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[balohna]

Hopefully Nintendo is not locked into "this is how much it will cost forever" deals with the manufacturers of the Wii U's guts. That's what caused the original Xbox to be such a black hole for MS.

 

[Zinthar]

So, going by the earlier graph, if Nintendo continued to have those kinds of losses for every 6-month period, it would take roughly 93 years for them to be bankrupt.

Now, obviously that's not exact - I'm sure their total figure is lower now than it was when that graph was done, But, we're still looking at around 90 years or so.

The losses are only that small because of the success of the 3DS. If the handheld market continues to erode, they'd start losing money much faster. And in any event, if you don't make a profit in 93 years, somewhere along the way shareholders are going to force you to change your business model into something that might actually be profitable.

 

[terrisus]

The losses are only that small because of the success of the 3DS. If the handheld market continues to erode, they'd start losing money much faster. And in any event, if you don't make a profit in 93 years, somewhere along the way shareholders are going to force you to change your business model into something that might actually be profitable.

Even if losses tripled, that's still looking at 30 years. (And again, that's assuming a hypothetical where, despite being a profitable company for virtually their entire existance, the losses they've had recently are now all they will ever be seeing again)

And, obviously it's not realistic at all for a company to have 90 (or even 30) years straight of losses. It's obvious something would be done about it along the way. But, the point is, they have been so profitable and have so much money built up, that people saying they're going to go bankrupt, or Sony's going to purchase them, or the company is going to be so in danger that they're going to have to act desperate in order to try to save themselves or something, are just completely unrealistic/ignoring just how much money they do have saved up and how long it would actually take for something like that to happen.

 

[Loonz]

i hope they really understand in design terms why the gamepad was not the wii remote or the ds's touch screen. it's crucial in moving forward.

IMO it doesn't work as a part of a home console mass-marketwise, it should have been an standalone device. Nintendo's squizo-approach, trying to design a device that's both a home console and a tablet, only with all the disadvantages and few of the advantages of both it's been an historical mistake. One that could lead the company into collapse if they don't rebuild themselves correctly.

I have a Wii U and a I've been a Nintendo fan since longer than I can even remember. I want to see them succeed. But they have to release appealing, well-thought products to the market, and at a correct price. Which is, as I see it, the cheaper they can in order to develop new gameplay experiences that people might want to try.

 

[Randolph Freelander]

Even if losses tripled, that's still looking at 30 years. (And again, that's assuming a hypothetical where, despite being a profitable company for virtually their entire existance, the losses they've had recently are now all they will ever be seeing again)

And, obviously it's not realistic at all for a company to have 90 (or even 30) years straight of losses. It's obvious something would be done about it along the way. But, the point is, they have been so profitable and have so much money built up, that people saying they're going to go bankrupt, or Sony's going to purchase them, or the company is going to be so in danger that they're going to have to act desperate in order to try to save themselves or something, are just completely unrealistic/ignoring just how much money they do have saved up and how long it would actually take for something like that to happen.

It's time to be real. The graphs showing accumulated profits are meaningless, because that's just not how business works. (Speaking of, it's not all that relevant whether or not Sony or Microsoft are profiting, because Sony and Microsoft do not answer to Nintendo's shareholders.)

Forget 90 years or 30, it's not realistic for them to go two-plus years with losses without some sort of strategic shift. Profits from 1981, 1991, 2001, or 2009 mean absolutely nothing. That money isn't sitting in a bank account waiting for a rainy day, most of it has been spent -- reinvested or paid out to investors. And they will continue to need to reinvest and pay out dividends to investors, which will require steadily growing profitability over time. Nintendo isn't just going to sit there and bleed their cash hoard.

There is going to be change at Nintendo. I'm not going to predict what that change will be, other than I don't think you'll see Iwata in charge very long into next year. I don't have the foggiest idea what they'll do, but it will not be business as usual.

 

[Zinthar]

Even if losses tripled, that's still looking at 30 years. (And again, that's assuming a hypothetical where, despite being a profitable company for virtually their entire existance, the losses they've had recently are now all they will ever be seeing again)

And, obviously it's not realistic at all for a company to have 90 (or even 30) years straight of losses. It's obvious something would be done about it along the way. But, the point is, they have been so profitable and have so much money built up, that people saying they're going to go bankrupt, or Sony's going to purchase them, or the company is going to be so in danger that they're going to have to act desperate in order to try to save themselves or something, are just completely unrealistic/ignoring just how much money they do have saved up and how long it would actually take for something like that to happen.

I agree completely that they won't go bankrupt or be purchased anytime soon, but if the handheld market dries up and they gain no traction in home consoles, their revenue base will have eroded and then the fixed costs that currently aren't a huge portion of their expenses end up pushing them deep into the red.

Research in Motion is a pretty good example of what can happen when a market shifts against the market leader and the leader fails to respond to that shift. They reported earnings yesterday and ate a $4.4 billion loss for the quarter, largely thanks to inventory write-downs for warehouses full of unsold Blackberry 10 smartphones (RIM also had a huge war chest of cash a couple of years ago from a decade of huge profits). It's hard to imagine Nintendo managing to dig themselves into a similar predicament, but they don't want to get into the position where they commit to trying to support a dying home console, and then another, and all while the handheld market continues to shift to smartphones and tablets. That's the worst-case scenario, to be sure, though.

 

[terrisus]

It's time to be real. The graphs showing accumulated profits are meaningless, because that's just not how business works. (Speaking of, it's not all that relevant whether or not Sony or Microsoft are profiting, because Sony and Microsoft do not answer to Nintendo's shareholders.)

Forget 90 years or 30, it's not realistic for them to go two-plus years with losses without some sort of strategic shift. Profits from 1981, 1991, 2001, or 2009 mean absolutely nothing. That money isn't sitting in a bank account waiting for a rainy day, most of it has been spent -- reinvested or paid out to investors. And they will continue to need to reinvest and pay out dividends to investors, which will require steadily growing profitability over time. Nintendo isn't just going to sit there and bleed their cash horde.

There is going to be change at Nintendo. I'm not going to predict what that change will be, other than I don't think you'll see Iwata in charge very long into next year. I don't have the foggiest idea what they'll do, but it will not be business as usual.

There's a big, big difference between saying "They're not going to sit there bleeding money for 90 years, if losses kept up they would need to try some different stuff" and saying "A couple more years of this, and they're going to be near bankruptcy/will get bought out by Sony/will be going the route of Sega/whatever else gets said."

They tried something, it didn't work. Obviously they're going to try some other stuff. That might not work either. Then they'll try some other stuff. That also may or may not work. If not, then they'll try some more stuff. The point is, they have the ability to do that, since they have the room to work with, and to return to being extremely profitable like they have been for most of their existence.

 

[Captain Smoker]

It's time to be real. The graphs showing accumulated profits are meaningless, because that's just not how business works. (Speaking of, it's not all that relevant whether or not Sony or Microsoft are profiting, because Sony and Microsoft do not answer to Nintendo's shareholders.)

Forget 90 years or 30, it's not realistic for them to go two-plus years with losses without some sort of strategic shift. Profits from 1981, 1991, 2001, or 2009 mean absolutely nothing. That money isn't sitting in a bank account waiting for a rainy day, most of it has been spent -- reinvested or paid out to investors. And they will continue to need to reinvest and pay out dividends to investors, which will require steadily growing profitability over time. Nintendo isn't just going to sit there and bleed their cash horde.

There is going to be change at Nintendo. I'm not going to predict what that change will be, other than I don't think you'll see Iwata in charge very long into next year. I don't have the foggiest idea what they'll do, but it will not be business as usual.

Then you should read their presentations & investor Q&A.


Nintendo started to heavily promote the Wii U now that the 3DS in a good direction (not perfect, but good direction).

They're going to continue their path with steady marketing throughout the year and a better pace of software releases (unlike 2013).

Furthermore, Iwata plans to maximize the profitability by reducing Wii U hardware production costs and to push their digital market, since this brings them the highest margins.
(Their digital software business accounted for 10% of their software revenues in the last two quarters)


For their next generation platforms, Iwata already stated that they "started a project to integrate the architecture for our future platforms."
"What we are aiming at is to integrate the architecture to form a common basis for software development so that we can make software assets more transferrable, and operating systems and their build-in applications more portable, regardless of form factor or performance of each platform. They will also work to avoid software lineup shortages or software development delays which tend to happen just after the launch of new hardware."

 

[Randolph Freelander]

They tried something, it didn't work. Obviously they're going to try some other stuff. That might not work either. Then they'll try some other stuff. That also may or may not work. If not, then they'll try some more stuff. The point is, they have the ability to do that, since they have the room to work with, and to return to being extremely profitable like they have been for most of their existence.

How many more "tries" of "stuff" do you think they have in them? Investors aren't going to set around for two more years waiting for successes, let alone a couple more generations of seeing if anything sticks. As long as gaming is the primary business for Nintendo, gaming has to continually and increasingly be profitable.

Then you should read their presentations & investor Q&A.

It would be good reading material for sure, but again, I predict change, starting at the top. Iwata will be replaced, and new management will have new ideas. Similarly, the old ideas are predicated upon Wii U actually succeeding, they're coming from the same management that is sticking to the 9 million shipment forecast for the fiscal year. When they do not come close to meeting those forecasts, and prospects for selling software are further diminished, there will be new questions requiring new answers.

 

[family_guy]

I'm sorry but Nintendo putting out a ps4 (aka a 500 dollar console) would doom them even further than going the low power route. Many people here fail to think clearly. Most Third parties wouldn't put their games on the platform even if there was parity and nobody would buy a 500 dollar Nintendo console let alone a 350 dollar one. They need to aim lower not higher

I disagree. First, no one said anything about them making a $500 console. In terms of technology they just need to be within the range of power of competing platforms even if they are the lowest spec machine. They can still do that at $350 or less. They just need to stop investing money in useless tech just so they can be the "cool" kid on the block with their innovative peripherals that no one feels like taking advantage of.

If it was even close to PS4 and XBox One in architecture then developers wouldn't shun it. We are at a point now where making a game on the PC and porting it to multiple platforms is easier than ever, but here we have Nintendo who's tech makes it very difficult for developers to make the same games that they would make for PS4/XBOne. It's no surprise that they aren't bothering. Nintendo's approach to hardware development is make a system that allows them to make and sell their own games. They don't care if third party games don't flourish on their platform.

 

[terrisus]

As long as gaming is the primary business for Nintendo, gaming has to continually and increasingly be profitable.

Well then, it's a good thing for Nintendo that they've been the only company to be able to do that over an extended period of time.

To think that they're just going to toss in the towel after a couple of losses, despite the massive profits they've been able to make, seems extremely short-sighted.

 

[MrNyarlathotep]

If it was even close to PS4 and XBox One in architecture then developers wouldn't shun it.

thats a pretty confident statement that is at odds with historical precedent.

 

[Randolph Freelander]

Well then, it's a good thing for Nintendo that they've been the only company to be able to do that over an extended period of time.

To think that they're just going to toss in the towel after a couple of losses, despite the massive profits they've been able to make, seems extremely short-sighted.

Where someone says "change," you replace it with "toss in the towel." Maybe stop doing that?

And again, the over-reliance on past performance might work among sports fans arguing over wins and losses (I mean, seriously, I have a cousin [-in-law?] I haven't seen in 10 years, but I saw him recently and the first thing he did was remind me of Duke's bad season in college basketball in 1995), but it's useless here. The market realities that produced truly massive profits 5 years ago do not exist any longer. The world changes, and the gaming market changes with it. The reality of it is they're losing money now, their revenues are diminishing now, and the things they were doing yesterday have only gotten them to now. The people making the decisions inside Nintendo have gotten them to right now, and now isn't a good place to be, nor is it building confidence for tomorrow, and confidence in tomorrow is ultimately going to shape Nintendo's strategy going forward.

And please, when you read that paragraph, do remember the one preceding it.

 

[terrisus]

Where someone says "change," you replace it with "toss in the towel." Maybe stop doing that?

And again, the over-reliance on past performance might work among sports fans arguing over wins and losses (I mean, seriously, I have a cousin [-in-law?] I haven't seen in 10 years, but I saw him recently and the first thing he did was remind me of Duke's bad season in college basketball in 1995), but it's useless here. The market realities that produced truly massive profits 5 years ago do not exist any longer. The world changes, and the gaming market changes with it. The reality of it is they're losing money now, their revenues are diminishing now, and the things they were doing yesterday have only gotten them to now. The people making the decisions inside Nintendo have gotten them to right now, and now isn't a good place to be, nor is it building confidence for tomorrow, and confidence in tomorrow is ultimately going to shape Nintendo's strategy going forward.

And please, when you read that paragraph, do remember the one preceding it.

Again, the primary issue is stuff like this, from the OP:

I mean if they stick to their guns and release Wii-U 2 and so on that doesn't pick up traction and bankruptcy becomes a possibility (though given how much money they've made elsewhere it could take years and years) then surely another Japanese company would try snapping them up. It's a company I imagine the Japanese would want to keep ownership within the country and Sony would have the most to gain from a buyout of Nintendo.

Talking about going bankrupt and being bought out by Sony.

 

[Randolph Freelander]

Again, the primary issue is stuff like this, from the OP:



Talking about going bankrupt and being bought out by Sony.

I don't know about bankruptcy, although in actually, companies go from being highly successful to not existing in a relative blink of an eye (and bankruptcy doesn't necessarily imply even that), but don't disregard acquisition. The market cap for Nintendo is down 80% from 2007, and more years of no or low profits will only act to keep the market cap low and if (IF) some larger company sees value in Nintendo, they could swoop in to buy. I'm not predicting it, but it's not unimaginable, but I don't imagine it would ever be Sony unless Nintendo was nearly circling the drain. Even if acquired, that doesn't necessarily mean a first party approach is abandoned, not at all.

 

[H_Prestige]

I don't necessarily want Nintendo to be a software only company, but I think the belief they'd sudden collapse and produce poor quality games is a belief rooted in nonsense and hysteria, from fans with a deep rooted and nonsensical loyalty to Nintendo the company and simply refuse to even humour the possibility of Nintendo focusing exclusively on software (ironic, all things considered). Nintendo is immensely functional as both a video game publisher and developer, and would retain just as much control and freedom over their projects while third party as they do with their own hardware. It's like some people believe Nintendo limiting themselves to software would turn them into EA overnight. They're a company already bound to shareholders. And a company that already does arguably ignore them and do their own thing, for better or worse. This would not change, and with the strength and brand recognition of their IPs I don't see any scenario where third party Nintendo wouldn't see tremendous sales success on borderline any platform under the sun.

What does concern me (and caused some nonsense knee jerk defensiveness on twitter) is Nintendo's relevancy in the home console space with their current hardware vision. I like Nintendo doing their own thing, but unsuccessful Nintendo is bad for every single party involved. It's bad for Nintendo, for obvious financial reasons. It pressures them to produce content faster, and more focused on sales. And this in turn has the potential to hurt the fanbase. Panic Nintendo sucks. Comfortable Nintendo is giving me two Mario Galaxy games and greenlighting shit like Sin & Punishment 2 and Xenoblade.

What I don't want is Nintendo to stick to their own home consoles for no other reason than stubbornness, when that stubbornness may be detrimental to growth of the company as a software producer and developer. My love for Nintendo hardware is not necessarily because of the hardware itself, but the software. That's what I love about Nintendo. They need to re-approach their position in the console space for their next system, and do so in drastic ways. If that doesn't mean becoming a third party publisher, and again I don't necessarily want or expect that to happen, it does mean they need to totally reassess what they're doing for hardware and work harder to ensure relevancy. Nintendo is a relevant software producer, but for the current generation they are an irrelevant hardware producer. The latter needs to change because the former will be affected by it.

This post is spot on. Nintendo can operate better and deliver higher quality software if they aren't desperately trying to sell a dying platform at the same time.

 

[iMorphball]

As long as Nintendo keeps making great games I'll keep buying their consoles. I don't care about HD gfx or 60fps, I just care about playing a fun game. Nintendo is pretty much the only company around that consistently does so.

 

[family_guy]

thats a pretty confident statement that is at odds with historical precedent.

They were close in power during the N64 and Gamecube era, actually more powerful than Sony's systems, but there were other contributing factors to developers not supporting those systems. Like the limitations and high cost of N64's cartridges. Gamecube's mini discs weren't as good as DVDs and I believe more expensive to produce. They also had higher licensing fees and a harder certification process to go through.

 

[nssdigitalchumps]

the problem with the whole third party arguments is that none of the so called benefits are proven and are basically a stupid gamble with more to lose than gain even worse yet all the down sides are if we look back at history .

Looking back at history (you know, before Sega became a third party company -- most young gamers have no idea that the industry began before Nintendo starting making the NES/Famicom)...

When Activision was formed, the first third party company in the history of video gaming, they made a profit of $6 million the first year. By year two, they were up 60+ million thanks to Pitfall and quite a few other titles that pushed the limits of the Atari 2600 hardware. It helped them to survive an industry collapse and then continue their life to present day.

Yeah, history shows us that third party companies creating new IP really suck at making profits and keeping form.

Nintendo would make amazing games on amazing hardware and most loyalist to Nintendo (and there isn't anything wrong with that) would be shocked.

 

[jroc74]

Looking back at history (you know, before Sega became a third party company -- most young gamers have no idea that the industry began before Nintendo starting making the NES/Famicom)...

When Activision was formed, the first third party company in the history of video gaming, they made a profit of $6 million the first year. By year two, they were up 60+ million thanks to Pitfall and quite a few other titles that pushed the limits of the Atari 2600 hardware. It helped them to survive an industry collapse and then continue their life to present day.

Yeah, history shows us that third party companies creating new IP really suck at making profits and keeping form.

Nintendo would make amazing games on amazing hardware and most loyalist to Nintendo (and there isn't anything wrong with that) would be shocked.

Glad this was bought up. Another thread had me looking at the history of the NES.....and Nintendo doing software only, being on other systems....is part of how they started making a name for themselves.... if they went back to this....it would just be coming full circle. And I think they would survive.

 

[H_Prestige]

Glad this was bought up. Another thread had me looking at the history of the NES.....and Nintendo doing software only, being on other systems....is part of how they started making a name for themselves.... if they went back to this....it would just be coming full circle. And I think they would survive.

Yeah, Sega had basically already killed themselves before going third party. And that was due to releasing two failed consoles back to back. Going third party allowed them to survive and keep making games.

 

[nssdigitalchumps]

Glad this was bought up. Another thread had me looking at the history of the NES.....and Nintendo doing software only, being on other systems....is part of how they started making a name for themselves.... if they went back to this....it would just be coming full circle. And I think they would survive.

They made a killing from Donkey Kong and the Coleco Vision deal they did in the early 80s.

They could survive quite well. Sega's issue right now is that it has some great games, good games and crap games. They have issues with making decisions about what titles hit what shores. Does anyone honestly think that Nintendo would treat Mario like Sega has treated Sonic since 2006? God no.

Having the ability to play Mario on a phone or on a tablet gives me goosebumps. I would pay the whatever for that to happen. Having all platforms available for Nintendo's IPs would be instant money for them (without the worries of keeping up with the jonses). I seriously doubt they would cut staff, rather they would just rearrange to get the products out quicker.

Nothing but positives, though it would make me sad to see them out of the hardware business.

 

[MYE]

Well, this is Operating Income:

Again, we're still looking at 50+ years of 2011-2014 sorts of issues before it starts to actually become an actual danger.

Obviously they wouldn't want to let that sort of thing go on for too long, but the point is, they have that cushion.

(Oh yeah, for anyone who doesn't want to count the 0s on that graph, the line near the top where their graph ends is $35 Billion)

Holy shit at the xbox division

 

[Sub_Level]

Metroid, Donkey Kong, Kirby, and F-Zero go to Xbox.

Everything else goes Playstation.

These are the canon pairings.

 

[krypt0nian]

Best case solution for them at this point would be to remain first party on handhelds and go 3rd party on consoles/phones.

Best of both worlds, especially since I see no real scenario where they regain 3rd party support, or capture lightning in a bottle again to have a Wii Era.


I wonder if they can work up a biz plan that would allow them to release a console that supports itself with ONLY first parry efforts, and play solely to the more limited but dedicated Nintendo Only consumers? Or am I just asking for the obvious handheld/console hybrid?

 

[mugwhump]

They could make money as a hitman of DOOM

For example, Sony pays Nintendo to make gaems for MS. Nintendo's DOOM would thus be transferred to Microsoft's system, making it DOOMED

 

[jblank83]

This post is spot on. Nintendo can operate better and deliver higher quality software if they aren't desperately trying to sell a dying platform at the same time.

Nintendo would not have the same operating capital without their hardware side. Losing hardware means massive layoffs, consolidation, downsizing. It means adopting risk-averse practices similar to EA, Activision, Square-Enix, Capcom: far more milking than they are already criticized for.

Also, EAD isn't sitting at the office thinking about how to sell Wii U. They're just making great games.

When Activision was formed, the first third party company in the history of video gaming, they made a profit of $6 million the first year. By year two, they were up 60+ million thanks to Pitfall and quite a few other titles that pushed the limits of the Atari 2600 hardware. It helped them to survive an industry collapse and then continue their life to present day.

Nintendo makes far more than that in licensing fees alone, without even counting their first party sales (sales that would be subject to having to pay licensing fees if they were 3rd party). Look at their financials. They're staggering. There are years they post over a billion in profit.

Short term losses are nothing compared to that, and those profits would not be possible solely publishing 3rd party software. Even if Nintendo continued to sell 30 million NSMB units as 3rd party they would, by virtue of having to pay licensing fees, still be making less money (see earlier post for criticism of argument that they would magically sell 3x as many units of hypothetical NSMB).


Nintendo could float 3-4 more unsuccessful platforms before they have to even worry about closing up the shop. And the market isn't so treacherous that they can't find a way to make profit on their systems, even on the Wii U which has barely been on the market 12 months. Even Gamecube made healthy profit.

Which makes this discussion beyond silly, tbqhwy.

 

[nssdigitalchumps]

Nintendo would not have the same operating capital without their hardware side. Losing hardware means massive layoffs, consolidation, downsizing. It means adopting risk-averse practices similar to EA, Activision, Square-Enix, Capcom: far more milking than they are already criticized for.

Also, EAD isn't sitting at the office thinking about how to sell Wii U. They're just making great games.




Nintendo makes far more than that in licensing fees alone, without even counting their first party sales (sales that would be subject to having to pay licensing fees if they were 3rd party). Look at their financials. They're staggering. There are years they post over a billion in profit.

Short term losses are nothing compared to that, and those profits would not be possible solely publishing 3rd party software. Even if Nintendo continued to sell 30 million NSMB units as 3rd party they would, by virtue of having to pay licensing fees, still be making less money (see earlier post for criticism of argument that they would magically sell 3x as many units of hypothetical NSMB).


Nintendo could float 3-4 more unsuccessful platforms before they have to even worry about closing up the shop. And the market isn't so treacherous that they can't find a way to make profit on their systems, even on the Wii U which has barely been on the market 12 months. Even Gamecube made healthy profit.

Which makes this discussion beyond silly, tbqhwy.

How can you possibly account for their licensing fees on platforms? They would probably negotiate licensing fees as a third party and whatever platform wants them would probably give them a helluva deal. They would be delivering an audience like no other platform has seen before.

It's not a silly discussion and (respectfully) I don't believe you have accounted for all the profits and benefits from such a movement. Sega produces some bad games and has for years since becoming a third party. How did they survive? They're going on their third generation of consoles right now.

 

[H_Prestige]

Nintendo would not have the same operating capital without their hardware side. Losing hardware means massive layoffs, consolidation, downsizing. It means adopting risk-averse practices similar to EA, Activision, Square-Enix, Capcom: far more milking than they are already criticized for.

Also, EAD isn't sitting at the office thinking about how to sell Wii U. They're just making great games.




Nintendo makes far more than that in licensing fees alone, without even counting their first party sales (sales that would be subject to having to pay licensing fees if they were 3rd party). Look at their financials. They're staggering. There are years they post over a billion in profit.

Short term losses are nothing compared to that, and those profits would not be possible solely publishing 3rd party software. Even if Nintendo continued to sell 30 million NSMB units as 3rd party they would, by virtue of having to pay licensing fees, still be making less money (see earlier post for criticism of argument that they would magically sell 3x as many units of hypothetical NSMB).


Nintendo could float 3-4 more unsuccessful platforms before they have to even worry about closing up the shop. And the market isn't so treacherous that they can't find a way to make profit on their systems, even on the Wii U which has barely been on the market 12 months. Even Gamecube made healthy profit.

Which makes this discussion beyond silly, tbqhwy.

What hardware capital are they getting from the Wii U?

It's not like this is some blip on the radar. If they don't change their strategy significantly, than the future of Nintendo home consoles is more Wii U's. They're not going to just magically post billions in profits simply because they used to at one time. They're going to be posting billions in losses with that kind of performance. No other publisher will put games on their consoles, meaning no licensing. All of that is worth being able to take 100% earnings from their software sales? And mind you, with shit hardware sales, their software sales will also crumble.

 

[sd28821]

so basically people in this thread are saying that nintendo can never make a new sucessfull home console

 

[nssdigitalchumps]

so basically people in this thread are saying that nintendo can never make a new sucessfull home console

Not at all, but outside of the Wii (which grabbed a demographic that no one had in that generation), they haven't really seen an industry dominating console since the SNES (and I'm not counting the handhelds because they have owned that market for decades -- and will continue to do so in the near future). Their consoles aren't failures, but somewhere along the way they're losing money on these these less than gigantic industry dominating machines.

They're also at a point in their life with the Wii U, where they have to make a decision to continue with a failing console and lose a load of money, hedge their bets on a new console and spend more money or they have to seriously consider jumping the console business (not the handheld business) and going third party.

Their attempt to capture that same demographic that the Wii brought them was not well researched. That demographic (older folks, parents, grandparents, etc.) has no interest in keeping the life we have as gamers. They aren't going to go to a midnight launch to grab the new console. They are going to wait until the console they have (the Wii) dies and they're forced to get another (if they want it). They need to forget about this demographic and make a console that is for their loyalist gamer fans (and also make it easier for third party companies to use and not have to go 10 miles out of the way to program for).

They have a lot to think about, but their situation isn't hopeless at all with consoles.

 

[Brainfreeze]

One thing I think people are forgetting to mention is brand quality. Even if Nintendo went third party and quality/quantity/diversity stayed the same, which we know it won't, as many people have argued just in the first 100 posts I read, their sales would still likely be lower than many are predicting.

If they reached the point where they had to quit hardware just to stay profitable, this sends the message that their games aren't good enough to maintain a console on their own. The name would be associated with failure, fall from grace, etc., at least for a few years. Mario, Zelda, Mario Kart may continue to sell, but everything else, including merchandising, would tank.

There's just way too much at risk and far too little to gain to quit hardware after one bum console out for one year. We'll talk in a decade or so but, until then, Nintendo is just fine and they're here to stay. I can't imagine how some people are still so foolish to support this from a business perspective after gamecube to Wii and the 3DS turn around. Can Gaf please get over this?

 

[nssdigitalchumps]

One thing I think people are forgetting to mention is brand quality. Even if Nintendo went third party and quality/quantity/diversity stayed the same, which we know it won't, as many people have argued just in the first 100 posts I read, their sales would still likely be lower than many are predicting.

If they reached the point where they had to quit hardware just to stay profitable, this sends the message that their games aren't good enough to maintain a console on their own. The name would be associated with failure, fall from grace, etc., at least for a few years. Mario, Zelda, Mario Kart may continue to sell, but everything else, including merchandising, would tank.

There's just way too much at risk and far too little to gain to quit hardware after one bum console out for one year. We'll talk in a decade or so but, until then, Nintendo is just fine and they're here to stay. I can't imagine how some people are still so foolish to support this from a business perspective after gamecube to Wii and the 3DS turn around. Can Gaf please get over this?

Nintendo would be fully focused on their games and make better titles with powerful hardware (on multiple platforms). There would be no disgrace or bad message sent if they bowed out of the hardware business. Simply put, they would be a company that didn't want to compete with skyrocketing hardware costs and they would fully acknowledge that their budgets aren't as endless as Sony/Microsoft's.

I know their are some Nintendo fans out there who don't want Nintendo to turn third party because of companies like Sega and their quality control/budgets, but I seriously seriously seriously doubt Nintendo would go along the same route as Sega in those categories. They would still deliver the goods to the fans the way they want it and possibly better. Most people wouldn't hold it against them that they want to keep producing quality games on different platforms.

 

[EMT0]

I'm sorry, this is a very uninformed viewpoint. How in the world would their games not be up to snuff? Why would they slip in quality? If anything, Nintendo would be fully focused on their games and make better titles with powerful hardware (on multiple platforms).

I know their are some Nintendo fans out there who don't want Nintendo to turn third party because of companies like Sega and their quality control/budgets, but I seriously seriously seriously doubt Nintendo would go along the same route as Sega in those categories. They would still deliver the goods to the fans the way they want it and possibly better.

Considering they'd have to transition to both a new hardware AND architecture, rebuild or license engines, and then learn how to work with new engines, most likely abandon certain projects for being either overly ambitious or too insignificant that were originally slated for the Wii U/Previously planned console, shave off a large chunk of staff, swallow the losses caused by stockholder uneasiness + the transition to new unfamiliar machines...

I'd say there's certainly the potential for quality to slip when priorities have to be shuffled. There is no magic switch that will turn the focus, money, and personnel that Nintendo puts on hardware solely to game development overnight.

 

[Sponge]

If Nintendo were just a software company, I doubt some of their games would still be around. Especially Smash Brothers.

Nintendo in the console biz is good for everyone.

 

[sd28821]

Nintendo would be fully focused on their games and make better titles with powerful hardware (on multiple platforms). There would be no disgrace or bad message sent if they bowed out of the hardware business. Simply put, they would be a company that didn't want to compete with skyrocketing hardware costs and they would fully acknowledge that their budgets aren't as endless as Sony/Microsoft's.

I know their are some Nintendo fans out there who don't want Nintendo to turn third party because of companies like Sega and their quality control/budgets, but I seriously seriously seriously doubt Nintendo would go along the same route as Sega in those categories. They would still deliver the goods to the fans the way they want it and possibly better. Most people wouldn't hold it against them that they want to keep producing quality games on different platforms.

so basically every thing would be good or better because you think it will.

 

[EMT0]

Nintendo would be fully focused on their games and make better titles with powerful hardware (on multiple platforms). There would be no disgrace or bad message sent if they bowed out of the hardware business. Simply put, they would be a company that didn't want to compete with skyrocketing hardware costs and they would fully acknowledge that their budgets aren't as endless as Sony/Microsoft's.

I know their are some Nintendo fans out there who don't want Nintendo to turn third party because of companies like Sega and their quality control/budgets, but I seriously seriously seriously doubt Nintendo would go along the same route as Sega in those categories. They would still deliver the goods to the fans the way they want it and possibly better. Most people wouldn't hold it against them that they want to keep producing quality games on different platforms.

If you think shareholders wouldn't react to Nintendo dropping one of their two platforms for making money, I don't know what to tell you. Their finances WILL reflect on the consequences of dropping out of 'the race'. You're also telling us 'Trust me guys, this'll turn out juuuust fine! Despite past evidence to the contrary!' Sega had to change what kind of games they made after dropping the Dreamcast. Nintendo would be no exception because they too no longer have to create prestige titles and will much more readily axe games that they think will not be sufficiently profitable. Bayonetta 2? The Wonderful 101? SMTxFE? They're probably all non-existant in this scenario. If anything, Nintendo is more likely to drop out of the console business and stop putting games on consoles entirely; all their resources would be put into the 3DS and its inevitable successor. Why would Nintendo dilute their IPs, from their point of view?

so basically every thing would be good or better because you think it will.

And this brings up a good point. You've stated that you sorely want to have Nintendo's games on other platforms...why not stop and reconsider this dream? Because it appears that you're envisioning a best-case scenario where everything is peachy.

 

[Randolph Freelander]

There's just way too much at risk and far too little to gain to quit hardware after one bum console out for one year. We'll talk in a decade or so but, until then, Nintendo is just fine and they're here to stay. I can't imagine how some people are still so foolish to support this from a business perspective after gamecube to Wii and the 3DS turn around. Can Gaf please get over this?

A couple of things, not to agree or disagree with your overall argument, but Nintendo cannot sustain a decade of losses or even mediocre profitability. The company itself could survive it, but everything you know and love about that company might not.

Secondly, if Nintendo could be counted on to produce a GameCube-to-Wii type of transformation, they'd probably have skipped producing the GameCube and Wii U, don't you think? I mean, really, can we be honest here? Nintendo got the Wii correct, they nailed it. They deserve all the credit in the world for that product. That's one product, though, and its market is already gone, and immediately preceding it and following it, they've produced 2 duds. Fortunately for them, they've historically had a healthy handheld market to really carry the business through troubled home console waters. Unfortunately, even the handheld business is experiencing significant declines in both hardware and software, and so far appears to be on course to regress to near or below GBA performance levels.

 

[nssdigitalchumps]

If you think shareholders wouldn't react to Nintendo dropping one of their two platforms for making money, I don't know what to tell you. Their finances WILL reflect on the consequences of dropping out of 'the race'. You're also telling us 'Trust me guys, this'll turn out juuuust fine! Despite past evidence to the contrary!' Sega had to change what kind of games they made after dropping the Dreamcast. Nintendo would be no exception because they too no longer have to create prestige titles and will much more readily axe games that they think will not be sufficiently profitable.

So their projection of Wii U sales through March 2014 isn't going to make the shareholders react?

Again, prior to Sega, other companies have done just fine as third party. One hardware company gone bad doesn't mean a darn thing in the long run. Nintendo would not back off on quality one bit with their titles.

Sega of Japan is a horribly backwards company when it comes to decision-making. See the Sega Saturn and Dreamcast for details (those were both on Sega of Japan -- and NOT on Sega of America). Those decisions killed the Sega brand and it was dying long before they announced their third party shift.

 

[schwabdizzle]

If Nintendo went software only, i wonder if they could get away with selling their games for more than $60

 

[MrNyarlathotep]

A couple of things, not to agree or disagree with your overall argument, but Nintendo cannot sustain a decade of losses or even mediocre profitability. The company itself could survive it, but everything you know and love about that company might not.

Secondly, if Nintendo could be counted on to produce a GameCube-to-Wii type of transformation, they'd probably have skipped producing the GameCube and Wii U, don't you think? I mean, really, can we be honest here? Nintendo got the Wii correct, they nailed it. They deserve all the credit in the world for that product. That's one product, though, and its market is already gone, and immediately preceding it and following it, they've produced 2 duds. Fortunately for them, they've historically had a healthy handheld market to really carry the business through troubled home console waters. Unfortunately, even the handheld business is experiencing significant declines in both hardware and software, and so far appears to be on course to regress to near or below GBA performance levels.

The immediate predecessor and successor of the Wii are the DS and the 3DS

 

[Randolph Freelander]

The immediate predecessor and successor of the Wii are the DS and the 3DS

Sorry champ, but no, those are not replacements in the same market. But the 3DS is dud-like, so at least there's that.

 

[MrNyarlathotep]

Sorry champ, but no, those are not replacements in the same market. But the 3DS is dud-like, so at least there's that.

They're not replacements in the market, but they are still hardware manufactured by nintendo in chronological order.
Its not like theres a "home" and "handheld" divisions to Nintendo that are entirely seperate.

Its also not like either the Ds or the 3Ds were ever a 'lock' to be successful.

 

[nssdigitalchumps]

so basically every thing would be good or better because you think it will.

No because Nintendo's strong point their entire video game life has been their first party titles. They have a strong, consistent pattern of producing kickass software (even before they had the NES).

Far more consistent than their hardware.

That is the reason why I'm confident they would do well. History shows, even at their very beginning during the arcade years, that they know how to make software better than anyone on the planet.

 

[nssdigitalchumps]

If Nintendo went software only, i wonder if they could get away with selling their games for more than $60

Probably, but they may not have to do it. Given the digital delivery of software these days, it cuts down on a lot of costs.

 

[sd28821]

No because Nintendo's strong point their entire video game life has been their first party titles. They have a strong, consistent pattern of producing kickass software (even before they had the NES).

Far more consistent than their hardware.

That is the reason why I'm confident they would do well. History shows, even at their very beginning during the arcade years, that they know how to make software better than anyone on the planet.

so again you have no fact s except what you believe

 

[nssdigitalchumps]

so again you have no fact s except what you believe

Give me a few days and I'll be happy to get numbers for you in regards to how they've done historically.

I understand that you have no argument and you present nothing but snide remarks about patterns over the last 30+ years that you obviously know nothing about. So, I don't know what you want to hear except that the patterns over Nintendo's lifetime show that it certainly survive if it went software only.

Let's turn this around, though. Nix Sega from your argument (because again, you can't compare Nintendo's decision-making to Sega's) and tell me why you don't think they can survive as a software only company.

Fire away, chief.

 

[Zinthar]

If you think shareholders wouldn't react to Nintendo dropping one of their two platforms for making money, I don't know what to tell you. Their finances WILL reflect on the consequences of dropping out of 'the race'. You're also telling us 'Trust me guys, this'll turn out juuuust fine! Despite past evidence to the contrary!' Sega had to change what kind of games they made after dropping the Dreamcast. Nintendo would be no exception because they too no longer have to create prestige titles and will much more readily axe games that they think will not be sufficiently profitable. Bayonetta 2? The Wonderful 101? SMTxFE? They're probably all non-existant in this scenario. If anything, Nintendo is more likely to drop out of the console business and stop putting games on consoles entirely; all their resources would be put into the 3DS and its inevitable successor. Why would Nintendo dilute their IPs, from their point of view?



And this brings up a good point. You've stated that you sorely want to have Nintendo's games on other platforms...why not stop and reconsider this dream? Because it appears that you're envisioning a best-case scenario where everything is peachy.

I don't think shareholders would be nearly as unhappy about the prospect of Nintendo dropping home consoles as you make it sound. The Wii U is the only thing holding the company back from making a rather large profit at the moment -- investors aren't pleased about that. In fact, the company's stock is down 80% from its high of $78/share in late 2007 to around $16/share today. That price reflects shareholders pessimism over the likelihood of Nintendo ever repeating the success (and profitability) of the Wii & DS days.

The opportunity cost of Nintendo remaining a home console platform holder requires consideration not only of the profitability of the Wii U, but also the software sales that Nintendo is foregoing by selling on only one platform. If the Wii U ends up becoming a complete disaster for the company and continues to track at half the sales of the Gamecube, it's possible that they'll never break even on the hardware side of the business, all the while foregoing billions of dollars in potential software sales.

There are plenty of arguments against Nintendo going third-party. But they are all premised upon their home console having some small degree of success financially, even if they are destined to be a distant third place.

We'll see how this unfolds next year. I think they're trying to stumble out of the fiscal year (which ends in March, IIRC) without dropping the price (because otherwise they'll have to book a loss on the inventory write-down and would likely have to warn they'll miss earnings forecasts). After that, they either will sell enough to just have a bad generation and live to fight another day (and hopefully come up with a better idea for the successor), or they try to reboot the Wii U into something different and cheaper, or shit completely spirals out of control. Should be interesting to see how they respond, if nothing else.

 

[sd28821]

Give me a few days and I'll be happy to get numbers for you in regards to how they've done historically.

I understand that you have no argument and you present nothing but snide remarks about patterns over the last 30+ years that you obviously know nothing about. So, I don't know what you want to hear except that the patterns over Nintendo's lifetime show that it certainly survive if it went software only.

Let's turn this around, though. Nix Sega from your argument (because again, you can't compare Nintendo's decision-making to Sega's) and tell me why you don't think they can survive as a software only company.

Fire away, chief.

So you created another argument that you are having with your self since i never stated they could not be successful as a third party but that they are in a better position remaining first party due to the advantages it has over third party which have been bought up numerous times in this thread.

 

[Opinionatedfish]

I remember Nintendo being just a Software company back in the days of Coleco and Atari.

That worked out so well for them that they ended up just making their own hardware for their software instead of dealing with other companies dumb choices.

Also, it gives them more freedom to develop games based on upcoming hardware and discontinue game development on older hardware at their own pace. Nintendo's policies are more geared toward developers than toward consumers.