I was just thinking about the relative success of Nintendo against the relative lack of success (both fiscally and overall) that the HD platforms which follow the razor/blade model have experienced. It takes one financial year and two at most to crown the Wii as the most financially successful home console of all times.
The consoles of this generation lack the one major ingredient that the razor/blade model requires and that is to lock the consumer in to one particular brand for a long period of time and then milk them with expensive razors. Console generations only last about six years, seven if you want to consider an extended version whilst someone who buys a razor in 1999 is probably still buying blades for it till this day at the same rate. Someone who bought a PS2 in 2002 isn't likely to be buying games at the same rate and if that person already upgraded, it could have been just as easily to a Wii or Xbox 360. Game attach rates fall over time whereas razor attach rates don't, see the distinction?
Nowadays there is a slight variation to the Xbox 360 and PS3 operations which brings it closer in line with a true razor/blade model and that is the online service and content these consoles provide. These can act to lock in a person to a particular brand of console, but it isn't 100% foolproof as one important reason for upgrading is growing bored of the content that you have available.In addition if theres a ground swell of support for another console brand then you have the incentive to follow your friends across anyway if you want to continue to play with them online.
Selling the consoles for a loss introduces a huge risk to the operation of releasing a console. If you have to cut the price earlier than expected due to competitors actions then you're going to pull an Xbox 1 or PS3 and lose a big wad of cash. In addition if you fail to differentiate your console enough you're setting yourself up to compete strictly on price terms which is again sets them up to lose a lot of money like the Xbox 1, Xbox 360 AND PS3. In addition to this arguably the Wii proves that the PS1 and PS2 didn't make as much profit as they should have.
So what does the Wii do thats so darn smart?
The Wii is a smart console because it made Nintendo loads of cash from day one and its both differentiated so it does not compete strictly on specifications or price and its uniquely compelling so it doesn't try to be exactly the same console as the other two. You can't substitute the Wii for an HD console but you can easily substitute the HD consoles for each other and choosing between them is often a case of 'which is cheaper' / 'which gives me better value. Execution trumps the ability to cut the price quickly almost every time when it comes to a consumer electronics product and by example other than Nintendo we have Apple doing just that.
So how does a console be more like Wii and less like the 3 financial stinkers in this example?
The console should be built to execute well what the consumers actually want now rather than what they might want in three years from now is a good start. Its hard enough trying to predict what people want a year down the track and gambling billions on extra hardware may not be such a wise decision.
The console shouldn't make trade-offs to appease one group whilst handing negative trade offs to everyone else. Some people may want MOAR GRAFIX, but for other people that may mean MOAR HEAT, MOAR NOISE, MOAR UNRELIABILITY, and MOAR THAN I WANT TO PAY FOR IT. Soon you can add MOAR ENVIRONMENTAL PROBLEMS.
A prettier picture isn't console distinguishing material. What is distinguishing is making a compelling console and executing with compelling and hopefully exclusive content quickly, as in within about a year of launch having a BIG system seller or three is a big help. This is where complex architectures and expensive protracted development gets in the way of a good time.
Finally what every good soon to be the next Wii console replacement needs is a great gimmick. I can't predict what that might be but its best that its implemented in software somehow as you can divide a large R+D investment over a lot of consoles and that cost doesn't increase with every console sold so more sold = profit, rather than more sold = more expenses. See a need and fill a need is all you have to do. My best guess is interactive educational 3D immersive software built on next generation interface technologies because school kids will need a new one every year and they have like 5 different subjects. 5x 60 x 4 years = $1200?
Tease.
Essay Pro