There is nothing in that interview that links to the tweet.
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What we know so far about the Nintendo NX with sources
- Thread starter Hero of Legend
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There is nothing in that interview that links to the tweet.
Oh. I was initially responding to someone else who didn't say that.
So basically Nintendo going third party? Yeah not interested in discussing that.
Mihael Mello Keehl
Banned
You guys... the tweet basically says that..
"NX is compatible with smartphones and Computers"
AND
"NX will Rival PS4"
Stop trying to turn that tweet into something else
"NX is compatible with smartphones and Computers"
AND
"NX will Rival PS4"
Stop trying to turn that tweet into something else
Having a platform that plays Nintendo games and that can run on any hardware is not exactly the same thing as going third-party, is it?
Oh, probably. But it's fun to think about.
I meant hardware, not software. Fixed now. Honestly you are setting yourself of for disappointment x).
They're still incredibly liquid. Just not as liquid as they have been in the past.
The major financial investments that they will likely need to make to build theme park attractions for Universal doesn't strike me as being as "conservative" as you believe them to be. There's been a LOT of business expenditures that they've been making to help grow their business, which have been what compounded their financial performance in prior years. And those expenditures aren't likely to stop, considering the projects they've been discussing as being in the pipeline.
They know that, just like any other business, you only get as much out of your investments as you put into them. But that means you have to put something into them.
Logistics/supply chain management is a difficult proposal for every corporate entity. You want just enough stock to meet the demand, with the right amount left over for any sudden upticks and seasonality.
Since you wanted me to explain myself, I will do so, but considering how long the post is going to be, you (and everyone else in the thread) will wish I had continued going without the detailed analysis. But since there's a LOT of bullshit spouted about distribution on GAF, now is as good a time as any.
Performance in procurement and distribution is typically measured by the amount of inventory turns you get in a year, or how often you have had to replenish your estimated stock levels at your intended destinations. Too many turns and you're over-spending in logistics and have underestimated demand. Too few and you have risked overspending your warehousing costs or may end up with dead stock at destination retailers, which will cause you to again overspend in logistics to re-distribute to regions that have higher sell-through of the product. That being said, items with high sell-through are generally preferred to have the lowest inventory turn you can get, depending on what your warehousing capacity is.
There are 3 major shipping methods for logistics: ocean, air and truck. Nintendo almost definitely uses a combination of all 3 methods. Each has very different pallet size and container weight restrictions. If your pallet is too heavy, you're charged for it. If your pallet is too tall/wide, you're charged for it. You have to strike the right balance, which is nigh impossible, at times. You almost always leave money on the ground, no matter which way you do it. The difference is in how much money that is.
And you have to maximize the usage of each shipping container, as any unused space basically leads to you paying for cargo space that you aren't using, so you avoid shipping pallets that you can't stack, so part of your pallet space is wasted in packing materials to ensure that your merchandise isn't going to be crushed by the pallet you stack on top of it. And you typically have to standardize this packing procedure, as uniquely packing pallets is a huge time-sink for a warehouse to deal with.
Then factor in where your stock has to go once it lands at its destination point, where it enters the rail and road intermodal networks to distribute them to retailers.
With 2 SKUs for each game, you have to make those calculations twice, with an order of magnitude more complexity, as the handheld SKU may have a higher demand in some regions and with some retailers, while others will not.
Since I don't know what the freight/pallet restrictions are for electronics (I mainly moved raw materials to be manufactured in-house), I'm going to have to use rough numbers and a reasonable facsimile of what their actual logistics scenarios could be.
Let's say Nintendo has a game that's launching in about a month. It's just left manufacturing and is ready to ship.
A disc-based SKU is a standard disc in a standard clamshell case, $1.50 to manufacture a piece. In order to ship these, because they can't be stacked loose, they're packaged in boxes that hold about 100 at a time. Of those boxes, in order to meet the size and weight mandates of each shipping method and to pack it with sufficient cushioning, you can only fit 14 boxes on a single pallet. So each pallet holds 1400 copies of a single game. Packing this pallet would cost an extra $2 in materials (pallet, boxes, padding, shrink wrap for the pallet, etc) per box, as a really rough number.
You can load 10 pallets in a 20ft shipping container while still meeting the weight and dimensional restrictions, totalling 14,000 copies per container. You're loading 50 containers to go by ocean freight (as most freight liners ship goods from multiple sources to the same port and that's the most you can allot to the freight liner), totalling 700,000 copies. According to estimates provided by the US government, the cost to ship via ocean from Japan to California, including import/export fees, is $4150 per container, a number that can decrease the more volume you can achieve in a single ocean liner. As a rough number, for 50 containers, let's say their volume shaves that number down to $4000 per container, or $200,000 for the total transportation cost to the port.
Now, you have to collect those containers from the port and send them to a warehouse for re-distribution. Warehouses have limited inventory space. Warehousing costs can vary greatly, depending on if you subcontract or own your own, but let's say the warehousing costs and collection from the port per pallet are averaged to $300.
Next, you have to re-distribute those pallets. To grossly over-simplify, let's say Nintendo only has to send them to one retail chain, who asks to have them sent directly to each of the retailer's distribution centres in 5 US regions. Shipping costs vary depending on origin/destination, but using rail (the slowest method) and assuming these distribution centres are at the railway hubs, let's say all 50 containers cost them $15,000 to ship. This is all assuming that you're sending WHOLE containers and not sending them via smaller amounts.
Let's say every retailer allots the same amount of shelving space. That shelving space is not free. Let's estimate that a 6'x12' dedicated shelf in all their retail outlets costs them a $2,000,000 annual slotting fee (yes, that's totally a thing and typically how places like Walmart actually make their money) and the retailer expects to sell through all 700,000 copies you gave them a month as part of that arrangement..
Nintendo expects to sell 8.4 million copies in the year and keep an extra month of the retailer's inventory needs per month for seasonal sales protection, meaning that they will be required to repeat these costs 13 times in the year. That is your preliminary inventory turn ratio. Meaning the total logistics cost per year for this one SKU is:
Total pallatization costs annually: 500 pallets per shipment x $28 per pallet x 13 = $182,000
Total ocean freight costs annually: $200,000 x 13 = $2,600,000
Total warehousing costs annually: 500 pallets x $300 per pallet x 13 = $1,950,000
Total re-distribution costs annually: $15,000 x 13 = $195,000
Annual slotting fees: $2,000,000
Grand total for yearly logistics: $6.745 million
Grand total for manufacturing: $13.65 million
Total cost per unit annually: $2.24 (74 cents a unit in logistics)
Next you have a cartridge SKU. Assuming they'd be packaged similarly to 3DS games, cartridge plus plastic clamshell case could cost $4 to manufacture in the bulk volume and contract discounts Nintendo would get (but considering that is the presumed estimate for 3DS games using ROM chips, I'd say it's probably lower... but whatever). Because of the smaller size, they can pack them 175 per the same size of box and achieve a similar weight. This nearly doubles the amount of copies you can ship. Let's assume we'll ship the same amount of containers across the ocean and achieve 1.225 million copies for the initial shipment. The retailer now requires less than you can ship, so the warehouse cost will be adjusted up to $450 per pallet. Applying all the same calculations per unit:
Prelim inventory turn ratio - 7.43
Total pallatization costs annually: 500 pallets per shipment x $28 per pallet x 7.43 = $104,020
Total ocean freight costs annually: $200,000 x 7.43 = $1,486,000
Total warehousing costs annually: 500 pallets x $450 per pallet x 7.43 = $1,671,750
Total re-distribution costs annually: $15,000 x 7.43 = $111,450
Annual slotting fees: $2,000,000
Grand total for yearly logistics: $5.37 million
Grand total for manufacturing: $36.4 million
Total cost per unit annually: $4.59 (59 cents per unit in logistics)
You've trimmed your logistics costs by nearly 25% for the entire year on that single SKU and require fewer shipments to achieve the same stocking targets. And that's without me recalculating to shave even more savings by trimming down the packaging.
Let's take that same cartridge and put it in a thinner and smaller clamshell container made of a cheaper to produce plastic (why do you think they did it with Blu-Rays?), cutting that material cost to $3.50 per unit. Now that it's twice as thin and smaller, let's say I can package 300 per box, totalling 4200 per pallet, 42,000 per container and 2.1 million units in a 50-container shipment and the warehousing costs increase to $600 per pallet, as you're now storing the merchandise for much longer than you were originally before it's redistributed to the retailer.
Prelim Inventory turn rate - 3.27
Total pallatization costs annually: 500 pallets per shipment x $28 per pallet x 3.27 = $45,780
Total ocean freight costs annually: $200,000 x 3.27 = $654,000
Total warehousing costs annually: 500 pallets x $600 per pallet x 3.27 = $981,000
Total re-distribution costs annually: $15,000 x 3.27 = $49,050
Annual slotting fees: $2,000,000
Grand total for yearly logistics: $3.73 million
Grand total for manufacturing: $31.85 million
Total cost per unit annually: $3.91 (41 cents per unit in logistics)
Puts it within spitting distance of a disc cost per unit, and all I had to do was trim the fat on product packaging.
Now try managing these numbers for 2 SKUs of essentially the same game and paying the manufacturing costs to have both media types on a shelf. It's messier, harder to manage possible demand and overall less cost-effective. It took me most of my evening to get these calculations done, and that's when I'm spit-balling numbers. With one SKU, that's one set of shipments, one consumer/retailer demand to account for, 1 less SKU that could be left to languish if accidentally over-stocked, which also costs money.
TL
R (which is actually appropriate in this case): YES, a simple thing like trimming your packaging can bridge the cost gap between cartridges and discs in a very significant way.They're sold to a liquidation retail outlet, more often than not. Most major retailers use them to off-load inventory they can't sell. And it's still more money than they'd get by tossing them. It's something I used to do all the time, when I could get away with it, because it was cheaper than re-shipping stock elsewhere.
ShockingAlberto
Member
There is, if you just want to go ahead and save yourself the time from this argument.
That's actually the more complex way of reading it. If that was the case they would have just said that, rather than making a list. There's no reason for us to assume anything other than that they were listing things it could work with.
Basically, if you want to say "smartphones and PCs", then you just say that. You don't say "smartphones, PCs". That doesn't make any sense.
And *even* rival ps4.
We all know NX will significantly leapfrog PS4 and even rival infinite power of the cloud, so your reading doesn't make sense.
TheMoon
Member
Broken Hope
Member
Why do people hype themselves up so much in regards to Nintendo?
The company acts like it's stuck in the past, to expect anything other than another underpowered system with a controller gimmick that uses obscure hardware and crappy SDK's is to believe that Nintendo has seemingly completely changed how their company operates.
The fact they are aiming for 'Nintendo like profits' pretty much rules out hardware that competes with the PS4.
I'm just hoping their online system actually resembles something from the last decade because frankly it's embarrassing now.
As for the virtual console, I fully expect them to start it over from scratch again, so look forward to Super Mario Bros from the NES again!
This is coming from someone who has owned pretty much every Nintendo console except the Virtual Boy.
The company acts like it's stuck in the past, to expect anything other than another underpowered system with a controller gimmick that uses obscure hardware and crappy SDK's is to believe that Nintendo has seemingly completely changed how their company operates.
The fact they are aiming for 'Nintendo like profits' pretty much rules out hardware that competes with the PS4.
I'm just hoping their online system actually resembles something from the last decade because frankly it's embarrassing now.
As for the virtual console, I fully expect them to start it over from scratch again, so look forward to Super Mario Bros from the NES again!
This is coming from someone who has owned pretty much every Nintendo console except the Virtual Boy.
Mihael Mello Keehl
Banned
No, the tweet is inaccurate because English is not Mochizuki's first language. He has said plenty of things in broken english before. To read and understand his tweet based on grammar is the wrong way to approach it.
If that's the case, then I can interpret it however I want. But that's probably not very smart, so I'll just Occam's Razor it. Simplest solution is that he made a list but didn't write it very well. So that's how I'll interpret it.
Mihael Mello Keehl
Banned
Screw occam and the razor
To be honest, that's how I see all classic games going forward with what Playstation 4 did for PS2 games. The future is jam packed with subscriptions, repurchases and upgrade fees to keep your digital content on future systems.
But you're also ignoring quite a lot of changes Nintendo has made recently and updating their portals, their restructure, and them joining Khronos which could even point to signs of standardization rather than going for anything overly unique in architecture. Much of the changes and overhauls like their development portals so far have been for ease of development as well.
GasProblem
Member
And now I want to play Nintendo games on my PS4 through an NX service. Thanks for putting this idea in my head guys.
Mihael Mello Keehl
Banned
lol
To update you with the most recent developments:
And dude, they are now working with a outside company on their online services. Your image of Nintendo is little bit stuck in the past.
LordRaiden
Neo Member
N64 says hello.
Even if not, then the meaning could be very simple: cross platform play. Akin to how Rocket League can communicate between PS4 & PC players.
I think people are reading way too much into this.
It has been implied that it won't be, so don't fret.
Cross platform play is on game by game basis. Even if NX would allow cross platform play for all the games, it needs to be permitted on the other platforms too. And Wii U has already some games with cross platform play, so it's not like it's an issue for Nintendo currently.
So cross platform play still doesn't make sense in the context.
Edit: And what cross platform play will the 1st party games have?
I mean I'm pretty sure you can't talk about NX without considering 1st party games, no?
Well, i don't think people are buying Nintendo Consoles judt for VC stuff of (S)NES/N64 stuff if they can emulate this on their phones;
But i get your point. Understood!
Makes more sense than every other theory being thrown around
You know what would make sense in the context of the tweet? Some VR or AR thing. But that probably won't happen because of the costs.
Sounds like NX could be a Cloud Platform alongside dedicated hardware. Effectively PlayStation Now but with Nintendo Properties and the ability to play it on any machine as long as you are subscribed and locked into the service. This could help broaden the potential customer base, create a fee-for-service, and cater to every single base possible (Nintendo fans of fixed hardware, rival platform owners, and PC owners).
NX could also hopefully be a step where Nintendo begins to take emulation seriously. Alongside Sony, they have the most powerful back catalogue available. If Nintendo began taking their retro properties and incorporated the most powerful Emulation tools available today (post processing shaders, SNES/NES/N64 online play, etc.) and manage to put it on every platform today - it could be a really big driver for profit.
This has me more excited than anything I've seen in the last few years. To imagine Shu Yoshida and Miyamoto on a stage together- well a man can dream.
NX could also hopefully be a step where Nintendo begins to take emulation seriously. Alongside Sony, they have the most powerful back catalogue available. If Nintendo began taking their retro properties and incorporated the most powerful Emulation tools available today (post processing shaders, SNES/NES/N64 online play, etc.) and manage to put it on every platform today - it could be a really big driver for profit.
This has me more excited than anything I've seen in the last few years. To imagine Shu Yoshida and Miyamoto on a stage together- well a man can dream.
This could also link with the hardware patent about using supplemental computing devices and peer-to-peer connections.
I wonder if they could make it totally web based and thus could work on PS4 from the browser or something.
I wonder if you could use the computing device in the LAN and thus play the games on any device within.
I wonder if they could use the PC power in combination to the computing device.
This is what I'm thinking as well. I don't think there -has- to be dedicated hardware with that kind of setup, but I do doubt there won't be.
NX was announced as a dedicated hardware, so yeah, there must be some. But that doesn't exclude the cloud component.
Broken Hope
Member
Playstation Now only exists because Sony purchased a company that had already pretty much perfected it.
Nintendo as far as I'm aware has done no such thing, people are really expecting Nintendo to go from dogshit online services straight to premium cloud streaming services in 1 generation?
Nintendo as far as I'm aware has done no such thing, people are really expecting Nintendo to go from dogshit online services straight to premium cloud streaming services in 1 generation?
Perhaps, but I also think it could be Mario Kart NX running on PS4 hardware natively, but the catch is - you have to subscribe to Nintendo's Service to play. This will help solve a major issue Nintendo has been facing: the ability to let users purchase Nintendo Properties but not own Nintendo hardware. The market is having a hard enough time supporting two consoles, I can't imagine Nintendo has pie in the sky expectations for fixed function hardware launching in the middle of the generation.
Instead I expect them to begin supporting Android, iOS, PS4, Xbox, you name it. Sign up to Nintendo Access and lock people in.
Could this be why they're involving DeNA?
If NX is running on the same X86 architecture, I imagine native ports to sister consoles (PS4/XB1) and PC won't be out of the question. A subscription service, however, is what I think Nintendo has in mind long term.
Broken Hope
Member
DeNA are likely helping with the MyNintendo stuff and their mobile games, I'm not sure if DeNA have any cloud streaming experience.
No, people don't expect premium cloud streaming services, whatever that means. People speculate, speculate what changes could happen, one factor being the collaboration with DeNa.
They have.
They announced NX specifically as their continuation in the dedicated gaming devices industry. That's the sole reason they announced its existence so early. I think you are going too far with that speculation.
Pokemaniac
Member
I'm not sure they'd really go that route. They keep emphasising that their dedicated hardware is still their main business. Their stated goal for mobile is to get people into their ecosystem and ultimately buying their dedicated hardware. Doing stuff like releasing full games on PS or Xbox goes against that.
Besides DeNA, there is still that $100 million acquisition which is still unknown.
There won't be a Nintendo cloud streaming service:
1. PS now is probably the best one currently on the market. Sony owns Gakai, Microsoft has awesome servers, Nintendo dont have the resources to implement one nearly as good as Sony or MS can.
2: Most old and new Nintendo game could be easily ruined by even slight latency.
1. PS now is probably the best one currently on the market. Sony owns Gakai, Microsoft has awesome servers, Nintendo dont have the resources to implement one nearly as good as Sony or MS can.
2: Most old and new Nintendo game could be easily ruined by even slight latency.
Pokemaniac
Member
1. ARM is looking much more likely at this point than x86.
2. The difference in ease of portability if they used x86 would be basically negligible.
At least we know that Nintendo is researching this thoroughly, going by the cloud computing patent, which addresses both your issues. So no reason to completely exclude this hypothesis.
But given Iwata's statements about unifying the consoles & handhelds, x86 being used for the NX Platform isn't likely. If anything, Nintendo would probably opt for ARM across the board.
Oh Nintendo is working on Cloud research since 2011 or 2012, there was a Iwata Asks in this Years with NERD.
Quote from IA
https://www.nintendo.co.uk/Iwata-Asks/Iwata-Asks-NERD/NERD/1-Introduction/1-Introduction-759158.html
and we know that NEED is researching new technologies for a new platform since 2012...
Sorry man, I haven't been following Nintendo news as closely as some of you guys- my reasoning is basically this:
I want to believe Nintendo has bigger ideas than launching dedicated hardware in the middle of a generation in a climate where the competition has greater than 80 million units sold.
At the end of the day, Mario Kart has the potential of selling GTA numbers, Zelda has the potential to destroy Uncharted/Halo sales, and titles like Splatoon will reach those grandiose profit heights of Nintendo IPs of yore.
IMO, a better strategy would be to acknowledge the competing platforms and lock them into a service that ultimately benefits Nintendo for years on forward as opposed to just a one time purchase. Think of it like EA Access, but you are required to both purchase the game and pay to play. I think it could work and bust the seams on potential userbase and profit.
R
Rösti
Unconfirmed Member
I suggested a while ago to Emily Rogers that maybe we can get some leads on this from the "Nintendo Co., Ltd. - Mergers & Acquisitions (M&A), Partnerships & Alliances and Investment Report" by MarketLine, published in November last year: http://www.researchandmarkets.com/reports/2347125/nintendo_co_ltd_mergers_and_acquisitions#pos-0
The report costs €332.
They do not the resources. DeNa has a livestreaming app since last year, works together with Alibaba since 2011 and Nintendo has shares in DeNa.
I'm not saying it is going to happen, but I also wouldn't say it can't.
Yeah, no. This is a real silly way to interpret the tweet. Those are completely different statements.
The tweet is talking about compatibility. It's compatible with smartphones, computers and perhaps even the 'rival' PS4 console.
NX 'rivalling' the PS4 is such a dumb throwaway statement that has nothing to do with the rest of the tweet, I can't see why anyone would interpret it as such.
Live streaming is not nearly as latency sensitive as gaming.
No disagreement thats why I mentioned "works together with Alibaba since 2011".
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