Soundwave said:
Mr Khan said:
Soundwave said:
Mr Khan said:
Wow this guy really gets it wrong, and fast. Nintendo is *not* a games company at heart. They make their games to sell hardware, that is their role as the hardware maker, to make games that push it. Their compelling first party library is created out of a need to sell consoles.
Understanding as much is essential before one can move forward. |
“The hardware is just a box you buy only because you want to play Mario games.”
- Hiroshi Yamauchi
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The point of that story is that it is software that drives hardware, not that hardware isn't what they're really trying to sell you.
Nintendo's strategy is predicated upon selling you the box by making compelling games, but the real money comes as a box-maker (or toy-maker, as soleron said). What Yamauchi was saying in the quote is that people don't buy the box if you don't have good games for it (a lesson lost on Iwata at the 3DS launch, though a little less so for Wii U's due to 2D Mario). It's the lesson that Sony learned the very hard way with the PS3 launch, where they thought they had made such a hot piece of technology that the thing itself was desirable.
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No it doesn't come from hardware. Even in the SNES days, they made what? Maybe $20-$30 off the hardware box total? In the life of the console if you bought say 8 games for the thing, they made $10-$30 every time you bought a game.
My friends are always surprised when I tell them that their game console is probably one of the few things in their house that's sold to them at a loss.
Its fanboys honestly that deify the hardware as being the most important thing ... the hardware is just a means to an end. People champion a piece of hardware and make that the most important thing. From the sounds of it, Nintendo's business model may be changing soon too anyway from Iwata's most recent comment. Obviously after three straight years of operating losses at Nintendo, something is not working.
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Accessories and royalties are the key points here. Yeah, you'll make $20-$50 total, depending on demand and markup and exchange rates, but that gets people into your environment where it's less about selling them your software and more about getting what is effectively free money from software royalties, or being able to sell $5 of plastic as a $30 controller (or much more, nowadays). Or getting people on board with the eShop, etc.
To get people to buy the box, now you're getting into an environment. Which is effectively what the others are trying to do as well, but without the idea that it's *your* software that are driving people to buy your box.
