By using this site, you agree to our Privacy Policy and our Terms of Use. Close
Soundwave on 12 July 2016
Edit Thread
SpokenTruth said:
Soundwave said:

Pokemon Go is just at the beginning of its tail cycle though, it's not even released in many major markets worldwide, also the take home revenue on mobile once the game is developed is almost pure profit whereas physical goods like game hardware have a much, much lower profit margin while they have high revenue. 

Pokemon Go I think the potential to get to Candy Crush sized numbers of 500 million (half a billion!) installs. Maybe even less at 350-400 million would still be enormous. 

Also Nintendo will get a bigger cut of future titles as for sure now they know to self-publish all their mobile games (they don't need Niantic to do that) and their own IP like Animal Crossing and Fire Emblem and (gulp) perhaps Mario Kart ... they fully own all those IP. 

Revenue is not what drives business models anyway .... profit does. 5 million Wii Us sold at $300 a pop is over $150 billion in revenue, but only likely $50-$100 million in profit.

This volume is not sustainable.   And installs is irrelevant if you're not getting IAPs.  Candy Crush did great but net profit across all 10 of their major games at their peak was only $575 million (back in 2014).   Nintendo did nearly that net income in 2015 despite the Wii U.

And while profit is obviously a good thing, revenue is just as important for a publicly traded company. For instance, Amazon rakes in huge revenue and damn no profit at all (losses for nearly 2 decades). 

 

That said, it's absolutely asinine to chase one profit model at the exclusion of another.  Like the Internet meme says, "Why not both?"  Especially when they can work as marketing and advertising components for each other.

 

Finally, your 5 million Wii U figure ignores software and portable games.

The issue is though games like Pokemon GO show there is a monstrous audience for Nintendo games ... they just don't choose to buy Nintendo hardware. 

So the "why not both?" strategy is problematic, because well then does that mean mobile gets Mario Kart too? Or are you keeping that away from mobile to keep it exclusive to a portable (or worse, a Nintendo home console) and thus limiting its sales potential.

And if you put say Mario Kart or the main Pokemon/Animal Crossing/Fire Emblem games on mobile (even perhaps releasing an official Nintendo controller) ... then what does that do to dedicated Nintendo portables? That's kinda the problem, something has to give in that equation. 

My suspicion is Nintendo's investors are going to start to hound them to be more aggressive with their IP usage. Clearly Nintendo are sitting on a gold mine, but these IP are locked into declining hardware formats which have limited Nintendo's profit potential big time. 

This is going to be a dilemma I suspect is happening in Nintendo's board rooms this week too ... I mean what about a Mario Kart iOS/Android? Do you say no and leave probably $1 billion+ dollars on the table? I don't think they expected mobile to blow up so quickly for them.