Forums - Sales Discussion - Why Nintendo shouldn't suck up to third parties

OttoniBastos said:


Fixed*

Wii sold mainly for the smartphone shovelware crowd.People who hardly played videogames before and didn't have smartphone/tablet at that time(2006) to play with.That's why the "gimmick" resonated so well with the demographic.For gamers(with the exception,of course,of the hardcore nintendo fan) Wii was a secondary console that they would buy only after pick a PS3/360/PC. 

Y'know, I sometimes get the impression that most gamers, especially those who aren't fans of Nintendo, just accept it as self-evident that the Wii sold primarily to non-gamers. I've yet to see any real evidence supporting this, such as market studies or surveys. It's simply considered axiomatic that the vast majority of Wii sales (perhaps around three quarters at least, considering the GameCube sold 24 million while the Wii sold over 100 million) were from soccer moms, old folks, and others who aren't "core" or "traditional" gamers. However, I think there are some crucial pieces of evidence that suggest otherwise. First off is the delayed peak of the 360 and PS3. It's normal for a system to peak by two or less commonly three years after launch. However, the 360 and PS3 didn't peak until 2011 in the U.S., while in Europe the 360 peaked in 2010 and the PS3 in 2011. For years the only other exception was the Sega Genesis, which didn't peak in North America until 1993, its fourth full calendar year. The Genesis was released in 1989, which was around the height of the NES's popularity, and despite being more powerful it just couldn't compete. It wasn't until the 16-bit era was in full swing that the Genesis started to take off. Incidentally, the Genesis got Sonic the Hedgehog, its first true blockbuster, around the same time the SNES came out. I find it interesting that the 360 and PS3 had a delayed peak just like the Genesis. Perhaps just like how releasing against the massively popular NES stunted the Genesis' sales, so too did the massive success of the Wii stymie sales growth for its more powerful rivals. Combined sales of the PS3 and 360 experienced relatively slow growth, and said growth didn't start to accelerate until after the Wii peaked and began its rapid decline. In fact, looking at U.S. sales at least, if you factor in sales of the PS2, which had strong legs and still did well even in 2007, sales of "traditional/core" consoles remained relatively flat, declining very slightly from 2007 to 2009 and growing slightly in 2010 and 2011. It isn't until you factor in the Wii that combined yearly sales of all platforms follow a normal bell-shaped curve. Now, it is possible that the relatively high initial price of the 360 and especially PS3 were a contributing factor as well, but I don't think the popularity of the Wii can be ignored as a factor as well. Incidentally, the DS was also released at a point when the GBA was still doing extraordinarily well in the U.S., and it wasn't until the GBA fell off the sales map that the DS started to grow rapidly. So, the delayed peak of the PS3 and 360 doesn't seem to be a case of post hoc, ergo propter hoc, as we have two other systems that did not peak until later in life than is the norm.

Another point is the Japanese market. Combined sales of seventh-gen systems as of the end of 2013 are just over 24 million, which is down from the nearly 29 million units all the sixth-gen systems sold, which in turn is down from just over 33 million fifth-gen systems sold. However, the Wii represents roughly 60% of all seventh-gen market share in Japan. Unless one is willing to concede that either A) over half of the Japanese console-buying market has always been "casuals" or non-gamers, or B) the Japanese console market lost 17.5 million core gamers in the span of a single generation, then it's apparent that the Wii was driven primarily or nearly exclusively by "core" console gamers. Also, as in the U.S., combined annual sales of all platforms look extremely anomalous if you remove the Wii from the equation, but look perfectly normal when one counts the Wii.

Of course, other people have their own arguments as to why they too feel that the "Wii casuals" are largely a myth, but I think hardware sales data alone is enough to cast serious doubts upon if not outright debunk this "Blue Ocean" hypothesis that Wii sales were driven primarily by "casuals" and non-gamers. I am willing to concede that some portion of Wii sales were due to people who otherwise would never buy a console, but I think said portion isn't very significant, perhaps less than 5% and certainly no greater than 10%. I simply think that the Wii offered something new and something fresh at an affordable price, and that the system had brilliant marketing that sold gamers on Nintendo's vision. Motion gaming had been attempted on many occasions, but it never worked as advertised. The Power Glove, one of the earliest examples of note, certainly wasn't as cool or as functional as The Wizard made it out to be (it really was "So bad," and not in the 80s sense of "bad"). It wasn't until the Wii that motion gaming was done right, and I think a lot of gamers were looking for something new. Even if it wasn't everyone's primary system, at the very least it was a secondary system, and I think the number of multi-console homes probably went up quite a bit last generation.



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OttoniBastos said:


Fixed*

Wii sold mainly for the smartphone shovelware crowd.People who hardly played videogames before and didn't have smartphone/tablet at that time(2006) to play with.That's why the "gimmick" resonated so well with the demographic.For gamers(with the exception,of course,of the hardcore nintendo fan) Wii was a secondary console that they would buy only after pick a PS3/360/PC. 

 

I said those same things and still say them. I told people that Nintendo's console that follows Wii won't sell well because they sold Wiis based on a gimmick. Everyone told me that I'm crazy. Now most Nintendo fans point fingers at everyone else and want to think Nintendo is the victim of some sort of video games company conspiracy.



PC GAMING: BEST GAMES. WORST CONTROLS

A mouse & keyboard are made for sending email and typing internet badassery. Not for playing video games!!!

I missed a good thread, but I don't see how using the X1 (which is going to outsell Wii U) has a good argument for your case.



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RolStoppable said:

Everyone who isn't in strong denial knows that the Wii U is a piece of trash. Just like there are various explanations for Nintendo's struggles, there are also various suggestions for what Nintendo's way forward should be, if they ever want to be successful again. One of those suggestions is that Nintendo has to suck up to third parties and make a console that is everything that third parties demand. This advice is voiced by Nintendo fans and detractors alike; while the motivations of these groupgs are fundamentally different, they are equally wrong. And here's why:

1. Third parties are biased against Nintendo

There's the belief that third parties would include every platform on Earth into the mix as long as the platform in question offers their demanded specifications. A prerequisite for this belief is the assumption that no third party would pull the line "We do not believe that there is an audience for our games." and forego giving support to Nintendo. This is an unsolvable problem for Nintendo, because the only realistic solutions would be to either pay off third parties for ports (thus ruining profitability) or build an audience for such games themselves which would lead into another commonly used excuse ("Only Nintendo games sell on Nintendo systems."), because consumers' expectations for quality and polish would be raised to levels that third parties are unable/unwilling to match.

2. People buy Nintendo systems in order to play the best games

There's no sales data (neither current or historic) that suggests that multiplatform games are in high demand on Nintendo platforms. Any list of best-selling games will have first party software at the top, followed by exclusive third party games, followed by multiplats. Therefore it's preposterous to suggest that Nintendo should build their console around the games with the least demand; the result would be an expensive system that compromises the values that consumers are looking for.

3. Xbox One

Since the preceding reasons still allow some wiggle room for the people who say that sucking up to third parties is the way to go, let's raise the stakes. Microsoft is an excellent practical example for how futile the pursuit of multiplatform games is. Keep in mind that consumers do buy Xboxes for multiplatform games, unlike Nintendo consoles.

With the Xbox One we have a system that gets all of the multiplatform support and yet it's still tanking hard. Who believes that the Xbox One could have beat the PS4 on a global level, if it launched at the same price, had no Kinect, was equally powerful and had none of the DRM nightmare before its launch? Continental Europe and Japan would have still picked the PS4 in much higher numbers than Microsoft's box. After all, the Xbox 360 failed to make significant inroads in the seventh generation despite having all the multiplatform games (and usually slightly better) and a clear price advantage. Therefore it's not outrageous to say that even a 100 Euro price advantage wouldn't threaten PlayStation. It's clearly an uphill battle for Microsoft and about the only reason why the 360 was competitive at all was the tremendous blunder that Sony committed with the PS3.

With this in mind, let's look at Nintendo again. Whereas Microsoft has only to deal with Sony, Nintendo has to deal with Microsoft and Sony when it comes to the battle of being the multiplatform console of choice. Let's say Sony and Microsoft put out $400 systems, that would basically mean that Nintendo has to sell an equally powerful machine at $200 in order to have a slight chance to succeed in selling their console. That, of course, is financial suicide. Alternatively, Nintendo could hope that both, Sony and Microsoft, launch PS3-like disasters. But any strategy that requires your opponents to commit huge mistakes isn't a good one. Now let's see who harps in on the first two points and ignores the third.





outlawauron said:
I missed a good thread, but I don't see how using the X1 (which is going to outsell Wii U) has a good argument for your case.

It's still going to be a failure, that's why it works in my argument's favor.



Legend11 correctly predicted that GTA IV (360+PS3) would outsell SSBB. I was wrong.

A Biased Review Reloaded / Open Your Eyes / Switch Gamers Club

RolStoppable said:
outlawauron said:
I missed a good thread, but I don't see how using the X1 (which is going to outsell Wii U) has a good argument for your case.

It's still going to be a failure, that's why it works in my argument's favor.

Why does 2nd place equate to failure?



outlawauron said:

Why does 2nd place equate to failure?

1. Selling far below the company's expectations.
2. Reduction of software sales due to lower hardware sales.
3. Reduction of Xbox Live subscriptions due to lower hardware sales.
4. Barely breaking even or losing money outright over the course of its lifecycle.



Legend11 correctly predicted that GTA IV (360+PS3) would outsell SSBB. I was wrong.

A Biased Review Reloaded / Open Your Eyes / Switch Gamers Club

Train wreck said:
This is an unsolvable problem for Nintendo, because the only realistic solutions would be to either pay off third parties for ports (thus ruining profitability).

How is it ruining profitability? If a said multiplatform game is not coming to the console, Nintnedo receive zero dollars. Paying for port guarantees some level of profitability in that Nintendo would receive royalty payments.


You know, there is some merit to this argument. As the only hardware manufacturer with a history (tarnished this generation) of earning profit on hardware sales, and as perhaps the most successful publisher in videogames period, Nintendo is in a unique position to offer access to their platform with no licensing fee.

Paying 3rd parties in the hope that sales are high enough to recoup the cost is a risk that Nintendo would have to be very strategic about taking, but forgoing license fees could allow Nintendo to profit off increased hardware sales and the sales of Nintendo software which would follow, and entice 3rd parties with more profit per unit than they could possibly see on rival platforms. It's a deal Sony and Microsoft can't afford to match.

Niether 3DS nor Wii U are a good opportunity for this strategy, though, as they aren't compelling enough to sell hardware at a profit. And there's the problem. If your hardware struggles to sell, you need what little licensing fees you get to stave off the red ink, if your hardware is a smash hit, you're bound to get at least nominal 3rd party support and you're leaving money on the table.



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