DMJ,
this article is not about "rubbing in" Wii's success. It's about things going on right now, in 2008. It's about how the old market is reacting to being disrupted, right now, in 2008, by distorting their view of the market, and creating this magical, undefinable "casual gamer" demographic. (Not in 2006, but in 2008.)
Squill,
Even if your 80/20 "rule" has merit, there's a key difference. In the old market, the profit, revenue and production costs were fairly aligned, and profit margin reletively even across the board. GTAIV is one of the most expensive, but also highest selling and most profitable. Basically, those who spend the most money get the most differentiation, and sell the most.
But right now, some of the games with the lowest production cost are among the highest selling and most profitable, and blowing historical profit margins away, with Brain Age being example #1. This is because there has been a shift towards underserved customers and new values, motivations and processes. Nintendo is spending less money to get the most differentiation.
Maybe both are 80/20, but obviously there are two different business models, and obviously one is better.
(Of course the new market will eventually become oversaturated. At first, GH and GHII probably had some of the highest profit margins in gaming. But now with more peripherals with more and more inputs (slide neck, bottom buttons, motion control, etc.), and with more and more liscensing fees for not just more and more songs, but celebrity bosses and instruments, guitar games' profit margins will quickly erode.)
"[Our former customers] are unable to find software which they WANT to play."
"The way to solve this problem lies in how to communicate what kind of games [they CAN play]."
Satoru Iwata, Nintendo President. Only slightly paraphrased.
