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Rpruett on 06 January 2012
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Play4Fun said:

.Nintendo has has large amounts of money stacked up and is in no debt unlike Sony. For them to go out of business they would have to fail badly in the handheld market, the console market and have very low software sales in both. They were raking in profits even with the GC.

Again, they are living and dying on the profit margins from these systems.  They don't have any other source of revenue.  They wouldn't be able to sustain themselves into the future in this industry if they weren't making profit or had a backlog to prop them up.

Sony and Microsoft have very different approaches.

Since, Nintendo sells consoles at a profit or very small loss and their software are so universally popular they are currently nowhere near getting out. Even if Wii U only sells 30 million, the console will sell enough hardware and software for them to make nice profits. They don't take big losses on consoles like Sony and MS do. Smart business for a gaming-only company.

They are a  very smart business.  However, if they did release a terd or two of a console and a terd of a handheld and sold a paltry amount, they don't have the sustainability to survive much of that.  It's the same situation as Sega, except they are far better at managing their business.

Based on the current state of the three the only one who would be likely to leave if they failed next gen is Sony. If Vita doesn't do as well as PSP and if they take even more losses with PS4 thanks to stiff competition from MS and Nintendo, that could very well drive them out of the industry. It doesn't matter if they have other branches when those  are not doing well either. If they reach a point where the gaming sector is dragging them down even more, they could very well cut it out (though it would make more sense to cut something else out instead since their gaming sector is one of the most profitable).

Again, as gaming is one of their most profitable sectors (Even in colossal failure that the PS3 generation has been for them), it's completely unfeasible barring Sony going under that they would abandon their gaming division.  Maybe a poor sector of their gaming division (Handhelds?).  

 

MS has large amounts of cash and their long-term goal is to become the entertainment centre of people's living room which they seem to be on the path to currently. So even though they have taken so much loss since coming into the console business, I can't see them getting out unless they reach a point where they have taken so much losses they decide it isn't worth it anymore.

Microsoft isn't immune simply because Microsoft hasn't dipped their feet all the way into the gaming community.  I could see another Xbox type generation really sinking, discouraging them.  MS doesn't have the first party studios like the other two.  They don't need to sustain losses, they could easily drop the gaming division from a business standpoint.

I just think they've provided enough competition in the market to remain viable and they have the money to take some hits and they're a large enough Corporation that can eat these hits to some extent.

 

Nintendo is the most likely to leave the 'Hardware' industry in my opinion because they are the least insulated from poor sales, poor performance, etc.  I don't believe they would abandon creating games and even if they did skip creating Hardware, I believe they would strongly consider publishing games (Like Sega) forging enough profits to build another console.