By using this site, you agree to our Privacy Policy and our Terms of Use. Close
Soundwave on 17 May 2013
Edit Thread
RolStoppable said:
Navane said:

I agree, but as I looked up sales numbers for the Gamecube, I'm actually astonished that Nintendo didn't cut off its Gamecube console at early on and try again. Then again, they didn't have the same amount of revenue earned now, but I can't believe what an utter failure the system was sales-wise. Nintendo may or may not have considered it a failure as it sold ten-million less than the N64, but even that sold terribly.

Looking at the sales number further, Nintendo has consistently sold less systems as each console generation passes. It wasn't until they released the Wii did those sales numbers jump dramatically. But it seems Nintendo has adopted a console strategy that's trying to leech off the Wii user-base, while attracting the hard-core gamer back. It would appear to be a solid strategy in an initial thought, but obviously they tapped that well dry. So it seems that what Nintendo has left are those hardcore faithful to keep the system aflot until they can either release new software in hopes to boost sales, or somehow create a different marketing strategy to dig a new well (most likely both).

It seems that their handheld console business is what they've done consistently well at, but it makes no sense to me why Nintendo can't achieve the same results with their home console business.

1) Considering how the video games market works, it's not really an option to pull the plug on a console, if a company plans to stay in this business. By default, the new system would be surrounded by questions regarding its longevity. Consumers would be hesitant to invest into the hardware, if it could be discontinued within two years. There's no other option than to ride it out for four to five years. By the way, Iwata once said that Nintendo expected to sell about 50m GCs in its lifetime, so its safe to assume that the console was considered a failure. They also had the money to start over again quickly, but that isn't a good idea for the aforementioned reason.

2) Indeed, the Wii U was supposed to retain the Wii audience while winning back the hardcore (whoever those people are). It's a sort of strategy we've seen fail all too often when it comes to games. You know, when a game is supposed to be a sequel to a popular game, but isn't much like the previous game at all. The company in question is trying to take advantage of an established fanbase and sell to a bigger amount of people. Most of the time a big chunk of the fans is lost while the new people who the company wants to attract won't give the product a serious look, because they are put off by the name alone (they didn't care about the previous entry, so why should this one be any different). So at the moment the Wii U is pretty much selling only to the people who buy every Nintendo console. This can change with more and new games in the future, but the damage is already done.

3) The main difference between home consoles and handhelds is that Nintendo has rarely faced a competitor in the handheld market that was serious about it. Additionally, third parties are pretty much required to beat Nintendo, but since most third parties have never been serious about handhelds, Nintendo has never encountered as tough of a challenge in the handheld market as in the home console space. Hence why they came out on top in the handheld market every single time.

Meanwhile, in the home console market they have two big competitors nowadays. Companies that have been willing to lose billions on toys and courted third party developers to the best of their abilities (at least most of the time), to the point that third parties have come to expect incentives for developing for a platform. This basically leaves Nintendo with two options as a console manufacturer:

1. Make a system that plays to their own strengths and "sacrifice" the hardcore (whoever those people are). There's quite a big amount of people who can live without the so-called hardcore content. Nintendo has the IPs and talent to operate highly profitable with such a strategy, especially because most of the rest of the industry can't or doesn't want to sell to such people. It's going to secure Nintendo's spot in the long term.

2. Make a system that caters to third parties and thus becomes much like their competitors' consoles. Even if Nintendo succeeded at that, the profit margins would be thin, because the competition is so fierce.

One of those strategies is clearly better than the other, but for the eighth generation Nintendo went with the bad strategy, even though in the seventh generation they made it a clear point to avoid just that.

With respect to your second point there (from the bottom), I do think if Nintendo had offered a fairly modern chip (lets say 1.2 TFLOP GPU) and really leveraged that full year headstart, they really could've pushed Sony out of the market in a lot of ways. Sony is in massive debt and having to start say 10 million units behind Nintendo with Nintendo also having a pricing advantage would probably be the death knell for Sony.

Microsoft is Microsoft, they'll always have money to burn, so you kinda just tolerate that, but I think Nintendo probably could've carved out a strong no.2 spot for themselves at a minimum this generation, but they just couldn't resist following the Wii formula once again, even though all the tea leaves were telling them that blue ocean audience has moved on.