| Smashchu2 said: Still missing the point 1)Risk my friend, risk! First off, Sony sold the PS2 and the PS1 which was already on the market. They were not juggling two new and fresh system releases, and they relied on third parties (a luxury Nintendo will not get) and a booming economy.Also, Nintendo does not have the assets and the income buffer that Sony has (or had). They will put a lot of money on the line hoping their idea works. Likely, they would rather release when there is potential conpetition which could steal third party support. What are forgetting is how the market that is video games works as well as what Nintendo's analysis has shown. That is software. Nintendo sold 4 million Wiis in a single month, in a very slow year. So then you have to wonder, if the system still has a lot of steam, why release a new one? Why not just make software. Nintendo has said 2010 was slow for them because they did not have strong software, and they will change that with better software. Market share doesn't matter as Nintendo is using Blue Ocean Strategy and Disruption. The latter says focusing on market share is bad and Disruption doesn't mention it. Not to mention software sales across the board are down (meaning people aren't buying). Release a new system is putting too much out there when there is no real thread (the other guys are doing better by dropping price) and the alternative is easier. Your forgetting about software. 2)This one is weird because you say "What you think about their decision is irrelevant given only Sony really know what goals and information they based their decision on." It makes me wonder why we are having this conversation. We are talking about what the businesses will do and what they should do. You have been saying Nintendo should release a new system (so this stament would apply to you too as I've said Nintendo goal is to release more software). Sony had to cut price because the system was overpirced beyond it's value. PS3s were not worht $600 or $500 in the market. This is a huge problem as they made a system that was more expensive then what consumers wanted, so to move the thing, they had to sell it at a lose. I've said before that they reason they are continuing with the brand is becasue they hope it will make money soon. Of course, I expect the line to continue to lose. Seeing as Sony is faultering, I wonder what will happen to them. |
The biggest risk for Nintendo is if they do nothing. Obviously their strategy isn't working 100% if their competitors are seeing ever growing profits and market share whilst theirs is shrinking. I don't care what you think they're disrupting but if their consoles market position is weakening every year relative to the competition it obviously isn't working so well. All 3 of their main competitors are growing stronger every year, thats Apple, Microsoft and Sony. If they don't address the decline of their main home console system they will not be given another easy opportunity to come into the market and take everyone by surprise. Their biggest advantage is their present dominance which they'll squander if they don't release a new system in the next 18 months.
Finally, yes I know Sony screwed up and cut the price. The original point is this, the PS3 sales and profitability are increasing moving forwards whereas the Wii is declining. Whether the Wii was substantially more profitable in the past or the PS3 was equally as substantial loss maker doesn't matter, what matters is how valuable the platform is moving forwards not looking backwards.
Tease.
