charlequin said:
Because advancing such credit presumes its own conclusion: that Nintendo is a canny, mobile operator whose masterminds cleverly look a step forward in every situation while lumbering industry beasts Sony and Nintendo blink slowly and miss opportunities due to their ignorance, preconceptions, and/or partial focus on non-gaming market elements.
In reality, we've already seen the limitations of Nintendo's strategies begin to bear unfortunate fruit. Rather than use the Wii as an opportunity to forge a brand-new relationship with third-parties (and thereby load off a portion of software development work to relatively risk-free partners, while continuing to reap the benefits thereof), Nintendo chose to carry on in their PTSD-esque post-N64 fashion: third-parties betrayed us once, so we should never trust them again. That, in turn, contributed to a fairly significant downturn in Wii sales in Japan when combined with another problem: a drastically underperforming holiday season anchored solely by Animal Crossing and Wii Music, and a lack of software momentum following it, with no major third-party releases to fill in the gaps.
Okay.
However, I'm not trying to argue that Nintendo's strategy is perfect, but just that it has rationale behind it. I will gladly admit to the problems within the strategy that I see Nintendo as pursuing: it is slow to reach rewards that could be achieved much more quickly, and only fosters good relationships with third parties (with, say, High Voltage Studios, who have a desire to work with the technology Nintendo champions) by giving the middle finger to the industry and letting those who don't want to make games for their platforms die. Nintendo slowly forces change rather than quickly encourages it, and I imagine that there are further, more subtle inadequacies that I could think of if I were to spend more time considering the matter. However, it may be that this strategy is less expensive to pursure than alternative strategies and harbours better relationships with the companies that do eventually produce games for their platforms, because they appreciate the values that Nintendo also appreciates. I imagine that the first proposition can be successfully argued, whilst the second is yet to be seen fully.
But note that I'm not trying to portray Sony and Microsoft as "lumbering beasts" that "blink slowly and miss opportunities, etc, etc..." either. I'm reminded of what kamne-sennin (sorry if I misspell the name, btw) said not so long ago, perhaps in the thread regarding whether the Wii's declining sales were temporary or something much more foreboding. He was paraphrasing Christensen in his analysis of companies, and said that all companies can be viewed through their resources, skill and motivation (iirc). In this manner, he said that Microsoft and Sony have always had the resources and skill to pursue motion controls, but never the motivation. But this is also true of Nintendo - they have always had the resources and skill to make Halo, but never the motivation to do so. Were it not for this rather small difference, all three companies would be very similar - just it turns out simply that this difference has very big effects.
I realise I've segued into somewhat of a tangent here, so let me return more to the point. I would argue that Sony, for example, have been misguided and ignorant of what a consumer wants: they have applied their own strategy (which would appear to be to harness, for a lack of a better word, advanced technology) to the desires of their customers, which turned out to be a big mistake. Consumers don't want technology, but entertainment. Nintendo has been equally misguided and ignorant, but of what external developers would want. Clearly Nintendo thought that they would be as profit driven as they are, and would take any opportunity to make money. This has also turned out to be wrong, as companies are happy to leave money on the table if it means that they pursue less risk. This is only a rough summary: perhaps Nintendo assumed that these developers were more flexible, or had some other quality they apparently do not have. Either way, Nintendo, like Sony, applied their own strategy to another party. It turns out that Nintendo, too, has been misguided, and led to ignorance. My point: the mistakes the companies have made have been made for, in essence, very similar reasons.
In short, I'm not trying to portray Nintendo as some all-perfect company that has played everything to their advantage. Equally, I'm not trying to portray Microsoft and Sony as companies that can only make mistakes. Rather, I see all companies as being very similar in their workings.
Because that presumes that there is actually a profitability benefit from these decisions, which is largely unsupported. The almost complete lack of third-party support has already had a demonstrable effect on Wii's Japanese sales;
Perhaps their strategy regarding third-parties will have a long-term benefit that we are yet to see. I wouldn't say that I know for sure, and I certainly wouldn't say that it will work, but I also don't see why Nintendo hasn't critically evaluated their options.
the complete lack of promotion, poor storage solutions, and anemic (in the US) release schedule for VC/WiiWare have reduced the sales and relevance of these services; etc.
I often read your praise of the iPhone and its digital distribution services, which stand as quite the antithesis of Nintendo's services. My criticism of this method is that it cuts the long-tail business model short by overloading the service with a quantity of games, such that games are simply lost within the crowd, and that there is an artificial trend to lower prices that will prove unsustainable for certain companies.
Of course, I do not want to create a false dichotomy, and I imagine that a service that champions the strengths of both systems can be found. Nevertheless, I don't see why Nintendo hasn't critically evaluated the situation, and made a worse choice out of many. You seem to propose that they haven't made a choice at all.
In order to justify the idea that these decisions are actually made in support of profitability, one would have to assert, essentially, that nothing outside of the ultra-casual market can ever be profitable enough to pursue.
Clearly, Microsoft has found a market of gamers that consistently buys a large volume of games. I will think more about this matter, especially in regards to how "hardcore" the 18-35 male market actually
is (I would still state that it is rather casual).
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Edit: I suggest that for the most part the 18-35 male audience contains a large casual fanbase with a central, hardcore fanbase that makes up the vast minority of the total "population", so to speak. The reason why the casual audience's buying habits may be obscured is because of the hardcore fanbase within the centre of the audience. Not to use GAF as representative of all hardcore gamers - I am very different from a lot of GAF, for example - but I imagine that the majority of hardcore gamers own a 360 and buy games for it, just like GAF. Because of interests and other factors, I would argue that very few other demographics (if any at all) have this core fanbase, but I would like to highlight the difference between correlation and causation here. Theoretically, I imagine, a soccer mom can be a hardcore gamer.
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But this assertion is not only poorly backed up by history (before this generation, even the "red ocean" gaming market managed to be fairly profitable for many participants)
The red ocean consists of the "same" casual gamers that contribute the blue ocean. Granted, they consist of extremely different demographics, which would result therefore in different tastes, etc. but I would suggest that the purchasing habits are quite similar.
but also not supported by Nintendo's selection of disruption strategy -- the purpose of which is to step outside the bounds of the existing market to find success, then leverage that success to more easily recapture upmarket customers.
And I would argue that to recapture upmarket customers does not mean to recapture the 18-35 male market, for example. Of course, there is a sliding scale of "hardcoreness" which becomes increasingly vague as you move away from each end. Nevertheless, I would imagine that one could guess that an 18-35 male knows more about games than their parents. (But do they show more interest in the games
industry than their parents? Perhaps not.) However, I would still argue that Nintendo's fanbase lacks not a significant core audience - these 18-35 males - but a significant
casual audience.
When this strategy is successful, it is wildly profitable -- I direct you to the DS, where Nintendo not only sees huge profits on hardware sales and hit first-party titles like Rhythm Heaven, but also continually draws in significant income from third-party hits which they need to provide little or no real support or financing to.
Has Nintendo made a concerted effort to appeal to third-parties with the DS? The best I can think of is Chinatown Wars.
The DS seems to be run on much the same philosophy as the Wii: disrupt the market, see who cares to make money, and go from there. On the DS lots of companies came to the table, but on the Wii they didn't. Perhaps Nintendo should have realised the differences between the Wii and DS that would have affected how external developers viewed the two consoles. Nevertheless, I can't see how Nintendo has acted much differently with the Wii than it did with the DS.
It really makes much more sense to apply the same standard to Nintendo that we do to other companies: look at their broader strategy and performance and evaluate their success in light of those facts. The Wii, while wildly successful, has seen significantly greater stumbles (both in terms of obvious strategic mistakes and in terms of effects on real performance) than the DS, and attributing these to a Panglossian "well, that's the best conceivable result they could have achieved" seems disingenuous when relatively low-risk options to repair these mistakes can be easily identified.
I'm not saying that Nintendo couldn't have achieved better results than it has managed to with the Wii. However, you seem to be saying that the mistakes they have been made are without reason, and I don't see why this is true.
Because the demonstrated effects of inaction have been a near-complete lack of meaningful third-party support, and a resulting fault-intolerance for scheduling problems or misplays in Nintendo's first-party lineup since there's no externally-dfeveloped software to fill in inconvenient gaps.
I'm not going to deny that Nintendo's sales in the past six months have been disappointing. However, I don't think that this will have much of an effect on their potential success, especially in the long term.
This strikes me as a fairly out-there statement. The DS is the gaming system in Japan and still selling quite a bit more dramatically than other systems in the US at the moment; it's had extremely successful core game titles sell in addition to its expanded-market stuff in both territories. The US certainly hasn't taken to it with the fierceness of the Japanese market (largely since the handheld revolution is a few years behind schedule over here) but the system has had no lack of software for users on any part of the continuum, from ultra-casual all the way to core niche gamers, for almost its entire lifespan -- something the Wii can't claim.
I wasn't referencing the Japanese market when I made the statement, so I agree that it has captured the corresponding 18-35 male market there. In regards to the American market, I do not believe that the majority of the Xbox 360 audience has a DS. In the same way that I say that the Wii is missing a significant casual audience, so too would I argue that the DS is missing a significant casual audience. It's just that this gap is made less noticeable by the system's greater success worldwide.
