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Forums - Nintendo Discussion - Pachter: "Wii U won't save Nintendo, phones took 35% of the market"

Squilliam said:
HappySqurriel said:

A smaller piece of a bigger pie may still be more pie ... While companies may want a bigger piece of pie, they really just want more pie

 

Mmmmm Pie

Nintendo's recent losses are quite telling aren't they? If they still had strong software revenues they wouldn't be posting such losses now would they? Not enough pie IMO.


Selling their system for 70% of what they expected to sell it for, and having the yen increase from 120 yen to 70 yen per US dollar obviously had nothing to do with that ...

The fact is that Nintendo has seen remarkably strong sales in their mobile platform througout the rise of the smartphones. If smartphones were really cutting into Nintendo's market we would not have seen this.



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RolStoppable said:
Squilliam said:
HappySqurriel said:

A smaller piece of a bigger pie may still be more pie ... While companies may want a bigger piece of pie, they really just want more pie

 

Mmmmm Pie

Nintendo's recent losses are quite telling aren't they? If they still had strong software revenues they wouldn't be posting such losses now would they? Not enough pie IMO.

RolStoppable said:

Your task was to provide evidence that Nintendo's business has been impacted. This chart doesn't show that. Post revenue numbers instead of percentages. They won't show a decline for Nintendo beyond the typical end of generation one.

My task was to have my pie and eat it too. Your task was to make some kind of witty response, I have obviously succeeded in spite of your failure.

Let me guess: You aren't going to post the revenue numbers, because they have never been revealed. Only the percentages are public, because certain people want to distort reality with such misleading pie charts.

Nintendo's losses aren't rooted in declining software revenues, but rather complete miscalculation of what the market wants. Stereoscopic 3D has basically no worth when it comes to selling hardware, but it increases the manufacturing costs tremendously.

Well its kind of hard to post revenue numbers from companies that are not public, which a lot of indie publishers for ios and android are.  You can look at the deverlopers who are public who support both platforms and will find that sales have been steady for their mobile platforms and have collapsed for the DS and PSP, EA IR is a good example.  And the revenue declines occured during the height of the DS in 2009.



Train wreck said:

Well its kind of hard to post revenue numbers from companies that are not public, which a lot of indie publishers for ios and android are.  You can look at the deverlopers who are public who support both platforms and will find that sales have been steady for their mobile platforms and have collapsed for the DS and PSP, EA IR is a good example.  And the revenue declines occured during the height of the DS in 2009.

The point is that the people who created this pie chart have the revenue numbers (otherwise they couldn't create the pie chart), but they refused to make them public.



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

A Biased Review Reloaded / Open Your Eyes / Switch Shipments

UncleScrooge said:

Yes. If Nintendo let them do that they will. So far Nintendo hasn't even tried to cater to the people you talk about. They simply ignored them. Nintendo losing the mass market is not caused by smartphones it is caused by Nintendo not catering to the mass market anymore. What mass market games have they put out so far for 3DS? Nintendogs? Yeah at launch when there were no games, the system was completely overpriced and Nintendo focused on the 3D aspect of the console. Ironically Nintendogs is selling quite well right now. But there are no other games in that vein yet. Also the original DS was priced at $129 at this point in its life while the 3DS is $169 and the videogaming market is highly price sensitive.

Also low end customers are defined by Christensen as "customers who want the least features and are willing to pay the lowest price". Most smartphones are way more expensive than gaming handhelds (especially the contracts) and totally overshoot people who play games like Brain Training. Do you really think people in their 50s and 60s (the core market for Brain Training games) or parents buying gifts for their children will buy iPhones over a 3DS? The core market for smartphones are obviously people in their 20's to 30's who want to surf the web all day who can afford expensive products. Ironically... that's the Vita's audience.

Edit: And I'm really sorry you get quoted like mad right now. I just think it's worth pointing these things out.

Nintendo had the same problem as before with PS1 vs N64, I.E. whilst the value of their game development is much higher than any one single company and few approach their ability to rack out hit after hit, the number of developers out there outweigh them through sheer numbers. There are litterally thousands of projects for iOS ongoing and through luck or skill some will rise to the top.

Value has a lot of different dimensions, LOL if you've been on this site long enough you'd have seen all the threads saying the PS3 is better value than the Xbox 360 because of X, Y, Z. You have to consider with iOS many different factors such as:

  • Price of games, $0-10 vs $20-35, the average person spends more on games than their games machine.
  • Usefulness of other features, I.E. browser, movies, music.
  • Price of hardware $subsidised, $169 iTouch or $499 iPad.
  • Educational value for families, I.E get an iPad 2 because Johny won't have to lug 14lbs of textbooks anymore and can study easier. 
  • Is a game like Soduku worth $1 or $20? It isn't as if you get a better soduku if you pay 20* the price either...

In the end it is complicated and simple at the same time. There are many overlapping dimensions between the products, the enemy of the good in this case is good enough. It is far easier to justify owning a handheld gaming machine when you don't already own something with significant overlapping functionality whether it is a tablet, iTouch or smartphone you own. There is already data suggesting that parents are indeed buying their children iPhones, iTouches and iPads for various reasons and lets not miss one major feature which is that all games bought for one child are immediately and always available to the other so long as they both have iOS devices.



Tease.

Train wreck said:
UncleScrooge said:
Squilliam said:
HappySqurriel said:
Squilliam said:


 

http://blog.flurry.com/bid/77424/Is-it-Game-Over-for-Nintendo-DS-and-Sony-PSP

156M iOS devices sold in a single year will certainly have an impact on the gaming market. They will come from the low end and likely take their brain training/Nintendogs market out from under them. A large proportion of the Nintendo handheld game market is addressable with iOS devices, hence the problem of simplicity and gameplay overriding complexity.

Yes. If Nintendo let them do that they will. So far Nintendo hasn't even tried to cater to the people you talk about. They simply ignored them. Nintendo losing the mass market is not caused by smartphones it is caused by Nintendo not catering to the mass market anymore. What mass market games have they put out so far for 3DS? Nintendogs? Yeah at launch when there were no games, the system was completely overpriced and Nintendo focused on the 3D aspect of the console. Ironically Nintendogs is selling quite well right now. But there are no other games in that vein yet. Also the original DS was priced at $129 at this point in its life while the 3DS is $169 and the videogaming market is highly price sensitive.

Also low end customers are defined by Christensen as "customers who want the least features and are willing to pay the lowest price". Most smartphones are way more expensive than gaming handhelds (especially the contracts) and totally overshoot people who play games like Brain Training. Do you really think people in their 50s and 60s (the core market for Brain Training games) or parents buying gifts for their children will buy iPhones over a 3DS? The core market for smartphones are obviously people in their 20's to 30's who want to surf the web all day who can afford expensive products. Ironically... that's the Vita's audience.

Edit: And I'm really sorry you get quoted like mad right now. I just think it's worth pointing these things out.

um the iphone 4s moved 37 million units in Q1, shitting on anything the 3DS did, higher price and all, so yes.  The device is simple enough so people in their 50s and 60s (the demographic least likely to have a cellphone) can easly adapt and have a device that does everything they need, without the need to carry anything else.  Saying that smartphones are for 20s and 30s is just asinine.


I never said that. I'm very well aware of iPhones sales and the extremely high adoption rate of smartphones in general. But the core market is still people in their 20's to 30's. Nielson agrees with me: http://www.geekosystem.com/smartphone-ownership-by-age/

Also the question was "are they buying it over a 3DS?" Maybe a little. Both devices fulfill very different purposes. As for comparing sales of 3DS and iPhone / smartphones in general: Really? That's like comparing computer sales with sales of home console: Consoles just play games, computers do a lot more. And I'd never argue about sales here. Of course you are totally right.

But I think we shouldn't focus too narrowly on these things. My point was: Smartphones can't "steal" a market Nintendo doesn't cater to. I don't doubt iPhones would get a chunk of Nintendo's mass market - they certainly would. But Nintendo doesn't cater to that market anymore. They stated time and time again that their focus for now are the core gamers. Last year Iwata was talking to investors about their japanese sales slowing because teenagers didn't buy a Wii and how to adress that by producing more core games. So to wrap up my opinion:

1. Are smartphones eating into the mass market Nintendo adressed with the DS? Yes, absolutely.

2. Are Nintendo's bad sales caused by smartphones? Not at all. Nintendo doesn't even try to adress that market anymore. Hence the low sales.

3. Would Nintendo be able to produce another 150 million selling handheld? Yes because there was still room for growth. Smartphones would've eaten into Nintendo's sales but sales would've stayed extremely strong and Nintendo would've been able to compete directly by pushing out high quality software.

It's not point 1 where I disagree with you guys. It's the second one (and consequently the third as well).



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RolStoppable said:
Train wreck said:

Well its kind of hard to post revenue numbers from companies that are not public, which a lot of indie publishers for ios and android are.  You can look at the deverlopers who are public who support both platforms and will find that sales have been steady for their mobile platforms and have collapsed for the DS and PSP, EA IR is a good example.  And the revenue declines occured during the height of the DS in 2009.

The point is that the people who created this pie chart have the revenue numbers (otherwise they couldn't create the pie chart), but they refused to make them public.


http://blog.flurry.com/bid/77424/Is-it-Game-Over-for-Nintendo-DS-and-Sony-PSP

Numbers are posted there



Pachters right, Nintendo had that crowd, but the phone market made casual titles more accessible. He's also said that the 3DS and Vita would be affected by the phone market. Is he wrong for saying that? He couldn't be anymore right. The phone market is making casual titles more accessible to casuals who just want simple titles. Kinect is the next big thing right now for the casuals. I was playing Fifa and Deadspace on my friends IPad the other day. He doesn't have a console, nor does he want one.



Train wreck said:
RolStoppable said:

The point is that the people who created this pie chart have the revenue numbers (otherwise they couldn't create the pie chart), but they refused to make them public.

http://blog.flurry.com/bid/77424/Is-it-Game-Over-for-Nintendo-DS-and-Sony-PSP

Numbers are posted there

Good. Just as I expected, the numbers show nothing beyond the usual decline of video game platforms after their fourth year on the market, so smartphones had no notable impact on Nintendo's business. And this is in the USA where smartphones are more widespread than pretty much everywhere else.



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

A Biased Review Reloaded / Open Your Eyes / Switch Shipments

RolStoppable said:
Squilliam said:
HappySqurriel said:

A smaller piece of a bigger pie may still be more pie ... While companies may want a bigger piece of pie, they really just want more pie

 

Mmmmm Pie

Nintendo's recent losses are quite telling aren't they? If they still had strong software revenues they wouldn't be posting such losses now would they? Not enough pie IMO.

RolStoppable said:

Your task was to provide evidence that Nintendo's business has been impacted. This chart doesn't show that. Post revenue numbers instead of percentages. They won't show a decline for Nintendo beyond the typical end of generation one.

My task was to have my pie and eat it too. Your task was to make some kind of witty response, I have obviously succeeded in spite of your failure.

Let me guess: You aren't going to post the revenue numbers, because they have never been revealed. Only the percentages are public, because certain people want to distort reality with such misleading pie charts.

Nintendo's losses aren't rooted in declining software revenues, but rather complete miscalculation of what the market wants. Stereoscopic 3D has basically no worth when it comes to selling hardware, but it increases the manufacturing costs tremendously.

This, and it pains me to admit it, as I was a big supporter of the feature. BUt people just dont really give a crap, not as much as I thought they would. Hell after playing a few game I dont even give a crap anymore



Squilliam said:
UncleScrooge said:

Yes. If Nintendo let them do that they will. So far Nintendo hasn't even tried to cater to the people you talk about. They simply ignored them. Nintendo losing the mass market is not caused by smartphones it is caused by Nintendo not catering to the mass market anymore. What mass market games have they put out so far for 3DS? Nintendogs? Yeah at launch when there were no games, the system was completely overpriced and Nintendo focused on the 3D aspect of the console. Ironically Nintendogs is selling quite well right now. But there are no other games in that vein yet. Also the original DS was priced at $129 at this point in its life while the 3DS is $169 and the videogaming market is highly price sensitive.

Also low end customers are defined by Christensen as "customers who want the least features and are willing to pay the lowest price". Most smartphones are way more expensive than gaming handhelds (especially the contracts) and totally overshoot people who play games like Brain Training. Do you really think people in their 50s and 60s (the core market for Brain Training games) or parents buying gifts for their children will buy iPhones over a 3DS? The core market for smartphones are obviously people in their 20's to 30's who want to surf the web all day who can afford expensive products. Ironically... that's the Vita's audience.

Edit: And I'm really sorry you get quoted like mad right now. I just think it's worth pointing these things out.

Nintendo had the same problem as before with PS1 vs N64, I.E. whilst the value of their game development is much higher than any one single company and few approach their ability to rack out hit after hit, the number of developers out there outweigh them through sheer numbers. There are litterally thousands of projects for iOS ongoing and through luck or skill some will rise to the top.

Value has a lot of different dimensions, LOL if you've been on this site long enough you'd have seen all the threads saying the PS3 is better value than the Xbox 360 because of X, Y, Z. You have to consider with iOS many different factors such as:

  • Price of games, $0-10 vs $20-35, the average person spends more on games than their games machine.
  • Usefulness of other features, I.E. browser, movies, music.
  • Price of hardware $subsidised, $169 iTouch or $499 iPad.
  • Educational value for families, I.E get an iPad 2 because Johny won't have to lug 14lbs of textbooks anymore and can study easier. 
  • Is a game like Soduku worth $1 or $20? It isn't as if you get a better soduku if you pay 20* the price either...

In the end it is complicated and simple at the same time. There are many overlapping dimensions between the products, the enemy of the good in this case is good enough. It is far easier to justify owning a handheld gaming machine when you don't already own something with significant overlapping functionality whether it is a tablet, iTouch or smartphone you own. There is already data suggesting that parents are indeed buying their children iPhones, iTouches and iPads for various reasons and lets not miss one major feature which is that all games bought for one child are immediately and always available to the other so long as they both have iOS devices.


I agree with everything you've said. I also agree this would have an effect on Nintendo's sales but again my main point was the bolded part in my post. As for the bolded part in your post: Why are you acting like the eShop didn't exist? Of course games on the eShop are still more expensive but not by law. Again if Nintendo actually cared about these customers they would push the eShop more agressively (like make it open to really small developers just as on iOS). And as for other features  (internet and learning): Yeah, that's why consoles died in the 80's when computer adoption rates went up.

Here is my main point again: Nintendo doesn't try to appeal to the mass market anymore. They keep talking about core gamers, released their handheld at a high price and didn't put out mass market software. 5 years ago Nintendo's main mission was to grow the market and they succeeded with their handheld sales doubling and their console sales multiplying by a factor of 5. They grew at a speed that rivals Apple's current growth but they were not able to maintain it because they stopped focusing on growth. 

Basically put a Nintendo releasing a "2DS" at $149 with a focus on mass market games like Brain Age, Super Mario, social games and e-learning would see way higher sales. Would smartphones eat into those sales? Certainly. Would Nintendo be in trouble right now? Probably not because there was still some potential for growth. I guess sales would've stayed roughly the same (add growth potential, substract smartphones).