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Azelover on 08 June 2009
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HappySqurriel said:
Azelover said:
The thing that worries me about Nintendo is that they are reaching a point where more and more obstacles are placed in front of them.

For instance, their audience expansion is already very saturated. Naturally that raises the bar on how difficult it will be to expect growth. With many people owning Wii consoles already it's difficult to expect this incredible growth to continue. If they had a new console, or a new design/configuration, maybe re-purchasing would help them keep growing especially at a lower price point. But as it stands right now they're not doing any of those things.

Second there is the economic downturn, that's another obstacle especially when you reach into the late adoption part of the cycle and you're not willing to drop prices. Then there's Natal, which is a PR stunt.

Now let me tell you why this concerns me. Were you here when the Dreamcast was around? Remember how the PS2 was announced in march of 1999 and suddenly it seemed like nobody wanted a Dreamcast anymore? See, you may think PR doesn't work, but sometimes it does. Especially when you're being "Dreamcasted".

Another instance where "Dreamcasting" happened was when the Xbox 360 was launched. Remember the KZ2 CG? FFVII? And guess what was the outcome? That year the 360 had a very bad reputation. Microsoft scrambled to get as many features as possible into their console and it resulted in flawed manufacturing. Among other things.

I fully expect next year to be better for Nintendo if things work out like I'm seeing them. Once the pressure builds up and Microsoft starts having to show their hand, instead of vision, the reality of expectation/letdown could kick in. As it normally does when "Dreamcasting" is used.

But for this year I don't think the "Nintendo is doomed" talk will end. You'll likely see a reduction of YOY sales througout the rest of the entire year. Sometimes dramatically like in November or even December. It is not unreasonable to expect that considering the new obstacles and the lack of solutions for them in the short term. Before Nintendo can rise again, if at all, they'll have to go through this phase which will probably be themed on disappointment this year. Especially when it comes to sales.

Being that the Wii has still seen very healthy year over year growth outside of Japan, what makes you think they have hit a saturation point yet?

The Economic downturn represents a change in people's buying habits towards an overall reduction in household spending; this does not mean that any one area of their spending will (necessarily) see a reduction in spending. It is entirely possible that a reduction in spending on entertainment could translate into lower spending on travel (or other forms of expensive entertinment) to less expensive entertianment like videogames or movies.

A family of 4 can easily justify the purchase of a $250 console and $750 in games if it means that they can reduce their spending on other entertianment by more than $1,000.

I think this "Dreamcasting" is just an excuse for people who were unable to capatalize on the first mover advantage. These systems were never that popular, and the products that supposedly hurt there sales never caused a reduction in the rate their console was selling. Most of the world never knew about what the PS2 was rumored to do, or had ever seen the Killzone 2 video, when they decided to purchase or not purchase the Dreamcast or XBox.

Right now, the vast majority of potential Wii owners have never seen or heard of Project NATAL and are unlikely to hold off buying a $250 console with a game in order to buy a $200+ console, a $100 add on, and a $60 game 2 years from now.

Nice colorful post :)

I didn't really mean it hit a saturation point, what I was trying to say is that the more consumers you successfully reach the more difficult it is to keep that growth going. With the PS2 after 2003 sales slowed down a little. I believe the appeal of the PS2 was more broad, and the competition less fierce. In my opinion this saturation will be reached more quickly with the Wii, and I think it might be an obstacle.

Yes, but how many of those will constitute late adopters? In my opinion, relying on this audience alone will have limited benefits at this point. It is important to drop prices even if a little bit. You can't argue anymore that demand has decreased.

Okay. Lemme try to explain my point simply. Being hot, or not, sometimes can be gauged in simple ways. The Wii was hot, is it still hot? Maybe it is, but if we only use numbers to determine that we won't be able to predict the future. People evaluate their purchases in very simple ways, most people don't necessarily want to waste time on checking certain details, or making particularly educated choices. The great majority of people want in on what is hot. This has benefitted the Wii, you can't argue with that. A truly mainstream product needs to be hot, and what determines that can vary.

What "Dreamcasting" does is exactly what you said. Consider Wii Motion Plus a new platform, along with Natal and whatever Sony is cooking up. If WM+ is about to be launched, and Natal is being shown as a PR stunt, is it not "Dreamcasting"? I think this stuff works more than you can imagine, and you may see the effects of it very soon. If something is seen as redundant, or not hot among early adopters, it may be because a new reference point has been shown that makes it look that way. A lot of naive people do know about Natal from the mainstream media, and if they don't they'll be figuring it out soon either by looking at the media online or simply word of mouth. I'm not necessarily concerned about Nintendo next year because I know Natal is mostly smoke and mirrors, but right now I think they need to do something. Obviously not reacting to Natal, but they need to find a new strength. The way they're headed now they can't stay, and even they agree.