I guess this fits better in this category since it primarily deals with games.

With the various 3^rd party conferences occurring being thus far somewhat more weak than expected for Nintendo fans, the charge is brought up that it’s Nintendo’s own fault for making the Wii so weak.  So did Nintendo screw up by making the Wii so much weaker?  I think that far from being a mistake it was a brilliant business move for Nintendo.  First and foremost Nintendo is in this for profit not to lose money pushing overly expensive overly powerful systems like MS and Sony.  Video game consoles always lagged behind computers for a reason after all.  It’s already been discussed why Nintendo chose not jump into the HD realm (small share of the market, slower than expected growth, and so forth).  It was smart of them to not do so for many reasons, not least of which it allowed them to have the only mass market priced console and the only profitable one.  This thread will primarily deal with 3^rd party support so I’ll elaborate on that reason.

One of the N64 and Cube’s biggest problems was the lack of 3^rd party support.  There were 3^rd party games of course but they were mostly ports.  Had Nintendo raised the specs on the Wii its price would have gone up since Nintendo can’t bear the kind of losses Sony and MS can.  Even so it would have still been the weakest system and even if a system is 1/3-1/2 as powerful it is very difficult to port games over.  The PS2 saw that when Sega made Sonic Heroes on the Cube and Pandemic made Full Spectrum Warrior on the Xbox then ported them over to the PS2.  The games looked terrible and still had frame rate issues.  However, the Wii at its higher price would not have the market share of the PS2 and so couldn’t expect 3^rd parties to make most games for it first with a few improvements added to the ports for more powerful systems.

The whole point of the Wii is the Wiimote, which means games need to be redesigned on the Wii to begin with.  3^rd parties are like people and businesses everywhere else, they are inherently lazy.  A more powerful Wii would mean they could just port the game over, tack on pathetic motion controls with the option of using the classic controller and call it a day.  Making the Wii radically different forces 3^rd parties to make games tailored to the Wiimote.  That doesn’t necessarily mean minigames galore but it means much more thought needs to be put into how an FPS or RPG will control.  Thought that may as well occur since they have to use a completely different engine anyways.

This does put 3^rd parties in a difficult though not impossible position.  As I see it they have 5 options. 

1) They can continue doing what they are doing, spending most money on the PS360 and tossing crapware to the Wii. 

2) They can design games on the PS360 and port them down to the Wii despite the higher cost. 

3) They can design games for the much weaker PS2-esque mass market system first then redo the engine for the more powerful systems (leading to worse looking games on the PS360). 

4) They can split their games evenly and focus on each system in particular (ie no ports or only a few PS3-360 ones).

5) They can focus on the Wii while largely ignoring the HD systems.

When analyzing which is best it has to be remembered, Nintendo cares about Nintendo’s profits and 3^rd parties care about their own profits. 

1 is not working for 3^rd parties as EA has been the most recent company to discover, but while it may limit Wii system sales it ensures a higher proportion of game sales will be Nintendo so doesn’t matter to Nintendo.

2 would be expensive for 3^rd parties ($20 million for the first game plus $5 million porting it) and would have a pretty bad profit margin as each system cannibalizes sales on the other, but again Nintendo wouldn’t care as that has little effect on its profit. 

3 is cheaper than number 2 for 3^rd parties ($5-10 million plus $10-15 million to port, $20 million overall) but would probably see similar total sales figures though more would be on the Wii which would marginally improve both of their profits at the expense of Sony and MS. 

4 would be the most expensive overall for 3^rd parties since each game would be bottom up for each system, hard to say how well it would do since only the Wii would regularly make profits for them and may tie up more gamer money in buying more systems than expected instead of games, but for Nintendo it wouldn’t have too big an impact on profits so wouldn’t much matter. 

Lastly, 5 is probably best for all involved from a profit standpoint, both Ubisoft and THQ are doing very well primarily focusing on the Wii, but I understand that 3^rd parties’ apparent graphics fetish and desire to keep any one company from dominating would augur against this one.

The key thing for Nintendo being its profits I don’t see how Nintendo’s decisions with the Wii have done anything but help it.  At the very least gamers will get a Wii and either PS3 or 360.  Since Nintendo makes a profit on every console even if a few different 3^rd party games are enough for someone to buy a Wii, Nintendo profits.  For MS and Sony every game someone doesn’t buy because they got a Wii is lost profit they desperately need to cover their huge per unit and development losses.  The Wii has disrupted the marketplace and caused 3^rd parties who refuse to get with the program profit problems but since when is that Nintendo’s primary concern?  If the 3^rd parties want to put graphics and keeping Nintendo from dominating the market (good luck with that) above profits they can keep going back to their shareholders with losses like EA, or with profits only due to one time gains like Bandai (DVD Gundam sales) and Activision (Guitar Hero II being #1 game) as they watch their stock price fall.  That could be seen as good for Nintendo anyways, as Nintendo keeps raking in more profit than the rest of the industry combined they’ll soon be able to simply buy all these cheap wayward 3^rd parties.

I think the Wii's design was driven in large part by a desire to maintain backward compatibility with the Gamecube, not just for consumers but for developers. Nintendo could not have been operating under the assumption that the Wii would take off to the extent it has; my guess is they targeted third parties by offering them ease of transition to the next generation. If they had been able to predict the system's level of success, they might have made less conservative choices in that area. But even Nintendo needs third party support -- they opted to do their best not to LOSE the developers who had already invested in the Gamecube, and I think that was the best possible choice at the time. Some of the third-party titles on the market now were clearly rushed, or are the product of developers without much Gamecube experience to assist them in the transition. I think there are major challenges to dealing with the human variation inherent to interpreting the Wiimote, and that's where a lot of "invisible" effort is going right now. Hopefully third parties are now committing more resources to their Wii titles -- recent announcements are encouraging, we're seeing more variety and some potentially epic games on the way.

I think Nintendo's goal is to develop enough ongoing system seller titles for the masses themselves and therefore any 3rd party games that they get is an added bonus. I know NOA and Reggie do a lot of work with American 3rd parties to try and help the Wii in the USA, that is crucial there to be the outright winner, but in other territories, especially Japan Nintendo can hold their own by themselves. I think this is what they are trying to do with the Wii, they have had to rely on pretty much their own games all three generations the last few times, and they are probably trying to do this again... look at the MAIN selling games on DS and it's clearly controlled by Nintendo influence. IF Nintendo can keep a consistent flow of good games coming to the Wii then that can only be a good thing, and as the install base becomes larger it only becomes better and better for Nintendo and then more and more attractive for 3rd parties. I think the 5 different development options are too broad of an 'estimation' and I think you will find that it will be completely different to this. 3rd parties aren't going to come running back to Nintendo like a lot of Nintendo fans think, but new games get announced for Wii every week but none of them really seem like companies 'top tier' games which is the same thing that happened with GameCube.

Honestly, I think Nintendo knew that it would be difficult to get any third party publishers on board with the Wii if they would have to spend as much on Wii development as PS3/XBox 360 development; at the same time I think Nintendo knew few people would take a chance on Wii if they had to spend $400 on the console alone. These factors meant that Nintendo was limited in the ammount of processing power the Wii could have.

Personally I suspect that (back in 2003) Nintendo was working on a low power consumption version of the Gamecube architecture to be used in a handheld in mid 2006 (similar to the PSP) and an 'advanced' version of the architecture to be used in their next generation console. Sony's plans to release the PSP in early 2005 meant that (like the Playstation/N64 and PS2/Gamecube generation) Sony would get 18 months lead time before Nintendo release their platform so Nintendo needed to change strategies. They couldn't cut the life of the GBA short for simply more power so they designed an unconventional platform (based on the GBA architecture) and planned to sell it as as a different line than the GBA; they continued to design this low powered Gamecube in case the DS flopped so that they could reduce a portable Gamecube to compete with the PSP.

In early 2004 and early 2005 the Wiimote was being designed as an add on for the Gamecube but Nintendo decided that it would not be well supported (as an add on) so they needed a new system; as I said earlier they decided they needed a low processing power system. The DS had not taken off and become super successful (but was successful enough that they didn't need a new Gameboy) so Nintendo was not certain of their strategy with the Wii. This uncertainty meant that they decided to take the low power-consumption Gamecube architecture and overclock it rather than take the advanced Gamecube architecture and 'run it slower'. The result is the Wii.

Had Nintendo known how successful the DS and Wii would be I'm pretty sure they would have choosen a somewhat more powerful architecture for the Wii ...

The Wii was designed for these reasons: 1. Affordability (for the consumers) 2. Profitability (Nintendo makes money on each console sold from the start) 3. Ease of Development (its just like the gamecube, so devs are familiar with it) 4. Backward Compatibility (VC and GC games can be played on it.) The issue at hand though is that the Wii is not as powerful as the 360 and the PS3. But here are some interesting things to think about... If the Wii did not have the Wii-mote, would it be as popular is it is? No. It would be a bigger "failure" then the Gamecube and N64. If the 360 and PS3 were slightly more powerful (or as powerful) as the Wii-- would either console be as popular as they are now? No, probably not. The thing that differentiates the 360 and PS3 are their computing power (and X-Box Live). So, here's the interesting thing to think about. Nintendo already "won" this console war. They are already making a ton of money on the Wii. Let's say they fall to "third place". It doesn't matter. They already "won". Now, the problem with Sony and MS is that the only way they can compete is by creating a SUPER CONSOLE. Thats the only way Sony and MS can compete with each other and with Nintendo-- by making the most powerful console because gamers love powerful consoles. The problem with this, is that SUPER CONSOLES are expensive to develop and manufacture. And Sony and MS can't sell these SUPER CONSOLES at too an expensive price or else few people will buy them. So that'st the problem with Sony and MS, is that they can only compete by making a SUPER CONSOLE, but they can't make a profit or be successful unless they sell a lot of CONSOLES and gamers buy a lot of GAMES for their console. So, for MS and Sony, in order for their SUPER CONSOLES and their GAMING BUSINESS to be successful, they need to be "#1". They need to have the biggest marketshare and they need to totally beat the competition. Whats worse is that MS and Sony have to sell more games for their console to be profitable. And their games are more expensive to develop and sell for more at retail then Wii games. So developers have to sell more games to make it worthwhile to develop games on the 360 and PS3. But its tough to sell a lot of games, especially if they are more expensive to buy. So, here's the funny thing. MS and Sony will not get a large chunk of the console marketshare and it will be tougher for their games to be super-mega-hits during this round of the "console wars". NOPE. The best scenario for MS and Sony is that there will be a "3-way tie" in terms of console marketshare. Even, if there is a "3-way tie" MS and Sony already "lost". I really doubt we'll be getting a "3-way tie" anyway. Nintendo already "won". I'm not even sure if MS will put out another X-Box even if they can get some profit from the 360. If you spend billions and billions of dollars in the video game market and only make millions of dollars-- is it really worthwhile to stay in the business when you could invest that money in something else more worthwhile? That question is what Sony and MS are asking themselves now. Will there be a PS4? An X-Box 720? I don't know... MS didn't even make a profit on the first X-Box...

I doubt the Wii would have been released without the Wii-mote. It seems fairly clear that the Wii-mote could have been introduced as a Gamecube peripheral, but would not have achieved much market penetration on that basis. The choice Nintendo made was to make the Wii-mote the driving feature and market the system as a new generation, taking advantage of some technological progress in the meanwhile to make the system consume less power and be a bit of a step up from the GCN architecture.

So far, this appears to have been the right choice -- consumers at large are proving to be much more interested in having something new, fun, and yes, even short-term to do (the Wii-mote) than digging deep into fancier iterations of existing gaming styles. And the Wii is inexpensive enough that hardcore gamers can afford a Wii as well as an HD-capable system.

(On that note, I think Nintendo is indirectly benefiting from the equivalent of a format war on the HD end in some markets -- the more multi-platform releases come out for both PS3 and 360, the less differentiation there is between them. It's easier for consumers to buy the cheap/now system and take a wait-and-see attitude on the high end. I know I was happy to buy a Wii but haven't quite made up my mind between the two high-end systems yet; to some degree the decision comes down to esoteric concerns about A/V and internet hookups for me personally. And if the Wii software flow picks up, I might not be in a rush until prices drop and the libraries grow for both HD consoles. I suspect this kind of fence-sitter's delay is playing into the market right now.)

Well I didn't mean it to read as a 3rd party "got to hell" rant like it does to some extent. I know 3rd parties will come back and I think it's a bit too early to say they are ignoring the Wii. Sorry that as long as it was I didn't make some things as clear as I should have. The main issue is not whether 3rd parties will ignore the Wii, they won't, but whether it was a good idea for Nintendo to make the Wii so much different and weaker given the trouble it could cause 3rd parties. In other words, was disrupting the market worth the risk to Nintendo's profits. I think it was a safe risk for Nintendo profit wise is all. Also, while it's up for debate, I don't really address whether it's good for certain types of gamers either.

@ddobson

I agree maintaining full backward compatibility was a reason for designing the Wii as they did. There's lots of reasons they designed the Wii the way they did, some good some less good. Nintendo is trying to get third party support and it is of course always helpful to have it. I know a lot of the problems with current games and support will take time since 3rd parties missed the Wii boat.

@Origin

 I agree excpet the 5 options are of course generalized. Different companies will fall in between several options so it's not a clear cut case for the market as a whole. The key point is whether any of the options being selected hurts Nintendo's profits? I think no so however the companies choose to play the Wii it won't really hurt Nintendo's bottom line. I don't expect 3rd parties to come rushing to the Wii untess it rivals the PS2's market share (if it ever does). Like I said the issue is whether Nintendo releasing a weaker system hurt it with 3rd parties so much to cause sales or profits worries and I don't think so. A more powerful Wii would have just been GameCube lite to the 3rd parties and PS360 lite to the market, it wouldn't have won either. At least this way Nintendo could win the market and so have some leverage with 3rd parties. If 3rd parties don't want to play along, it's their loss, so I think it's pretty certain they will eventually.

@Happy Squirrel

Interesting thoughts on the development process.  I have to say one of the annoying things this time round is how quite Nintendo has been about development.  I remember following Project Reality, Dolphin, Katana, Saturn years before they launched.  It's interesting how they changed designs and direction and so forth.  Now the most interesting of all the consoles by far I think and we know next to nothing about how Nintendo arrived where it did.  

@Ramberk

That's pretty much what I'm saying.  The way Nintendo designed the Wii the essentially can't fail.  3rd place = lots of money, 2nd place = even more lots of money, 1st place = so much money they could buy the Imperial Palace or California (yeah, you have to be really old or followed world events at a very young age to get that).  Certain gamers may not like what Nintendo did but from a business standpoint it was brilliant.

And possibly wouldn't that successful. So they became successful, because they didn't calculate with that much success.

I think MS is able to make profit out of the XBOX360. XBOX Live generates much money for them and I think they already have become the shooter-console, so they always get more shooters, because the players that play shooters already have a X360.

The Wii's designs, for BOTH hardware and software, aren't designed to attract to the "core" gamer exclusively, unlike the PS3 and 360. In fact, the "weaker Wii" gave way to several different advantages that the 360 and PS3 do not possess. I'll cover some pointers for ya. The small design not only makes it easy for transport and easy to place anywhere, but also is more appealing to those who are usually intimidated by traditional "bigger is better" technologies, which is extremely helpful towards non-gamers and casual gamers. The white Ipod design that accompanies the small size gives it a sleek, impressive look that people from all categories find stylish, not just the "hardcore". Hell, it's pretty much the only console of the 3 you can call "cute", and that counts to some people. :) The massively smaller electrical and heat footprints of the Wii also gives it something appealing to those who worry about such issues. Now overlap those points with the title name "Wii". The term "we" is used when explaining the intention of the console to those unaware, but at the same time the name itself creates interest just from the term, thus starting many people's impression of it. Then kicks in the size/style factor when they ask about it. The "playstation" is already self-explanatory term, and the "xbox 360" name is a hi-tech style by default, with no real attempts at a mass-market "comfortable" feel to it. With the Wii staying in the same family of processors and graphics chips, it allows the platform perfect backwards compatibility with the gamecube library. While not as significant as the PS2's library (or maybe even xbox's library, depending on your taste), the perfect out-of-the-box compatibility gives it an edge over the PS3 and 360 easily. Don't forget the Virtual console leverages a massive backlog of software titles that is very appealing to both long-time gamers whom either missed or desire to replace certain games, and those who have been "out" of gaming for 1 or more generations who desire those games they played long ago. And you can play all of those games on a single console smaller than all of it's "virtual" predecessors. My finger's hurt. :) Nintendo really hit the nail on the head by leveraging the console's uniqueness into a domino-effect that's catching people's attention like no other video game console before it.