Okay I'm just popping my thoughts in real quick after skimming through the page.
3DS is down 20% from the DS sales by this time in the year, the only difference is that the DS launched several months earlier, and by now had Diamond and Pearl, it's Pokemon games. You know, the biggest Handheld seller? Which even with that amount of loss, it's incredibly small considering the boom of the mobile games industry. People are quick to say that people are abandoning handheld gaming and the casual market is gone. Phones aren't the gaming industry! People still use dedicated gaming devices, as well as playing Angry birds in the toilet. They are different calibers of gaming and you know what, sometimes I play Fruit Ninja in the can, and other times I knock out a race in Mario Kart 7.
Sure Apple makes more money than Nintendo and Sony combined, but it's a different and broader market.People playing games on dedicated devices won't stop doing so because they can also play Angry Birds free on their phone. It's two completely different experiences, which is Sony's major issue with the Vita but I'll get to that in a second. Mobile markets just add another tier to gaming. Bringing more people into our completely separate industry, not pulling them out. Phones are seen in North America as a basic human right, and every house has access to them, eventually it will be the same thing for Cellular phones. Phones which have games, people may play one and find they enjoy video games and may go out and buy something like a dedicated handheld or a console. 7 Billion people on earth with only 250 million console sales, there's plenty of room to get bigger, much less room to get smaller.
Now let's assume every "casual gamer" that came in with the Wii's boom and even PS2's cheap DVD, and count the number of people suddenly up and left. Looking at the sales numbers of the 6th generation, that's 160 Million units sold. Divide by 3 and there's enough profits to go around for everyone. Obviously though, that's not the case. People continue to garner interest. about 200 Million units sold. As you can see interest has steadily grown over the years, and I can see it growing even faster, as games start spreading to more corners of the world. Hell, look at the 3DS, hasn't hit 2 years and it's over 30 Million units sold without it's major games released. How is that showing signs of the industry faltering?
As for the Wii/U. I honestly don't believe that the soccer moms that bought the Wii now have iPads and will not get the Wii U. There's no basis for this whatsoever, it's just assumed because that market has grown fast, without mention that it's a completely different market. Phones, something that everyone has as a basic need while video games are a luxury, but through phones and free shovelware games, games spread and more people are exposed to it and it's becoming more of an accepted hobby and even now a viable career. Hell the fact that 3DS is keeping up with the DS is incredible proof of this. The differences in power are somewhat negligible and the "wow" factor of 2 screens no longer applies, yet it's still going just as strong. Btw, I won't go into power right now, I'll do so with more basis in the weekend, but I will say this. The PS4/XBO are extremely inefficient with no room for improvement, Wii U is very much so and should at the minimum be at the same pace as the PS4, in a years time. More on that in a couple of days.
Speaking of Sony and MS, why don't we talk about them?
Microsoft
First off; Microsoft. More specifically Steve Ballmer. Steve Ballmer, promoted to President in 2000, launchedthe Xbox in 2001. Throughout the just over a decade he's been in office, he's made it clear, he wants Microsoft to take the living room and expand beyond business software. A venture that has lost Microsoft, as of last year, over 450 Billion dollars. Including major losses in the Xbox brand. As you may know, ValueAct, an investor with a 0,8% stake in MS, just over 2 Billion dollars, recently called for 3 things to happen. Steve Ballmer to be fired, a chair on the Board of Directors, and the Xbox brand to be sold off. The Xbox brand over the years has put them under over 6 Billion dollars, as of last year. Last year MS reported losses of 900 Million dollars. Approximately 170 Million due to Xbox. Most of their income came in part of Xbox LIVE. While 360 eventually came to be profitable, it's still not enough and their investment is nowhere near paid off. But that's the past, and we are transitioning into the future.
Xbox One. This beast. So I'll skip the controversy behind it on this one and focus on the investment it has had known so far. 1 Billion on the servers. 1 Billion on opening up game studios. 500 Million on the NFL deal, 100 Million on R&D for the controller, and what we can only assume to be another 300-500 Million on exclusive deals with Activision, EA, and apparently there's even something with Ubisoft and the Division. Roughly 3 Billion or so on what we know. Now the most important things are what we don't know. Kinect and the actual box itself. Now this next part is purely speculation; The controller was 100 Million, what could the box cost? 500 Million? 700 Million? That sound right? The year they launched the 360 they had a loss of 2 Billion. Of course back then they had custom hardware, not it's off the shelf so it's presumably cheaper. Let's go off of Nintendo's losses last year, 500 Million. A nice safe round number. Okay so 3.5 Millon. But now here's the big money spender. Kinect.
Kinect, an intriguing device which under the wrong hands can be pretty scary. But tinfoil conspiracy aside, let's talk about the tech. Kinect 2.0 is said to use the tracking technology in jets. The original Kinect prototype cost them 30,000 just to manufacture the unit itself, then they cut some stuff out and it ended up at about 120 dollars to manufacture. Not this one with all it's added features, which reportedly costs as much to manufacture as the Xbox One box itself. Technology to trace your eyeballs and sense your heartbeat through that, and know who you are at first glance. Couldn't have been cheap. 1 Billion? 2 Billion? Has to be a lot with them pushing it so hard. Even being generous it can end up at 5 Billion more dollars pre-launch. How about manufacturing costs? If reports are true and the Kinect costs as much as the box. how much can the box cost? For this I'll quickly look at a piece of tech very similar to it in parts used. PS4. PS4 is extremely similar using almost identical parts. With the exception of more expensive RAM. Sony has reported they don't expect to take as big as a loss than they did with the PS3, but with that being a 200-300 loss it's expected. People have taken the sum of the known parts and puts it in the ballpark of 480. Assuming XBO is in that ballpark, maybe 420, or even 400. If the Kinect costs as much to manufacture, that brings the costs to about 800 per box. Shipping out 6 Million units? Being generous (again), and putting it at 700 per box, that's an extra 4 Billion+ investment in the brand. Bringing us to a grand total of 15 Billion dollar investment on the brand (I won't go over these number for everyone, there's a reason for this). "But it's MS, they can take the loss and wait out the profits", but will they? Maybe with Ballmer involved.
Only thing is, ValueAct has gotten it's wishes come true. CEO has a chair on the board, and Ballmer has announced his retirement, which was forced upon him. ValueAct and supporting investors are calling for change at the company and for them to go back to the only profitable business for them, business software. What is to become of Xbox then? Will the new MS take these losses, and continue to get hit by them for even another year, just waiting for the returns? Well that is yet to be seen, but it's extremely doubtful. Now selling Xbox, if that were to happen it'd be to some major congolomorate company, but who? Samsung? MS is going to want some of their money back on that, a significant amount really, and with Xbox's brand power fading, who will put up the money? Apple or Google? I doubt it. The most likely course of action is filing Microsoft Game Studios as bankrupt (to cleanly cancel contracts), and sell off individual assets. Publishing rights, IPs, studios, the works. Will that happen? Well let's give it a few months for those corporate suits to do what they do best. Meanwhile how about the Xbox One doing great and bringing back the money? Well after the controversy, that's a good 2-4 Million potential sales lost to Sony. That's nothing in the long run, but in the short run, it's the people that buy a console day one and spread the word to buy it. They haven't done all wrong though, they are doing well by Europe by havign the FIFA preorder deal, which is sure to kickstart the system, as well as Forza 5 in EU. They also have a decent lineup of games with a potential major hit in Q1, and nothing in the forseeable future, but Titanfall (as much as I hate the fact that it is), looks like a system seller and even that first year of exclusivity will help keep it alive through the inevitable game drought. At that point it's too far ahead to predict anything. Who knows if it will even last that long, or it may succeed and be a big hit. Time will tell.
Sony
Now how about Sony? Here's where it gets interesting.
Not only have they lost every cent they've made on the PS1/PS2 era, they've fallen greatly as a company....
Okay, I got sidetracked looking for links and I found http://www.notenoughshaders.com/2012/09/08/the-ten-year-decline-of-sony/this. This is all that you need to read in terms of their current finance situation.
In terms of the PS4, I'll try to be quick. Sony (even before reading that), needs nothing more than a miracle to have the PS4 be a success, and as luck would have it, they got that miracle, through MS' slip-ups, and they went through and went all out to expose that slip up and gain the most out of it, not out of vanity or some sort of thing against their practices, but because they needed them to slip-up, and they needed to bring it home. Now the PS4 will make 2 Million hype sales, sure. But hype/1st month sales mean nothing. What matters is keeping that up through software, which is something they don't have, a killer app. inFAMOUS is sure to bring in numbers, but not enough. Their launch; I predict 2-2.5 Million units sold by January. Now after that, we have nothing until February, and then a drought. The problem is what comes in February is not a killer app, and unlike Nintendo, they don't have a top selling software product to keep them afloat. In Q1 Nintendo has Mario Kart, Microsoft has Titanfall, and Sony has inFAMOUS. inFAMOUS, while a staple game which sells well, it isn't a hardware seller, neither is Killzone or new IPs. Titanfall is shaping up to be, and we know Mario Kart is. Unlike the PS1, PS2, and PS3, they don't have a killer feature to separate it from the rest. No Bluray, CDs, or DVDs. As such it needed software, which wasn't ready for launch.
Now that's not the PS4's biggest issue, maybe on it's own merit in a perfect world [For SONY] it could outsell the gimicky less powerful Wii U and the more expensive Xbox One, but it isn't one, and it's not on its own in the market. The biggest issue for the PS4, is the PS3. If I'm one of 70 Million + consumers that has a PS3, that's not going to be one of the initial 2 Million buyers. Why should I upgrade? It's 400 for a box that has minimal return on graphics, features, and is yet to have a killer app. Most games are available on PS3 as well and hell the PS3 is still getting exclusives. They have to convince 70 Million people to put down 400 dollars on a system that doesn't give much of a different experience and on top of that, you have to convince people to buy these boxes with 60 dollar games over the a PS3 you can get for 100 dollars or 200 in stores and has an entire library of games you can't even get new anymore, which means they don't get the profit for software sales on what many people will see as a much more viable platform (Cheaper, still getting games, and more games). A major issue is that the at the moment all Sony platforms are third party centric going into the next year, something that is not a good thing. Few exclusives in the first 6-8 month lineup, and most of those exclusives will be on both or all three of their platforms.
Speaking of 3 platforms, let's talk about the VITA. Ooh boy, this thing. I keep saying I'll keep it short and never do huh? Well here goes another attempt at that. The Playstation VITA. 2 years in and still a complete bust. You know, I can keep this short as there isn't even much to say. 3DS is dominating and VITA isn't, and I have an idea why. They are going with the shiny gloss and 'OLED' screen and 'better hardware'. Meanwhile they left out the games. The VITA relies solely on third party ports and very few first party titles, and the ones that do come in are more console ports. That's the biggest problem with the VITA imo, they are going for a console gaming experience on the go, but that's not what people want from a handheld. When I pick up my 3DS it's a different experience in games from playing Console games. You could say that's due in part by the whole DS side of things, then let's take it back a bit. Pokemon Stadium for the N64 and Pokemon Yellow. (I may be completely off with my timing here). When you play a console pokemon game like Stadium or GX it's a completely different experience from that of the portable version. It almost feels like they designed it like that for a purpose. Mario Land feels different from Mario World, and not just because of hardware constraints. Super Mario 3D Land felt like a handheld game built for the system. When I play Mario Kart 7 and Wii, it's a different game and you can tell. SONY is trying hard to get that Console gaming experience on the go, but that experience isn't for the go, it's meant for the home. A handheld is supposed to bring you a different gaming experience than the home experience, and the PSP did that, as with the DS/3DS is doing now. VITA is far from that.
Now SONY's latest blunder/potentially biggest. Well, it goes both ways. That conference and Gamescom showed me many things. First off, nothing has changed, just more and more ports into the VITA's third year, and worrying that many ports on PS4 as well, but more on that in a second. VITA is showing no changes for the future, well one. Sony's apparent abandonment of the system, with Killzone bombing and news that Gran Turismo won't be on the system, because it's 'too hard' for them? The VITA is now left with Indies doing all the work for them. The new VITA Slim is more proof of that. All they are doing with that one is reducing their investment ont the platform. With a plastic, cheaper plastic over the higher quality built of the previous iteration and most notably the removal of the OLED screen and leaving it with an LCD. This is just cutting their costs, not further supporting the system, Same price, lesser quality. Clear purpose is to reduce the loss on the system.
And here it comes, the VITA TV! This thing was a HUGE mistake but at the same time a saving grace. Let me explain. Firstly, the way it can help them. With the VITA TV being basically a home VITA model at a budget price of 100-150 depending on whether or not you own a controller, great deal of good it will do for people on the fence. There's two problems though, well this first is likely the plan. Through this they are leaving the Handheld Market. They reduce investment, and book it the hell out of there with a home model to help increase profits on the platform and saving face rather than just abandoning it completely. So now, Nintendo jumps back up to 90-95% marketshare in the handheld space (I don't count phones a part of that). Meanwhile they have a selling platform in the VITA TV which will likely sell more than the VITA had potential to with RemotePlay. All fine and dandy until something happens. With the VITA TV being a portstation at 150 it has the potential of biting into the PS4's marketshare since people can play Playstation games on that rather than spend 400 on a new system. Graphics don't matter anymore and the biggest thing holding the Wii back was simply the 480p resolution. VITA has acceptable resolutoin that I believe will upscale to 720 on VITA TV.
As such, there's several million people that can now spend 150 on a SONY hardware over 400, and people that care more about their games or graphics can get a PS3 for 200. So how are they going to convince people not to do that and instead buy a PS4? There's no backwards compatibility so I'd much rather buy a PS3, PS4 has less games and won't be getting too many in it's first year that won't be on other systems, namely PS3. Sony got their first miracle to win over Black Friday, maybe, but what then? They aren't showing potential for moving forward and they really need to.
Nintendo
Now Nintendo on the other hand is in a sweet position. Despite what you may be led to believe, the market has been kind to the Wii U, given the drought and ports it's had. In the time it was released, the first few months, it his 3 Million sales, on mostly NSMBU alone, with little hype and much confusion surrounding it. Hate it or love it, the Wii U Gamepad brings a lot more to the table than it's given pubic credit for. Wii U has a unique aspect that actually improves gameplay and adds features not available on any of the other platforms, while doing anything the other platforms do. There's more reason for a 360/PS3 owner to get a Wii U than a PS4/XBO with unique gameplay, while still being able to play the original way, and many different supported control schemes whilst maintaining a ton of exclusive first party games. We have two games a month from here to January, from there we have a major hitter, Mario Kart. Before then it's got a 3D Mario, Sonic, Zelda, DKC, amd Wii Fit, Wii Party all games which have been proven system sellers, as well as other supporting previously released games such as NSMBU, Game & Wario, Monster Hunter 3 Ultimate, Zombi U, Pikmin 3, Wonderful 101, and LEGO City Undercover. On top of that, despite what everyone says, it's got tons more third party support already than Nintendo's had in 2 decades. More third party support by the way of EA incoming once the WIi U sells, which it's primed to do the most of this holiday and going into next year.
Now it's true, the Wii U's power isn't an issue, and honestly it has more potential than the PS4/XBO without being a mess like the Cell processor but more on that on the weekend, it's the lack of demand to give an investment, and third parties didn't give owners a case to buy their ports, which gave them reasons to not develop for the system. Here's the thing, I doubt EA is stupid, they just happen to be money sucking leeches. As such they want to make a profit, and I can't see Nintendo doing 12 Million sales by March with the PS4 at around 2-3 million while XBO is at around the same, and EA not putting their games on the shelves next to Smash Bros. Where EA goes, the rest will follow. It's a shame they have this power, but they have it and as such we move on. Now don't try to counteract with Bethesda's shit talk. Bethesda, which has made 2 games for Nintendo systems, Home Alone, and ****ing Where's Waldo! Their word is irrelevant and I easily see them on the Nintendo stage in 2014/15 at e3 showing off their latest bugfest to release on Wii U with exclusive content. Quote me on that one, I want this to be remembered.
Sony's biggest mistake was recent, giving Japan to Nintendo. With the PS4 not launching until the end of February, that gives Nintendo an extra 4 months to release their games and becoming a more established force in Japan. Tretton has already said their focus is on the west and after that conference it is clear to me they are ready to let Japan go. Nintendo is uncontested in Japan for 4 months while all their major games are released and Mario Kart will be out before the PS4 launches, potentially Bayonetta as well. Meanwhile, all of Japan's PS4 games are either ports, or cross platform, which means they don't have a reason to buy a PS4, they can just get the games. Nintendo is giving continuous support to the Wii U going into 2014 and even potentially reaching 2015, with more games to be announced this year, and of course the next. MS has no business there. Now in other regions, more importantly NA, the chips can very well fall in the Wii U's favor. The million preorders are only 1 million units with likely another million on top of that, no further support for months. The Wii U has a major price advantage which includes a full retail title, and you can bet your ass that they will have a SM3DW bundle and a Wii Fit U Bundle. Sure, Black Friday will easily go to Sony but how will December go? PS3 has more titles and most the PS4 titles. Wii U has all killer apps incoming, to ensure an extremely profitable holiday for Nintendo. I am predicting roughly 1.5-2 Million a month from October-January, jump 3 million in the month of MK8. If they can keep up the pace of game releases into next year, I can't see the Sony seriously competing after the initial 2-3 Million sales. They don't have the software available to back it up.
Now MS is actually in a better position, as much as I'd hate to say it. NFL deal will look really nice in Q1, having that Fantasy Football stuff and ESPN around Superbowl time. That partnered with Titanfall will do them some good, but not enough good with a single game to go on. On the brigter side, their software lineup at launch is much more promising than Sony's. So while the PS4 is going to do good with those won over by e3 and shunned by MS, they will make it up through the software and FPS deals which actually do matter to some people, although until Titanfall it will be considerably less overall.
Through Nintendo sales we will get EA, that's a given, but we will also get those which have been quiet and waiting for it to be a viable platform, such as Square Enix which is no doubt to bring their two games to the platform, and Konami, which will bring it. Namco and CAPCOM will further support the system. Id and Gear softworks are different stories as they've been vocal against the system, but when it's a viable business move, you'll them praising it. I think the biggest third party game, which likely releases just early enough to not get a Wii U port, and just late enough that it could, by a company that is supporting the system, could be a major influence in what the Wii U becomes, Destiny by Activision. It's rumored to drop in July, just after e3. Prime time where it may or may not be ported to the system published by an active supporter of the Wii U which has gone out and even defended it from the remarks of Bethesda. Let's be honest, the only reason EA isn't supporting the system now is that they are upset about Origin not being the store on the Wii U, but money will bring them back.
As for Indies, well Nintendo's been doing well by them for a while now, they just having been shouting it out into the wind like Sony has. They partnered up with Unity and are giving away free Unity 4 licenses as well as giving loaner devkits which can be returned or bought after use which is rumored to cost around the 1500-2000 ballpark. Devs have full access to the entire system and all the gamepad features through the custom Unity tools.
Nintendo is primed for success, Sony and MS are primed to leave the market within 2 and 1 years respectively. They've got heavy competition with themselves. while still taking losses on their new systems. The gamepad will go further than the Wii ever could. There's also one final thing to note. Well let me mention something, Casual market isn't gone. 100 Million users didn't just up and buy new phones and won't touch another console again, that is a silly notion and when the Wii U has stuff that gets people talking, which I imagine will end up being it's next pack in game, Wii Party U, it will bring those people to the console, and then some. People seem to forget Nintendo has a larger fanbase with timeless IPs. What Is a niche Nintendo game, would be a high selling staple game for other companies. Their quality hasn't faltered and their namesake is as strong as ever. I predict 320 Million sales this generation, with Nintendo having around 80% Marketshare overall. It'd be more if the competition wasn't primed to crash.
Interesting links:
http://www.destructoid.com/blogs/The+Bowels+of+Trogdor/sony-is-flirting-with-death-and-death-is-showing-interest-261402.phtml
http://www.notenoughshaders.com/2012/09/08/the-ten-year-decline-of-sony/
They are no longer the companies they were back when they joined the console market, they've exceedingly lost money at it. Hell, the Gamecube made more profit for Nintendo than the PS2 did for Sony, and that had a 130 Million unit lead on it. They act like they are ahead because they need to, if they show signs of weakness they are boned.
MS has gone down from 660 Billion net worth to 212 Billion since 2000.
Sony has gone down from 100 Billion to 11 Billion in the same time, with 135 Billion in liabilities (read the second link), more than Google, EA, MS, and Apple combined.
Nintendo has steadily profited over 30 years and now has a value of about 16/17 Billion now with 11 Billion in the bank and rising while the others continuously drop.
Iwata says 1 Billion profit? Okay, I can see that. Now life time, sales for these games releasing, based on sales of previous iterations combined, well let's just say it's a lot of profit from software sales on Wii U. Any numbers I put out would be pure speculation and I'd rather not have that.
So yeah, I completely believe in this. The Wii U is a perfectly rounded system with everything you could possibly want, and on top of that a completely new way to play all of your games, plus suport for Wiimote and Pro controller at the cheapest price point with the best and most games and the best way to play multiplats. It's going to be hard for Nintendo not to dominate the competition, for as long as there is some. This is going to be like the NES days, Nintendo's return to power saving the industry from once again crashing, putting publishers in line. Except with even higher quality games. I don't know if you've been paying attention but all the games released are top SNES+ quality. Hell there may become a new standard known as Wii U quality games.
So much for quick thoughts, I apologize for the lack of structure and I'll get back with the power thing, in which I'll focus on explaining why the Wii U has more power and potential than the 'Wonder' Twins, in a couple of days.
).
