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RolStoppable said:

You should remember where Nintendo was in 2005: In a position bordering on irrelevance, just like most Japanese developers seem to be in today. A change of strategy that wasn't driven by technology catapulted Nintendo back into the position they once were. Nintendo didn't even try to compete on Western merits, but were successful regardless. Or rather, precisely because of it.

So the answer to the Japanese problems should indeed be "be more like Nintendo". In their heydays, the Japanese got smoked by Western developers on the technological front and it didn't matter one bit. The Japanese simply made the better games and that's all that mattered.

How could Nintendo become the outlier of today's market? Well, they happened to be the only Japanese developer who seriously supported the home console that favored Japanese game development. If we applied the events of the seventh generation to the days of the NES, then Japanese third parties would have made their games for various home computers instead of the Nintendo Entertainment System which would have led to similar levels of failure for them.

I disagree. I don't think they were ever in a position of near irrelevance. Not even as a console maker. They were getting their asses handed to them marketshare wise on the home console front, sure, but even in their darkest hour they still had incredibly successful handhelds and incredibly successful first party software all around. That's nowhere near irrelevant, and they never will be as long as they have Mario, Zelda, and the Pokeymans.

At least not until kids who grew up on iWhatsits have their kids playing Angry Birds Karts on the iPad 37.