@bardicverse

According to Iwata the problem lies in "aging" gaming population in Japan (he showed some convincing graphs on this matter), i.e. low percentage of non-gamers (that's expected in highly developed game market of Japan compared to relatively undeveloped markets of US\EU) and high percentage of "sleep" gamers (those who didn't play games anymore, that's very disturbing trend). That leads to overall "mainstreamization" ("hardcorization" you may say) of japanese gaming population, standardization of gaming tastes and low variety of demands and offers of game market, as a result many people quit gaming at certain age (usually when they have family, kids etc.) at faster pace than in US\EU markets. Obviously under these circumstances Wii can't survive in Japan long enough aming the same demography as Wii aiming on makets abroad, it's already overgrown it's potential in Japan. In long run Wii needs some major "mainstream" for japanese gamers software releases (i.e. DQX) to survive or... miracle, something radically new that could turn a bunch of "sleep" gamers in Japan back to gaming. (That's what would have happen with US\EU game market in next decade if previous trends of narrowing gaming demography will be still intact... well, Iwata began his career as game developer around the crash of 1983, so he should remember that gaming market isn't immune to disaster, sudden or creeping).

//On sidenote, "Japan's reluctance" to western gaming is due to passive western publishers policy, that leads to low awareness of western gaming among japanese gamers. Japan is highly developed game market (high percentage of gaming population compared to overall population). When it exhausted itself (japanese market have it's boundaries, only 130M of population compared to billions of americans and europeans), japanese publishers moved to external markets to survive, to sell it's software (i.e. US\EU). This explains why major japanese publishers desperately want a piece of US\EU game market, and why japanese gaming culture penetration here is more significant than vice-versa. At the same time western publishers not so interested in Japan as long as they able to develop native market, which is relatively undeveloped compared to crowded by japanese publishers game market of Japan. In the case of crowded japanese game market, cultural penetration in it would cost more money than developing native market. So, I believe, insignificant cultural influence of western gaming on japanese gamers is the result of economical inexpediency at this point.

No, I understand completely. What you're asking Nintendo to do is to be more like Sony. But Nintendo has won this generation by deliberatly persuing what you would call "the least prized customers." I suggest you read up on what "blue-ocean strategy" and "disruption" really is. Nintendo isn't "non-competing" they are competing. If you want proof just look at all the effort Sony and MS are going to go through to compete for these "least prized customers" as you put it.

Futhermore, you're right, the name of the game isn't making money...it's making customers. Successful businesses create good customers. That is what Nintendo does, it's why they have such a ravenous fan-base.

Lastly, Nintendo with never, ever, ever, create M-rated games. They create games that everyone can play, that's they're strategy; to not restrict their potential customer base. It's gotten them the best selling games of all time so i'd say the strategy is a good one.

You overall point is correct, the reason Sony and MS are in their current position is because of the way they do business: poorly. Nintendo has NEVER been in the red. They do business well.

EDIT: As an aside, i suggest you read articles by Sean Malstrom. He relates the ideas of Blue Ocean Strategy and Disruption to video games. He also explains Nintendo's strategy.

That does make perfect sense, the overall potential userbase is smaller than the US/EU, so the profit margin is more limited.

Interesting points in the Iwata reference, which does make sense. There are a few IPs that stir up the "core" market, Final Fantasy, Dragon Quest, Zelda, Mario, etc. Nintendo hasn't really pushed much in this sense in nearly a year, barring the recent MH2 release. It is true, the core market will always fuel the big sales, whereas the casual market will do their bulk purchases strictly around big holidays.

How does the fact that the DS did get Civ Revolution fit in with this? It has weaker graphics and unique controls.

tbh by looking at the games that are coming out or soon coming out, the amount of games targeted for different audiences are both pretty attractive and pretty good quality, if people just play games and not care about the resolution(which is some dumb shit) then 70% isn't too hard down the road since the only region where low 3rd sales is really happening is Japan.

Wont happen

do you guys realize that he's talking about 70% ratio on Wii(not the entire market) before you post things like not gonna happen? it's already slowly happening in the US and Europe o_O.

At this rate the third-party support will get to 80% and quality thirdy-party support to 50%.

It aint gonna happen. Wii is not PlayStation

I am sure you thought you were being clever, but you demonstrated the problem mindset for them perfectly. The reason those two enjoy such strong third party support is a testament as to how they do business. This is how you get strong third party support. You demonstrate that a console is a viable format through your software. You provide financial incentives to get needed software. You make a dedicated effort to secure the most prized consumers.

That is neither a smart or viable way to do business. Never before has a company provided finanical assistance for third party support. If anything that shows weakness. Weakness in that you must pay someone else for the content because you can not produce it. Nintendo is able to make content and have it push the system. There isn't enough gain from a third party title to justify buying third parties. Third parties chose the console for numerous choices. The paying is between the two HD rivals. The publishers are not making Wii games becuase Sony and Microsoft are paying for them. It's becuase they don't see the Wii as a profitable advetnure (although they are wrong).

By the way the model isn't unprofitable. The reason Sony is unprofitable is because they pushed the pricing envelope too far. They did this by trying to turn a game console into a Trojan horse. Which is something Nintendo can't really do. They like Microsoft contract out for their parts and the manufacturing.

No, the razor and blades modle is unprofitable. If it was what you claimed, then why is Sony abandoning it. It only worked when they were in first, and even then, Nintendo made about the same as Sony did overall. Nintendo, Sega and Atari never used that system. Microsoft doesn't becuase they never planned to make a profit. Sony is the only one that does, and recent events have proven it unprofitable.

Like I said in my first post I just think Nintendo is so conservative that they will not abandon their old ways. Even when the answer is right in front of them. They will not be able to bring themselves to the point where they will actually craft mature games, spend the money to acquire high end exclusives, or actually market themselves as a console for gamers.

Congradulations, you just desribed Sony and Microsoft. And guess who is making all the money. Nintnedo. That means they should definatly not take your advice and keep doing what they are doing.

Oh and before you say so what. This is exactly what got Nintendo into third place for two generations. They were effectively not competing, and they are not really competing now. They just found a overlooked market that is paying huge dividends. Not that the others will let them have it all to themselves next generation.

Ummm, excuse me?

"They will see our results, and they'll see how much of a challenge and dogfight this new era of gaming will be." Reggie

Nintendo is competing. Disruption is about taking over the old market with new values, and that is what Nintendo intends to do. Do not be fooled; Nintendo is being very agressive. It will be clear soon when Sony and Microsoft have to fend off Nintendo if they even try.

You might not understand this or just blow it off, but if Nintendo does not have the core or hardcore on board. Then Microsoft with its game show concept, and Sony with its Second Life concept may very well take huge chunks out of the casual market. While they maintain those other two markets, and if that happens Nintendo will zip right back down into third place, and have another profitable console that just sells twenty million.

Wow. All the juciy stuff was in the last paragraph then.

First off, "core" means the old users. Core Nintendo users were those who were old Nintendo fans. Nintendo always had them on board. The "hardcore," are made up people who have no real idenity. There is no definition for hardcore. Also, Sony and Microsoft definatly are not going for the so called "casual" audience. They are going for their core, or the current hardcore. Neither of those games can break into the new market becuase they have old values to them and how they are played.

I love how your conclusion is "Sony and Microsoft will somehow) take over the new market, pushing Nintendo out." HOW? This doesn't even make ssence. Nintendo has won the audience a long time again with Wii Sports, Wii Fit and Mario Kart Wii. They will not buy a more expensive console for one peice of software that isn't a must have. No sence. I think this is more your dream than a possibility.