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Forums - Nintendo Discussion - China: The next frontier?

your mother on 26 July 2007
Lingyis said:
i showed my Wii to my dad, and after he got back, he advertised the Wii to everybody. he alone has made ~30 people buy Wiis. Now, i'm gonna tell you, it's actually not a good deal for Nintendo.

ALL their softwares are pirated. let me tell you how a Wii is purchased in china.

you put in an order at a store. you go pick it up the next day. for 300 RNB (~$40) extra, you can install a modchip that plays ALL the pirated games on the market. which, of course, is an ESSENTIAL option. all in all, you can buy a modded Wii for about $2200 RNB (~$290).

the pirated games sell for 5-10RNB (about $1US). EACH and EVERY game is pirated, from the Japanese games to US games. it takes less than a week for a game showing up on the mass market before it gets pirated, and that's if you're lucky--often times you see pirated copies BEFORE the game is officially released. my relatives typically buy 20-50 games. that's... 500RNB (~$60) max?

Nintendo getting big profits in China? that's a dream. a dream that won't be fulfilled for at least another 10 years. let me give you a comparison.

I spent the first 13 years of my life in Macau (now the world's largest gambling center). i grew up playing pirated games. Macau now has a GDP per capita comparable to those of Western European nations (though to be fair, per capita income is nowhere close). and guess what, last time i went back, you can STILL buy pirated games.

Nintendo is fortunate that they actually make a profit on Wii hardware. 1 mln units in china is ~$50mln in profits for nintendo, but they'd much rather shift that mln units to Japan or USA or Europe, where these 1 mln owners would actually buy $50 games which is where they REALLY make profits.

As much as I'd like Nintendo to expand into China, it's just not going to be worth it. They _could_ expand their manufacturing base so much that they make profits only off hardware in China, but I'd rather them focus their energies elsewhere.

I agree with most of your post, except these points:

Now, i'm gonna tell you, it's actually not a good deal for Nintendo.

Overall, it's still a good deal because they still make money on the hardware. The piracy issues isn't going to go away anyhow. What's worse, if Nintendo games cannot be pirated, then Nintendo wouldn't make money on hardware either!

Nintendo is fortunate that they actually make a profit on Wii hardware.

I don't see that as Nintendo's good fortune. I see that as good and sound planning by Nintendo! It was their plan to start with - make money on everything. Contrast that to the PS3 which in China is completely and utterly overlooked.

They _could_ expand their manufacturing base so much that they make profits only off hardware in China, but I'd rather them focus their energies elsewhere.

They don't need to manufacture hardware and distribute in China - all the independent retailers are doing this already! Even with an official launch in Hong Kong, the PS3 is still selling miserably compared to the Wii which hasn't been, and probably will never be, officially launched here. Yet, despite the lack of official distribution or even hardware, you can find all the Wiis you want here, and hardly any PS3s are being carried by retailers because it simply doesn't sell.



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Lingyis on 26 July 2007
your mother said:
Lingyis said:
i showed my Wii to my dad, and after he got back, he advertised the Wii to everybody. he alone has made ~30 people buy Wiis. Now, i'm gonna tell you, it's actually not a good deal for Nintendo.

ALL their softwares are pirated. let me tell you how a Wii is purchased in china.

you put in an order at a store. you go pick it up the next day. for 300 RNB (~$40) extra, you can install a modchip that plays ALL the pirated games on the market. which, of course, is an ESSENTIAL option. all in all, you can buy a modded Wii for about $2200 RNB (~$290).

the pirated games sell for 5-10RNB (about $1US). EACH and EVERY game is pirated, from the Japanese games to US games. it takes less than a week for a game showing up on the mass market before it gets pirated, and that's if you're lucky--often times you see pirated copies BEFORE the game is officially released. my relatives typically buy 20-50 games. that's... 500RNB (~$60) max?

Nintendo getting big profits in China? that's a dream. a dream that won't be fulfilled for at least another 10 years. let me give you a comparison.

I spent the first 13 years of my life in Macau (now the world's largest gambling center). i grew up playing pirated games. Macau now has a GDP per capita comparable to those of Western European nations (though to be fair, per capita income is nowhere close). and guess what, last time i went back, you can STILL buy pirated games.

Nintendo is fortunate that they actually make a profit on Wii hardware. 1 mln units in china is ~$50mln in profits for nintendo, but they'd much rather shift that mln units to Japan or USA or Europe, where these 1 mln owners would actually buy $50 games which is where they REALLY make profits.

As much as I'd like Nintendo to expand into China, it's just not going to be worth it. They _could_ expand their manufacturing base so much that they make profits only off hardware in China, but I'd rather them focus their energies elsewhere.

I agree with most of your post, except these points:

Now, i'm gonna tell you, it's actually not a good deal for Nintendo.

Overall, it's still a good deal because they still make money on the hardware. The piracy issues isn't going to go away anyhow. What's worse, if Nintendo games cannot be pirated, then Nintendo wouldn't make money on hardware either!

Nintendo is fortunate that they actually make a profit on Wii hardware.

I don't see that as Nintendo's good fortune. I see that as good and sound planning by Nintendo! It was their plan to start with - make money on everything. Contrast that to the PS3 which in China is completely and utterly overlooked.

They _could_ expand their manufacturing base so much that they make profits only off hardware in China, but I'd rather them focus their energies elsewhere.

They don't need to manufacture hardware and distribute in China - all the independent retailers are doing this already! Even with an official launch in Hong Kong, the PS3 is still selling miserably compared to the Wii which hasn't been, and probably will never be, officially launched here. Yet, despite the lack of official distribution or even hardware, you can find all the Wiis you want here, and hardly any PS3s are being carried by retailers because it simply doesn't sell.


 italicized: as i explained in my post, it's not a good deal because even though they can make money on each units sold, there is no software attachment like in the US or Japan.  it is DEFINITELY a BAD DEAL for Nintendo.  making OODLES of money is better than making SOME money.  

 the third point is essentially the same point--they're better off selling Wii's to markets where they actually pay $50.

 

the only good thing that's coming out of this is brand recognition.  which is intangible, but could potentially go a long way.   which is why i'm hoping nintendo will make hardware that sells big in china (wii fit, for instance; but they need more than just that).

 



the Wii is an epidemic.

diegomoroco777 on 26 July 2007

In South America, about 90% of console owners pirate their consoles. If you want to sell hardware here, you need to be vulnerable to piracy. That`s why the PS3 is having a really bad time selling here, when the PS2 had about 90% of the hardware sales. Going with Blu-ray has sadly bitten them in their asses in this market.



your mother on 26 July 2007
Lingyis said:
 

italicized: as i explained in my post, it's not a good deal because even though they can make money on each units sold, there is no software attachment like in the US or Japan. it is DEFINITELY a BAD DEAL for Nintendo. making OODLES of money is better than making SOME money.

But using the same argument, you can say that making SOME money is better than making NO money!

 



your mother on 26 July 2007
diegomoroco777 said:
In South America, about 90% of console owners pirate their consoles. If you want to sell hardware here, you need to be vulnerable to piracy. That`s why the PS3 is having a really bad time selling here, when the PS2 had about 90% of the hardware sales. Going with Blu-ray has sadly bitten them in their asses in this market.

...which pretty much echoes my rationale about the PS3 failing miserably over here because you cannot pirate the software (yet), while Nintendo is making a killing in hardware (but not software) because the software is so easily pirated. 

 



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FishyJoe on 26 July 2007

Thanks for all the insight, I guess my thinking was a bit flawed. But I still think it's better to be desired than to be unwanted.



Silver_Z on 29 July 2007

Now it comes to the point where..... Even Nintendo has a big sales figure, is it still lucrative for Publishers to make games for Nintendo?



johnsobas on 29 July 2007

Nintendo should release this message to them
http://www.youtube.com/watch?v=-Xfqkdh5Js4



currently playing: Skyward Sword, Mario Sunshine, Xenoblade Chronicles X

DeltaXIII on 29 July 2007

your mother said:

. . .If piracy was such an important matter Nintendo would have attempted to include better deterrents than what they currently have in place - which admittedly, is a joke. 


I believe what I read before is that Nintendo is the most vocal about requesting you don't emulate/pirate and states the most often that it is illegal (whether this is actually true in your area or not, they may very well still claim it), but has never really brought any legal charges other than injunctions against people.

Can anyone tell me how iQue has done? 



 

SlorgNet on 30 July 2007

My guess - and this is only a guess - is that China goes prime-time in 2009.

The drivers are economics and urbanization. Russia's emergence as a game market is a case in point: in 2002 almost everything there was pirated. (Per capita income was $250 a month). Nowadays, piracy is a lot less common, because Russian per capita income is up to $642/month. Crime no longer pays, instead people becoming willing and able to pay for genuine goods and decent customer service. (Sony's Russia biz is reportedly going through the roof.)

China's average per capita income is $2200, or roughly $183 per month. Since average incomes in China's cities are three times higher than rural incomes, the urban regions should reach that magic $642/month level by 2009 or 2010. (Urban regions = 40% of China, about 480 million people). So my guess is, the Chinese mass market is two years away.