killeryoshis said:
You seem to know little |
Not sure where you got your 30 billion figure from as it was only 7 billion in 2003 and 10 billion dollars in 2008, which was after the start of the generation and the combined success of the Wii and DS.
Anyway besides the point, Nintendo have achieved their extraordinary profitability and huge cash reserves by not taking unnecessary risks. Nintendo saw last generation the decline of profitability due to escalating development costs and, as you say, decided to make the Wii about something else. To deny however, that there was a very real risk that Wii was going to fail is to deny history, there was barely an analyst in the games or business world that predicted any measure of success for the DS and Wii, let alone the huge success they have enjoyed. The possibility that the Wii could actually succeed didn't even occur to people until after it's E3 showing, mere months before it's release, and long after most R+D and design decisions had been finalised.
For Nintendo to manufacture a system of comparable power and price to the PS3 or 360 would have required them to loss lead (Nintendo can't magically produce a system that is comparible in power and significantly cheaper to manufacture than the competition). That is to say they would have had to build a system that costs more to manufacture than what it sells at retail with a dollar loss associated with every system sold. In this model, profitability is a long term goal associated with ongoing software and accessory sales, combined with gradually declining hardware development costs. If Nintendo had done this and then the Wii had gone on to sell at levels comparable with the GC, software and accessory sales may never have gotten to the point that allowed the system to achieve overall profitability. Remember games cost much more to develop these days so the amount of revenue generated this way has lessened proportionally. Just look at the 360, nearly twice the sales of the Gamecube and still how many billion dollars in the red?
Gamecube may have sold for $99 but show me evidence that it was profitable at that price point, if it was, I would imagine it was only just so. Keep in mind it only hit this price point several years after it's release. We actually have no idea whether the Gamecube was even profitable as a whole, it probably was, but Nintendo financials just show us that they continued to be very profitable throughout last generation. How much of this was due to the GC and how much was due to a little thing called the GBA is anyone's guess.
My point: If Nintendo had entered this generation with the Wii remote, which was a huge gamble, and a hardware and business model more in line with MS and Sony's offerings, failure in the market would have been a very big problem for them even with their huge cash reserves. Sony and MS are willing to risk those losses for a long term goal, history would tell us that Nintendo isn't.
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