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Lets talk about Nintendo going 3rd party (from an economics perspective)

aquamarine's sort of going out of her way to present a fairly well-reasoned argument. you're basically shooting it down with little to back it up. i think that sucks.

Companies that are losing money (like Nintendo) layoff employees all the time. Sony, for example, just got rid of its PC business. The TV business is likely next. Hewlett-Packard has been firing employees for years. Yahoo!, Bank of America, BlackBerry, the list goes on and on and on.

In fact, it's actually the prudent measure. Let's say Nintendo makes another console and it bombs. The QoL platform doesn't take off. Android gaming emerges as a viable force and destroys the market for the 3DS. Nintendo keeps bleeding money and its cash pile dries up. What happens then? Management is fired, a new team comes in. They may liquidate the company or sell off some of its IP. Suddenly the notion of a Nintendo game made by Nintendo game creators is long dead -- either on Nintendo's hardware or anyone else's.

I'm not saying it's going to happen, or that Nintendo needs to go third party. But you can't just dismiss the argument by saying, "Nintendo is a well-established company and this is how they've always done things so this is how they should always do things." That's nonsense.

The only reason Nintendo should keep making hardware is because management believes it will produce the most profits for the company now and/or in the future.
 
circling the drain is something reserved for a company like thq in its final moments. sony may be in some financial danger, but the situation isn't that dire.

sony's software divisions have never produced the string of supersellers that nintendo and even microsoft are capable of, and they have a lot of them. it makes sense to cut certain teams, although i certainly wouldn't have made the same choices they did. i think management is a huge issue for their game studios.

Yeah Fitch recently downgraded Sony's current credit rating to Ba1, the highest tier for Non-investment grade corporate bonds.

According to Fitch: "The obligor (Sony) is LESS VULNERABLE in the near term than other lower-rated obligors. However, it faces major ongoing uncertainties and exposure to adverse business, financial, or economic conditions which could lead to the obligor's inadequate capacity to meet its financial commitments."
 
They're losing money on the Wii U hardware.
They're losing money on Wii U, but I think it'd be far better for them if they could make hardware from which they could make profit.

The thing about the hardware isn't only the fact that it usually makes Nintendo huge profits. It's also the fact that it gives them massive revenue. While that revenue without profit is kind of a bad thing, if it can be turned to make profit, it's a really good thing. The more revenue you have the more room you have to operate, because you can do bigger investments and thus you can get much better stuff.

There might come a time for Nintendo to really consider about going 3rd party, but it's not yet. As has been pointed out, It's not a flip of a switch they can do all of a sudden, so it's better to see if they can be successful with new hardware. Honestly I think they are becoming sort of irrelevant in hardware space, but they should still try.
 
it sounds like you know more than you believe. who is it? snk? it's snk, isn't it.

I personally believe, for reasons I stated in another topic, that Sony will bring their PS Now service to tablets, mobile devices and even to smart TVs. It's a great business decision for a company that's in very serious financial trouble. I want to make it clear that I'm not just talking about tech made by Sony, but also Apple and Android hardware.

I apologize for dragging this topic off course. Please continue with the Nintendo discussion and forgive my off topic remarks.

Personally I would love to see Nintendo sell just NES games on mobile. People are already stealing them and playing them for free on their mobile devices. Sell them for a $1 a pop and they'll make a fortune. I'm sure this idea has been suggested many times before now.
 
I personally believe, for reasons I stated in another topic, that Sony will bring their PS Now service to tablets, mobile devices and even to smart TVs. It's a great business decision for a company that's in very serious financial trouble.

Sony's management has stated explicitly that they will do this.
 
Companies that are losing money (like Nintendo) layoff employees all the time. Sony, for example, just got rid of its PC business. The TV business is likely next. Hewlett-Packard has been firing employees for years. Yahoo!, Bank of America, BlackBerry, the list goes on and on and on.

In fact, it's actually the prudent measure. Let's say Nintendo makes another console and it bombs. The QoL platform doesn't take off. Android gaming emerges as a viable force and destroys the market for the 3DS. Nintendo keeps bleeding money and its cash pile dries up. What happens then? Management is fired, a new team comes in. They may liquidate the company or sell off some of its IP. Suddenly the notion of a Nintendo game made by Nintendo game creators is long dead -- either on Nintendo's hardware or anyone else's.

I'm not saying it's going to happen, or that Nintendo needs to go third party. But you can't just dismiss the argument by saying, "Nintendo is a well-established company and this is how they've always done things so this is how they should always do things." That's nonsense.

The only reason Nintendo should keep making hardware is because management believes it will produce the most profits for the company now and/or in the future.
That's a lot of text and hypotheticals to just say "Nintendo should do whatever maximizes profit growth." It doesn't mean a lot when the discussion is about what direction will be profitable.

Immediately dropping the console side of the business will not maximize profit growth. Everything we know about the company indicates it will be a costly gamble that at the same time abandons areas of potential growth.
 
Companies that are losing money (like Nintendo) layoff employees all the time. Sony, for example, just got rid of its PC business. The TV business is likely next. Hewlett-Packard has been firing employees for years. Yahoo!, Bank of America, BlackBerry, the list goes on and on and on.

In fact, it's actually the prudent measure. Let's say Nintendo makes another console and it bombs. The QoL platform doesn't take off. Android gaming emerges as a viable force and destroys the market for the 3DS. Nintendo keeps bleeding money and its cash pile dries up. What happens then? Management is fired, a new team comes in. They may liquidate the company or sell off some of its IP. Suddenly the notion of a Nintendo game made by Nintendo game creators is long dead -- either on Nintendo's hardware or anyone else's.

I'm not saying it's going to happen, or that Nintendo needs to go third party. But you can't just dismiss the argument by saying, "Nintendo is a well-established company and this is how they've always done things so this is how they should always do things." That's nonsense.

The only reason Nintendo should keep making hardware is because management believes it will produce the most profits for the company now and/or in the future.

if all of those situations pan out like you predict, then nintendo ought to have some sort of contingency plan. but it's a lot of hypothetical situations to all line up in a row.

i don't think nintendo will return to the glory days of the wii/ds, but i want to point out that 10 years ago, nintendo was expected to lose their handheld lifeblood to sony's psp, and that they were totally irrelevant in the console space. the point is, they've been here before. and if they had closed up shop in the face of overwhelming competition, they would have never made the ds or wii at all.
 
At least this talk is not polluting another thread for once :/

Seriously the thread was over at this post :
Nintendo revenue breakdown (April 1st, 2012 - March 31st, 2013):

635.422 billion JPY - Net Sales

227.224 billion JPY (35.8%) - DS + 3DS Hardware sales - Revenue stream lost from going third party
136.852 billion JPY (21.5%) - Wii + Wii U Hardware sales - Revenue stream lost from going third party
32.270 billion JPY (5.1%) - Other Hardware sales - Revenue stream lost from going third party

Total amount of revenue streams lost by going third party:
396.347 billion JPY (62.4%)



144.588 billion JPY (22.8%) - DS + 3DS Software sales - Revenue stream modified from going third party
77.156 billion JPY (12.1%) - Wii + Wii U Software sales - Revenue stream modified from going third party
15.793 billion JPY (2.5%) - Content Income / Other Software sales - Revenue stream modified from going third party
1.535 billion JPY (0.2%) - Playing cards, Karuta, Misc. Income

Cost of sales: 495.068 billion JPY (77.9%)
Gross Profit (less SG&A): 140.354 billion JPY

Yeah that revenue could be partially made up through mobile...third-party exclusivity deals...stuff like that. But the question is whether that would be enough to offset the loss in revenue streams / whether the modified and new revenue streams would lead to greater profitability.

But for some reasons this talk just won't die.
It's like the Wii HD talk of before, only even dumber.

I don't feel like doing more than quote timetokill who summed the situation quite clearly
From an economics perspective, much like from nearly every other perspective, Nintendo going third-party doesn't make any sense. They lose revenue, they lose control over their software, they lose control over their ecosystem. They would have to shed a massive amount of their workforce, and so on. Going third-party isn't a strategy to grow a company, it's to salvage a dying one. Nintendo isn't dying.

The only perspective it makes sense from is a fanboy perspective. I haven't heard a rational argument as for why, especially the completely absurd ones like "they could keep making handhelds and just put their big games on my PS4!"
 
Are you seriously suggesting that Nintendo go 3rd party and immediately remain exclusive to one console again? What the hell would be the point? So they're only on one console, but this time they have to pay Sony royalties and miss out on the obvious benefits of selling their own hardware.

If they are completely multiplat then maybe there is a case to be made. I feel like they would wreck the charts on Steam especially.

This is what I was trying to get at.

Hell, if Nintendo followed my advice of keeping handhelds but going third party for home consoles, Mario and Zelda could be on PS4/XBO/PC whereas Metroid and Star Fox could still show up on the 3DS with smaller budgets. Make them eShop games even.

If Nintendo still has the 3DS around why would they bother wasting any resources developing games for other non-Nintendo consoles. They would put their flagships Marios and Zeldas on the 3DS/successor.
 
What difference does that make?



And what if their next system(s) go on to sell like the Wii/DS did? Even if you think it's unlikely, it's still a possibility.

3rd party comes from the time where Nintendo would become a 3rd party to Sony and MS. These days they would develop for PC/Steam, Android, iOS, PS4, Xbone and so on. 3rd party seems wrong to me then.

To your second point, look at the downward trend of Nintendo hardware since the NES, with only Wii and DS as outliers. Seems very unlikely. And the longer they hope and wait, the less relevant Nintendo becomes to the current youth.
 
The top selling PS games include a bunch of Call of Dutys, Uncharted, God of War, Gran Turismo, Killzone, on Xbox it's Halo, COD, Gears, Forza, Fifa.

It's first person shooters, third person shooters, Racing Sims and Football. I can't see the user base on those consoles taking to Nintendo games. Economically I think it would be a bad move.
 
I'd say that the better thing for them would be (as they are, probably) going create a "virtual console" (not the actual one) where developers (including their teams) can develop for exploiting shared tools that could create games playable from both the handheld and the home console (shared OS, shared engines, shared interfaces and so on). this would help optimizing the development efforts, would create a unique "nintendo" environment for both developers and costumers, would even offer advantages in owning both hw products with cross-save/buy/play and so on.
 
Where were you when Sony was losing a massive amount of money per PS3 and almost every single hardware department they own? Nintendo barely losing money on one home console is not enough to take them down, they could go a very long time losing a little bit of money.

Lets do some research people.
But Sony's problem wasn't systemic, and consoles still had another generation to go at least. Nintendo will never produce another hit home console. The real issue becomes if being handheld only isn't enough portfolio diversity for a company their size, personally I think it is, but the shareholders/board may not.

It's not just Nintendo, all three ten years from now will be radically different, or dead.
 
But Sony's problem wasn't systemic, and consoles still had another generation to go at least.

yes it was. the ps3 was pretty much created in the image of the ps2, except it was more expensive, harder to develop for, and was a trojan horse for something few wanted instead of dvds. sony spent the entire generation trying to correct what went wrong. the ps4 is pretty much the antithesis of what the ps2 and ps3 were, at least in terms of what developers see in it, and how sony marketed it.

i agree with your point being that consoles have a sort of expiration date as an idea. that is, unless, if someone can come up with an idea for why they can stick around as-is, after everyone begins moving towards accepting entertainment as a service instead of as a product.
 
yes it was. the ps3 was pretty much created in the image of the ps2, except it was more expensive, harder to develop for, and was a trojan horse for something few wanted instead of dvds. sony spent the entire generation trying to correct what went wrong. the ps4 is pretty much the antithesis of what the ps2 and ps3 were, at least in terms of what developers see in it, and how sony marketed it.
I meant systemic as in existing within the market's infrastructure, not the literal console itself.
 
"Going third-party" to Sony or MS systems isn't a solution for Nintendo problem.
The questions the company need to answer are:
1) In what business does Nintendo see themselves in? What is their core competencies they can leverage?
2) What's the definition of videogame?

Because if the answers revolves strictly around the traditional videogame business as we have known in the past decades then the company is destined to shrink no matter for what hardware they develop for.

Losing the hardware division just means Nintendo choose to walk down the path of irrelevance.
 
If Nintendo still has the 3DS around why would they bother wasting any resources developing games for other non-Nintendo consoles. They would put their flagships Marios and Zeldas on the 3DS/successor.
Because 3DS only has Gamecube graphics. It would be much more easier for Nintendo to convert whatever Wii U projects over to the PS4/XBO/PC than having to scrap everything entirely because 3DS can't handle it.

And of course, the audience for buying games is far bigger on those 3 platforms. Nintendo would look weird ignoring what could one day be a 100 million installbase when all they have to do is release Mario.

Edit: There's nothing stopping them from having 2 flagship Marios or Zeldas by the way.
 
I do not buy the argument that Anihawk is presenting regarding difficulties of software migration to other platforms like PS4 or Xbox One. If anything, the well developed ecosystem of these platforms may make it easier for Nintendo to add certain features to their games, since they're already much more mature and standardized than what Nintendo is currently offering. Plenty of third party publishers are able to release simultaneously on multiple platforms without much difficulty.

At this point, I only see potential upside from Nintendo adopting a third party software stance across the entire industry (mobile, consoles, etc). They currently make no money on hardware, and their software sales are being seriously inhibited by the platform they are tethered to. Third party software sales are also practically non-existent.

I do not envision any blue ocean strategy for Nintendo to capitalize on either. Their QoL products will likely be a failure if the latest Wii Fit is anything to go by, and that market is already quite competitive.
 
I do not buy the argument that Anihawk is presenting regarding difficulties of software migration to other platforms like PS4 or Xbox One. If anything, the well developed ecosystem of these platforms may make it easier for Nintendo to add certain features to their games, since they're already much more mature and standardized than what Nintendo is currently offering. Plenty of third party publishers are able to release simultaneously on multiple platforms without much difficulty.

the immediate downside is that the threshold for profitability goes up immensely. in order to make the same amount of money they were before, they would need to sell around 50% more each time (assuming nintendo currently profits 75% off each game at the moment). it's also hard to argue for a fact that the nintendo fanbase is secretly on the ps4 and xbox one, or that that audience has been yearning for nintendo's games for years and would yield the results nintendo would need.

and don't forget the graveyard left by last generation. getting everyone up to speed took its toll, and there's been fewer and fewer in the way of the kinds of games nintendo makes. there would absolutely be a brutal period where nintendo developers struggle to learn brand new hardware and pipelines. it would be like preparing for a new console, which takes them usually a good 3 years before we ever see results.

moreover, if you have guys who know how to make hardware, why give them all the axe, when you can have them use their strengths to continue in r&d and hopefully bring in more revenue? it doesn't make sense to panic and cut off a resource.

At this point, I only see potential upside from Nintendo adopting a third party software stance across the entire industry (mobile, consoles, etc). They currently make no money on hardware, and their software sales are being seriously inhibited by the platform they are tethered to. Third party software sales are also practically non-existent.

it's okay if you forgot about nintendo's handheld division, but if you think nintendo should divert an unholy amount of resources to a third-party software development model on the console side while also making handheld games, i don't understand the thought process. at all.

I do not envision any blue ocean strategy for Nintendo to capitalize on either. Their QoL products will likely be a failure if the latest Wii Fit is anything to go by, and that market is already quite competitive.

nintendo will get what they put into it. i think wii fit u and wii sports club are poor examples of games heavily promoted by nintendo to win back their old new audience. beyond being tied to unappealing hardware, neither was advertised much at all. nothing in the way of television commercials or talk show appearances. it's a better product than the first two wii fits, but the general public doesn't know about it. it may have been sent to die after they figured out their qol future, in order not to split that fanbase, or they just had x amount of marketing dollars and could only divert so much cash to one thing. or both.
 
Going third party would be a last resort, if they even bother at all. It wouldn't surprise me if they bury their franchises and focus on QOL out of pride. Having said that, they could just double down on handheld games and release up-rezzed ports to the 8th or 9th gen consoles. They would have to substantially downsize.
 
For a developer to go from PS3/360 to PS4/XBO, it has to be absolute heaven. And I'm not saying this because I like those consoles (although part of it is) but because it has to do with this.

The problem with the PS3/360 era was developers/publishers probably went in with the expectation of it being another PS2 when unfortunately, dev cost and the shift in market changed that.

PS4/XBO gen isn't like that. Publishers should now know what the market is like before going crazy with mid tier or AAA games.

In addition, there's the hardware. Developers got what they wanted now and it's the memory. Architecture has also made development more easier (they're all x86 and there's no more of the Cell).

Ironically, theses improvements should actually make the PS4/XBO the new "PS2".
 
The problem with the PS3/360 era was developers/publishers probably went in with the expectation of it being another PS2 when unfortunately, dev cost and the shift in market changed that.

PS4/XBO gen isn't like that. Publishers should now know what the market is like before going crazy with mid tier or AAA games.

that's actually a really bad thing. well the market has narrowed its focus in terms of variety, but at least it's a lot harder to take risks!
 
I know what you're thinking, I'm not saying they should. I just want to explore the possibility. I'd imagine what holds them back from entertaining the idea of doing this:

1) Giving up profit in the form of royalties to Sony/MS
2) Giving up some more profit on game manufacturing (I'd imagine this is marked up by Sony/MS)
3) Giving up 3rd party royalties on their consoles

So for 1) couldn't they manage to get a sweetheart licensing deal from either Sony or MS if they chose to go exclusive with one of them? I'd imagine both companies giving them crazy favorable terms to lock up their content for 5-10 years. For 2) I'd imagine this isn't a significant enough amount to be a barrier (few dollars per disc). 3) Based on how the Wii U is doing, they aren't really giving up much 3rd party royalty revenue. Also by not having to R&D, distribute and market their own console, that saves them a lot of money and effort they could just put into games and peripheral development.

So from an economics perspective, is there anything holding them back from doing this for consoles? For the portable market there's still an argument that they can make that work with their own hardware, but with consoles I don't see why they wouldn't go 3rd party. They literally have so much to gain with a small trade off of paying a small royalty on their titles to either Sony or MS.

The bolded part sums for me why anyone asking Nintendo to go 3rd party doesn't get what Nintendo is all about.
 
If Nintendo released games on other systems who would buy Nintendo consoles ?

I think Nintendo would have already gone down this route, but they have no interest in doing this, i think it would only be a short term gain for Nintendo's investors anyway.

Nintendo seem to want to have control of everything, ok this is now damaging them, but the financial side of the business all they want to do is protect themselves from takeover & getting into debt again.
 
that's actually a really bad thing. well the market has narrowed its focus in terms of variety, but at least it's a lot harder to take risks!
Luckily, it's still not the end for PS4/XBO. As long as sales continue to climb higher (which they are), Publishers will become more free to takes risks.
The payoffs are for those who stay till the end. That's when we should see a big boom in titles of hopefully, every genre.
 
Answering OP, I don't know about your hypothetical future.

The way i see it, Sony is the most prepared to be third party, they have a complete infrastructure prepared to offer games like Netflix offers movies (PSN+ and Gaikai), without the need of a console.

If Nintendo went third party, what makes you think they will go to a Sony or MSFT console? The way i see it, the only way they would go third party is that consoles stop existing as we know them, and we have a beautiful future of Android boxes attached to our TVs, which are consoles, but with a different logic.

I think that's were all is headed now; I wouldn't be surprised if in the medium term future (3-5 years from now) we see Nintendo offering VC games on mobile platforms; all the Nintendo is doomed articles and forum threads are basically port begging, that's a huge public that wants Nintendo games offered as a service.

Financially speaking, I honestly don't know, I think right now is not the moment, but I also think they should prepare their infrastructure because nobody knows what the near future will look like, there are powerful new actors entering the gaming business and attracting the audience, both the casual (Amazon, Apple and Google) and hardcore (Valve, NVidia and all those internet stores offering recent games for a dollar) gamer, and consoles right now are not the best choice to game.
 
Luckily, it's still not the end for PS4/XBO. As long as sales continue to climb higher, Publishers will become more free to takes risks.
The payoffs are for those who stay till the end. That's when we should see a big boom in titles of hopefully, every genre.

that only weeds out the smaller companies, whatever few remain. they're not going to be able to wait on the market to change in their favor, or become big enough that their piece of the pie is more than a sliver while big companies release games that are driving and changing the market more and more to their favor. and you can bet that the bigger companies aren't going to be making colorful platformers, single-player rpgs, and action-adventure games when they can get more bang for their buck from getting more money from people who have already purchased their games (and locked into paywall services like playstation plus and xbox live gold).
 
that only weeds out the smaller companies, whatever few remain. they're not going to be able to wait on the market to change in their favor, or become big enough that their piece of the pie is more than a sliver while big companies release games that are driving and changing the market more and more to their favor. and you can bet that the bigger companies aren't going to be making colorful platformers, single-player rpgs, and action-adventure games when they can get more bang for their buck from getting more money from people who have already purchased their games (and locked into paywall services like playstation plus and xbox live gold).
What about Sony & Microsoft? They're the ones who are suppose to lead by example and grow the market for new experiences. Their funding/backing of Indies may also help them in bringing about a software renaissance.
 
What about Sony & Microsoft? They're the ones who are suppose to lead by example and grow the market for new experiences.

microsoft's vision was a system that checked to see if you had an internet connection so you could play your game. they also supported pay-to-win microtransactions. both sony and microsoft are promoting paywall for online. those aren't signs of companies willing to grow the industry as much as they are signs of companies trying to maximize profits out of existing models.

the big question mark is how sony proceeds with software on their vr platform. i'm interested in seeing how that goes, but my expectations aren't very high given sony's stable of developers.

Their funding/backing of Indies may also help them in bringing about a software renaissance.

there's not a single first-party developer that's not backing indie developers these days. nintendo, valve, sony, microsoft, apple, google, amazon, etc are all giving power to the small guys. even so, independent games lack the exposure retail games with a marketing campaign have. independent developers now may be the mid-tier companies of the future, but they're probably a decade away from influencing the direction of the industry.
 
Im not sure the Wii U will recover at this point.. but I believe they are doing fine with the handheld department. I still think Nintendo will come out with some sort of handheld/miniconsole hybrid before they go 3rd party.
Except they're not doing fine in the handheld category. The 3DS is selling significantly worse than the DS.
 
After seeing MK8 on WiiU, I salivate as to what they could create on PS4 (a console with a GPU 10x as powerful and 8x, much faster RAM). It would be as close to Pixar visuals in real time as anyone has gotten.

At this point it's a chore to boot my WiiU up and deal with that fucking tablet lol, if there was the option I would just play MK8, Smash, Bayo 2, X and Zelda on my PS4 even though I bought WiiU on day one...

I'm a massive Nintendo fan, have been playing their games and owned their hardware since '87 but at some point you have to say enough is enough. WiiU is drastically limiting their own potential software sales. How many copies is Zelda U going to sell on a less than 10 million install base in late 2015 when Skyward Sword sold less than 4 million copies on a 100 million install base ?.

I dont believe we would have Bayonetta 2, X, W101, Fire Emblem,Sin and Punishment, Kid Icarus,Xenoblade, , Last Story,Metroid,some localizations etc. without Nintendo systems :( .

Those games were funded for a reason, what would be the point of making them for another system? they are too risky Nintendo doesnt operate in a bubble and they would publish less games.
Their systems have a lot of problems, they have become less competitive, they need to make some changes, and its okay if you think the Wii U is shit, but having their own hardware is both a curse and a blessing, i personally would not be jumping with joy if i knew they stopped making their systems out of necessity.

And why its always the PS4 :p? how would you feel if Nintendo made games exclusively to the Xbox One, or a more powerful system in a few years? just asking.
 
As always, people are far too adamant that Nintendo couldn't survive or even thrive as a 3rd party.

1) They don't make that much money on third party royalties. They could live without that money.
2) The massive revenue streams generated by hardware are not that profitable. They have only really made a huge difference during the Wii / DS era. With cheap tablets and phones around, this will most likely never be an area of large profitability ever again. Shut down the hardware side of the business and you lose nothing financially.
3) The big problem would be losing 10-20% of their first party software sales to a platform holder. That's what would hurt like hell, and that's what makes having their own platform worth it, even if it has be sold at a minor loss. You can say that they might make more money overall due to more game sales on bigger install bases, but that's far from certain. I believe this is the one big issue that would give them pause if they ever wanted to go this route.

In the Playstation 1 days, Sony gave up on the third party royalties if the game was exclusive to the PS1.

Sony never had a profit day one in any console.

It is arguably that before the ps3 with all the new ips (LBP, Uncharted...) and studios (thatgamecompany) the first part sony offering was almost nonexistent save from god of war and gran turismo.

So ... going from an economics perspective, why Sony don't go 3rd Party ?

Seems MUCH MORE logical than Nintendo..... BUT YOU PEOPLE WANT FUCKING 4k GRAPHICS, that is why you never consider SONY going first party and it is always Nintendo =P
 
I dont understand why people want Nintendo to go the way of Sega & Atari?

Sega made huge missteps in their hardware business. Same with Atari... while Nintendo business model has sustained them since the beginning.

If anything people should be speaking more about Nintendo's console strategy... how to appeal to today's crowd while also staying profitable.

They're not going to stop making consoles.... so we got to stop this third party talk.
 
I'm sure there would be great potentially negative change at Nintendo on the road to a role as a third party, but I just can't see their future in hardware in the long term, so what other option is there?

Their home console business is seemingly already unsustainable, and now even their handheld business is facing a downward trend as other technologies and competitor markets eat into theirs further and further. I'm sure the next handheld will give a good run for its money, especially as some form of hybrid with all the software focus that can bring, but for how far behind the tech curve and services curve Nintendo is, I just can't see them not continuing to lose more and more ground.

Maybe there is a base-level of hardware sales Nintendo's directors would be happy to fall to but maintain, but I can't see their investors happy with being told theres no future of growth beyond maintaining, which would involve an absurdly costly proposition to become a private not publicly traded company.

So yup, the short term economics of going third party looks bad, but the long term looks even worse.
 
So ... going from an economics perspective, why Sony don't go 3rd Party ?

Seems MUCH MORE logical than Nintendo..... BUT YOU PEOPLE WANT FUCKING 4k GRAPHICS, that is why you never consider SONY going first party and it is always Nintendo =P

A big chunk of gaming would be lost if Sony didn't have hardware.
Remember back in 2013, how vocal everyone was with stuff like "the game industry is dead" "Nobody wants consoles anymore" "Wii U is enough proof consoles are over?"

Who was going to pick up the pieces? Microsoft? Google? Apple?

So yeah, I want graphics but I also understand Playstation is needed for there to still be an industry (at least one that is thriving and supports third parties etc etc).

Nintendo doesn't have that power.

"But what about NES and Wii?"

NES was such a long time ago it's near impossible to make a modern day comparison. The Wii is an example of how fragile Nintendo is with this stuff. They brought in casuals but they also had no idea how to keep them. And going by what supporters of Nintendo want, we would never have seen a PS4 system from them. Only more Wii U clones (and the market has shown that is not what the industry wants).

The industry would still go on without Nintendo home console hardware. It wouldn't be a tragic loss outside of them releasing peripherals (but those could still be done without their hardware).
 
A big chunk of gaming would be lost if Sony didn't have hardware.
Remember back in 2013, how vocal everyone was with stuff like "the game industry is dead" "Nobody wants consoles anymore" "Wii U is enough proof consoles are over?"

Who was going to pick up the pieces? Microsoft? Google? Apple?

So yeah, I want graphics but I also understand Playstation is needed for there to still be an industry (at least one that is thriving and supports third parties etc etc).

Nintendo doesn't have that power.

"But what about NES and Wii?"

NES was such a long time ago it's near impossible to make a modern day comparison. The Wii is an example of how fragile Nintendo is with this stuff. They brought in casuals but they also had no idea how to keep them. And going by what supporters of Nintendo want, we would never have seen a PS4 system from them. Only more Wii U clones (and the market has shown that is not what the industry wants).

The industry would still go on without Nintendo home console hardware. It wouldn't be a tragic loss outside of them releasing peripherals (but those could still be done without their hardware).

Not to mention the fact that hardware is Sony's core competency. Sony as a gaming third party doesn't make much sense. I'm not even sure it'd be profitable. If Sony were to stop making hardware their best bet would be to sell off the studios and IP and get out of gaming. Nintendo would be an immensely successful third party publisher.
 
A big chunk of gaming would be lost if Sony didn't have hardware.
Remember back in 2013, how vocal everyone was with stuff like "the game industry is dead" "Nobody wants consoles anymore" "Wii U is enough proof consoles are over?"

Who was going to pick up the pieces? Microsoft? Google? Apple?

So yeah, I want graphics but I also understand Playstation is needed for there to still be an industry (at least one that is thriving and supports third parties etc etc).

Nintendo doesn't have that power.

"But what about NES and Wii?"

NES was such a long time ago it's near impossible to make a modern day comparison. The Wii is an example of how fragile Nintendo is with this stuff. They brought in casuals but they also had no idea how to keep them. And going by what supporters of Nintendo want, we would never have seen a PS4 system from them. Only more Wii U clones (and the market has shown that is not what the industry wants).

The industry would still go on without Nintendo home console hardware. It wouldn't be a tragic loss outside of them releasing peripherals (but those could still be done without their hardware).
What?

Can you tell me something Sony has done "innovative," without first taking notes from Nintendo, that would constitute this "chunk" of power you're talking about?

The fact of the matter is Sony products have always been seen as a status symbol, so people will never let them go.
 
Nintendo software will only thrive on Sony hardware.

MS hasn't cultivated a userbase that will allow games like Mario to flourish. At least with Sony they have attempted with Pupeteer, Tearaway, Ratchet, etc

I agree with this, also, Sony has a MUCH more favorable presence in Japan than Microsoft. That alone would be the deal breaker.

Both bombed massively, though.

I also agree with this, but I think its more of a function of the PS Vita simply being a bomb itself (even though I love my Vita, dammit!)
 
I dont understand why people want Nintendo to go the way of Sega & Atari?

Sega made huge missteps in their hardware business. Same with Atari... while Nintendo business model has sustained them since the beginning.

If anything people should be speaking more about Nintendo's console strategy... how to appeal to today's crowd while also staying profitable.

They're not going to stop making consoles.... so we got to stop this third party talk.

Sega and Atari also made catastrophic missteps with their hardware as well. I think Nintendo would not do the same with regard to their software if third party. They've kept a lot of their core talent (see also: legendary talent) in house, unlike Sega and certainly unlike Atari which was largely a shell of its former self.

Sega also wasn't exactly known for rampant first party success as a developer. The majority of their successful franchises were second party developers published BY Sega, not in-house development.
 
the immediate downside is that the threshold for profitability goes up immensely. in order to make the same amount of money they were before, they would need to sell around 50% more each time (assuming nintendo currently profits 75% off each game at the moment). it's also hard to argue for a fact that the nintendo fanbase is secretly on the ps4 and xbox one, or that that audience has been yearning for nintendo's games for years and would yield the results nintendo would need.

and don't forget the graveyard left by last generation. getting everyone up to speed took its toll, and there's been fewer and fewer in the way of the kinds of games nintendo makes. there would absolutely be a brutal period where nintendo developers struggle to learn brand new hardware and pipelines. it would be like preparing for a new console, which takes them usually a good 3 years before we ever see results.

moreover, if you have guys who know how to make hardware, why give them all the axe, when you can have them use their strengths to continue in r&d and hopefully bring in more revenue? it doesn't make sense to panic and cut off a resource.



it's okay if you forgot about nintendo's handheld division, but if you think nintendo should divert an unholy amount of resources to a third-party software development model on the console side while also making handheld games, i don't understand the thought process. at all.



nintendo will get what they put into it. i think wii fit u and wii sports club are poor examples of games heavily promoted by nintendo to win back their old new audience. beyond being tied to unappealing hardware, neither was advertised much at all. nothing in the way of television commercials or talk show appearances. it's a better product than the first two wii fits, but the general public doesn't know about it. it may have been sent to die after they figured out their qol future, in order not to split that fanbase, or they just had x amount of marketing dollars and could only divert so much cash to one thing. or both.

I think they would easily sell 50% more if they were to go multiplatform, especially taking into account the current landscape for consoles and mobile.

You'd also have reduced expenses due to lack of R&D for new hardware, which can typically be a substantial cost.

There are a certain number of dedicated fans that will pick up any new Nintendo system regardless (less than or equal to the GameCube), but the rest are content with other platforms even though if Nintendo released titles on those systems they'd definitely pick one up.

I'd say, however, that the vast majority of the potential audience Nintendo can tap into isn't a dedicated, core Nintendo gamer. That's pretty clear based upon the Wii vs. Wii U numbers. And if the platform userbase is high enough, Nintendo can profit immensely off their popular and well established IP's.

I also don't think that there's much added development struggle compared to what they're already going through with on the Wii U. Titles like Mario 3D land and Mario Kart are already good enough looking, in HD, and have that wonderful Nintendo charm.

As for their handheld division, that's not really much of a bright spot for Nintendo. Diminishing sales, particularly for software, and it will never come anywhere close to the business the DS generated. Nintendo really needs to consider mobile, where there's a massive opportunity for them to make substantially more money.
 
Yeah the 3DS may not sell as well as the highest selling closed gaming platform of all time. Oh no.

Right, it'll sell significantly less and won't allow Nintendo to meaningfully increase their profitability (or lessen the lack thereof) going forward.

Business aren't concerned at all about not growing the company, after all...
 
How many games on the PS3 reached Nintendo's games on the Wii? Then you factor in that they would be paying more in royalties for those sales. Plus they haven't cultivated a userbase on PS4 or any platform but their own.
There is no realistic scenario in which Nintendo sells enough software on the PS4 or One that would offset the losses they would be taking from being third party.

Don't use the Wii's software sales as an example. The Wii was a special spark that won't happen again with a Nintendo home console. Look at GameCube software sales.

At least this talk is not polluting another thread for once :/

Seriously the thread was over at this post :


But for some reasons this talk just won't die.
It's like the Wii HD talk of before, only even dumber.

I don't feel like doing more than quote timetokill who summed the situation quite clearly

This thread was over from a post that wrote about revenue and not profit?
 
I think they would easily sell 50% more if they were to go multiplatform, especially taking into account the current landscape for consoles and mobile.

mobile, maybe, but on the console side of things you have what used to be a market of kindred spirits in japan pretty much up and disappear, and those types of games no longer resonating with the direction sony and microsoft have taken. neither sony or microsoft have fostered the type of audience nintendo is known for, and that's something that makes a transition especially risky. maybe mario does well, and maybe zelda does too, but i'll be you it comes at the expense of several smaller series.

You'd also have reduced expenses due to lack of R&D for new hardware, which can typically be a substantial cost.

it would also mean fewer revenue streams, increasing their dependence on software development.

I'd say, however, that the vast majority of the potential audience Nintendo can tap into isn't a dedicated, core Nintendo gamer. That's pretty clear based upon the Wii vs. Wii U numbers. And if the platform userbase is high enough, Nintendo can profit immensely off their popular and well established IP's.

if anything, i think the wii vs wii u numbers demonstrate there was a large *something* missing from the way the wii u was presented and the wii was presented. the wii u is not the wii, but not because it isn't popular. and it's not like the wii for having a focus outside of hardware power (which is something a lot of people latch onto). the wii u and 3ds share many of the same problems- inaccessibility due to complex and expensive hardware and software. if there's any benefits to the gamepad or 3d, they have to be explained or seen in person. you can't just watch someone flail around with a stick or poke at a screen and immediately understand the appeal behind something.

but going back to the other point, which is that nintendo could profit off a platform userbase- i mean anything is possible, but is that a good, realistic business scenario? it's easy to consider a company some sort of machine. like it's a thing that needs fixing. it's not making money so it's broken. how do you make money? do x thing. it should be easy because it's only x thing and company is a machine. but a company is a collection of people.

imagine tomorrow you went in to work and you were now expected to do learn a bunch of new skills after already having just learned a bunch of new skills. in the meantime, you have to still complete your normal tasks. or maybe you're not actually qualified so it's easier to remove you and hire someone new. that's risky because would have to get used to the corporate culture, or may not actually adjust and work well in a team. the devil you know. imagine that but for your entire department. people leaving, others coming in. communication problems, learning curves. all that fun stuff. now apply that to a company that staffs in the thousands. everything would have to change- management, marketing, production- not just game design. at the end is it still the same company? the same culture? would they be able to produce the same games? a lot of the people who are demanding changes want the top guys gone. what does all this do for morale? how does that affect everything else?

that's the sort of thing that happened with sega (although there was a lot more us/japan fighting at sega on top of everything else from what i gather), all while they had to keep a release schedule to make money. and that company was a lot smaller too, so that's fun.

I also don't think that there's much added development struggle compared to what they're already going through with on the Wii U. Titles like Mario 3D land and Mario Kart are already good enough looking, in HD, and have that wonderful Nintendo charm.

that's nintendo working within the parameters they set up for themselves. that's what they're comfortable with. i know my computer desktop at work. i know where everything is. to a anyone else it's a labyrinth (and not the kind with sexy rock stars), but it's comfortable and i work very efficiently within my own parameters.

As for their handheld division, that's not really much of a bright spot for Nintendo. Diminishing sales, particularly for software, and it will never come anywhere close to the business the DS generated. Nintendo really needs to consider mobile, where there's a massive opportunity for them to make substantially more money.

the 3ds coming in so much lower than the ds sucks, and the move in japan to mobile platforms is incredibly worrying. still, i think you diminish the 3ds's standing to something incredibly weak, like a gamecube or original xbox, when it will in all likelihood outsell the snes and the nes as well. if nintendo was poised with going third party or focusing all of their studios on one platform, where they could produce around 20 games a year, in their own ecosystem, i think i know which would be the more appetizing proposition.

and the 3ds is still profitable. why should nintendo kill their entire hardware branch and focus on risky possibilities? there's a massive opportunity for substantially more money? well talk is cheap. show me how.
 
Ridiculous. These threads always have a ton of good, reasoned posts in them whether you agree with them or not. Look at Anihawk, Aquamarine or infinite's posts among others. This is a major topic in the industry right now, no reason not to talk about it on here.

It's an important topic but I feel like I'm going through groundhog day or something whenever I read these topics. We've had so many that I feel like I already know all of the ins and outs of the pros and cons.
 
AniHawk,

I think there's tremendous potential for titles like Mario, Zelda, and Metroid to do enormously well on consoles like the PS4/XB1. Zelda is a series that used to have quite the connection with the hardcore market. With recent entries, that interest has waned, in part due to the direction they've decided to take the series, but also the audience that purchased Nintendo systems has (over time) distanced itself from the core gamer. I believe that the same type of consumer that buys games like Skyrim would also buy a core oriented Zelda game. And Metroid could easily be marketed to gamers that enjoy sci-fi shooters.

Instead of those games selling a few hundred thousand at most first month NPD (which is what they've been relegated to), I'd argue that they could potentially go on to sell multiple millions if they simply released on systems that would jive well with those series, or fill some core niche that isn't necessarily being quenched (in the case of Mario). And perhaps you're right -- this consolidation would come at the expense of other titles, but so what? Those other titles sales are so minor in comparison to having a few huge blockbusters that I don't believe it's necessarily a bad position to be in, in fact business would be better as a result of this consolidation. The same holds true for the mobile space if they tailored some of their handheld titles for phones and perhaps experimented with different business models and F2P content.

Fewer revenue streams is an irrelevant point in the face of zero hardware margins, which I firmly believe is something Nintendo will never be able to go back to. And changing corporate culture is a part of the gaming business. Having to change your software strategy to work on multiple platforms isn't much different than having to change your strategy to support some new Nintendo device.

Let me ask you a question, how does Nintendo turn it around in your opinion? And why are you so easy to dismiss the power of Nintendo's IP doing well and above what they're currently doing on failing Nintendo platforms?

I think you're selling them way short and are simply relegating the company to accept their fate of doing really poor business.
 
AniHawk,

I think there's tremendous potential for titles like Mario, Zelda, and Metroid to do enormously well on consoles like the PS4/XB1. Zelda is a series that used to have quite the connection with the hardcore market. With recent entries, that interest has waned, in part due to the direction they've decided to take the series, but also the audience that purchased Nintendo systems has (over time) distanced itself from the core gamer. I believe that the same type of consumer that buys games like Skyrim would also buy a core oriented Zelda game. And Metroid could easily be marketed to gamers that enjoy sci-fi shooters.

keep in mind that mario was never more popular than he was just a few years ago, when he was limited to nintendo hardware. metroid has never been a megaseller, and zelda is generally doing about the same it always has. what is it about the skyrim fanbase do you think would interest them in zelda? the focus on puzzles and dungeons? the colorful and cartoony graphics? the linear story?

what t-rated third-party sci-fi shooters have sold in the multiple millions in the last five years?

how many 3d platformers have sold 800,000 units on a sony or microsoft console from 2005-2014 in the us? how many 2d platformers have sold 1 million units on a sony or microsoft console in the same region?

it's hard to say there's a market secretly starved for nintendo games when there isn't any data to back this up.

Instead of those games selling a few hundred thousand at most first month NPD (which is what they've been relegated to),

skyward sword cleared a million in its first npd month. its lifetime worldwide sales are lower than a lot of 3d zeldas, but i think a lot of that has to do with the game launching in 2011 and requiring a peripheral to work. i don't think there were arguments that the zelda series was dead after majora's mask (which performed worse), so i won't buy the arguments that it's dead now.

Fewer revenue streams is an irrelevant point in the face of zero hardware margins, which I firmly believe is something Nintendo will never be able to go back to. And changing corporate culture is a part of the gaming business. Having to change your software strategy to work on multiple platforms isn't much different than having to change your strategy to support some new Nintendo device.

it's pretty different. there's way more red tape as a third-party. like, nintendo actually owns factories where they make stuff. and they do it on their own schedule. they don't need to have peripherals officially licensed by other first-parties before including them with games. they don't have to worry about sony's restrictions when it comes to premium editions, or what cut first parties want from such games, or microsoft's restrictions when it comes to game manufacturing. they can skirt rules they create for themselves it's good.

a lot of that is all management and marketing too. so that doesn't even get into the game design aspect and the brand new pipeline that would affect every single release. look at it this way- nintendo's a company of 5000 people. they know how to create a console that would accommodate themselves.

i would argue that changing corporate culture as being part of the gaming business isn't very accurate. at the very least, it would definitely hurt the quality of nintendo games considering that for better or for worse, they have been able to keep a certain reputation for the last 30 years. i don't know a whole lot about them, but maybe nihon falcom is the most similar comparison.

Let me ask you a question, how does Nintendo turn it around in your opinion?

first off, the wii u and 3ds are two of the worst nintendo systems out there. expensive, dependent on short battery life, complex, weak, hard for third-parties to make games for, and in the 3ds's case, difficult even for independent developers to get on board with. it's just everything that could possibly be bad about a games console all rolled into one.

now while i personally find a lot of value in backwards compatibility, it's something consumers don't really care about unfortunately. so their next systems wouldn't reference the 3ds or wii u at all. i mean, it didn't seem to help much when they also played the libraries of nintendo's most successful platforms, so why bring them back? one of the issues with the wii u's architecture is that it was made to also have a wii inside of it. in the 3ds's case, a successor handheld would be bound to the 3d visuals, 3ds clamshell design, or the 2ds shape. instead, both successors to the wii u and the 3ds should be fresh starts to save on cost and remove restrictions from the hardware r&d team.

the next thing, they're already doing, and that's making both platforms easy to develop for together. this means it's a lot easier to share assets and get games out the door. teams that move from the handheld division to the console division and vice versa won't have to speak in different languages. it reduces time, cost, and hopefully manpower. not that they should fire people- but maybe it allows for one more game to be made from the people not forced to work on other projects (the 3-man a link between worlds team was split up in 2010 to work on nintendoland and new super mario bros. u).

so that's the start.

when they're making hardware and software, the marketing team needs to be in on the production meetings. everyone needs to know what the product is, who the audience is, and what message needs to get across. the 3ds and wii u especially suffered from low-key and bizarre marketing decisions. in the wii u's case, after a year and a half of not communicating what the system was, they showed a bunch of people playing a mario game in colored squares and then advertised only two games on television for the next twelve months (lego city undercover and pikmin 3).

if they're going target families, that means everyone needs to be on board and consider what that means for the direction of software design, hardware design, pricing, and marketing strategies. they honestly really nailed it with the wii and eventually the ds.

in the meantime, nintendo should be creating a futureproof eshop network. none of this wiiware/wii vc/psn/xbla wont-work-on-future-consoles stuff. one connected account. purchase super mario bros. 3? you have it for both systems. considering that services may be the future of video games, and considering they're behind valve, sony, and microsoft, they need to get on the ball and prepare for that possibility.

and this is while they keep their hardware division busy with stuff to do. i think it's interesting they're looking into other industries. it's hard to say without seeing literally anything just what the hell they mean about their qol talk how it will pan out, but i think at the very least it will let their game system have a more focused identity when they're not trying to go for a frankenstein's monster like the wii u and 3ds were.

And why are you so easy to dismiss the power of Nintendo's IP doing well and above what they're currently doing on failing Nintendo platforms?

because they're failing nintendo platforms. we've seen what those ips do on nintendo platforms that don't fail, and i think the talk of third-party nintendo is a huge knee-jerk reaction to a problem that isn't really there, or simply wishful thinking on the part of people who want nintendo games, but believe they're made in a vacuum and could happen anywhere without consequence.

I think you're selling them way short and are simply relegating the company to accept their fate of doing really poor business.

and i think simple solutions to complex problems aren't realistic.
 
Why is this ever even a conversation? Who cares? If you want to play Nintendo games, but you refuse to buy Nintendo hardware, then I could understand why you repeatedly talk about these hypothetical scenarios where Nintendo goes third party. But, they wont, so why keep doing this? Buy their systems if you like their games. No one will judge you. If not, then dont buy their systems.

I fail to see the relevance in a conversation about something that isn't very likely to happen. It's like a forum dedicated to Texas leaving the union.
 
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