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pokoko on 27 July 2016
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RolStoppable said:
pokoko said:

You probably shouldn't be disparaging anyone's knowledge of video game history if you don't know about Nintendo shutting out competitors in the NES era.

"This resulted in a number of lawsuits brought by both the public and private sector, and in 1992 Nintendo was found by the New York state court system to have established an illegal monopoly on the U.S. video game market.  Nintendo's first response was a modest relaxing of its licensing restrictions, in which a developer had to wait at least two years before porting an NES title to another system.  Unsatisfied, the American and Japanese governments eventually forced Nintendo into abandoing such tightly exclusive contracts altogether.  Unfortunately for Sega, this legal intervention came too late to save the SMS, and left it without the library of games it could have had if not for Nintendo's ruthless licensing tactics."  Service Games: The Rise and Fall of SEGA: Enhanced Edition

If you don't think that would hurt Sega and NEC then why would you worry about Sony buying exclusives?  It's the same thing, except one makes third-parties happy while the other just makes them disgruntled.  In the end, most third-parties came to Sony simply because of all the other factors, like programming support, lower fees, and cheaper game production. 

As for your last question, if Nintendo doesn't want to spend their money then they don't have to.  They can leave it in their war chest all they like.  As you've pointed out, they have a lot of it.  But, as all business people know, sometimes you have to spend money now to make money later.  Sony can't even come close to matching Microsoft but they haven't held back on the PS4.

That's not really the issue, though.  Nintendo spent $100 million in marketing for the N64.  They didn't lose ground because they spent less money, they lost ground because of bad decisions.

I didn't deny any of your claims that Nintendo had some very questionable business practices in the past. What was the issue with your argument is that Nintendo's practices were a result of Nintendo establishing itself in the market fair and square while on the other hand Sony bought itself into the market. That's a big difference. Additionally, Nintendo didn't have these business practices in place anymore by the time Sony entered the market, so it was irrelevant that you brought them up in the first place.

You didn't answer my question. I asked you how is Nintendo supposed to compete without burning their money. Am I supposed to take your answer as "If Nintendo spent their money, they'd beat Sony with ease.", is that really what it means?

In my initial post I said that Sony won because they outspent their competition. You bring up what Nintendo spent in marketing for the N64, but Sony spent a lot more than $100 million in marketing the PS1. In which way is that supposed to be a counterpoint to what I've been saying?

Forcing third party developers to sign contracts that keep them from developing for your competitors is fair and square?  That's not even questionable, that's actually illegal.  It doesn't matter if Sega and NEC had not entered the North American market yet; Nintendo knew they were coming and was actively trying to stop competition from having a chance, thereby establishing a monopoly.  That is not fair and square.

As for relevance, as I've already said, that's how they aquired a strange-hold on the market in the first place, so it certainly matters.  In that respect, it's no different than anything Sony or Microsoft have done--well, again, except for being illegal.  Glass houses, stones, etc.

Moving on to the SNES era and beyond, it's true that Nintendo was no longer allowed by law to use certain tactics but that doesn't mean that the overriding philosophy of squeezing and using third-parties was gone.  In fact, that's very relevant, as this mentality gave first Sega and then Sony a foothold into the market.

Developers like EA were ready to ignore the console market and focus on the PC as the next gaming platform:  "Like many third party publishers, EA was leery of the console business. "Nobody liked paying high royalties under restrictive licenses, and what made it even worse was having to build ROM cartridges at great cost and inventory risk," Hawkins explained. However, with the arrival of the Genesis, he saw an opportunity to once again rewrite the rules of publishing."  

---

"The Nintendo 64 saw only a handful of titles from Electronic Arts. Its popularity lagged far behind Sony’s PlayStation, and Nintendo’s reliance on expensive ROM cartridges made EA unwilling to take inventory risks on anything but the most surefire hits."

http://www.gamasutra.com/view/feature/130129/we_see_farther__a_history_of_.php?print=1

That is why they lost ground, not because Sony bought more ads.  It's just like the original Xbox One failing despite all of Microsoft's money.  People just liked what the other guys were doing more.  Relative to that $100 million, it looks like both Nintendo and Sony spent the same amount in one year.  Money wasn't the separating factor.

And your question, I'm afraid I don't understand what you mean.  Whose money would Nintendo invest in thier business if not their own?  Sony is spending their own money, even if they had to sell a building to get it.  I'm pretty sure they have far less fluid capital than Nintendo.  Why shouldn't Nintendo spend their own money for the sake of their own business?  When I sold my first business, I rolled every bit of it into my next business.  That's how it works.  Amazon has become a monster by reinvesting almost everything back into the company.  Fear of spending is not an excuse.