Nintendo isn't going to die. Their profit margin on games is a lot higher than Microsoft and Sony's because the development costs for their games are a lot less. They also have huge franchises like Mario and Pokemon. Nintendo doesn't need to be king of the hill, they just need to keep pushing the envelope because there are always early adopters who will buy every gimmicky game. And if somehow that gimmicky game becomes a hit, then they have a huge competitive advantage over Microsoft and Sony since it would take awhile for the other two companies to come up with something similar. Rokkit is right, there really is no difference between the PS3 and the 360, you don't really get a better gaming experience, you just get prettier pictures and sexier sounds. The Revolution, is hopefully something totally different. Here's a page with charts and graphs and pretty pictures. http://nintendoinsider.com/site/EEEFylpkElFffmiBlr.php
No. They see power, big money (expenditures) and flash as a means to an end. They aren't about power, big money and flash. They're about conquering market share and they use power, big money and flash to get it. That's generally how things work: you lose money... you continue to lose money... the end comes. And no, they didn't die different deaths (welll... Sega did - they were never on top). Atari was profitable and led the market. Almost. After 40+ plus years of profitability, they posted their first loss in company history in the first half of fiscal year 2004. Selling a product that people enjoy is nice. Selling a product that people prefer is 100 times better. And I'm not necessarily saying that Nintendo should be a cookie cutter of the 360/PS3. Innovation can be good, and could put them back on top. But they should rebuild at the core level of their product and be innovative from there, instead of just building a goofy controller. That's what they did with the Nintendo 64. It was innovative. It was profitable. And it led the industry. Nintendo was on top. Their NES was the leader, with Sega putting up the fight. And Nintendo continued to dominate the market as they came out with the Super NES, and then the Nintendo 64. But then Sony and MS came around and built a product and marketing strategy that successfully toppled Nintendo. If Nintendo wants to survive, they must find a product/marketing strategy that will regain what they've lost. Having an identity is good. But it's not good enough to survive in the VG console market. IMHO, this is the last console Nintendo will be delivering (unless they completely restructure their product/marketing strategy). They're on a fasttrack to being just another page in VG history. Maybe I'm wrong. Time will tell.
Sega, Atari; they all died very different kind of deaths. They were losing money before their end came. Nintendo has yet to lose money. And they are putting out product that people enjoy. If they just start becoming another cookie cutter of the other two they will likely 1) not be very good at it and 2) lose the large, loyal customer base they have. True but how much of their profit has been from their consoles/games since the N64? It's my opinion that they are making most of their money off of their portable (i.e. Game Boy) dept. I personally think that if Nintendo put all of it's money into developing portable systems and scrapping home consoles altogether, it would be a better move. The Revolution? It's already doing something right with the Virtual Console. The controller is different, but this is the company that already gave us analog sticks, rumble capabilities, 'connectivity' (which Sony is already starting to copy with the PSP) and other innovations that became mainstream. It'll be interesting to see what they have in store. It's nice to be the first and to be innovative, but if you don't have the games for said peripherals, it wouldn't matter. Nintendo has put out innovative things but for every rumble pak there's a super scope six..for every revolutionary controller there was the SNES mouse...you get my point. They need games for these peripherals to be even remotely successful. Nintendo isn't going to die. Their profit margin on games is a lot higher than Microsoft and Sony's because the development costs for their games are a lot less. They also have huge franchises like Mario and Pokemon. Nintendo doesn't need to be king of the hill, they just need to keep pushing the envelope because there are always early adopters who will buy every gimmicky game. And if somehow that gimmicky game becomes a hit, then they have a huge competitive advantage over Microsoft and Sony since it would take awhile for the other two companies to come up with something similar. If that's Nintendo's frame of mind, they are essentially playing Russian Roulette every time their next generation console comes out. Praying that a 'gimmicky' game would give them a "huge competitive advantage" over MS and Sony does not work. Pokemon was HUGE but you didn't see Sony fold. No they rolled out with Final Fantasy VII, Metal Gear Solid, Chrono Cross, Resident Evil 2, etc. Instead of one monster, they compiled an impressive library. Rokkit is right, there really is no difference between the PS3 and the 360, you don't really get a better gaming experience, you just get prettier pictures and sexier sounds. The Revolution, is hopefully something totally different. Here's a page with charts and graphs and pretty pictures. But isn't graphics one of the top 3 reasons for buying a new system? Call me a Sony fanboy if you want but I've played my fair share of games and went through my fair share of systems to know that Nintendo needs to reprioritize and shift it's gears away from the console market..even if it's just for a few years. MS and Sony are basically battling for supremacy with $$$$ backing them up. Nintendo should just focus on the portable gaming dept and wait for the dust to settle in the 'console wars'.
Actually the Apple comparison is right on the money ~ Nintendo can have a long happy life in the industry with a small market share. They have their cash cow (gameboy/DS = Ipod) -- so they have some security to take chances. The video game industry has exploded since Nintendo was on top so there is plenty of room for for a 3rd (or 4th, 5th, etc) fiddle. Heck, even Atari is making a comeback.
The question that no one has attempted to answer is: "Why does the console market have to be winner-take-all?" How much hype did the Gamecube really have in comparison to PS2 and XBox? Even with that lack, didn't the GC still end up neck-and-neck with XBox? Now, I'm going to agree with droxford already and say that yes, I doubt that happens again. The XBox will be a solid #2 if not #1, depending on how things play out. I don't see Revolution being a contender for market leader, but there's a ways to go for sure. But, if Nintendo doesn't stagnate by just doing Mario + Zelda + Pokemon, then I think they'll continue to serve as the second/third console in the house, or even as the kid's gaming machine. If they want that and have a financial way to pull it off, cool. And, I guess the other thing to point out... What if XBox remains lackluster in the global market? What if Nintendo becomes so much of a niche player that it only survives in Japan? I like questions.
I'd agree with you on the handhelds. But I'm specifically speaking about the consoles. Atari is making their comeback with games, not consoles. And I'd agree more with steddinotayto and his ideas of Nintendo's position and future.
The question that no one has attempted to answer is: "Why does the console market have to be winner-take-all?" Answering a question with another question: When HASN'T it been about winner-take-all? Every generation of videogame systems always been about competition and one-bettering each other. No company comes into the video game market to just 'be a player' or 'survive'. They come in for the sole purpose of trying to be #1 and to take a big piece of that billion-dollar industry pie. How much hype did the Gamecube really have in comparison to PS2 and XBox? Even with that lack, didn't the GC still end up neck-and-neck with XBox? There was no hype for Gamecube. Luigi's Mansion as a launch title?! C'mon. As for Gamecube running neck and neck with XBox...I think it has to do with Nintendo going back to it's core characters (Mario, Samus, etc) and XBox's lack of core characters and great titles But, if Nintendo doesn't stagnate by just doing Mario + Zelda + Pokemon, then I think they'll continue to serve as the second/third console in the house, or even as the kid's gaming machine. If they want that and have a financial way to pull it off, cool. They HAVE stagnated. Every time a next generation console comes out from Nintendo, gamers always speculate when Metroid, Zelda, or Mario will come up. They haven't blown away anyone with any other titles. Aside from Pokemon, all their other ventures (i.e. games like Nintendogs and Pikmin) are good but they're not marketedly good. There's no staying power with those games. And, I guess the other thing to point out... What if XBox remains lackluster in the global market? What if Nintendo becomes so much of a niche player that it only survives in Japan? I think that XBox will be more successful this time around. They've planted the seeds and they're going to be up there. Time will tell if they can bring home the games that Sony luckily had on their systems (GTA series, Metal Gear series, FF series, etc). I think when they have more of those 'exclusive' games, they'll definitely be a stronger console
if a game were to combine both a dpad with a dance mat for its control, now that would be revolutionary.
Woo-hoo! A debate about Nintendo's future. These are always fun. You had some decent points until you mentioned that article. Funny how he combines handheld sales with console sales, despite Sony (at the time) and MS only had consoles to sell. Plus, he picked a part of the year where there were extreme shortages for PS2's and Xbox's. That was around the time Sony started trying to sell off all the old PS2's in preparation for the PStwo, although they screwed up a bit with shipping along the way. Of course, since then, they've sold like 20+ million PStwo's alone (more than the Gamecube total), and probably made at least ~$50 a piece on just the hardware. I think the Xbox started to pull away from the GC as well; it really isn't too close to call between those two anymore, especially since MS and Nintendo will probably quit supporting the Xbox/GC for much longer. In the end, MS will finish second and Nintendo will be third when it comes to console sales for this generation. Of course, if we throw in handhelds, operating systems, TV's, mp3 players, etc., the numbers might be a little different. Just in case anyone's curious, here are some profitability numbers from the big 3 up until the 1st fiscal quarter of 2006 (end of March 05 for Sony and Nintendo, end of June 05 for MS): Code: - Year Sony Nintendo Microsoft 1998 974,000,000 629,000,000 1999 1,130,000,000 645,000,000 2000 730,000,000 421,000,000 2001 -409,000,000 726,000,000 2002 623,000,000 800,000,000 -750,000,000 2003 939,000,000 560,000,000 -1,191,000,000 2004 650,000,000 316,000,000 -1,215,000,000 2005 384,000,000 777,000,000 -391,000,000 2006 -54,000,000 33,400,000 [b]Totals 4,967,000,000 4,907,400,000 -3,547,000,000[/b] I know MS includes the Xbox business with their H&E division, so their numbers are actually a little worse when it comes to the Xbox business by itself. I think Nintendo might also include some other things as well (think Pokemon stuff that aren't games, like cards and merchandise I guess). Sony's should be fairly accurate of just the gaming business since they all are under the one division (SCE). Besides that, I don't really have much to offer to this whole "where will Nintendo be in 6 years?" debate. I know they're taking a big risk with the Revolution, and unlike previous years, they won't have ~100% of the handheld market to lean on. Of course, as said, Nintendo may not need to do too much to stay profitable next-gen, and the loss of marketshare may not be too bad in the handheld business if they can still sell tons of DS's (which they're doing very well at the moment). I'm in a wait-and-see situation with them, unlike the consoles from MS and Sony. Although as mentioned, I would be interested in seeing what would happen if Nintendo just stuck with the handheld business...especially if they also continued to make games for consoles. Maybe someone could finally take down EA.
Hey RC Something ain't right. Nintendo posted a loss in the first half of 2004. (link). How could they have possibly turned that around in 6 months to a profit of 316,000,000 (numbers you indicated)?
At 1AM in the morning, I'm not sure how to answer your question exactly. Could be something to do with the various ways to describe profitability/losses. I just took those numbers from a thread over at GAF: http://www.ga-forum.com/showthread.php?t=57027&page=1&pp=50 If you want to look into it more, here are some PDF files of some financial reports from Nintendo that I believe the numbers were based off of: http://www.nintendo.co.jp/kessan/annual0403e.pdf http://www.nintendo.co.jp/kessan/annual0303e.pdf http://www.nintendo.co.jp/kessan/annual0203.pdf I might try to look it over some later today (when I'm less tired) to see if I can offer an explanation for the difference in numbers.
We are pretty much agreeing here. They are 'about' it in that very sense; it is what drives (hypes) the market to buy their consoles. Most powerful, best graphics, most elaborate 'trailer', etc. That is the game the big two are playing; and, IMO, it's an angle Nintendo shouldn't bother with. Again, exactly my point. Nintendo doesn't lose money. They haven't. They don't now. A first-half of one year may be debatable (particularly since, most of what I've seen echoes what RC put up), but they don't 'continue to lose money'. So neither Sega nor Atari is a valid comparison. And it's not logical to not include handhelds. That's still Nintendo's money. And they are making huge gobs of it from those. That's still profit. Better yet, IIRC, the console doesn't lose money for them either. Unlike Sony or Microsoft, from what I understand Nintendo doesn't sell the Gamecube at a loss. Or if they do, it is considerably smaller. So they don't even lose money there either. They aren't suffering, like a lot of people want folks to believe. Who's to say what people prefer? Who prefers? You think the people that prefer the XBOX or Playstation now (conversly the people who will jump into a Nintendo thread with "Nintendo Sucks!" and jump back out) are suddenly going to jump ship because Nintendo is trying to play that game? What are Nintendo's strengths? Their innovation, and their established franchises/characters. And none of that falls in line with the approach Sony/MS takes. Donkey Kong doesn't jive with Grand Theft Auto. If they try and take that turn, they lose the audience they do have. And their market share. And their pofitability. The N64, BTW, is somewhat considered a flop. And it began Nintendo's downfall. Not exactly a good example to use. They are surviving. They have found a strategy that works. Is it good enough to 'conquer' the market? No. But it's also making them money, and has created a market for their product. Their identity is the very thing that gives them a place in this market. Well, I could be too. They just aren't 'dying' currently, and if they continue to play to their strengths I see no reason they will in the future.
It doesn't matter. It's still all profit. And if they can keep doing that, and keep creating good content that many people enjoy, I see that as a strength. I think they have the games. They have some of the most recognizable content in the industry. You're thinking about their innovations, however, the wrong way, IMO. Because when they create something that works, it spreads throughout the industry. IOW, for every super scope (which actually did evolve into something all the systems use now) you have a huge industry-wide innovation like rumble tech. For every SNES mouse, you have something that changed the face of gaming, like the analog. Looking at the failures they've had when trying to be innovative, IMO, is hardly overmatched by the impacts they've had on the industry. Again, they aren't struggling. A lot of that would hold more weight if they were, like Sega, losing money continuously. But they are not. They aren't 'trying' to carve out a market. They have. And Final Fantasy, Metal Gear, Resident Evil...where did those games first come see the light of day? They will always be around; they don't exist because of the system. They exist, and will find a system. Nintendo isn't going to blow loads of money in order to play that part in the console wars. MS has lost a whole lot just to try and establish their market in the US vs. the Playstation. And they might not even make much headway this generation (look at how many people are saying - even though there isn't a whole lot of hard info out there - that they are 'going to wait for PS3'). There's no way it's a good idea for Nintendo to try and do the same thing. You say you're a Sony fanboy? Do you have an XBOX? Would you pick an XBOX over your playstation? If no, then I think you are like a lot of folks who have their preference and stick to it. With the huge machine that MS has, and the loads of cash they are willing to lose and have lost to do it, there are still plenty of folks who still prefer Playstation. Why? XBOX had better graphics. XBOX had good games. It still didn't matter. If MS couldn't make that shift, you honestly belieive it's in Nintendo's best interest to try and play that same game? And yet they're still profitable, and still make consoles, and are doing fine. Why change that?
Nintendo has been making a profit and their DS is picking up in Japan despite the PSP. But this tired ass strip tease of secrets is getting corny and stupid. Plus the possibility that they won't release system specs might mean gamers aren't getting the entire picture here. The Cube's graphics are impressive, so if they can't boost graphics way above Resident Evil 4 for the Revolution and won't even support High Definition resolutions, then I want to know what I'm getting into. A conservative number should be at 250 or less. Preorder online? Where did you get that from? Does Nintendo deliver it themselves or something? By the time you buy all the gimmicky gadgets for 4 people, you're down another 100 without even looking at the price of their games.
Some people here sure seem to be wishing for Nintendo to flop with Revolution so they can leave the console market for good. With a billion dollar gaming industry, I think there's room for three systems. And it'll be a sad day (for me at least) when and if Nintendo leaves the home console market, because they have continued to be creative innovators who put out a different product than the other big boys.
Well, now that I finally checked out the annual report, I do indeed see that Nintendo made a net income of $316,134,000 (page 34 of the 0403 report). The rest of the numbers show up as well from what I can see, so the numbers I posted should be accurate in showing Nintendo's net income over the last couple of years. That said, while I was checking this out, I did see some people mention Nintendo's first losses ever occurring in 2003, so that seems accurate as well. Not to mention the fact that GS had articles about it as well: http://www.gamespot.com/news/6076336.html?q=Nintendo finance http://www.gamespot.com/news/6083469.html?q=Nintendo finance My memory is a little sketchy at the moment, but it sounds like this was the time when the GC went to $99. Since that wasn't a factor in until the next half (not to mention the currency exchange issues they had in the first half), that's probably why they went from slightly in the red to a couple hundred million over at the end of the year. Keep in mind that they still predicted to make something like $540 million after posting this loss.
I'm guessing most people (myself included) would be curious in seeing how much Nintendo makes in the console business compared to what they make from selling handhelds and Pokemon stuff (similar to how I want to see how much MS really lost on the Xbox business by itself). As with others, I'm under the impression that they make most of their money not from the console market but from the other two areas. I'm very curious to see how Nintendo's numbers will be affected in the next 5-6 years now that they have competition in the handheld market. Maybe it won't really have any effect at all and Nintendo proves that they make a lot of money in all three areas as opposed to just one or two. Or maybe not. FWIW, you are right about Nintendo not losing money on their hardware. Generally, they make money off of the hardware as well as the software, outside of hardware launches and price cuts; even then, Nintendo usually breaks about even or suffers just a slight loss on each console/handheld sold. Of course, when you're also charging like $99 for a handheld that cost you like ~$40 to make, you can afford to do that. Personally, that's one thing I don't like about Nintendo from a consumer standpoint, but hey, it seems to have worked for them so far.
I honestly think Nintendo is going towards the 'other' route or a 'different gameplan' because they know they don't have the financial and developmental means to compete with Sony and MS. This is pretty much a given. They're essentially inventing peripherals and what not just to BE in the mix. Criticize me all you want but I have been a Nintendo supporter even when everyone I knew had a Genesis and I was the rare one w/ the SNES. But time's different now: they basically alienated themselves when they did not use CD propriety for the N64. And ever since, I think they forced themselves to create new things and what not. Has it paid off? The numbers don't lie so yes it has. But could it have been better? Absolutely. Saying that you make $300 million a year sounds good but knowing that you could have made twice as much does bring some of the shine off of that $300 mil. Of course they have the most recognizable characters to date. We all grew up with those characters. But sometimes you just have to wonder "what else is there?". They had some great things going when they still had Rare under their roof (Perfect Dark, all those colorful and zany characters, etc). Nintendo has been innovative I'll give them that much but are those peripherals making gamers buy more games to use the peripherals? They're called 'accesories' for a reason. If they were just after being in the Gaming History Lore or Legend, then sure everything that they've done up until NES has put them in that realm. I have never bought a game because of an add-on accesory and I think it's been the other way around (capcom fighting stick for Street Fighter). What I don't get is that Nintendo in recent years tries to play the 'we're different' card. "We're different than Playstation" "We're different than XBox" "Our demographics are different" "Our games are different". Okay fine. But why are you always trying to put yourself in a race with Sony and MS? Nintendo didn't necessarily had to develop a next generation console to be released around the same time as the others. IMO, I think they should have developed and released a next-gen system BEFORE Sony and MS started their development. You want to cater to a niche market, wouldn't you want to separate yourselves from stiff competition? I just think Nintendo has a "Don't forget about me!" complex right now. As for the games, of course they will find a system..maybe even a system that gives the developing company a bigger audience/customer/fanbase? A system that has the "best" graphics and is reasonably easy to program? Games will jump from console to console I'll agree with that but has any of the "big" series jumped to Gamecube aside from Resident Evil? Almost everyone jumped shipped with the N64. Hey I'll admit it: After NES and SNES, I went with the original playstation and then went to the PS2. Why? Because Sony had the biggest library of games. Were most of them crap? Sure, same as SNES (you can't tell me Shaq Fu isn't crap). XBox might have good games but Playstation had better games. And I hope you could acknowledge that much. If you can, then you know why people stuck with playstation. Do people tend to stick with what works? Of course, it's human nature. I am confident enough to say that if PS3 fails miserably, I have no problem whatsoever buying an 360 or a Revolution if that's where the better games (and the games I want to play) are at. Because I see a lot more potential in what Nintendo can do if they concentrated on the portable market. They already dominate it as it is and that's including the fact that they focus on a home console as well. I just want to see Nintendo put all their effort in portable gaming. I think it's an inevitable route.
My kids (10 & 14) have gotten an amazing amount of gametime out of the DS. I thought the WiFi feature would end up being more of a gimmick than anything really useful, but they use it all the time. My 14 year old son is trying to decide if he wants to spend his bucks on a 360, or wait for the PS3, but he's still buying games for the DS and playing on it a lot.
