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RolStoppable said:

You are working with the wrong premise. When Nintendo makes a system, the highest priority is to sell it to consumers because that's where the money will come from. Nintendo doesn't gain anything from making concessions to third party developers who make games that don't bring in more consumers. The underlying problem in such discussions is that it's too common that people analyze Nintendo in the same way as they would Sony and Microsoft, but only the latter two are comparable while Nintendo is markedly different.

It's also not absurd to believe that there is no convincing certain developers. You say that this is an industry, as if it that meant that all business decisions will be reasonable and rational. What we have in reality are third party publishers who have openly insulted Nintendo console owners which is an action that contradicts a willingness to sell products to certain consumers. We can agree to disagree on that, as well as on the rest we talked about.

Nintendo always makes mistakes with their consoles, but the same is true for every other console manufacturer as well. The crucial difference between them is that third parties take the stance to accept whatever a certain company puts out as the standard, and that company is not Nintendo, so they will always divert from the standard in some way, i.e. they end up being screwed regardless of what they do. It has happened too often to ignore and the reasoning is laughable on a regular basis (like the GameCube discs you've heard of). Meanwhile, Nintendo does all their crazy things in the handheld market, but that has not hurt them anywhere close as much. That's because there is no other company who gets to dictate what the standard has to be, so Nintendo has to deal with a lot less bias against them. That doesn't come down to sales, because when the Wii ran circles around the PS3, third parties held on to having the dreaded Cell processor as their lead platform despite losing significant amounts of money on it (third parties have never lost that kind of money on Nintendo projects).

Yes, Nintendo has priority to sell to its customers but it is also their priority to maintain third party support. They can do both at the same time, it doesn't have to be one or the other. There are people that would gladly buy a Nintendo system at launch but often wait till they see it at a cheap price years later because they don't bother at launch if they know they can't get  third party games and will only use it for a few Nintendo exclusives that will release throughout its life cycle.

Nintendo have allowed themselves to fall into this cycle where people don't even expect third party games on their systems anymore because of how they haven't bothered properly trying for a long time. They are notorious for making consoles that are good for their first party games in mind, which often leads to frustrations from third party developers. 

On what criteria are you judging that the third party games don't bring in any more customers? Because, as with any other console, yes the main purpose is to buy it for the exclusives but as I said just now a lot more would buy if they knew they could get it all on that one system as well and don't just see it as the "Nintendo exclusive machine" when it could just be known as any regular gaming machine if they can get everything on it.

I disagree with that anyway. I think any developer could be convinced if given enough time. Nintendo just doesn't try hard enough. 

The reason developers are so quick to stance and accept what Microsoft and Sony put out as the normal is because they know their games sell well there. With Nintendo they have the mindset of "Well our games won't sell there anyway" because Nintendo has allowed it to become like that where they only take into account their own first party development when making the hardware and not thinking about how it will be for third parties. They need to change that.