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HappySqurriel on 27 July 2008
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Rock_on_2008 said:

Both MS and Sony are much more powerful companies than Nintendo they both have more assets and  engage in other business ventures in which they are extremely profitable in. MS and Sony would be both worth over 200 billion dollars. Nintendo relies solely upon being profitable in the video game console industry. Sony is the leading electronics company in the world. MS is the leading Computer software company in the world. Sony and MS can afford to make initial losses when introducing a new console to the market. Nintendo could not afford to adopt the same business model as MS or Sony.

Losses are expected for a new console, R&D, advertising and other expenses to get the new project up and running. One or two billion dollar loss a big deal to MS or Sony? lol. That is mere loose change to MS and Sony. If Nintendo took a couple of billion dollar loss to introduce a more powerful console onto the market they would being financially ruined.

 

Although there is an element of truth to what you say, Nintendo is still a massive company and can easily afford the  R&D to produce a console that is as (or more) powerful than what their competition produces; with the exception of the NES, every previous Nintendo console was (at least) roughly as powerful as their competition.

Nintendo can also engage in losses (the Gamecube was estimated to lose Nintendo $20 when it launched) and a massive warchest of money (it was $8 Billion before the Gamecube was released, and between the DS and Wii it has to be massive by now), and they have the revenue streams and to be able to support losses on the scale that Sony and Microsoft have; it is not good business though.

 

My expectations for their next system (put in terms of hardware that could have been used in this generation) would be something similar to Nintendo launching the Wii with a PowerPC 970MP at 1.5 to 2.0 GHz, with a GPU similar to a Radeon X800 or Geforce 6800 ... In other words, it wouldn't be as powerful as it could be but the ratio between the processing power and cost to manufacture would be (roughly) the best on the market.

If I was translating this back to to hardware that I expect will be available in the next generation it would be a Power7 based processor running at (greater than) 6 GHz, and a GPU with a similar architecture to the HD4800 with 1600 or 2400 stream processors. The cost to manufacture this system will be (roughly) $300 but Nintendo will still pack in a simple (Wii Sports like) game.