Does It Really Matter How Much Switch Sells?

[potato_hamster]

RolStoppable said:

potato_hamster said:

... you know those investor briefings are public record, right?

"Given that the company is not currently running at a profit, I find it unpersuasive to define our targeted business size by, for example, giving a concrete figure for the operating profit, so I will not give a number to what I perceive to be the right business size for Nintendo. Our software business alone could achieve that business size in, say, one or two years if we are fortunate enough to have some hit titles. However, it has been 30 years since Nintendo started its business of dedicated video game systems, and if I want to maintain that size for the next 10, 20 or 30 years, leading a software-only business would only put us at a big disadvantage, which is another reason why we insist on our integrated hardware-software model. On the other hand, the integrated hardware-software model has a significant handicap today, as the traditional way of explicitly telling consumers the investment they need to put in to buy hardware and software now comes across as being relatively more expensive due to changes in our environment. Although people may actually be spending more money (to play games on other devices not dedicated to video games), it is less visible, so the hurdle we have to clear in order to encourage them to purchase dedicated game systems has comparatively become higher. As with games that are free-to-play, or “free-to-start” as we like to call it, there is a tendency within the entertainment industry to make gaming as easy as possible to start playing. Because our hardware and software are integrated, we first need consumers to purchase our hardware to get our business off the ground, a challenge I outlined when I talked about changing the way we sell our products. Our mid-term goal would be to give an answer to this question in a way that had never been seen before."

Iwata, 2014, during a Corporate Policy briefing. Please note, this was before Nintendo decided to invest in mobile games.

What part about that tells you that Nintendo is treating mobile as a marketing tool? It appears to me they're treating mobile as one of  their fiercest competitors. It appears to me that while Iwata firmly believed in a "hardware-software model",  Iwata recognized that making hardware in 2014 left Nintendo at a handicap (his words), and acknowledged advantages to going "software-only" as he liked to put it, but strongly felt that maintaining a "hardware-software model" was the best way maximize profit for the future. But see that's the key there - maximizing profit. The reason Nintendo continues to make both hardware and software is because they have their investor's confidence that this is the best opportunity to maxmimize profits. That's it. But whats to say that hasn't changed in the last 3 years considering Nintendo has funded multiple mobile projects since that time? What's to say that won't change further in the next 3? Going "software-only" is something Nintendo has been considering for some time now, they just don't believe it'll be the most profitable course of action right now.

Furthermore, my comparisons to Sega are not asinine. Again, why couldn't Sega continue to secure investment if making their own hardware was obviously the most profitable endeavour? In fact why would they even need an investment if making their own hardware was obviously the most profitable endeavour?  Why was their first move to remain a software development company, and not a hardware development company when cuts had to be made? Sure Sega's IP were never as strong as Nintendo's but at the time it was a lot stronger than it is now (and I'd argue that Nintendo's IPs were stronger then than they are now). Sega was also a strong and proud Japanese company, that at that point, had been making game machines well before Nintendo ventured into it. So why again is it so ridiculous to you to considering that Nintendo might stop making hardware within the next decade?

Also, where have I ever said that I hope Nintendo stops making hardware? The opposite is true, in fact. I just see the reality before me and recognize it as the strong possibility it is. That doesn't mean I want it to happen.

Yes, they are public record. This means the most logical thing to do is to look up Nintendo's announcement for why they started to make smartphone games:

https://www.nintendo.co.jp/corporate/release/en/2015/150317/index.html

In order to flexibly deal with the developments of the Internet and social media as well as the changes in the people’s lifestyles, we will start strategic endeavors so that Nintendo can maximize the value of our IP that we have used primarily for our own dedicated game platforms. 
I announced Nintendo’s management policy of “more actively utilizing Nintendo IP” and “taking advantage of smart devices” in our Corporate Management Policy Briefing back in January 2014. The endeavors that I am explaining now are in line with these management policies.

On the other hand, if we are to maximize the value of Nintendo IP while the competition to attract consumers’ attention is fierce, we must deliver the value of Nintendo IP in a stress-free fashion to our consumers around the world who are living in varying environments.

This is why Nintendo has decided to utilize smart devices aggressively. 
Very simply put, it is structurally the same as when Nintendo, which was founded 125 years ago when there were no TVs, started to aggressively take advantage of TV as a communication channel. Now that smart devices have grown to become the window for so many people to personally connect with society, it would be a waste not to use these devices.

This is just one quote of a long explanation, but the bolded part is the interesting bit. The intention is to use smart devices as a communication channel. Iwata then goes on to say that Nintendo's passion for dedicated hardware won't suffer as a result, to the contrary, it's now higher than before. This is the point in time when NX was announced to make it clear that Nintendo is already working hard on new hardware. Iwata also makes it clear that games for smart devices will be distinct to the games they make for their dedicated gaming hardware. Basically, everything you need to know is in the link. It's the link you should have looked up to begin with, because this announcement is what I refered to in one of my previous posts.

When did I ever say that continuing to make hardware was going to be the most profitable way for Sega? I say it again, Sega then and Nintendo now are in very different positions, so the comparison doesn't make sense. Sega only had a home console that sold ~10m units and the strength of their IPs was weak. Additionally, Sega was on the ropes financially, so they needed the Dreamcast to be a big success. On the other hand, Nintendo has sold ~80m units of hardware this generation along with several first party games that crossed the 10m mark, another few that sold at least 5m and a total of more than 50 games that sold 1m or more copies. In addition, Nintendo is sitting on cash reserves worth a few billion US-dollar, so they have no problem to come up with the funds that are needed to launch a new console.

That you want Nintendo to stop making hardware is easily taken away from your posting history. You want the company to fail. You want the company to make games for PlayStation. If you were basing your arguments on facts, you wouldn't be throwing around the wild assumptions that you do. You would realize that Sega in 1998 and Nintendo in 2017 are not even remotely in the same position. You would realize that Nintendo's strategy for smart devices has a beneficial effect on their dedicated hardware as 3DS sales rose in the second half of 2017 and Pokémon Sun and Moon shipped over 14m units in a mere two months. Nintendo is not going to think about changing their smartphone strategy when their strategy is working so well and making their core business stronger.

So Nintendo is, in their own words "utilizing smart devices aggressively". However, you are dismissive of anyone that see this as the beginning of a pivot from Nintendo when this message regarding the mobile platform differs vastly from the message they were telling investors just 3 years ago. They went from a "let's wait and see" approach to "guns blazing" in a matter of three years. Here you are telling me that Nintendo intends on nothing more than keeping the mobile endeavours as more or less cheap advertising to get people to buy more Nintendo hardware, but are we really seeing that? Sure, Nintendo calls it a "communication channel" but how is that implied? Does it mean adversiing, or do they see it as a medium where the games are the communcation. That is, do they view the method of playing a video game on a home console as "communication channel" as well? You're assuming they mean advertising here. I'm not so sure. And. sure we're seeing a slight uptick in 3DS sales, sales of which that are still dramatically down year on year compared to DS sales, but is that a maintainable solution? Is the added boost to hardware and software sales more profitable than the mobile game itself, and if so, will that trend continue.

But again, with Sega, you're failing to understand, Sega no longer makes game consoles because it became more profitable for them to just make games instead. That's the long and short of it. IPs, money in the bank, all of that does not matter. Profit drives publicly traded companies. Nothing more, nothing less. Nintendo is no exception. If Nintendo's leadership fail to meet expectations then new leadership will be put in place to make the decisions that will allow Nintendo to do so.

And if you think i want Nintendo to fail, you're ignorant. Flat out. Just because I believe they will fail as they're proceeding doesn't mean I want them to. All your seeing that somone that is a Nintendo fan, but not a Nintendo fanboy. Learn the difference.