Support NeoGAF

[Christberg]

My feelings on Pachter are quite simple.

He releases a hatchet job on Nintendo about once very couple months. With the exception of advising Nintendo to raise the 3DS price (which was dumb) he's never had a single positive thing to say about them. This is a regular pattern going back several years now.

Thing is, he completely ignores the broader market in favor of fashionable opinions.

Has he ever said anything negative about Sony? No. Microsoft? Nope. Has he made comments about the broader market and the fact that the entire entertainment industry is in a period of decline? Nope. Has he even taken into account the weak as hell dollar and how that factors into this? Of course not.

I've heard that Nintendo couldn't compete with Sony. False. I've heard that Nintendo can't compete with Microsoft. Nope. Now I hear that Nintendo can't compete with Apple. And you know what? I severely doubt the "competition" in question even exists.

So yeah, him being kinder and gentler changes nothing. It's SSDD in slightly more politically correct packaging.

An articulate troll is still a troll. No amount of chap stick is going to make that pig more pleasant. Nor will it make the garbage that comes out of his mouth more true.

 

[Zuhzuhzombie!!]

"Nintendo is gonna release the WiiHD anytime now."

"The WiiHD is a terrible idea that may sink them."

 

[Smiles and Cries]

It only takes 1 game to turn things around for Wii U. I believe this will happen or Iwata would have not put his job on the line.

 

[T-0800]

Thanks, Pachter, you just confirmed that Wii U will be the market leader...

It currently is.

 

[Steve Youngblood]

"Nintendo is gonna release the WiiHD anytime now."

"The WiiHD is a terrible idea that may sink them."

This is not a good example of hypocrisy. He was wrong about the WiiHD releasing years ago, but the Wii U's current troubles and reactionary analysis no longer has anything to do with that.

 

[Aquamarine]

It's split among Nintendo, Creatures, and GameFreak, or something.
But Creatures is a wholly owned Nintendo subsidiary.

I don't know where you're getting that information. Because according to Nintendo's annual reports, Creatures Inc. is an independent company. It's not a subsidiary at all.

http://www.creatures.co.jp/html/en/company.html

http://www.neogaf.com/forum/showpost.php?p=45463406&postcount=56

 

[tehrik-e-insaaf]

I think what I'm trying to understand is the extent to which you're arguing that a scenario reminiscent to GameCube-like profits is acceptable or desirable to those most invested in the company. I understand your point that it might not be prudent to treat Nintendo like a company that is beholden to the kind of growth Pachter's clients would like to see. However, I'm not clear on what you think a reasonable low-end target should be in terms of profitability/growth.

Great question - without getting into too much detail - I think Nintendo needs to target a minimum baseline of ~40 million Wii U and ~80 million 3DS - this would be a great base outcome and assuming they maintain a fairly high tie-in ratio with a higher ratio of first party games and collaborations, and assuming the Yen settles around ~100/$ - I suspect Nintendo will report income of around ~$2.5 billion USD cumulative over the next 5 years assuming they capture a similar proportions of their userbase for their titles.

Under a scenario where they do half of that - 20 and 40 million - I think they will struggle to capture the same scale and multiplier effects - I predict $1 billion USD cumulative over the next 5 years which is fine as well given they continue to attract and retain talent and are positioning themselves in the fallout that I expect to happen after this gen (Sony is in huge trouble IMHO if the PS4 doesn't really do well).

That said, if Nintendo starts investing aggressively in their software infrastructure for the following generation or decides to write down additional costs in-advance, and I throw in a higher % y/o/y average on their expenses - I still see Nintendo clearing $500 million USD across 4-5 years in income under a Gamecube situation and a handheld market that that is ~50% less than the Gameboy Advance that cleared 80M units and moves proportionally less game software with lower margins and a giant $500M investment outlay amortized late in the cycle, in scaling up their programmers even more and improving talent among internal studios...

This is all dependent on a lack of one-time events FYI - and I assume their recent whoring of Mario doesn't lead to long-term damage of their brand

Of course on the flipside... if Miiverse takes off as a great social experience and they expand it beyond Nintendo device users... they could blow past these numbers... The point though is that rather than relying on that - I like to take the baseline view and invest on that basis

So your question is - what do I think is good? Baseline is good - anything above baseline is amazing. Half of that is mediocre - but assuming the mindset of the existing shareholder base, I think that's totally fine. Nintendo operates like a partnership more than a company.

 

[Fatalmephisto]

Okay I'm going to say something that will prob backfire but i want people's opinion on this. Now with Sony and Microsoft doing more with there next gen consoles related to other devices such as iphones, TV and other devices, I think they will. Now since Nintendo is going to release an app for iphones and ipads for Miiverse. I think Nintendo should create there own unique games outside of the ones we all play and love for mobile devices, that way Nintendo can gain back those Casual gamer's that moved on from the Wii to Mobile gaming only.

I mean if they can manage to fix that Nintendo Network ID issue where your games are linked to that and not the system itself. Nintendo can release these mobile type games and have mobile user who owns a Wii U as well to link there Nintendo Network ID and allow them to re-download the game on the Wii U Eshop to continue playing while there at home and there phone is charging.

Thoughts?

 

[Steve Youngblood]

Great question - without getting into too much detail - I think Nintendo needs to target a minimum baseline of ~40 million Wii U and ~80 million 3DS - this would be a great base outcome and assuming they maintain a fairly high tie-in ratio with a higher ratio of first party games and collaborations, and assuming the Yen settles around ~100/$ - I suspect Nintendo will report income of around ~$2.5 billion USD cumulative over the next 5 years assuming they capture a similar proportions of their userbase for their titles.

Under a scenario where they do half of that - 20 and 40 million - I think they will struggle to capture the same scale and multiplier effects - I predict $1 billion USD cumulative over the next 5 years which is fine as well given they continue to attract and retain talent and are positioning themselves in the fallout that I expect to happen after this gen (Sony is in huge trouble IMHO if the PS4 doesn't really do well).

That said, if Nintendo starts investing aggressively in their software infrastructure for the following generation or decides to write down additional costs in-advance, and I throw in a higher % y/o/y average on their expenses - I still see Nintendo clearing $500 million USD across 4-5 years in income under a Gamecube situation and a handheld market that that is ~50% less than the Gameboy Advance that cleared 80M units and moves proportionally less game software with lower margins and a giant $500M investment outlay amortized late in the cycle, in scaling up their programmers even more and improving talent among internal studios...

This is all dependent on a lack of one-time events FYI - and I assume their recent whoring of Mario doesn't lead to long-term damage of their brand

Of course on the flipside... if Miiverse takes off as a great social experience and they expand it beyond Nintendo device users... they could blow past these numbers... The point though is that rather than relying on that - I like to take the baseline view and invest on that basis

So your question is - what do I think is good? Baseline is good - anything above baseline is amazing. Half of that is mediocre - but assuming the mindset of the existing shareholder base, I think that's totally fine. Nintendo operates like a partnership more than a company.

As I'm sure you are aware, this kind of analysis is beyond my level of expertise. However, I do appreciate your insight. Right or wrong, I appreciate you taking the time to type up that response.

 

[tehrik-e-insaaf]

Okay I'm going to say something that will prob backfire but i want people's opinion on this. Now with Sony and Microsoft doing more with there next gen consoles related to other devices such as iphones, TV and other devices, I think they will. Now since Nintendo is going to release an app for iphones and ipads for Miiverse. I think Nintendo should create there own unique games outside of the ones we all play and love for mobile devices, that way Nintendo can gain back those Casual gamer's that moved on from the Wii to Mobile gaming only.

I mean if they can manage to fix that Nintendo Network ID issue where your games are linked to that and not the system itself. Nintendo can release these mobile type games and have mobile user who owns a Wii U as well to link there Nintendo Network ID and allow them to re-download the game on the Wii U Eshop to continue playing while there at home and there phone is charging.

Thoughts?

Read my post on Miiverse - I agree partially with what you are saying - but in a different way and I'm less interested in "games" than "experiences" that tie into their proprietary games and hardware

http://neogaf.com/forum/showthread.php?t=513759

 

[tehrik-e-insaaf]

As I'm sure you are aware, this kind of analysis is beyond my level of expertise. However, I do appreciate your insight. Right or wrong, I appreciate you taking the time to type up that response.

My pleasure... I hope at least I've clarified that I'm not just refuting Pachter and going the opposite extreme... I'm genuinely trying to understand the company and trying to forecast performance in a very conservative way

I have written in the past that buying Nintendo stock today is the best deal of a life time - people don't understand their balance sheet well because you have... less then qualified financial analysts... making bold proclamations about the revenue and profits... screaming iPhone and iPad over and over again

What I see in owning Nintendo shares is that I get all my investment repaid in cash and short-term liquidities, after that I get free IP in the form of Mario and Zelda, a multi-billion dollar stake in Pokemon, a free baseball team, and a great IMHO management team that truly understands games and have the talent to create compelling experiences which alone is worth a billion dollars... Never mind the licensing revenue streams they make and their console and handheld operating income that I predict will inevitably happen...

For Americans who aren't willing to convert to Yen to buy Nintendo shares listed on Osaka - I'll put it this way - in 18-24 months I believe OTC: NTDOY will double assuming the Yen stays stable - so ~22 dollars at a minimum... Just my 2 cents

 

[Fatalmephisto]

Read my post on Miiverse - I agree partially with what you are saying - but in a different way and I'm less interested in "games" than "experiences" that tie into their proprietary games and hardware

http://neogaf.com/forum/showthread.php?t=513759

Damn dude, that was a good read ty for posting your thread. I would love to see Miiverse turn into something like that. If they can manage the staff to do so, you might very well be on to something here man.

 

[jrDev]

Damn, it seems like Pachter has something to say every week. There is, like, a thread about a pachter quote literally EVERY week now...such a Pachyderm...

 

[Quadraphonic]

Okay I'm going to say something that will prob backfire but i want people's opinion on this. Now with Sony and Microsoft doing more with there next gen consoles related to other devices such as iphones, TV and other devices, I think they will. Now since Nintendo is going to release an app for iphones and ipads for Miiverse. I think Nintendo should create there own unique games outside of the ones we all play and love for mobile devices, that way Nintendo can gain back those Casual gamer's that moved on from the Wii to Mobile gaming only.

I mean if they can manage to fix that Nintendo Network ID issue where your games are linked to that and not the system itself. Nintendo can release these mobile type games and have mobile user who owns a Wii U as well to link there Nintendo Network ID and allow them to re-download the game on the Wii U Eshop to continue playing while there at home and there phone is charging.

Thoughts?

Microsoft and Sony have done this.

Wordament, a barely-multiplayer word game is on Windows 8, Windows Phone 8, Silverlight in a browser and iOS. You can actually earn Xbox achievements on an iPhone. And Xbox Smartglass is on iOS and Android. You can control your Xbox and manage messages right from virtually any device.

Sony has developed their Music Unlimited app for Android. And they have Playstation Mobile, a branch of Android games that run on approved HTC and Sony Android devices and the PS Vita.

So those companies are branching out to previous competitors.

 

[seattle6418]

I've always thought the Wii was the exception, not the rule for Nintendo. Handhelds are their own thing, but on consoles, Nintendo has been in limbo ever since the original PS entered the market. They are just coming back to where they were with N64-GC, now that motion control hype has died off.

I might be hated for saying this, but i'm not surprised since the last time they owned the traditional core gaming market was with the SNES. Wii was just a case to be studied, not a recipe for continued success.

 

[Busaiku]

I don't know where you're getting that information. Because according to Nintendo's annual reports, Creatures Inc. is an independent company. It's not a subsidiary at all.

http://www.creatures.co.jp/html/en/company.html

http://www.neogaf.com/forum/showpost.php?p=45463406&postcount=56

I thought I saw it on all those "put Pokemon on iOS" stuff.
But yeah, I clearly didn't actually look into it myself.

 

[casmith07]

Spoiler

While I think that the Wii U is a bit of a blunder for Nintendo, Pachter is such a huge troll it's almost comical.

Nevermind...saw his post.

 

[royalan]

This is not a good example of hypocrisy. He was wrong about the WiiHD releasing years ago, but the Wii U's current troubles and reactionary analysis no longer has anything to do with that.

Besides, as wrong as he was about WiiHD releasing back in '09 - '10...Looking at the Wii U's performance thus far, it's starting to seem like he was basing his "prediction" on logical conclusions, if not any real insider intel.

Releasing something like the Wii U back then, when all of these problems facing Nintendo now were starting to take root (early 3rd party support migrating over to PS360, MS and Sony catching a second wind and revitalizing their hardware) would have been a smart move. Nintendo would have had new hardware to push just as the Wii was beginning to lose steam, and years headstart against MS and Sony's new machines.

I think this one is a case of Pachter not alloting for the possibility that Nintendo would blow a hardware launch like this - in both hardware and timing.

 

[Aquamarine]

I thought I saw it on all those "put Pokemon on iOS" stuff.
But yeah, I clearly didn't actually look into it myself.

Nintendo's control in the Pokemon IP is through their minority stake (20%-30%) in The Pokemon Company. Game Freak and Creatures Inc. own the other percentages.

It's The Pokemon Company that controls what happens with the Pokemon IP. Game Freak and Creatures Inc. have a vested interest in keeping Pokemon on Nintendo devices, but they're obviously not shy to new avenues (Pokedex on iOS is only the first step).

If Nintendo sells their stake in The Pokemon Company, the Pokemon IP would be become 100% third-party and would flood all sorts of devices, from Mobage, to Gree, to iOS and Android.

 

[Izick]

I know it's funny to joke about Pachter, but I honestly don't think he's too far off from the truth here. Wii U is hurting now, but it's only going to be worse when the next-gen consoles are released.

 

[Nessus]

I have a hard time understanding how Nintendo thought that that was an adequate launch line up, especially at that price and with the subsequent post-launch drought.

They'll drop the price of the Wii U similarly to how they slashed the price of the 3DS, but without games I don't know if it'll be enough. Maybe in Japan, depending on how much Japanese devs like the PS4.

 

[tehrik-e-insaaf]

Nintendo's control in the Pokemon IP is through their minority stake (20%-30%) in The Pokemon Company. Game Freak and Creatures Inc. own the other percentages.

It's The Pokemon Company that controls what happens with the Pokemon IP. Game Freak and Creatures Inc. have a vested interest in keeping Pokemon on Nintendo devices, but they're obviously not shy to new avenues (Pokedex on iOS is only the first step).

If Nintendo sells their stake in The Pokemon Company, the Pokemon IP would be become 100% third-party and would flood all sorts of devices, from Mobage, to Gree, to iOS and Android.

Read my post - you are partially correct but partially wrong - the copyright is shared - NCL itself owns part of it

Click View Post

 

[SapientWolf]

I'm not sure what your point is? Just because it has sold 2 million over the past few months in the US alone doesn't refute my point - that when hit games come out (few big hit games have come out so far) it dynamically improves hardware sales - and under such a circumstance - it is likely that their publishing revenues would recover. He picked Nintendo's peak to its cyclical trough and is trying to say third party revenues are bigger and more important to their overall company-level profitability. Hence him arguing this negates Nintendo's ability to generate historically average profits to the N64/Gamecube is incorrect.

NSMB Wii did over 26 mil. NSMB U should have been a hit, but the install base is too small. So to generate a "hit" Nintendo is going to have to get the install base up first, with almost no 3rd party support. Even though their pack-in and a sequel in one of their best selling franchises didn't get the job done.

Things are looking grim. I'm expecting a Wii U price drop this year from Nintendo, or a eulogy. People disagreed with Pachter's prediction of Nintendo's doom, but the gravity of the Wii U's situation is the one thing that most people here actually agree on. The rate at which they release sequels might actually be starting to hurt them.

 

[IrishNinja]

came for miksars's post, thankfully caught this one

...That's it, not trolling, but that is my reasoning.

well-reasoned and appreciated, especially given the treatment you receive in threads like this. thanks for that.

 

[tehrik-e-insaaf]

NSMB Wii did over 26 mil. NSMB U should have been a hit, but the install base is too small. So to generate a "hit" Nintendo is going to have to get the install base up first, with almost no 3rd party support. Even though their pack-in and a sequel in one of their best selling franchises didn't get the job done.

Things are looking grim. I'm expecting a Wii U price drop this year from Nintendo, or a eulogy. People disagreed with Pachter's prediction of Nintendo's doom, but the gravity of the Wii U's situation is the one thing that most people here actually agree on. The rate at which they release sequels might actually be starting to hurt them.

You aren't making any sense - I'm not sure if you aren't reading what I'm writing or simply repeating what you think he is saying as being correct - killer apps/hit games drive hardware sales, hardware doesn't sell itself - this is what Pachter fundamentally fails to understand - my point is that there are a lot of people waiting for a hit/killer app to drive adoption of the new platform

NSMB Wii MAY have sold a lot (it was a "hit") - but it was NOT a hardware seller - Wii Sports was a hardware seller - Few people bought a Wii for the purpose of NSMB Wii - NSMB Wii was like a cherry on top of fudge chocolate on vanilla ice cream... The ice cream was Zelda or Wii Sports depending on who you were... Your fudge came in the form of Brawl or Wii Fit... Anyone assuming an HD version of a side scrolling game that isn't a hardware pusher, and that everyone has played for 20 years is going to push 30 million hardware units in just 3 months is delusional...

 

[Fatalmephisto]

I have a hard time understanding how Nintendo thought that that was an adequate launch line up, especially at that price and with the subsequent post-launch drought.

They'll drop the price of the Wii U similarly to how they slashed the price of the 3DS, but without games I don't know if it'll be enough. Maybe in Japan, depending on how much Japanese devs like the PS4.

While i agree a price drop is in order but depending how Nintendo see's Sony and Microsoft as a Threat for when it comes to there prices. Now as for 3rd parties. Sure we all think the same will happen like the Wii did plus there previous console as well but remember, back then Nintendo made the stupid choices that forced third parties to manly focus on Sony and then also with Microsoft as well. With the Wii, the hardware was the main issue, GC never had that problem with hardware, developers just didn't the disk space those cd minis Nintendo had been using. The Wii U, well since more engines are becoming a lot more easier to scale down. I don't see the Wii U having a huge huge problem with 3rd parties this around. Plus when you take into account that Indie games, Kickstarter games, 3rd exclusive games and lastly collaborations as well to play into the mix of it. I'm sure Nintendo will be fine this upcoming generation. Nintendo just needs to do there part with 3rd parties and they will be fine.

 

[Aquamarine]

Read my post - you are partially correct but partially wrong - the copyright is shared - NCL itself owns part of it

NCL, Game Freak, and Creatures Inc. formed The Pokemon Company in 1998 to manage the Pokemon IP licenses and how they're being utilized.

If Nintendo were to cut ties with The Pokemon Company, they would no longer have influence over the direction of the Pokemon IP, regardless if they actually hold part of the copyright.

 

[diamount]

Nintendo have got a lot of cash to last them if they keep making a loss. Unlike Microsoft and Sony, they don't have other divisions to fall back upon.

 

[tehrik-e-insaaf]

NCL, Game Freak, and Creatures Inc. formed The Pokemon Company in 1998 to manage the Pokemon IP licenses and how they're being utilized.

If Nintendo were to cut ties with The Pokemon Company, they would no longer have influence over the direction of the Pokemon IP, regardless if they actually hold part of the copyright.

Assuming they have assigned their copyright to the Pokemon Company in perpetuity and no longer exercise or protect it independently - then they would NOT be able to influence the use of the intellectual property if they sold their stake in the Pokemon Company - but that isn't the case - when PETA used Pikachu Nintendo and the Pokemon Company both acted - each claiming that they had a share or agency of the IP and independently filed with their own lawyers (go read the filing)

In any case, the Pokemon Company partnership is a lot more complicated than that as I've described - it's not as simple as 1/3rd 1/3rd and 1/3rd as most people assume to think it is

 

[darkistheway]

Great question - without getting into too much detail - I think Nintendo needs to target a minimum baseline of ~40 million Wii U and ~80 million 3DS - this would be a great base outcome and assuming they maintain a fairly high tie-in ratio with a higher ratio of first party games and collaborations, and assuming the Yen settles around ~100/$ - I suspect Nintendo will report income of around ~$2.5 billion USD cumulative over the next 5 years assuming they capture a similar proportions of their userbase for their titles.

Under a scenario where they do half of that - 20 and 40 million - I think they will struggle to capture the same scale and multiplier effects - I predict $1 billion USD cumulative over the next 5 years which is fine as well given they continue to attract and retain talent and are positioning themselves in the fallout that I expect to happen after this gen (Sony is in huge trouble IMHO if the PS4 doesn't really do well).

That said, if Nintendo starts investing aggressively in their software infrastructure for the following generation or decides to write down additional costs in-advance, and I throw in a higher % y/o/y average on their expenses - I still see Nintendo clearing $500 million USD across 4-5 years in income under a Gamecube situation and a handheld market that that is ~50% less than the Gameboy Advance that cleared 80M units and moves proportionally less game software with lower margins and a giant $500M investment outlay amortized late in the cycle, in scaling up their programmers even more and improving talent among internal studios...

This is all dependent on a lack of one-time events FYI - and I assume their recent whoring of Mario doesn't lead to long-term damage of their brand

Of course on the flipside... if Miiverse takes off as a great social experience and they expand it beyond Nintendo device users... they could blow past these numbers... The point though is that rather than relying on that - I like to take the baseline view and invest on that basis

So your question is - what do I think is good? Baseline is good - anything above baseline is amazing. Half of that is mediocre - but assuming the mindset of the existing shareholder base, I think that's totally fine. Nintendo operates like a partnership more than a company.

I love you

Great Miiverse analysis, too

 

[AzaK]

Your statement that they aren't doing a service to their shareholders is flawed, because the company is closely held by a few institutions and Yamauchi, and the goal of the company is to stay in business and produce games for another generation, not maximize short-term profits by diluting their brand value so your clients can make a few extra dollars.

True they need to think long term but if they are not working for shareholders then they shouldn't be public. Their share price is sitting at less than what it was 13 years ago, with changes only really happening during Wii years during the boom.

 

[jvm]

If this is correct then it's pretty clear that first party sales alone aren't going to make the Wii U profitable.

That's a quote from my article, I think, and yes I've seen enough data outside my conversations with Michael to believe that it's true. Wii U software sales, excluding bundling and digital sales, are below 2 million units in the U.S.

Just to add a bit more...

Michael has always answered my questions in email, and has generously given me his opinion and reasoning even when it was clear that he and I were on opposite sides of an argument. He writes a lot and you generally only use 2-3 lines in a column. That's what happens in my columns, and I try to ensure that the quotes I use have some supporting evidence and explanation.

The one quote of his that I've printed that blew up was "casuals are never buying a console ever again" (paraphrasing at the moment). I happened to think he was generally right (the market is different now than it was in 2007-2009) and printed it because it fit with my view at the time.

 

[Ninja Scooter]

One area where I think Nintendo is missing out on some easy money is really exploiting the Virtual Console and their back catalog. If anyone has the ability to create the iTunes or Netflix of video games with their history and catelog, it's Nintendo, but they seem hell bent on wasting it away. Games come out in slow drips. It gets nearly no pub or hype. And they stupidly don't make it a single, universal service. Imagine if VC was just a service that you could access with ease on your Wii, Wii U, DSi or 3DS? Hell Nintendo could even release a $99 stand alone VC player that competes with the Roku/Apple TV/OUYA's of the world and make a KILLING on software sales.

 

[tehrik-e-insaaf]

True they need to think long term but if they are not working for shareholders then they shouldn't be public. Their share price is sitting at less than what it was 13 years ago, with changes only really happening during Wii years during the boom.

There are various reasons to stay public... Under Japanese securities law I believe if you reach a certain threshold of shareholders you have to file public statements... This is the case in the US and one of the reasons why Facebook eventually went public even despite a thriving secondary market that could have generated sufficient liquidity

More likely, since Nintendo is closely held by institutions like Mitsubishi UFJ under their asset management business, they need to be public to easily recalculate their portfolio pricing without depending on unreliable private company analysis... It probably allows them to invest pension funds, etc. into Nintendo and collect their yearly dividend... It also gives them the benefit of generating short-term liquidity if they need it since they can easily borrow against a public stock

 

[SapientWolf]

You aren't making any sense - I'm not sure if you aren't reading what I'm writing or simply repeating what you think he is saying as being correct - killer apps/hit games drive hardware sales, hardware doesn't sell itself - this is what Pachter fundamentally fails to understand - my point is that there are a lot of people waiting for a hit/killer app to drive adoption of the new platform

NSMB Wii MAY have sold a lot (it was a "hit") - but it was NOT a hardware seller - Wii Sports was a hardware seller - Few people bought a Wii for the purpose of NSMB Wii - NSMB Wii was like a cherry on top of fudge chocolate on vanilla ice cream... The ice cream was Zelda or Wii Sports depending on who you were... Your fudge came in the form of Brawl or Wii Fit... Anyone assuming an HD version of a side scrolling game that isn't a hardware pusher, and that everyone has played for 20 years is going to push 30 million hardware units in just 3 months is delusional...

I guess the big question now is, what is Wii U's ice cream going to be, and who's going to be eating it?

 

[CouldBeWorse]

You aren't making any sense - I'm not sure if you aren't reading what I'm writing or simply repeating what you think he is saying as being correct - killer apps/hit games drive hardware sales, hardware doesn't sell itself - this is what Pachter fundamentally fails to understand - my point is that there are a lot of people waiting for a hit/killer app to drive adoption of the new platform

NSMB Wii MAY have sold a lot (it was a "hit") - but it was NOT a hardware seller - Wii Sports was a hardware seller - Few people bought a Wii for the purpose of NSMB Wii - NSMB Wii was like a cherry on top of fudge chocolate on vanilla ice cream... The ice cream was Zelda or Wii Sports depending on who you were... Your fudge came in the form of Brawl or Wii Fit... Anyone assuming an HD version of a side scrolling game that isn't a hardware pusher, and that everyone has played for 20 years is going to push 30 million hardware units in just 3 months is delusional...

So what's the killer app? Does Nintendo have another billion dollar idea in them?

It's not anything that we know of so it won't come out before the other next gen systems, which is a problem.

Everything announced so far is Nintendo either trying to appeal to the Nintendo core fan (WInd Waker HD, Pikmin 3, and all of the vague recent. announcements) OR the lost Wii fan (Wii Fit). Nothing announced is trying to expand the base like the Wii and DS did.

 

[Quadraphonic]

The Pokedex was the first step.

This is the second:
https://play.google.com/store/apps/details?id=com.pokemontv
https://itunes.apple.com/us/app/pokemon-tv/id594261405?mt=8

I imagine a third isn't too far behind.

 

[Aquamarine]

Unless they have assigned their copyright to the Pokemon Company in perpetuity and no longer exercise or protect it independently - then they would still be able to influence the use of the intellectual property regardless of whether they had a portion of the Pokemon Company - but that isn't the case - when PETA used Pikachu Nintendo and the Pokemon Company both acted together each claiming that they had a share of the IP

In any case, the Pokemon Company partnership is a lot more complicated than that as I've described - it's not as simple as 1/3rd 1/3rd and 1/3rd the way you think it is

I never said it's a 1/3rd split. It was a joint investment at the beginning, but I completely understand that the relationship is multi-faceted.

And yet, I have to rebut with the publishing of the Pokemon app for iOS. If Nintendo REALLY had the ability to exercise control over the Pokemon IP as you say they do...
...they never would have allowed it.

NCL's reaction to the release of Pokedex for iOS indicates that The Pokemon Company has control over the franchise.

http://www.giantbomb.com/articles/nintendo-of-america-dont-even-think-about-pokemon-/1100-3463/

Nintendo of Japan strongly denied such chatter, citing that it doesn't outright own The Pokemon Company or the Pokemon franchise. Thus, The Pokemon Company was within its right to experiment like this.

 

[kirby_fox]

Has he ever said anything negative about Sony? No. Microsoft? Nope. Has he made comments about the broader market and the fact that the entire entertainment industry is in a period of decline? Nope. Has he even taken into account the weak as hell dollar and how that factors into this? Of course not.

I was actually thinking about this earlier. I can't recall him saying anything negative about Sony or Microsoft as if they can't do no wrong and are going to constantly be leaders.

Which is funny, because if Sony has a misstep here with the PS4, abandons the Vita (which they're inching closer to) and PS Mobile does nothing big- I see Sony leaving the gaming industry and going third party before Nintendo ever did. That said- the purchase of Gaikai and expanding their people this generation makes me think they're attempting to go for the long haul and make a big splash.

Hell- I honestly don't doubt the next Xbox could be a disaster with the last few product launches coming from Microsoft going bad.

 

[Fatalmephisto]

So what's the killer app? Does Nintendo have another billion dollar idea in them?

It's not anything that we know of so it won't come out before the other next gen systems, which is a problem.

Everything announced so far is Nintendo either trying to appeal to the Nintendo core fan (WInd Waker HD, Pikmin 3, and all of the vague recent. announcements) OR the lost Wii fan (Wii Fit). Nothing announced is trying to expand the base like the Wii and DS did.

We have more Nintendo directs coming in the future before E3, and once E3 comes along. For all we know, Nintendo could be making a huge new IP that we will not see coming. It's unlikely yes but hey Nintendo can change man. Since now gaming has changed so much this generation, Nintendo knows they can't keep doing what they have been doing for the last 20+ years. Gaming is evolving now and Nintendo is slowly doing it themselves. Plus remember a while back that Miyamoto came out and said that he wanted to develop a new character that people can enjoy and react to. Maybe not in a big way but with so many people who have been itching for years for a new character to get rooted out of Nintendo. Never say never man. That could be one of the many Secret elements that will make people's heads turn.

 

[tehrik-e-insaaf]

I never said it's a 1/3rd split. It was a joint investment at the beginning, but I completely understand that the relationship is multi-faceted.

And yet, I have to rebut with the publishing of the Pokemon app for iOS. If Nintendo REALLY had the ability to exercise control over the Pokemon IP as you say they do...
...they never would have allowed it.

NCL's reaction to the release of Pokedex for iOS indicates that The Pokemon Company has control over the franchise.

http://www.giantbomb.com/articles/nintendo-of-america-dont-even-think-about-pokemon-/1100-3463/

I've included that in the original post BTW - this was the very article that led me to research the situation - under my interpretation Nintendo *could* do what it wanted by invoking its copyright holding - but it didn't want to because they have a good relationship with the ex-NCL staff that are involved in the Pokemon Company and there have been other Pokemon related releases on the App Store (a Pokemon rhythm game thingy) and even a PC card game that Nintendo helped distribute

Even if they didn't WANT the app released, they don't really get involved in the day to day operations of the company... One because Nintendo leaves these partnerships alone as long as the relationship is good (go read interviews with Creatures and how Nintendo is hands off)... and second because it would likely complicate the relationship - for example, Nintendo can't force Game Freak to release another game either since Game Freak has the exclusive rights to DEVELOP the games - if Nintendo pissed off Game Freak and Creatures it would hurt them as well

But believe me, if Game Freak + Creatures decided they wanted to abandon the 3DS and go to the Vita or iOS exclusively or even do a dual release on multiple platforms for a mainline title - Nintendo could step in - not just as a minority owner of the franchise - but as a joint copyright holder - separate legal rights exist to protect both - go read a book about copyright law if you don't understand

That said - I have clearly and forcefully made the point that Nintendo doesn't have complete control over the franchise and the filings we have are vague - I'm not sure why you are arguing with me - all I am saying is that it isn't as simple as saying "OMG POKEMON iOS POSSIBLE OMG!"

If you are really interested I have done a thorough search in trademark and copyright in the United States for who owns Pokemon, the name, the logo, the drawings of the characters, the code on the game design, etc There is a lot of various intellectual property here. I don't want to occupy this thread with a technical discussion around all of it - but we can take it off line if you want.

 

[Pachterballs]

One area where I think Nintendo is missing out on some easy money is really exploiting the Virtual Console and their back catalog. If anyone has the ability to create the iTunes or Netflix of video games with their history and catelog, it's Nintendo, but they seem hell bent on wasting it away. Games come out in slow drips. It gets nearly no pub or hype. And they stupidly don't make it a single, universal service. Imagine if VC was just a service that you could access with ease on your Wii, Wii U, DSi or 3DS? Hell Nintendo could even release a $99 stand alone VC player that competes with the Roku/Apple TV/OUYA's of the world and make a KILLING on software sales.

they've exploited it to hell. Hell, I love the backlog, but... another re-release of LOZ?

those android boxes are going to be hacked and have mame+snes+whatever the else put on it. you just wait for it.


the way forward isn't looking back. They need to have games. And remarket. And pray it works. Because despite their best attempts, the gamecube bombed.

 

[tehrik-e-insaaf]

^--- Above situation about Pokemon copyright vs trademark vs ownership of the license I am describing is exactly why Nintendo was able to block the original Goldeneye getting ported to XBLA - they still owned a COPYRIGHT on the game since it was a joint-work between Rare and Nintendo and filed that way - despite Nintendo no longer owning Rare and having nothing to do with the James Bond license

 

[Ninja Scooter]

they've exploited it to hell. Hell, I love the backlog, but... another re-release of LOZ?

those android boxes are going to be hacked and have mame+snes+whatever the else put on it. you just wait for it.


the way forward isn't looking back. They need to have games. And remarket. And pray it works. Because despite their best attempts, the gamecube bombed.

They've been exploited in the wrong way. Reselling SMB or Zelda 1 a dozen different times anytime you have a new platform is only going to appeal to diehard fans who Nintendo doesn't really have to try that hard to hook. But if you could create a sleek, easy to use interface and system where you buy a game like Zelda ONCE, and it's playable across all their hardware, it will appeal a lot more to a more casual fanbase who maybe aren't diehard, but have nostalgia for playing games from the NES/SNES/N64 in their youth.

Having a killer service can be just as important as having a killer app. Success in this industry isn't just about having a few great games people want to play, it's about creating an ecosystem. That's what Apple, Amazon and Google have done. That's what MS and Sony have been doing with XBL and PS Plus and are hoping to translate over from the current gen to the next gen, and it's something Nintendo has missed badly on. There is no Nintendo ecosystem.

 

[Aquamarine]

I've included that in the original post if you bothered to read it - Nintendo *could* do what it wanted - but it didn't want to because they have a good relationship with the ex-NCL staff that are involved in the Pokemon Company and there have been other Pokemon related releases on the App Store (a Pokemon rhythm game thingy) and even a PC game

Even if they didn't WANT the app released, they don't really get involved in the day to day operations of the company... One because Nintendo leaves these partnerships alone as long as the relationship is good (go read interviews with Creatures and how Nintendo is hands off)... and second because it would likely complicate the relationship - for example, Nintendo can't force Game Freak to release another game either since Game Freak has the exclusive rights to DEVELOP the games


But believe me, if Game Freak + Creatures decided they wanted to abandon the 3DS and go to the Vita - Nintendo could step in - not just as a minority owner of the franchise - but as a joint copyright holder - separate legal rights exist to protect both - go read a book about copyright law if you don't understand

That said - I have clearly and forcefully made the point that Nintendo doesn't have complete control over the franchise and the filings we have are vague - I'm not sure why you are arguing with me - all I am saying is that it isn't as simple as saying "OMG POKEMON iOS POSSIBLE OMG!"

Please stop insinuating that I "don't understand copyright law" or I "didn't bother to read your post." I did both.

I fully realize that Nintendo could step in and potentially strong-arm Creatures / Game Freak into keeping Pokemon exclusive---that's what I meant by "they have a vested interest in remaining exclusive to Nintendo."

The point I'm trying to make is this: The Pokemon Company has control over the direction of the Pokemon IP. Nintendo will not let anything happen to The Pokemon Company because they have a dominating influence over the other two rights holders (because of reasons ever so eloquently stated in your post that you linked).

But supposing Nintendo were to relinquish their iron grip over The Pokemon Company (which would only happen in situations like bankruptcy), the control over the IP would EFFECTIVELY become third-party because The Pokemon Company is the nexus by which Nintendo imprints its copyright.

By giving up control over The Pokemon Company, Nintendo is essentially saying "Hey, I no longer care about the Pokemon IP." I do realize that Nintendo could still cause legal troubles because of their joint copyright, supposing they still exist in a situation where they no longer care about The Pokemon Company.

 

[PhantomR]

^--- Above situation about Pokemon copyright vs trademark vs ownership of the license I am describing is exactly why Nintendo was able to block the original Goldeneye getting ported to XBLA - they still owned a COPYRIGHT on the game since it was a joint-work between Rare and Nintendo and filed that way - despite Nintendo no longer owning Rare and having nothing to do with the James Bond license

Direct question. What is your affiliation/connection with the industry? Your insight and knowledge on most things Nintendo from a financial/product development perspective is world class and first rate.

 

[Digital-Hero]

If the wii u is a failure its a good failure. I love it

The same thing was said about Dreamcast and Saturn. Nevertheless, I don't think its over for Nintendo just yet.

 

[tehrik-e-insaaf]

But supposing Nintendo were to relinquish their iron grip over The Pokemon Company (which would only happen in situations like bankruptcy), the control over the IP would EFFECTIVELY become third-party because The Pokemon Company is the nexus by which Nintendo imprints its copyright over.

By giving up control over The Pokemon Company, Nintendo is essentially saying "Hey, I no longer care about the Pokemon IP."

Ok you are right that TPC has control over the direction of the franchise - and that's because Nintendo has enfranchised them that way. And in practicality if Nintendo gave up on TPC voluntarily and didn't care - I don't think they would care about the copyright provisions outside of porting game-specific code to another platform.

But let's assume that they never gave up the copyrights and wanted to enforce it later despite having zero ownership in TPC - they are entitled to injunctive relief - because Nintendo would still own a copyright on the Pokemon franchise independent of its ownership of the franchise or within the Pokemon Company

Nintendo gave up control over Rare (sold it) - but they still held a joint copyright on Goldeneye - this is why Activision, Rare, Microsoft, etc all needed Nintendo's approval to port Goldeneye to XBLA - Nintendo eventually declined because it was within its rights to do so even though they didn't own Goldeneye the name, James Bond the franchise, or even Rare the company. They had a copyright on the code within the game and it entitled them to injunctive relief if it was put out on XBLA.

Ergo, assuming Nintendo sold Pokemon Company, it could STILL block the release of Pokemon games assuming they used any jointly-held copyrights. I have done a full search of the register of this. Even the name "Pokemon" is trademarked under a joint holding by Nintendo, Creatures, and Game Freak and not the Pokemon Company. It was never "assigned" to the Pokemon Company either. Nintendo hasn't relinquished that but independently licenses that trademark to be used for each Pokemon Company game.

Effectively however, Nintendo doesn't get involved - they let them do what they want.

 

[Aquamarine]

And again you are wrong - because Nintendo would still own a copyright on the Pokemon franchise independent of its ownership of the franchise or within the Pokemon Company

Nintendo gave up control over Rare (sold it) - but they still held a joint copyright on Goldeneye - this is why Activision, Rare, Microsoft, etc all needed Nintendo's approval to port Goldeneye to XBLA - Nintendo eventually declined because it was within its rights to do so even though they didn't own Goldeneye the name, James Bond the franchise, or even Rare the company. They had a copyright on the code within the game and it entitled them to injunctive relief if it was put out on XBLA.

Ergo, assuming Nintendo sold Pokemon Company, it could STILL block the release of Pokemon games assuming they used any jointly-held copyrights. I have done a full search of the register of this. Even the name "Pokemon" is trademarked under a joint holding by Nintendo, Creatures, and Game Freak and not the Pokemon Company. It was never "assigned" to the Pokemon Company either. Nintendo hasn't relinquished that but independently licenses that trademark to be used for each Pokemon Company game.

Effectively however, Nintendo doesn't get involved - they let them do what they want.

Please read my edit:

Please stop insinuating that I "don't understand copyright law" or I "didn't bother to read your post." I did both.

I fully realize that Nintendo could step in and potentially strong-arm Creatures / Game Freak into keeping Pokemon exclusive---that's what I meant by "they have a vested interest in remaining exclusive to Nintendo."

The point I'm trying to make is this: The Pokemon Company has control over the direction of the Pokemon IP. Nintendo will not let anything happen to The Pokemon Company because they have a dominating influence over the other two rights holders (because of reasons ever so eloquently stated in your post that you linked).

But supposing Nintendo were to relinquish their iron grip over The Pokemon Company (which would only happen in situations like bankruptcy), the control over the IP would EFFECTIVELY become third-party because The Pokemon Company is the nexus by which Nintendo imprints its copyright.

By giving up control over The Pokemon Company, Nintendo is essentially saying "Hey, I no longer care about the Pokemon IP." I do realize that Nintendo could still cause legal troubles because of their joint copyright, supposing they still exist in a situation where they no longer care about The Pokemon Company.

 

[tehrik-e-insaaf]

Please read my edit:

We're on the same page then. Sorry to be anal. I took a class on copyright in law school and had a professor who ingrained the difference between various types of IP in my head and I get a little anal about it.