Ka-pi96 said:
No, it isn't. If the profits are big then yeah that would be succesful. But what is the point in making a console and spending a lot of money on it if the profit at the end is only going to be small? It either has to make a BIG profit by itself, or sell enough consoles and gain enough brand awareness to greatly increase the chance of big profits from the next console. |
Sorry but your wrong. Truly, a business is successful when it meets the goals it was set out to achieve (if you were expecting 500b profit and only get 10b, you might consider it unsucessful). But even more than that, a business is worth it when you meet your break-even. Why? Because it was enough to feed every worker (and that's the ultimate objective of every firm, to feed its members), to pay ur suplliers, taxes, social security, etc. Of course a big profit is better cuz you have more to invest next time, but ultimately I'd start a business if at least i could pay my bills with it, and if I make a profit, better.
The brand awareness, although undoubtly important, it's secondary when conceiving a console. Brand awareness in a worldwide business with only 3 main competitors, such as videogaming, is a given. Every hardcore gamer (as people like to call it nowadays) knows about gaming and about the consoles out there. And hardcore gamers are what really feeds the console videogame market, not the casuals (ok they helped for Wii console sales, and at lesser degree they tend to help every console, but only partially). Brand awareness is already there, it's how you place yourself to the market (marketing) that may help you or not. And that is independent from previous console sales - Gamecube (20M) to Wii (100M) and PS2 (155M) to PS3 (80M) say hello. Marketing helps a lot and in this particular case, Sony excels at it, Nintendo sucks.
The amount of consoles you sell in previous generation doesn't influence how many you sell now all that much. Ok granted it can earn you a legion of fans, but if you present them with a bigger, better product many will shift. Many other things do, such as the price, the quality, the way consumers look at it (example: Nintendo being seen as kiddy hurts them), marketing (yes, the hype), the games, etc.
