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Forums - Nintendo Discussion - Did the Nintendo Unified Strategy Work?

 

Who will win by 2030?

Rule of Two Era 0 0%
 
Unified Era 16 100.00%
 
Total:16

The point of this thread is to do a long term analysis of Nintendo’s Rule of Two Era (Handheld and Home Console) vs. this new Unified Era we are living in to see if unifying the teams has produced more or less profit for the company.

I’ll update this each year so we can see how the averages change for this new period. Let the multi-year fun begin!

The average for the Unified Era skyrocketed when I put in the 2019 numbers, so it will probably be beating the Rule of Two era, by quite a bit, when we get the 2020 Annual Report. I predict by the 6th year of the Switch they will have left the Rule of Two era in the dust, but I look forward to finding out for sure if my prediction comes true.

 

Year

Operating Income

2002 - 2016 Avg.

2017-2019 Avg.

2002

$899,000,000.00

$1,478,333,333.33

$1,401,666,666.67

2003

$835,000,000.00

2004

$1,050,000,000.00

2005

$1,060,000,000.00

2006

$780,000,000.00

2007

$1,915,000,000.00

2008

$4,872,000,000.00

2009

$5,665,000,000.00

2010

$3,834,000,000.00

2011

$2,061,000,000.00

2012

-$455,000,000.00

2013

-$387,000,000.00

2014

-$450,000,000.00

2015

$206,000,000.00

2016

$290,000,000.00

2017

$261,000,000.00

2018

$1,674,000,000.00

2019

$2,270,000,000.00

Operating Income = Profit - Operating Expenses

*Currency exchanges helped and hurt years, hopefully averaging things out.

*Finding data prior to 2002 apparently is really hard, especially in English. If you find some links please let me know.

 



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You can cut this exercise short by assigning 2017 to the old era, because 2017 covered only the first month of Switch availability. The methodology of average profit per year is also questionable at best.

But aside from that, game development times and market expectations have changed over time, so putting out a high enough volume of first party games to sustain two distinct consoles concurrently stopped to be a realistic endeavor. So of course the unification of software development was the right choice.



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

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

Now we have "Handheld and Hybrid" instead .. And we will also likely see a "only tv" version at some point.. Does that mean "era of three"?

So the question is "was it smart that all Nintendo games can be played an all Nintendo devices" from a business point of view?

And that's more philosophic than just looking at the numbers..



Switch will outsell 3DS and Wii U combined so in that sense yeah. It probably won't outsell DS + Wii though.



http://www.youtube.com/watch?v=F1gWECYYOSo

Please Watch/Share this video so it gets shown in Hollywood.

Signalstar said:
Switch will outsell 3DS and Wii U combined so in that sense yeah. It probably won't outsell DS + Wii though.

I think the word probably on the second sentence is unnecessary. I would be very hard to outsell one, the two combined is the definition of impossible.



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Signalstar said:
Switch will outsell 3DS and Wii U combined so in that sense yeah. It probably won't outsell DS + Wii though.

Yeah but that doesn't mean it will make more money.

Double devices means:

Double the marketing, production costs, studios developing games from the same series for weaker and more powerful devices, etc. 

What I wanted to do was look at their profit after expenses were taken out to see if they are doing better financially than when they had to double all those things and the evidence points to a resounding yes.



$5.6 Billion Operating Profit in a year is absurd, and something the Switch will never be able to live up to. But that doesn't mean that going unified is an error. Times have changed.



Switch isn't the end point of Nintendo's transition as a company - it's the vehicle which enables that transition to happen. Nintendo still need to get the other pillars of their business in place and Switch's success obscures that fact. It's one reason why Switch will be Nintendo's major hardware system until 2024 at least - Nintendo need more time to get their other areas (subscriptions, mobile, merchandise, films, theme parks) up and running.

Nintendo used to have the two major pillars, and now Switch is overwhelmingly responsible for Nintendo's success. It also leaves Nintendo overwhelmingly reliant on a single hardware ecosystem in order to sustain their success. The plan they laid out in 2015 clearly accounted for the potential weakness inherent in such a singular focus and the transition into the new model is far from complete.



Nintendo is still doing two things - they're doing a hybrid, and they're making mobile games. I really don't think it has been a fundamental change on Nintendo's part. They're still hitting two relatively distinct segments of the gaming market, just as they have for the last 25 years.



VAMatt said:
Nintendo is still doing two things - they're doing a hybrid, and they're making mobile games. I really don't think it has been a fundamental change on Nintendo's part. They're still hitting two relatively distinct segments of the gaming market, just as they have for the last 25 years.

Yeah but their aren't spending money on really making a bunch of mobile games like they used to with handhelds. They make like 1-2 mobile games a year on average, all of which cost a whole lot less than full fledged games on a handheld.

That is the point of this thread. Their expenses are down because of this consolidation.