If you were President of Nintendo, what would you do?

[SlayerRondo]

TheLastStarFighter said:

SlayerRondo said:

TheLastStarFighter said:

SlayerRondo said:

JoeTheBro said:

SlayerRondo said:
Go third party fast and hard while still supporting the 3DS and WiiU for a while for a nice smooth transition.

Nintendo makes great games that are reason enough for people to buy their OK consoles. But not enough anymore and even less in the future.

Xbox One, PS4, Vita, PC, Tablets, phones and everything else will give Nintendo games the sale they deserve.

Even if game sales tripled, they would still lose money doing that.

(Replace tripled with whatever you want. I'm not doing the math, but it might be around there)

And how do you figure that? 

Besides Nintendo's downhill trajectory gives them a whole lot more to lose than going third party would.

http://gamrconnect.vgchartz.com/thread.php?id=176458&page=1

From that thread:

TheLastStarFighter 3 days ago

edit thread

In terms of their business, Nintendo is primarily a hardware maker.  Yes, they spend a lot of resources making games, and they are the biggest software maker in the industry.  But they are also the biggest hardware maker, and it is where most of their income comes from.  If we use the Wii as an example, we will get the following chart:

Hardware Total	Profit per unit	Total
100.95	$49	$4,946,550,000
Total Software	Royalty per unit	Total
913.5	$7	$6,394,500,000
Total income from hardware business:	$11,341,050,000
Nintendo Software	Publisher share	Total
312.84	$27	$8,446,680,000

Note that their are a few assumptions made, first of all that the profit per Wii was/is $49.  It was reported that Nintendo was making $13 in Japan, $49 in the US and $79 in Europe per Wii soon after launch. That may not be totally accurate, but it's a good estimate.  Secondly, prices on both software and hardware get reduced over time... but the relative dollars should be at least somewhat consistant, and costs go down too.

But as you can see, in that chart 57% of Nintendo's business is the hardware side.  The company themselves say it's about 65%.  Further, the royalty revenue from software costs Nintendo virtually NOTHING, unlike the actual development of first party software.  About 30% of their revenue simply comes from existing in the hardware sector.

Nintendo will never become a software-only company if they can avoid it.  They will only do so if their hardware begins to mount massive year over year losses.  Since the 80's they have been build on royalties as a business and will continue to be.  Even if Wii U is a complete failure they will try again, simply because the royalty revenue business is too lucrative.  And this is even before considering factors such as their own software getting a boost by being the "flagship" titles for the system, and other 1st party advantages.

 

You clearly don't understand where Nintendo makes their revenue.

I understand where they make their revenue.

I just believe that with the WiiU and the next generation of Nintendo consoles likely failing The sooner Nintendo gets on the third party bandwagon the better off they will be in the long run.

And that's stupid.  That's like saying if BMW has a couple bad years selling cars they should close their car buisiness and stick to motorcycles.  Nintendo is primarily a hardware provider.  If they have a poor couple of years, they should correct problems, not close a buisiness which has provided billions and billions in profits.

To come back from the WiiU they are going to need another Wii like success and I don't see that being possible for them. Their current success was leveraged from past successes and with the rise of multi purpose media devices they need to get on the third party bandwagon now.

Also the problems they have are based mostly around the hardware they have and the image surrounding it. They would need to launch new consoles to properly fix this. And by the time the next generation comes around for Nintendo they are going to find themselves with an even smaller audience then they had when the gamecube was at an all time low.