Editorial (external): Nintendo’s Roaring Nine

[Sqrl]

Erik Aston said:
Nintendo has a situation where they can simply use the parts similarly priced to what they used last generation to build the new console. This will of course net them a significantly more powerful machine than the Wii. But they also have another benefit working for them, the fact that the Wii is a proven concept now will allow Nintendo to feel far more secure in their venture the second time around, as a result it is very likely they will feel more comfortable with a smaller profit margin on the console and as a result we could see even more power from the extra expenditures. When you add to that a generations worth experience gained from the motion controls you get a pretty good situation.

I think this thinking is way, way, way off base.

Nintendo is looking to become a perpetual disrupter. Wii is not one big single market disrupter that Nintendo wants to use to reinvent the market once to establish advantages, and then coast off those advantages even as the profits get thinner. They are not risk-adverse at all.

What you're describing is how Nintendo fell to third place in the first place. Trading profits for system power, and looking to perfect proven concepts instead of create new concepts. That describes SNES, Gamecube, GBA and N64 minus about 3 or 4 games.

Brain Age. Nintendogs. Wii Sports. Wii Fit. Does this look like a company that is happy to stick with a proven concept, or one trying to perpetually reinvent the market? A "WiiHD" which doesn't open the door for more radical new ways to play could well be dominant. But it would be an utter abandonment of what they've been doing for the last 3 years.

Those two bolded words are very important. I was talking about the current situation going into the next generation. Not what I thought their actual strategy would be. I was simply trying to point out that from a financial and expectation standpoint Nintendo is in a great position.

Edit: The strategy Nintendo ultimately employs will be a lot more involved than just tech upgrades and taking advantage of past experience.  All three companies will have in-depth well thought out strategies for their new consoles, but they won't be starting on equal footing and right now it appears Nintendo will have a clear advantage.