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Forums - Gaming - Gaming's worst marketing/business decisions?

foxtail on 07 July 2016
Intrinsic said:
foxtail said:

Nintendo had to fight to get shelf space with retailers after the crash in the 80s with a lot retailers not wanting to bother with videogames at all.   Trying to get better shelf space was a old practice and something all products and companies wanted way before videogames. Nintendo convinced retailers to give them a chance and with the NES they found success with a wanted product.  Sony and Microsoft are also benefactors of the inroads Nintendo made back in the day for videogame shelf space.

As for keeping  their competitors products off the shelves, was there actually any lawsuits or was this just hearsay because unless I'm mistaken the lawsuit you're talking about is actually Atari vs. Sega in 1994 over shelf space for the Atari Jaguar? - source  

Yup. it happened. this is the most recent article i could fimd of the incident. 

That article actually talks a lot of nintys history but here is a snippet on this very issue.

The courts found Nintendo guilty and required amends to redistribute a large amount back to the consumers and break exclusive deals with third parties and retailers, but Nintendo ended up turning the loss into another victory. They distributed the price-fixing settlement in the form of thousands of $5 rebate checks, so to exercise the settlement consumers had to buy more Nintendo products.

A lot of that article is a bunch of content in the form of hearsay.  That lawsuit was not about keeping their competitors products off the shelves, it was only about price-fixing.  That case had nothing to do with it's competitors or third parties.

Here's the details of the settlement below:

------------------------------------------------------------

New York Atty. Gen. Robert Abrams said the company had been accused of coercing retailers into keeping the price of its basic video system at $99.99 or more and threatening to slow supplies to those who reduced prices on its products by as little as 6 cents.

Nintendo of America, the U.S. unit of the Japanese electronics giant, is not obliged under the consent agreement to admit any violation of antitrust laws. It said it accepted the settlement to avoid a costly trial and maintain "good will" with customers.

"Nintendo has cooperated fully with the FTC and the states of New York and Maryland in this matter," Senior Vice President Howard Lincoln said in a statement. "While we were emphatic during negotiations and continue to insist that Nintendo had done nothing improper or in violation of antitrust laws, we decided to enter into this comprehensive and nationwide settlement to maintain the good will our company enjoys with millions of consumers who play Nintendo games."

 

Under the agreement, Nintendo of America will:

  • Mail a $5 "instant redemption certificate" toward purchase of any Nintendo game cartridge to consumers who bought game machines between June 1, 1988, and Dec. 31, 1990.
  • Guarantee redemption of at least $5 million of the certificates and agree to issue up to $25 million in coupons if enough qualified consumers apply.
  • Pay a total of $4.75 million to the 39 states involved in the dispute to cover administrative and enforcement costs.
  • Advise all Nintendo dealers in writing that they are free to sell the game machines, cartridges and accessories at any price they choose.
  • Include a disclaimer in promotional material that the "suggested" retail price is not mandatory, assuring dealers that they can set their own prices.

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KLAMarine on 07 July 2016

I win.



DonFerrari on 07 July 2016
foxtail said:
DonFerrari said:

And no it isn't 8 per console... it's NO MORE than 8 USD, relative to 4% of the selling price of the drive.

It was 4% of the net sales price of DVD players and DVD decoders (not just the drive) , with a minimum royalty of $4.00 per player or decoder and a maximum of $8.00.  The Gamecube and Xbox would be considered the DVD players, and 4% of their net sales price would reach the $8 limit.  They would both be charged $8 per console at their launch prices.

Most PS2 games could fit on a Gamecube disc, and for those that couldn't they could use two discs (though it may be harder with some open world games) or use compression .  Besides, if they put a DVD drive in the Gamecube it would be less of a small CUBE. =P

That table I put was for DVD-ROM DRIVE not DVD Players (which was another part of the table)... so you are talking about different things. PS2 had to pay for royalties for their DVD Player, MS had to pay for the Driver, not the end unit... or do you think computers would have to pay royalty on DVD drive on the price of the whole PC?



duduspace11 "Well, since we are estimating costs, Pokemon Red/Blue did cost Nintendo about $50m to make back in 1996"

http://gamrconnect.vgchartz.com/post.php?id=8808363

Mr Puggsly: "Hehe, I said good profit. You said big profit. Frankly, not losing money is what I meant by good. Don't get hung up on semantics"

http://gamrconnect.vgchartz.com/post.php?id=9008994

Azzanation: "PS5 wouldn't sold out at launch without scalpers."

DonFerrari on 07 July 2016
SpokenTruth said:
Intrinsic said:

Would have loved to go back about 24/25yrs to be able to key you in but hey... thats not poasoble yet. But i guess when i seem to hate the decisions a company makes to prevent third parties from releasing more than 5 games a year some may think im some sort of fanboy lol.

The 5 game per publisher per year rule was put into place because of Atari.  Part of the reason for the 1983 market crash was that publishers were flooding the market with sub-par games.  Nintendo limited publishers to ensure they put more effort into the 5 games they were limited to and to keep the shelves from filling up with too many titles.

In before someone says Nintendo still applies that rule to themselves....

I don't remember sony 1st party to release much more than 5 games any year in recent times.



duduspace11 "Well, since we are estimating costs, Pokemon Red/Blue did cost Nintendo about $50m to make back in 1996"

http://gamrconnect.vgchartz.com/post.php?id=8808363

Mr Puggsly: "Hehe, I said good profit. You said big profit. Frankly, not losing money is what I meant by good. Don't get hung up on semantics"

http://gamrconnect.vgchartz.com/post.php?id=9008994

Azzanation: "PS5 wouldn't sold out at launch without scalpers."

kopstudent89 on 07 July 2016

Wii U hardware, marketing, all of it

PS3's 2006 E3

Nintendo not going CD-rom with the N64

Nintendo ditching Sony

XBox one's focus on Kinect

Nintendo VR

Decision on under-powering the Wii hardware, took away all the momentum going into the 8th generation

Sega Saturn and Dreamcast



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Intrinsic on 07 July 2016
SpokenTruth said:
Intrinsic said:

Would have loved to go back about 24/25yrs to be able to key you in but hey... thats not poasoble yet. But i guess when i seem to hate the decisions a company makes to prevent third parties from releasing more than 5 games a year some may think im some sort of fanboy lol.

The 5 game per publisher per year rule was put into place because of Atari.  Part of the reason for the 1983 market crash was that publishers were flooding the market with sub-par games.  Nintendo limited publishers to ensure they put more effort into the 5 games they were limited to and to keep the shelves from filling up with too many titles.

Yup i know. Still wasnt something publishers liked tho, no one likes to be told what to do. Anyways that all kinda wemt awsy as games got more expensive to make. 



DonFerrari on 07 July 2016
kopstudent89 said:
Wii U hardware, marketing, all of it

PS3's 2006 E3

Nintendo not going CD-rom with the N64

Nintendo ditching Sony

XBox one's focus on Kinect

Nintendo VR

Decision on under-powering the Wii hardware, took away all the momentum going into the 8th generation

Sega Saturn and Dreamcast

VirtuaBoy is great



duduspace11 "Well, since we are estimating costs, Pokemon Red/Blue did cost Nintendo about $50m to make back in 1996"

http://gamrconnect.vgchartz.com/post.php?id=8808363

Mr Puggsly: "Hehe, I said good profit. You said big profit. Frankly, not losing money is what I meant by good. Don't get hung up on semantics"

http://gamrconnect.vgchartz.com/post.php?id=9008994

Azzanation: "PS5 wouldn't sold out at launch without scalpers."

DonFerrari on 07 July 2016
SpokenTruth said:
Intrinsic said:

Yup i know. Still wasnt something publishers liked tho, no one likes to be told what to do. Anyways that all kinda wemt awsy as games got more expensive to make. 

Certainly many didn't like it.  Konami even established a spin off publishing company called Ultra Games to get around the restriction.  Keep in mind this rule didn't apply to Japan as it wasn't affected by the 1983 crash.

However, few believe this was a bad decision overall as it did help prevent a repeat of 1983. 

And with the cost to make games and easiness to do shitty jobs it was justified at the time... today with the costs involved no one need a company to limit them, the risk will limit it.



duduspace11 "Well, since we are estimating costs, Pokemon Red/Blue did cost Nintendo about $50m to make back in 1996"

http://gamrconnect.vgchartz.com/post.php?id=8808363

Mr Puggsly: "Hehe, I said good profit. You said big profit. Frankly, not losing money is what I meant by good. Don't get hung up on semantics"

http://gamrconnect.vgchartz.com/post.php?id=9008994

Azzanation: "PS5 wouldn't sold out at launch without scalpers."

foxtail on 08 July 2016
DonFerrari said:
foxtail said:

It was 4% of the net sales price of DVD players and DVD decoders (not just the drive) , with a minimum royalty of $4.00 per player or decoder and a maximum of $8.00.  The Gamecube and Xbox would be considered the DVD players, and 4% of their net sales price would reach the $8 limit.  They would both be charged $8 per console at their launch prices.

Most PS2 games could fit on a Gamecube disc, and for those that couldn't they could use two discs (though it may be harder with some open world games) or use compression .  Besides, if they put a DVD drive in the Gamecube it would be less of a small CUBE. =P

That table I put was for DVD-ROM DRIVE not DVD Players (which was another part of the table)... so you are talking about different things. PS2 had to pay for royalties for their DVD Player, MS had to pay for the Driver, not the end unit... or do you think computers would have to pay royalty on DVD drive on the price of the whole PC?

To conform to the applicable DVD format standards (DVD disc, drive, codec and software, etc.) you must pay the licensing and/or royalty fees. The company that ships the end product is responsible for paying those fees unless the drive is sold standalone. For new PCs it would be the PC OEMs.  Microsoft avoided paying the fees on the original Xbox by excluding the necessary software for DVD video playback.  Even for Win7 and later they avoid paying fees by not including the codecs in non-Media versions of Windows out of the box.

Since the cap is $8 they would never have to pay more than that no matter if the whole price of the PC was $200 or $4000.   If the price was $100 or less the fee would be the $4 minimum, in-between $100-200 it would be 4% of the total price (i.e. if the final price was $150, 4% of that would mean a $6 fee).



DonFerrari on 08 July 2016
foxtail said:
DonFerrari said:

That table I put was for DVD-ROM DRIVE not DVD Players (which was another part of the table)... so you are talking about different things. PS2 had to pay for royalties for their DVD Player, MS had to pay for the Driver, not the end unit... or do you think computers would have to pay royalty on DVD drive on the price of the whole PC?

To conform to the applicable DVD format standards (DVD disc, drive, codec and software, etc.) you must pay the licensing and/or royalty fees. The company that ships the end product is responsible for paying those fees unless the drive is sold standalone. For new PCs it would be the PC OEMs.  Microsoft avoided paying the fees on the original Xbox by excluding the necessary software for DVD video playback.  Even for Win7 and later they avoid paying fees by not including the codecs in non-Media versions of Windows out of the box.

Since the cap is $8 they would never have to pay more than that no matter if the whole price of the PC was $200 or $4000.   If the price was $100 or less the fee would be the $4 minimum, in-between $100-200 it would be 4% of the total price (i.e. if the final price was $150, 4% of that would mean a $6 fee).

So, since GC wouldn't need to playback DVD video they wouldn't have to pay 4-8 USD, so your point is?



duduspace11 "Well, since we are estimating costs, Pokemon Red/Blue did cost Nintendo about $50m to make back in 1996"

http://gamrconnect.vgchartz.com/post.php?id=8808363

Mr Puggsly: "Hehe, I said good profit. You said big profit. Frankly, not losing money is what I meant by good. Don't get hung up on semantics"

http://gamrconnect.vgchartz.com/post.php?id=9008994

Azzanation: "PS5 wouldn't sold out at launch without scalpers."