Nintendo to offer Wii DLC and you have to pay for some online games X_X

[Bodhesatva]

BengaBenga said:

Bodhesatva said:

Stever89 said:

Bodhesatva said:

I want to ask this question more generally, because I think it's an important point. For anyone who's looked at MS and Sony's financial statements for the last 2 or 3 years, it's pretty apparent that they have to make more money somehow. And in case you thought this was a momentary, 2-3 year blip, the situation has generally gotten worse, not better; Sony made more money in the PS1 era (Despite the PS2 being a more popular console both in hardware and software sold), and it's readily apparent that they'll make a lot less money in the PS3 era. What we may think is a lot of money -- 600 dollar PS3, 400 dollar Xbox 360s, 60 dollar games -- clearly isn't enough.

They have to make more money. What do you suggest they do? I'll give you some options:

1) Decrease the power of the consoles in the future. Take the Wii route, and take small steps.

2) Increase the price of the hardware

3) Increase the price of the games

4) Introduce for-pay downloadable content

5) Introduce an online subscription service

Option 1 seems to be completely unacceptable to a lot of people. Option 2 and 3 seem almost absurd, as people are complaining about the prices of the PS3 and 360 even now, when their respective companies have bled billions to push them at their current costs.

Number 4 has already been put in place by all 3 companies, and for Microsoft and Sony, it clearly isn't enough to stem the tide.

So that leaves number 5. Am I missing something? Is there some error in my calculations here? Because from what I see, subscription costs are simply a necessity. Or we can all buy Wiis. Or they can sell the PS3 for 800 dollars. You chose, because Sony and Microsoft aren't going to be happy bleeding billions upon billions of dollars for eternity.

 

Isn't number 2 some of the reasons why PC gaming has died? Too expensive hardware (for most games at least, and the more hardcore games usually have high spec requirements), along with unreliable software. And I think the only problem most people have this time around is the great difference between the Wii's power and the HD consoles power. I don't think anyone (from this forum) complained that the PS2 wasn't as powerful as the GC or Xbox. Why weren't people saying that games should be put on those consoles because they'd look better?

It seems Naz is right. Only a few people care about graphics, and they should either get a nice computer and help the real graphic machine, or deal with less than "great" graphics. Otherwise, it won't be casuals that destroy the market. It'll be the hardcores.

That was basically the point I was making -- all the possibilities I listed are either unpalatable to the 360/PS3 consumer (1,2,3,5) or have already been implemented and aren't enough on their own (4).

But something on that list has to happen, because economic reality demands it. To go to an extreme to highlight the point: I would love to have a brand new quad core computer for 200 dollars, but such a pricing structure would quickly put Dell, Gateway, and other hardware manufacturers out of business. There is no magic fairy dust that suddenly makes high end electronics cheap to develop (please keep in mind everyone that I'm talking about the pricing structure over the life of the system, not just right now. Production costs will drop, but so too will MSRPs). I have to either be prepared to pay more, or be willing to buy a cheaper, less powerful computer.

And that's basically the situation that PS3/360 users are in: pay more, or buy cheaper, less powerful systems, because the current pricing structure isn't tenable.

 

Interesting point you're making Bod, but I think you're missing the point a bit. If Sony's and Microsofts profits aren't high enough that's caused by their strategy. In a world where Nintendo can make a profit on the Gamecube hardware sales, without even talking about the games, there's no need for Sony to have declining profits on a 120 million selling gameconsole, unless they intent to or have a failing business model.

For Microsoft we know that it's their strategy to not bother about profits too much, in the sense that it's A goal and not THE goal. Their main strategy behind the Xbox and the 360 is to enter the livingrooms, mainly to push their software and coding properties.

Back to the declining profits. This year there were software developers that made enormous profits and eneormous losses and in between. This has nothing to do with low revenues, although games have gotten cheaper through time. I have the box of Donkey Kong Country for SNES here and it cost 180 Dutch guliders, which is about 80 euro. In current value that's probably well over a 100 euro or 150 dollar. The main reason is that most companies don't understand the market in which they operate. I never seen a business in which so many stupid development and business decisions are made as in the game industry. Part of that has to do with it being on the border of being an artform and making money, part has to do with increasing technology and part with it being a fairly young industry.

A good example of a stupid business decisions or bad management: People blame everyone but themselves for failing. A good example is the Wii. Every company should have had at least one game ready for it in case it became a succes, only Ubisoft had, in other businesses every missed opportunity means someone will be held accountable, not in this case. Here the excuses were plenty. A year after the Wii started its rise to become the fastest selling console ever the 3rd party developers still haven't jumped on the bandwagon en masse. Which is strange considering the rise in stock value Capcom experienced once it announced Monster Hunter 3 for Wii. Instead they keep telling things like: "We can't compete with Nintendo", "The public only wants mini-games", "It's success will be short lived" etc. That might be good for fanboys and nice forum discussions, and maybe they're right, but from a business perspective you should at least make a serious effort. Instead they look at each other and say: "well dev A doesn't do anything so we won't"'. Last year would have been an excellent opportunity to make money with that little competition.

Another good example of doubtfull asset management are the Mega-Projects that are currently going for PS3. These are absolutely ridiculous. It is rumoured that MGS4 costs 70 million, which, in case of a $20,- dollar revenue per sold game will need 3.5 million games sold to break even. Final Fantasy 13 will maybe even cost more than MGS4. Developers are more busy with creating the best game ever than to make profits, which is good from a gamers perspective, but not really from a business side.

So to conlclude, I think the problem lies within the industry and not with the lack of potential revenue.

We actually agree, generally speaking. We're just looking at this from different angles.

Look at my first suggestion: decrease the power and technological sophistication of the consoles. Nintendo has managed to keep profitability high by minimizing costs. You agree that the people suffering most are those that are spending exorbinantly: the people making 70 million dollar games and such.

And we agree that the answer is: "Stop making 70 million dollar games," I just noted that this answer isn't palatable to the 360/PS3 consumer. The big budget, epic games like Halo and Final Fantasy and Metal Gear are the headliners of these consoles. The Wii is overlooked precisely because it isn't as epic and the graphics aren't as good. 

There are two ways to bring finances into line: spend less or make more. We seem to agree that spending less is the obvious solution, but my point is that many people don't seem to be willing to accept that. Not just developers, but some players, too.