of all time, has decreased its performance significantly in every region, especially Japan where it is now at best selling evenly with the PS3, and these lulls are directly attributable to Nintendo's inability to produce the quantity of desirable software necessary to keep sales as high as they potentially could have been. This reduces Nintendo's overall level of profitability, which in turn has led to multiple cuts of yearly expectations, disappointing investors (who Nintendo are legally obligated to maximize profits for) and potentially contributing to greater difficulty or less timeframe flexibility in terms of launching their successor console.

Making profit is never sufficient for a publicly traded company; one must make as much profit as possible given the resources available. Leaving money on the table (which failing to pursue superior third-party relationships is unquestionably doing) is unacceptable.

When wasn't it the time?

The time is "the earliest possible time that has not already passed." No time like the present, etc.

 

[viciouskillersquirrel]

charlequin, I concede your point regarding Nintendo not being just a manufacturer, but I still see the cause of the behaviour in purely economic terms. I'd quote the bit of your post I'm referring to, but I'm posting from my phone.

It is probable that Nintendo simply doesn't care about courting the small potatoes publishers because their presence on the platform doesn't significantly affect the bottom line. If courting the big publishers (SE, Konami, Capcom et al) who do bring in significant volume of product comes at the expense of the niche ones, the decision as to who to gear your business to is an easy one.

Nintendo is at the end of the day a business. If being profitable comes at the expense of being a good platform holder, you can bet they'll do it.

They do need to improve their third party relations, this much is clear. Some of the suggestions here, however, are asking too much of a business that is set up to deal in volume. Small publishers have it tough, but it's too much to expect a big manufacturer to change their entire business because they want a few hundred extra units inside a week.

Let me reiterate, though, demanding payment up-front for such huge volumes is ridiculous and they should be raked across the coals for it. The rest, however, sound like the natural consequence of manufacturing large volumes of complicated items for multiple customers.

Cartridges aren't some simple commoditised item like DVDs are and it's unrealistic to expect the cost structures or turnaround times to be the same.

 

[Jokeropia]

Whenever I hear Nintendo fans declaring publishers/developers are xenophobic and have an imbedded hatred for Nintendo, I often think it's more likely Nintendo's business strategy that puts them off. Now we have proof of this and Nintendo fans are still delusional!!

I don't think you paid attention. The publisher in question has only released DS games (out of Nintendo's systems) and most of the issues mentioned are related to the use of carts.

 

[Vic]

I don't think you paid attention. The publisher in question has only released DS games (out of Nintendo's systems) and most of the issues mentioned are related to the use of carts.

Nice edit. I was going to slap your fingers.

 

[Shao Kahn Brewing a Stew]

This thread is a mod party! xD

Now all we need is third-party devs revealing what Sony/Microsoft do so we can compare.

 

[Vic]

1. Nintendo has had a relatively uneven relationship with third parties -- in general -- for about 25 years.
2. Nintendo turns a ludicrous profit regardless of the condition of its third-party support.

Given these two points, I'm having a tough time establishing a legitimate reason why Nintendo will suddenly start altering its business practices.

What's even better are the people who say that NOW is the time that Nintendo needs to retool its relationship with 3rd parties. I thought five years ago was the time? Or was it five years before that? Or even further back? When wasn't it the time? This is one of the longest running and most predictable plot lines in the game industry.

I really wonder if all those issues listed in the OP are not related medium itself rather than Nintendo supposedly being evil tyrants like they were back in the days.

 

[Vic]

dp

 

[Jokeropia]

Nice edit. I was going to slap your fingers.

I sometimes like to leave a comment like that and then only post the full explanation if the comment is challenged. Kinda like a bait and switch.