Lifespan of the Wii?

[Erik Aston]

Some projects can be cancelled, but it would be silly to pull the plug on anything that's already cost 8 figures. Makes much more sense to port it to 360 or better yet go to Sony and beg for money.

Either way, its bad for Sony.

Nintendo's previous system had a 12% market share. It'll take more than just being better than that.

Well, they've got a 34% marketshare right now, and much more than that on a month-to-month basis WW.

PS1 did not have the PlayStation brand or the 12 years of building developer relations that goes along with it. Also, back then, Sony was not a strong publisher, and its internal efforts had been jokes consisting primarily of its own crappy licenses. Sony's not the new kid on the block any more. They know the industry, and the industry knows them. I do think they're too arrogant for their own good, but that doesn't negate the good things that they have going. Let's see Nintendo try to sell a $600 system and see how far they get.

Nintendo wouldn't launch a $600 console. Sony's arrogance DOES negate the good things they have going, because that arrogance RESULTED in the high price tag and bad press which alienated customers and caused this giant post-launch drop-off in sales.

You can only get so far on the basis of one company. We saw that with N64 and Gamecube. At least on N64 they had Rare, but now they don't even have that. Third parties are needed to win. They need to start embracing them and stop doing everything based on their own needs. That's what got them in trouble in the first place.

Nintendo understands this. However, when they aggressively pursued third parties with Gamecube, they failed. They failed because MS could pony up money, and Sony had the install base. Do you think that Sony needed to buy exclusivity on third party franchises after 2002? Even when Nintendo ponied up the cash for RE4, it still went to Sony, probably for free, because they had the install base. Nintendo are going after the install base. That is the only way to secure major third party support in the long term. In the short term, they've got a dev. cost advantage.

I want to see a company willing to spend. That to me says they're serious. Aggressive marketing, losses on hardware, shopping for exclusives, online gaming, whatever it takes. It can be argued this isn't the smartest move, and perhaps Nintendo's too small to do it, so cutting corners was probably their best strategy.

You continue to underestimate how big Nintendo is, and prove you haven't really examined their strategy. As I have said, they had enough in the bank to have two XBox-like embarrassments in a row if they so chose. They haven't cut any corners, they've merely challenged the conventional wisdom within the industry, which is that a company has to risk billions upon billions in an arms race with their competitors to have any chance at success.

We saw Microsoft reduce about 25% months ago, and they're just above the 10 million mark. Sony's halfway to that point and has a lot more room to reduce.

Sony's halfway to what point now?

A 25% reduction for Sony just gets them down to what? Still above wholesale, I imagine. They are in danger of losing money on each PS3 sold for the entire life of the console. They better hope they are able to reduce by 80%+ to get to the $100-150 sweet spot that Nintendo will be on the lower end of in 5 years. 

The difference between N64 and now is that N64 lost all its exclusives before it even had a chance to get them.

Another difference is that Nintendo owned all the biggest franchises of the day, had just landed the rights to James Bond, and were in the midst of establishing what became the second most popular franchise of all time over on Game Boy. Sony owns only one uber-franchise today.

Microsoft may not have wanted shorter lifecycles perse, but their goal of launching earlier than the competition resulted in it.

Do you not understand what "goal" and "strategy" mean? Launching early is a strategy, massive profits is a goal.

PS3 already has third party support. It doesn't need to get it. Obviously, going forward, we are talking about something different, but there are enough major projects already in the works that developers will be looking at sales of those to determine where to go next.

PS3's third party support is now only stronger than Wii's due to MGS and FF, and we have yet to have a major industry media event for game announcements since the consoles launched. The biggest franchise still up in the air is Kingdom Hearts, roughly as popular a franchise as MGS.

Sony doesn't even have any first party games out yet. They never feel the need to launch with a killer app. If they did, we'd have seen God of War II on PS3, where it probably should have been.

Resistance and Motorstorm, their only two hits, are both first party.

Bingo. Once Nintendo's quick start disappeared combined with lackluster third party sales, support dried up.

Nintendo did not have a quick start with GC. They had 2 good months in one region. Wii has had 5 good months in all three major regions, and has (no surprise) constantly improving support.

The exclusives are meaningless, though. Well, maybe not quite meaningless, but largely pretty close to it. Mario, Pokemon, SSB, etc. are all excellent exclusives to have, but as far as third parties, the list ranges from "Who cares?" to "Okay, maybe even pretty good," with an emphasis on "Who cares?" Their biggest exclusives are spinoffs that we already know won't sell as well as the main franchises (we saw this with both FF and RE already) that are going to be on other systems.

Well, exclusive "spinoffs" on Wii have outsold the main series counterpart on PS3 twice already (Tony Hawk and Sonic). That's not too bad.

I'd just say "wait until the major media events." I'm not sure when they're all coming. And remember that if you want to talk about third party mega-franchises, Sony merely has a 2-0 win over Nintendo. Not enough to win a console war on.

Making a profit over the long term at the expense of short term losses is how the industry works. Nintendo can have a profit annually (primarily from its portable sales but whatever), but the others are willing to be more aggressive.

Its how you've been taught the industry works. Its the prevailing wisdom of the day. However, that loss is supposed to keep your system cost down, and get it into homes faster than your competitors. Thats why companies subsidize their consoles early on. When a company already losing money needs to cut the price just to stay in the game sales-wise, they're in trouble.

And one of the key traits of the "Blue Ocean Strategy" is the ability to break the cost:value relationship. Nintendo made something more valuable to consumers which costs less to make with games like Wii Sports. It is designed to do exactly what you're attacking it for.

 

The next time you're at the mall, think about stopping by Barnes and Noble, finding the book "Blue Ocean Strategy", and reading the first few chapters. Should be required for anyone trying to discuss "console wars".