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Forums - Nintendo Discussion - Nintendo is doomed, a personal story.

pokoko on 27 July 2016
RolStoppable said:
pokoko said:

You probably shouldn't be disparaging anyone's knowledge of video game history if you don't know about Nintendo shutting out competitors in the NES era.

"This resulted in a number of lawsuits brought by both the public and private sector, and in 1992 Nintendo was found by the New York state court system to have established an illegal monopoly on the U.S. video game market.  Nintendo's first response was a modest relaxing of its licensing restrictions, in which a developer had to wait at least two years before porting an NES title to another system.  Unsatisfied, the American and Japanese governments eventually forced Nintendo into abandoing such tightly exclusive contracts altogether.  Unfortunately for Sega, this legal intervention came too late to save the SMS, and left it without the library of games it could have had if not for Nintendo's ruthless licensing tactics."  Service Games: The Rise and Fall of SEGA: Enhanced Edition

If you don't think that would hurt Sega and NEC then why would you worry about Sony buying exclusives?  It's the same thing, except one makes third-parties happy while the other just makes them disgruntled.  In the end, most third-parties came to Sony simply because of all the other factors, like programming support, lower fees, and cheaper game production. 

As for your last question, if Nintendo doesn't want to spend their money then they don't have to.  They can leave it in their war chest all they like.  As you've pointed out, they have a lot of it.  But, as all business people know, sometimes you have to spend money now to make money later.  Sony can't even come close to matching Microsoft but they haven't held back on the PS4.

That's not really the issue, though.  Nintendo spent $100 million in marketing for the N64.  They didn't lose ground because they spent less money, they lost ground because of bad decisions.

I didn't deny any of your claims that Nintendo had some very questionable business practices in the past. What was the issue with your argument is that Nintendo's practices were a result of Nintendo establishing itself in the market fair and square while on the other hand Sony bought itself into the market. That's a big difference. Additionally, Nintendo didn't have these business practices in place anymore by the time Sony entered the market, so it was irrelevant that you brought them up in the first place.

You didn't answer my question. I asked you how is Nintendo supposed to compete without burning their money. Am I supposed to take your answer as "If Nintendo spent their money, they'd beat Sony with ease.", is that really what it means?

In my initial post I said that Sony won because they outspent their competition. You bring up what Nintendo spent in marketing for the N64, but Sony spent a lot more than $100 million in marketing the PS1. In which way is that supposed to be a counterpoint to what I've been saying?

Forcing third party developers to sign contracts that keep them from developing for your competitors is fair and square?  That's not even questionable, that's actually illegal.  It doesn't matter if Sega and NEC had not entered the North American market yet; Nintendo knew they were coming and was actively trying to stop competition from having a chance, thereby establishing a monopoly.  That is not fair and square.

As for relevance, as I've already said, that's how they aquired a strange-hold on the market in the first place, so it certainly matters.  In that respect, it's no different than anything Sony or Microsoft have done--well, again, except for being illegal.  Glass houses, stones, etc.

Moving on to the SNES era and beyond, it's true that Nintendo was no longer allowed by law to use certain tactics but that doesn't mean that the overriding philosophy of squeezing and using third-parties was gone.  In fact, that's very relevant, as this mentality gave first Sega and then Sony a foothold into the market.

Developers like EA were ready to ignore the console market and focus on the PC as the next gaming platform:  "Like many third party publishers, EA was leery of the console business. "Nobody liked paying high royalties under restrictive licenses, and what made it even worse was having to build ROM cartridges at great cost and inventory risk," Hawkins explained. However, with the arrival of the Genesis, he saw an opportunity to once again rewrite the rules of publishing."  

---

"The Nintendo 64 saw only a handful of titles from Electronic Arts. Its popularity lagged far behind Sony’s PlayStation, and Nintendo’s reliance on expensive ROM cartridges made EA unwilling to take inventory risks on anything but the most surefire hits."

http://www.gamasutra.com/view/feature/130129/we_see_farther__a_history_of_.php?print=1

That is why they lost ground, not because Sony bought more ads.  It's just like the original Xbox One failing despite all of Microsoft's money.  People just liked what the other guys were doing more.  Relative to that $100 million, it looks like both Nintendo and Sony spent the same amount in one year.  Money wasn't the separating factor.

And your question, I'm afraid I don't understand what you mean.  Whose money would Nintendo invest in thier business if not their own?  Sony is spending their own money, even if they had to sell a building to get it.  I'm pretty sure they have far less fluid capital than Nintendo.  Why shouldn't Nintendo spend their own money for the sake of their own business?  When I sold my first business, I rolled every bit of it into my next business.  That's how it works.  Amazon has become a monster by reinvesting almost everything back into the company.  Fear of spending is not an excuse.



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pokoko on 27 July 2016
RolStoppable said:
pokoko said:

Forcing third party developers to sign contracts that keep them from developing for your competitors is fair and square?  That's not even questionable, that's actually illegal.  It doesn't matter if Sega and NEC had not entered the North American market yet; Nintendo knew they were coming and was actively trying to stop competition from having a chance, thereby establishing a monopoly.  That is not fair and square.

As for relevance, as I've already said, that's how they aquired a strange-hold on the market in the first place, so it certainly matters.  In that respect, it's no different than anything Sony or Microsoft have done--well, again, except for being illegal.  Glass houses, stones, etc.

Moving on to the SNES era and beyond, it's true that Nintendo was no longer allowed by law to use certain tactics but that doesn't mean that the overriding philosophy of squeezing and using third-parties was gone.  In fact, that's very relevant, as this mentality gave first Sega and then Sony a foothold into the market.

Developers like EA were ready to ignore the console market and focus on the PC as the next gaming platform:  "Like many third party publishers, EA was leery of the console business. "Nobody liked paying high royalties under restrictive licenses, and what made it even worse was having to build ROM cartridges at great cost and inventory risk," Hawkins explained. However, with the arrival of the Genesis, he saw an opportunity to once again rewrite the rules of publishing."  

---

"The Nintendo 64 saw only a handful of titles from Electronic Arts. Its popularity lagged far behind Sony’s PlayStation, and Nintendo’s reliance on expensive ROM cartridges made EA unwilling to take inventory risks on anything but the most surefire hits."

http://www.gamasutra.com/view/feature/130129/we_see_farther__a_history_of_.php?print=1

That is why they lost ground, not because Sony bought more ads.  It's just like the original Xbox One failing despite all of Microsoft's money.  People just liked what the other guys were doing more.  Relative to that $100 million, it looks like both Nintendo and Sony spent the same amount in one year.  Money wasn't the separating factor.

And your question, I'm afraid I don't understand what you mean.  Whose money would Nintendo invest in thier business if not their own?  Sony is spending their own money, even if they had to sell a building to get it.  I'm pretty sure they have far less fluid capital than Nintendo.  Why shouldn't Nintendo spend their own money for the sake of their own business?  When I sold my first business, I rolled every bit of it into my next business.  That's how it works.  Amazon has become a monster by reinvesting almost everything back into the company.  Fear of spending is not an excuse.

So another round of strawman arguments it is.

There's no hope here. The question was how would Nintendo compete on Sony and Microsoft's term without running themselves into the ground like Sega did. "Burning money" should have been a clear enough indication that I was refering to a serious depletion of Nintendo's cash reserves. The fact that you had so much trouble up until now is convincing me that you deliberately want to avoid a proper answer to the question. Hence, there's no hope.

You're presenting "burning money" as a loaded question and you know it.

Your argument doesn't even make any sense.  Being in business requires spending money.  You spend money to make money.  Nintendo's strategy is to spend less money?  That's totally fine.  However, in doing so, they can expect a lower revenue ceiling, slower growth, and reduced market share.

If you want a better answer then ask a better question.



Wright on 27 July 2016
CaptainExplosion said:

Nobody can compete with Nintendo in the handheld market.

Sony's PSP prevented Nintendo from having more than the 50% of the handheld marketshare during the seventh gen. Companies can definitively compete against Nintendo in such market.

EDIT: Maybe my math isn't correct, but my point still stands.



Wright on 27 July 2016
RolStoppable said:

Really? The DS sold about twice as many units as the PSP, so what's your math to arrive at less than 50% market share for the DS?

EDIT: The point doesn't stand, because Sony couldn't repeat it.

You can't really extrapolate a conclusion based on two cases. Likewise, Nintendo shouldn't keep doing consoles because they couldn't repeat Wii's success.



Kai_Mao on 27 July 2016
Aeolus451 said:
CaptainExplosion said:

Yes it is, because again, Sega and Atari. One's barely alive, and the other is 99% dead.

The were forced into it. Look at any of the big third party publishers and they sell just fine. Nintendo has the money to develope plenty of games at their own pace. Nintendo could do the same either way but more than likely they'll do well as a third party publisher. 

They would have to cut down a lot of staffing. They may not necessarily burn money like Sega did, but I'm not sure if they can maintain the staffing if they are losing money (at a greater rate than they did a few years back). Plus, there would be even LESS incentive to revive other IPs or create that variety, which is a luxury that they have as a first party. Also, they want the freedom to create intuitive experiences that allow their hardware to mesh with their software. Wii Sports, Splatoon, Skyward Sword, Nintendogs, and even much older games worked not just because they're good to great games in general, but also due to the fact that they interact with their respective hardware, which Nintendo has full control of. While Soundwave has mentioned that they could negotiate for control and avoid paying royalties, I'm not sure if they could have that leverage or would Sony or Microsoft would allow them to.



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Aeolus451 on 27 July 2016
RolStoppable said:
Aeolus451 said: 

With home consoles. If they're unwilling to adapt then yes. I think that it's hardware is what's holding it back from making more money. Their brand is still strong and their IPs are still popular. 

Then we are looking at a variation of "Nintendo is doomed."

Still no. "Nintendo is doomed" means it failed as a company. It going third party is not the same as the company dying. It's the opposite. I think going third party is a more viable business model for nintendo than making hardware to sell their software through. If the hardware doesn't sell well, it's limits how well they do on software. Nintendo is certainly playing around with the mobile market. It's not much of a stretch to say they're likely looking into going third party and weighing the pros/cons of it. 



pokoko on 27 July 2016
RolStoppable said:
pokoko said:

You're presenting "burning money" as a loaded question and you know it.

Your argument doesn't even make any sense.  Being in business requires spending money.  You spend money to make money.  Nintendo's strategy is to spend less money?  That's totally fine.  However, in doing so, they can expect a lower revenue ceiling, slower growth, and reduced market share.

If you want a better answer then ask a better question.

I'll take that opportunity.

Do you think that Sony can compete with Nintendo in the handheld market?

Not without IP that work well in that market, which Sony completely failed to develop when they had the chance (with the PSP).  



Wright on 27 July 2016
RolStoppable said:

Um, yeah...

1. It doesn't look like there will be a third Sony handheld, so when are we allowed to draw a conclusion?

2. There have been six Nintendo home consoles, so there is more to go by than two cases. But it's not just the number of devices that makes this subject a lot more complex than the other one, it's also the amount of strategies involved. PSP and PSV are very straightforward to analyze because it was the same strategy both times. Nintendo home consoles are a different ballpark.

 

Fine, fine. I went back and forth checking some handheld data but Nintendo always came on top (not that there have been much competition, but still). While improbable, there's the possibility of yet another Sony handheld, but I'll refrain from arguing this point when I have nothing to back it up.



Aeolus451 on 27 July 2016
Kai_Mao said:
Aeolus451 said:

The were forced into it. Look at any of the big third party publishers and they sell just fine. Nintendo has the money to develope plenty of games at their own pace. Nintendo could do the same either way but more than likely they'll do well as a third party publisher. 

They would have to cut down a lot of staffing. They may not necessarily burn money like Sega did, but I'm not sure if they can maintain the staffing if they are losing money (at a greater rate than they did a few years back). Plus, there would be even LESS incentive to revive other IPs or create that variety, which is a luxury that they have as a first party. Also, they want the freedom to create intuitive experiences that allow their hardware to mesh with their software. Wii Sports, Splatoon, Skyward Sword, Nintendogs, and even much older games worked not just because they're good to great games in general, but also due to the fact that they interact with their respective hardware, which Nintendo has full control of. While Soundwave has mentioned that they could negotiate for control and avoid paying royalties, I'm not sure if they could have that leverage or would Sony or Microsoft would allow them to.

How much staff are required to design and make their hardware? I think most of their staff is tied into their software.

You're acting as if nintendo would be coming to microsoft or sony as an indie developer looking for funding for their games. Nintendo is a publisher and they could make games in any way they wanted. Sony nor microsoft wouldn't be picky about the games because they don't lose any money on them. Of course, nintendo would pay royalities like the other big publishers but that's no big deal. As long as their games sell, nintendo would be very good. 



Aeolus451 on 27 July 2016
RolStoppable said:
Aeolus451 said:

Still no. "Nintendo is doomed" means it failed as a company. It going third party is not the same as the company dying. It's the opposite. I think going third party is a more viable business model for nintendo than making hardware to sell their software through. If the hardware doesn't sell well, it's limits how well they do on software. Nintendo is certainly playing around with the mobile market. It's not much of a stretch to say they're likely looking into going third party and weighing the pros/cons of it. 

Oh man, you really don't get it.

Nobody is stupid enough to think that Nintendo will vanish from the face of the earth when they make their doom posts. It is always about Nintendo stopping to make their own hardware and move their games elsewhere. It's about Nintendo going the way of Sega (exiting the hardware business).

You are dooming Nintendo. No ifs, no buts. That's what you are doing.

YOU think it's doom and gloom. I don't. You're just trying to tie the "nintendo is doomed" rhetoric to people who want nintendo to go third party to give it a irrationally negative vibe to other nintendo people.