Nintendo wants 70 percent third-party support for Wii

[griffinA]

Dodece said:
@griffinA

I am sure you thought you were being clever, but you demonstrated the problem mindset for them perfectly. The reason those two enjoy such strong third party support is a testament as to how they do business. This is how you get strong third party support. You demonstrate that a console is a viable format through your software. You provide financial incentives to get needed software. You make a dedicated effort to secure the most prized consumers.

By the way the model isn't unprofitable. The reason Sony is unprofitable is because they pushed the pricing envelope too far. They did this by trying to turn a game console into a Trojan horse. Which is something Nintendo can't really do. They like Microsoft contract out for their parts and the manufacturing.

So Nintendo already has one destructive temptation out of the way. Besides we are not talking about loss leading. We are talking about investing in mature first party titles, and investing in third party titles by providing incentives, and by proper marketing.

The name of the game is not making money. The name of the game is making more money, and that is why Reggie wants stronger third party support. It means their next console could enjoy better support, and thus be more likely to be successful. The race doesn't end when you have a dominant console. You have to fight to stay on top. Having a console that sells more brings you more money, and if weak third party support might mean your next console will much less then that is something you should resolve.

Like I said in my first post I just think Nintendo is so conservative that they will not abandon their old ways. Even when the answer is right in front of them. They will not be able to bring themselves to the point where they will actually craft mature games, spend the money to acquire high end exclusives, or actually market themselves as a console for gamers. Oh and before you say so what. This is exactly what got Nintendo into third place for two generations. They were effectively not competing, and they are not really competing now. They just found a overlooked market that is paying huge dividends. Not that the others will let them have it all to themselves next generation.

You might not understand this or just blow it off, but if Nintendo does not have the core or hardcore on board. Then Microsoft with its game show concept, and Sony with its Second Life concept may very well take huge chunks out of the casual market. While they maintain those other two markets, and if that happens Nintendo will zip right back down into third place, and have another profitable console that just sells twenty million.

No, I understand completely. What you're asking Nintendo to do is to be more like Sony. But Nintendo has won this generation by deliberatly persuing what you would call "the least prized customers." I suggest you read up on what "blue-ocean strategy" and "disruption" really is. Nintendo isn't "non-competing" they are competing. If you want proof just look at all the effort Sony and MS are going to go through to compete for these "least prized customers" as you put it.

Futhermore, you're right, the name of the game isn't making money...it's making customers. Successful businesses create good customers. That is what Nintendo does, it's why they have such a ravenous fan-base.

Lastly, Nintendo with never, ever, ever, create M-rated games. They create games that everyone can play, that's they're strategy; to not restrict their potential customer base. It's gotten them the best selling games of all time so i'd say the strategy is a good one.

You overall point is correct, the reason Sony and MS are in their current position is because of the way they do business: poorly. Nintendo has NEVER been in the red. They do business well.

 

EDIT: As an aside, i suggest you read articles by Sean Malstrom. He relates the ideas of Blue Ocean Strategy and Disruption to video games. He also explains Nintendo's strategy.