Fight-the-Streets said:
I always thought it's just tactics from Nintendo when they say, we don't compete with Sony and Microsoft, we are in a different market segment. I mean, of course Nintendo prefers if they are also market leader by pure sales numbers and they would love to have those NES days back but ultimately, most important for Nintendo is to have a sustainable business.
I always thought, it's just PR talks but after reading this article, I'm convinced now that Nintendo is really only focusing on themselves, to have a sustainable business. Sales numbers mean nothing if the profit is swallowed by multi-million marketing campaigns, gargantuan development costs, an expensive internet-network and a business model which is too short-term. Ultimately, Nintendo doesn't care if they only rank 3rd (in sales numbers) as long as they have a sustainable and successful business.
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Nintendo do things their way. That's always been the case. Sometimes it flies high as with the wii or it can crash and burn as with the GameCube. That's the risk they take by taking this path.
I do agree that massive amounts of revenue are eaten up by developement and marketing etc,. The amount of MS Xbone ads you get on British TV across pretty much all channels all day can probably pay off third-world debt. People love to count the money coming in and forget the enormous expenses going out.
Another factor is the guy from Capcom stating the developement is 10x more work on Xbone and PS4. If this is true that's 10x more work for less gain. How all this pans out is going to be very interesting and there are plenty of articles pointing to this as a real problem within the industry going forward.
Nintendo (I think) tries to avoid a lot of these hurdles by keeping the hardware relatively low power and not building massive network systems like the current buzz word, "cloud" servers.
However, consumers really don't care about such things. They just want the games at a reasonable price and to hell with with what happens behind the scenes. There is nothing wrong with that.
Ultimately how well a console sells is the defining factor of it's success. As it stands the wii u is not even close to being sustainable. On the other hand it doesn't need to sell as well as the others do to turn profit.
As you pointed out when you compare the massive cost of developing games plus the infrastructure to support these games, these consoles need to sell a whole lot more hardware and software than the wii u to be sustainable, even with the help of subscription fee's.
The wii u can survive with a poor 30m lifetime sales. The others probably would need twice that.