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Forums - Nintendo Discussion - The Nintendo Third Party Dilemma: How we got here and why (from Gaf)

Incubi on 28 August 2013

Maelstrom picks apart the author from GAF:

First off, the guy gets the generations incorrect. There are only two generations of game consoles prior to the Atari crash, not three. There were the consoles without cartridges (PONG machines) and the consoles with consoles (beginning with the Atari 2600). 1977 (when the Atari 2600) to 1983 (the crash) is six years which is the average length of a generation. In trying to split it into two, the guy has Generation 2 be three years and Generation 3 be three years. COME ON. Three year generations?

Now let’s roast this turkey.

Nintendo, who had been suffering financially since the gaming market crash during the Third Generation…

The author makes up things out of his own ass. Nintendo was certainly not suffering financially. Nintendo was making best selling games in the arcades (Donkey Kong Jr. and Mario Brothers) as well as TAKING OVER JAPAN with the Famicom in 1983+.

Where else does the author think Nintendo got the money in order to release their console in the United States? Nintendo had extremely strong financials which is what attracted investors during their American push.

Hiroshi Yamauchi, Nintendo’s president, instructed his engineers to leave out the frills of the other gaming systems, and include only the essentials to save money.

I can’t tell if the author is referring to the Famicom or the NES. The NES was originally shown at Consumer Electronics show with a keyboard and all sorts of frills. The original NES release included R.O.B. the robot, light gun, multiple controllers, and a couple of games (Duck Hunt and Stack Up I believe). Essentials my ass.

He is likely referring to the Famicom that did had an initial defect rate. He doesn’t mention that Nintendo ate the cost to repair the problem. I’m not sure what he is talking about when it comes to the Famicom hurting its relations with retailers and developers. Famicom unpopular in Japan? The author is crossing into science fiction and fantasy.

After the Nintendo Entertainment System (NES) was released, Nintendo pressed for huge media infiltration of their advertisements, which was something not being done by competing systems. The market had been extremely slow in the previous years, and many companies were very cautious.

Nintendo was very cautious with the NES release. It released the NES in ‘test markets’. The first ‘test market’ was New York City.

I have no idea what he is referring to with ‘marketing media blitz’. Does he mean the Fun Club Newsletter? I would not call that a ‘marketing media blitz’. A few commercials on TV that had R.O.B. the Robot? What exactly is the author saying? We don’t know. He just goes on.

Nintendo, fueled by a marketing drive rarely seen, was able to capture nearly 90% of the U.S. gaming market by 1986.

I’m not sure if the year is correct. Nintendo did get 90% marketshare which had to have occurred before the release of the Sega Genesis (1989).

What was the gaming market in that time? I know they aren’t including arcades or PCs here. The numbers would reflect whoever was growing the market the fastest, and it sure wasn’t the Sega Master System.

The NES penetration rate would exceed that of Atari 2600s and has yet to be surpassed in popularity (in terms of household penetration) by any console that came after it. It is why in 2006, Nintendo execs kept citing the Wii to resume NES’s mission to ‘grow the market’. Gaming was not becoming more popular, society-wise, since then.

This popularity had dozens of gaming companies at Nintendo’s door to produce titles for their system.

This is true. Everyone wanted a piece of the pie.

However, because of Yamauchi’s foresight, Nintendo had changed the previous “free-market” set up of the industry with the inclusion of something called a “key-chip” in his NES units.

Yamauchi had nothing to do with this. The Famicom didn’t even have this chip, I believe. The lock out chip of the NES was put in place to avoid the fate of the Atari crash. You had to have Nintendo’s permission to sell your game for their system. There is nothing unusual to this, and Nintendo’s NES practices established the legal framework that consoles today use.

‘Free market’ set up? This was the free market at work. Atari OWNED the game console market, but they screwed it up. American game companies abandoned the console market which is why a Japanese game company took over.

During the preceding generations, a video game programmer would simply purchase the equipment to construct games for a system from the system’s parent company. The programmer was then was free to design any game without permission from the company. (A prime example of this was the video game based on the “Porky’s” movies released by CBS for the Atari VCS/2600.)

THIS IS WHAT CAUSED THE ATARI CRASH!!!! Does the author not even know what he is saying!??? Anyone and everyone began making games for the Atari 2600, even General Oats and Colgate. There was so much crap out there that it all crashed.

Yamauchi did not like this freedom given to the designers.

The statements the author makes. He makes it sound as if Yamauchi is some emperor or something.

The disabling code was then patented by Nintendo and copyrighted. The result was that it became illegal to reproduce the code, without Nintendo’s consent. Nintendo then made specific contracts that companies must agree to abide by in order to receive permission to reproduce the “key-chip.” This gave Nintendo complete control over its third party licensees, and they used that control to propel the Nintendo Entertainment System farther.

Atari stole the code from the copyright office and began making cartridges of their own without Nintendo’s permission. It caused Atari to get sued in a very large court case.

I’m not sure what ‘control’ the author is referring to. The only ‘control’ Nintendo had was to make sure games were not published without their consent on the system. For example, a third party couldn’t make more than five games per year on the system. The reason why is because Nintendo didn’t want a flood of crap. Less games meant companies would try to make the games good so they would sell better (instead of flooding with software).

The Nintendo platform was not the console market. It was Nintendo’s market. They took the risk and established it. And there was MASSIVE risk back then and even today of making game consoles.

Because of Nintendo’s considerable market share, few companies argued with this policy.

It was the law, not Yamuahi’s ‘will’.

The result was that many competing systems were driven to extinction because of a severe lack of games. Companies like Atari and Sega could not hope to compete with a system with over 100 new games each year, when they could only produce a dozen or so annually without the help of third party licensees. This propelled Nintendo’s domination of the market further.

Then why did so many games on the NES appeared on the Atari and Sega systems? Even Nintendo’s own games appeared on Atari’s system.


Above: Even Atari had Mario and Luigi. Of course, this was not SUPER Mario Brothers which was a phenomenon back then.

Nintendo began orchestrating game shortages sometime in 1988. This was called “inventory management” by Peter Main, an executive in charge of public relations at Nintendo, but was really to keep the customers on a short leash. By limiting the amount of product available, Nintendo could keep the demand for the product high. The editor of one toy-industry journal noted that “Nintendo has become a name like Disney or McDonald’s. They’ve done it by doling out games like Godiva chocolates.” By design, Nintendo would not fill all of the retailers’ orders and kept half or more of its library of games inactive and unavailable. In 1988, for instance, 33 million NES cartridges were sold, but market surveys indicated that upwards of 45 million could have been sold. That year retailers requested 110 million cartridges, almost 2.5 times the indicated demand. These practices would greatly benefit Nintendo, but drive many smaller software firms out of business. Certain titles would be produced, then sold very slowly over the span of a year, and the profits would not come in fast enough to keep these small companies afloat. The toy and electronics as well as department stores became dependent on Nintendo, in addition to most game producers. This gave Nintendo a great deal of clout in dealing with companies who were used to throwing their muscle around.

1988 was when the NES really took off. It was 1988 when there was a great cartridge shortage. There was no ‘manufactured shortage’. It was like the Wii. Nintendo just didn’t have enough cartridges due to overwhelming demand.

Another Nintendo policy that made retailers furious was their return policy, or lack thereof. Because Nintendo’s quality control was boasting a defect rate of 0.9% for hardware and 0.25% for software by 1988, Nintendo executives did not see a need for their previous 90 day guarantee. A new policy was announced to the retailers: no returns. Once a game cartridge box or system box was opened, a refund was out of the question. Concerning this, Sheff wrote:

“Pandemonium followed. One of the largest retailers in the country threatened to stop carrying Nintendo Systems and products. Nintendo refused to change the policy and the retailer refused the products. The retailer held out for three months; after that it crawled back and agreed to Nintendo’s terms.”

The melodramatic Sheff quotes aside, why would Nintendo take a loss on defects when the NES which was selling out everywhere? Nintendo had a hot product. So they placed the leverage on the retailers. The retailers could either choose the risk of the low defect rate to have the ‘hot product’, or they could do without. I don’t see the issue here.

Nintendo’s next atrocity would be to use the considerable monopoly they had to control the consumer. Because of the game shortages, consumers would be more concerned about getting a particular title than the price. And because of Nintendo’s domineering stance with the retailers, they were able to dictate the expected prices for their games.

No. Demand was greater than supply. When that happens, the supplier sets his own price. When the supply is higher than the demand, the demand sets its own price.

In the electronics and computer industry, you can expect equipment to reduce in price over time. When new devices are created that make older ones obsolete, the older devices are reduced in price to compete with the newer ones. This is clearly evident if one simply peruses the want-ads in their local paper and notes the prices of computer systems that were considered state of the art a year previous. This logic applies to all aspects of the computer and electronics industry, including video games. Why then between 1985 and 1989 did the Nintendo Entertainment System only lower $10 in its price?

It is because demand didn’t lower until 1989. And 1985 and early 1986 were nothing but test markets. The NES was similar to the Wii phenomenon.

This was exactly what Attorney Generals from all fifty states were wondering when they began investigating the activities of Nintendo of America in 1989. They found that Nintendo had been fixing the price of systems and games in the stores, using intimidation to influence retailers to abide by their wishes, and were making astronomical profits. Nintendo had been doing this since they first brought out the NES in 1985. They had strived to construct the system inexpensively, however, it was being sold at the same price as the competing systems. An antitrust action was brought up against Nintendo by these same Attorney Generals, and on October 17, 1991, District Court Judge Sweet granted approval of settlement agreements. [775 F.Supp. 676 (S.D.N.Y. 1991)]

Here is the letter I received.

Note that the author refrains from quoting reactions to this case. Let us hear what Sheff said in his book “Game Over”. This is a quote from page 273 from my book.

What it boiled down to was that Nintendo was forced to offer a merchandising deal that Peter Main might have cooked up on a good day. It was, pure and simple, a promotion to encourage people to buy millions of Nintendo games. It was also an indication that the government’s case against Nintendo was fragile.

But Sheff doesn’t stop there. He quotes an editorial in Barron’s (December 1991 issue). It says:

The settlement, the piece read, “was declared a victory. Abrans said it sent ‘the most powerful possible message across the country that we will not tolerate this kind of pernicious practice which takes millions of dollars out of the pockets of consumers.’ Indeed, it was a victory for Abrams, who arranged for Nintendo to mail out the coupon with self-congratulatory letter from him, just as his campaign for the U.S. Senate got under way. In contrast, consumers had to spend $20 to $70 on Nintendo products in order to enjoy the $5 rebate.

The government had lost the case. The letter and coupon was the government saving face by the politicians trying to show ‘the folks’ that it wasn’t all for naught. It was open season on anything Japanese in the 1980s.

I personally think that the inherent risks of a signle system market are sufficient to warrant concern if the industry becomes dominated by one company again.

What is this author smoking? The NES didn’t ‘dominate’ the market, and didn’t ‘take over the market’. There was no market there. The NES created the market. It was like the Wii with its Wii Sports and Wii Fit games. Nintendo didn’t take over fitness game market because there really wasn’t a fitness game market to begin with.

The only thing stupider than the author are people who cite NES history as to why modern day third party companies don’t want to publish their games on the Nintendo system. The reason why they don’t is because they don’t think they will make money. However, third parties publish games on the Nintendo handheld system all the time outside of the Sony handheld  because *gasp*, they think they can make money that way.



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Ponyless on 28 August 2013

Why are you posting a NeoGaf thread from a month ago?

Anyways i thought this was a good response by tehrik-e-insaaf that for some reason no one responded too :

Much of OP is revisionist history trying to explain "third-party" decisions - this is flawed because the bulk of today's third parties are primarily PC-driven developers who never had any relationship with Nintendo. The few remaining like EA were always closer to Sega/Sony which both had California-centric executives who all lived in the same neighborhoods.

Some of the empirical evidence cited is really dumb. Yes Nintendo built lock-out chip, but it was in direct response to the flood of crap that destroyed the Atari 2600. There were many pleased third parties even if there were some that were dissappointed. The licensing fees that developed from maintaining the proprietary nature of the platform kept the format alive and gave birth to the idea of subsidized hardware that Sony pushed when the Playstation came out.

As far as the revisionist history of the Gamecube. The mini-disc format did not matter as most games were well under 1.5 gigabytes at that point and compression was a cakewalk. Third parties supported it well frankly who were traditional console developers - where Nintendo failed was in bringing over the Goldeneye market to the Gamecube by dumping Rare and losing their party-game shooter Perfect Dark that had a shot at recapturing that market from the N64. Microsoft came in with with Halo and Nintendo was left with a console that didn't have its traditional dominance in local multiplayer nor the novelty of DVD. Nintendo tried to fit into industry conventions and failed IMHO with respect to gaming hardware because they were fighting on multiple fronts.

I would argue that even having DVD would have made little difference. Sony had two things: Grand Theft Auto III exclusive for the first few years, and second, exclusive Japanese games that Nintendo wasn't gonna get since Sony had an iron fist in Japan. Microsoft realized the problem with getting Japan since Sony had a brutal lock on everyone there, and courted PC developers to prop up the Xbox after they realized it was going to be difficult. They also bought off Peter Moore to effectively destroy Sega's US base in exchange for a job offer. Nintendo was squeezed as the Western relationships they had cultivated were poached away (including a ton of people at NoA) in a few months by Microsoft and getting back into Japan was going to be a difficult process with Sony's mega-dominance of that territory.

Listen, forget the revisionism and all the other side show drama. There is a very simple reality here. Nintendo doesn't have third parties because they have decided there are better places they can spend their time and money to get a return, and they get loads of attention from MS (and Sony to an extent). NIntendo has to do two things: first show there is a market for non-Nintendo content currently on the platform by actively co-promoting third party games and building a userbase for those games. They are doing that by taking localization risk for certain games from Japan, and promotions like the SMT IV eShop credit that will likely convince Atlus that releasing console-content is worth the risk. They could do a few more things which I won't delve into here.

Second, they need to have a better on-the-ground presence in the markets where most of the executives and developers are so that there is momentum on their side (California mostly). In the past they delegated those tasks to NoA - but faced poaching by MSFT pre-Xbox release - and the new Japanese management couldn't just rebuild NoA overnight and get those institutional relationships back. NCL has now incorporating those relationships directly through Japan because they don't want another NoA-like situation.

These things will come in time as NCL is now becoming a more global company rather than offloading regional work to silos abroad (Nikkei has an article on this if anyone is interested) - in any case I think depending on PC developers and EA is a poor strategy to rely on fixing the issues with the Wii U - because there are already lots of alternative places to play that content - and most people are not going to buy a Wii U to play those games on a Nintendo console (although it might help).

To turn things around, my view is that Nintendo should stick to generating more first-party content, focusing on diversifying their own lineup, growing indie relationships (perhaps by having an indie center in Austin in proximity to Retro Studios and really funding smaller projects that take advantage of the GamePad), focus on locking up interesting content that they know will be a good fit for the userbase from Japan where they have a better presence and localizing it, expanding retail by growing the Nintendo World format and controlling the experience of buying a Nintendo console more closely, and pushing their own last-gen tie-ratio beyond 10 with most it being their own software.

The word from Japan is that third parties are finally getting back into 3DS development - it took Nintendo's sheer willpower to get the content out that made it attractive. Now Nintendo needs to focus on getting the Wii U business back and I think they are on the right track - they are releasing games that their own base will consume far quicker than the Wii - and they are rolling out the red carpet - once the momentum comes back they can focus on doing riskier projects and really push third-party collaborations.

At the end of the day,even with all the Wii U's issues, I think it will clear around 40 million consoles and end up being *far* more profitable than the Gamecube was for Nintendo.



bananaking21 on 28 August 2013
DieAppleDie said:
are mods going to ban me cause i badmouthed the guy from gaf who wrote the text?
keep dreaming bAnana


you were talking to me obviously, anyways ill leave it up to the mods. 



bananaking21 on 28 August 2013

ponlyLess^^ i just read the thread. im not a Gafer so i didnt read it before.



Ponyless on 28 August 2013
bananaking21 said:
ponlyLess^^ i just read the thread. im not a Gafer so i didnt read it before.


Ah.. Sorry then, i seen this article used a bit before whenever Nintendo comes up so i figured someone made a thread about it before. My bad



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burninmylight on 28 August 2013
Ponyless said:
Why are you posting a NeoGaf thread from a month ago?

Anyways i thought this was a good response by tehrik-e-insaaf that for some reason no one responded too :

Much of OP is revisionist history trying to explain "third-party" decisions - this is flawed because the bulk of today's third parties are primarily PC-driven developers who never had any relationship with Nintendo. The few remaining like EA were always closer to Sega/Sony which both had California-centric executives who all lived in the same neighborhoods.

Some of the empirical evidence cited is really dumb. Yes Nintendo built lock-out chip, but it was in direct response to the flood of crap that destroyed the Atari 2600. There were many pleased third parties even if there were some that were dissappointed. The licensing fees that developed from maintaining the proprietary nature of the platform kept the format alive and gave birth to the idea of subsidized hardware that Sony pushed when the Playstation came out.

As far as the revisionist history of the Gamecube. The mini-disc format did not matter as most games were well under 1.5 gigabytes at that point and compression was a cakewalk. Third parties supported it well frankly who were traditional console developers - where Nintendo failed was in bringing over the Goldeneye market to the Gamecube by dumping Rare and losing their party-game shooter Perfect Dark that had a shot at recapturing that market from the N64. Microsoft came in with with Halo and Nintendo was left with a console that didn't have its traditional dominance in local multiplayer nor the novelty of DVD. Nintendo tried to fit into industry conventions and failed IMHO with respect to gaming hardware because they were fighting on multiple fronts.

I would argue that even having DVD would have made little difference. Sony had two things: Grand Theft Auto III exclusive for the first few years, and second, exclusive Japanese games that Nintendo wasn't gonna get since Sony had an iron fist in Japan. Microsoft realized the problem with getting Japan since Sony had a brutal lock on everyone there, and courted PC developers to prop up the Xbox after they realized it was going to be difficult. They also bought off Peter Moore to effectively destroy Sega's US base in exchange for a job offer. Nintendo was squeezed as the Western relationships they had cultivated were poached away (including a ton of people at NoA) in a few months by Microsoft and getting back into Japan was going to be a difficult process with Sony's mega-dominance of that territory.

Listen, forget the revisionism and all the other side show drama. There is a very simple reality here. Nintendo doesn't have third parties because they have decided there are better places they can spend their time and money to get a return, and they get loads of attention from MS (and Sony to an extent). NIntendo has to do two things: first show there is a market for non-Nintendo content currently on the platform by actively co-promoting third party games and building a userbase for those games. They are doing that by taking localization risk for certain games from Japan, and promotions like the SMT IV eShop credit that will likely convince Atlus that releasing console-content is worth the risk. They could do a few more things which I won't delve into here.

Second, they need to have a better on-the-ground presence in the markets where most of the executives and developers are so that there is momentum on their side (California mostly). In the past they delegated those tasks to NoA - but faced poaching by MSFT pre-Xbox release - and the new Japanese management couldn't just rebuild NoA overnight and get those institutional relationships back. NCL has now incorporating those relationships directly through Japan because they don't want another NoA-like situation.

These things will come in time as NCL is now becoming a more global company rather than offloading regional work to silos abroad (Nikkei has an article on this if anyone is interested) - in any case I think depending on PC developers and EA is a poor strategy to rely on fixing the issues with the Wii U - because there are already lots of alternative places to play that content - and most people are not going to buy a Wii U to play those games on a Nintendo console (although it might help).

To turn things around, my view is that Nintendo should stick to generating more first-party content, focusing on diversifying their own lineup, growing indie relationships (perhaps by having an indie center in Austin in proximity to Retro Studios and really funding smaller projects that take advantage of the GamePad), focus on locking up interesting content that they know will be a good fit for the userbase from Japan where they have a better presence and localizing it, expanding retail by growing the Nintendo World format and controlling the experience of buying a Nintendo console more closely, and pushing their own last-gen tie-ratio beyond 10 with most it being their own software.

The word from Japan is that third parties are finally getting back into 3DS development - it took Nintendo's sheer willpower to get the content out that made it attractive. Now Nintendo needs to focus on getting the Wii U business back and I think they are on the right track - they are releasing games that their own base will consume far quicker than the Wii - and they are rolling out the red carpet - once the momentum comes back they can focus on doing riskier projects and really push third-party collaborations.

At the end of the day,even with all the Wii U's issues, I think it will clear around 40 million consoles and end up being *far* more profitable than the Gamecube was for Nintendo.

Your words are like sexual healing for my soul.



Metallicube on 28 August 2013

Third parties WANT Nintendo to fail, plain and simple. If Nintendo goes, the standard in the industry goes TREMENDOUSLY lower, and the third parties get a TON more leverage in the industry, as Sony and MS essentially bend to their will (just look at the fiasco behind the Xbone regarding DRM, before MS quickly came to their senses and corrected it). Nintendo has made their share of mistakes, but at the end of the day they are not the biggest problem. The third parties are the problem..

As long as Nintendo is around, their games will always be measured against theirs, and Nintendo being Nintendo (even in the modern era where their quality has begun to slide), their games are generally still miles ahead over the vast majority of third parties. These companies know this, so they are trying to rid themselves of their troublesome competition, by ANY means necessary. Hell, even the phenomenon known as the Wii couldn't sway the third parties. They walked away from free money, or they put out complete garbage on the console, in order to sabatoge it. They would rather see Nintendo gone than make more money off their consoles, if it means helping Nintendo in any way.

This may sound like tin foil wearing shit but as someone who has paid close attention to the politics of this industry for over a decade and who has seen the actions of the third parties (as well as the third party supported gaming media and analysts such as Patcher) in relation to Nintendo, this to me is quite obvious..



Aielyn on 28 August 2013

Any article that would say that Nintendo's decision to go with a gamepad design similar to that of the DS as a continuation of the "blue ocean strategy" isn't worth consideration. If you don't actually understand business terminology, then you don't actually get business, and thus cannot be considered to have any value in a discussion of why third party businesses don't work with Nintendo more.



Soundwave on 28 August 2013
Metallicube said:

Third parties WANT Nintendo to fail, plain and simple. If Nintendo goes, the standard in the industry goes TREMENDOUSLY lower, and the third parties get a TON more leverage in the industry, as Sony and MS essentially bend to their will (just look at the fiasco behind the Xbone regarding DRM, before MS quickly came to their senses and corrected it). Nintendo has made their share of mistakes, but at the end of the day they are not the biggest problem. The third parties are the problem..

As long as Nintendo is around, their games will always be measured against theirs, and Nintendo being Nintendo (even in the modern era where their quality has begun to slide), their games are generally still miles ahead over the vast majority of third parties. These companies know this, so they are trying to rid themselves of their troublesome competition, by ANY means necessary. Hell, even the phenomenon known as the Wii couldn't sway the third parties. They walked away from free money, or they put out complete garbage on the console, in order to sabatoge it. They would rather see Nintendo gone than make more money off their consoles, if it means helping Nintendo in any way.

This may sound like tin foil wearing shit but as someone who has paid close attention to the politics of this industry for over a decade and who has seen the actions of the third parties (as well as the third party supported gaming media and analysts such as Patcher) in relation to Nintendo, this to me is quite obvious..

Third parties don't really care one way or another. They want to make money.

Nintendo does get third party support -- Disney Infinite, Just Dance, Sonic, Skylanders, LEGO, etc.

The problem is these aren't the games Nintendo fans want. They want GTA, MGS, BioShock, etc. (the "big guns"). There's a demographic issue there though, Nintendo makes almost exclusively family-friendly games starring cartoony mascot characters ... most of the big third party franchises are violent titles, and I think there is a conflict there.

Third parties feel like Nintendo is making a specialized console more for kids.

If Nintendo had Mario, Pokemon, Donkey Kong, Kirby, etc. swapped out for Halo, Uncharted, God of War, and Gran Turismo ... they would get all the dark/violent IPs too.

The problem is Nintendo was too lax in the 90s and early 2000s and basically conceeded the entire core gamer demographic to Sony and MS. They did not capitalize on the success of GoldenEye properly and failed to carry that over to successive generations and that was a huge, huge mistake.

If I'm making Grand Theft Auto, it doesn't matter to me that Mario or Wii Sports sells 10 million+ copies. I got problems of my own, I got deadlines, I got to pay my employees, it's hard enough getting two versions of the same console game running, I'm struggling to deal with high next-gen costs ... figuring out what weird/quirky direction Nintendo is going in and then bending over backwards to accomodate them just isn't in the schedule.

Nintendo just doesn't have carry any weight with third parties making darker/more violent types of games because they don't have any credibility with that audience, so they aren't taken seriously by third parties for those types of games. It's not a personal thing, it's just a business, and Nintendo just hasn't had any huge success with that crowd since GoldenEye, nor have they really even tried all that hard. The Resident Evil experiment on the GameCube largely failed and Capcom's management forced Mikami to bend. No third party wants to be stuck in that situation.



zippy on 28 August 2013

Nintendo does what is best for Nintendo..that is why throughout the years Nintendo has remained mostly profitable, even on lower selling consoles. At the end of the day they are a business, and first and foremost want to make money. The main priority on Nintendo consoles/handhelds is that the hardware is tailor made for their first party games, and perhaps they dont give much thought for the 3rd parties. But thats the way it is, sometimes to remain profitable it comes at a price, and that is 3rd parties unfourtunatly.
If Nintendo made hardware on par with Xbone/PS4 it doesnt mean 3rd parties will suddenly fall in love with Nintendo and release every game possible. Nintendo cant take that risk or the losses, hence cheaper lower performance hardware, driven by their 1st party library of unique IPs, and we know..nobody makes games quite like Nintendo.