Analysts optimistic about Wii ; THQ talk about Wii costs

[pc999]

http://www.investors.com/editorial/IBDArticles.asp?artsec=17&issue=20060505

"Nintendo can be the one that surprises you and wows you with some big new game title or product," said David Cole, an analyst with research firm DFC Intelligence.

"They can't compete dollar for dollar with the investments that Microsoft and Sony can make, so they've taken a different approach," said Brian O'Rourke, an analyst with research firm In-Stat. "It has good solid technology, but not cutting-edge technology."

Nintendo could price Wii at $200 or $250 and do quite well, says Mike Hickey, an analyst with Janco Partners.It might even decide to price games at $40 or $50 instead of the $60 charged by Sony and Microsoft for their new games, says Hickey, who owns Nintendo stock.

Nintendo, Hickey says, also wants its games to cost $3 million to $5 million to make, instead of $15 million or more for the next-gen Sony and Microsoft systems.

http://www.revolutionreport.com/articles/read/435

"One of the things we like about that platform is the development costs...on the Wii are nowhere near what they are on the PS3 and Xbox 360. That's something that's quite encouraging. As you probably know, our portfolio maps very, very well to what we think the Wii demographic is going to be."

Generally, according to Ferrell, Wii titles can be produced for far less due in part to the system's architectural similarities with GameCube.

"[The Wii] wasn't a whole new programming environment. So we had a lot of tools and tech that work in that environment," Ferrell noted. "So those costs--and again, I hate these broad generalizations--but they could be as little as a third of the high-end next-gen titles... Maybe the range is a quarter to a half."

I hope this is reflected in terms of lower price to the games (1/4-1/2 of the others ) and more games.

 

[patsu]

Even though i dislike analysts in general, I think you should correct the title.

 

[pc999]

I agree althought it seems I can only change the title within the thread, please mods chage it, thanks.

 

[ninzel]

Great news, and with lower costs devs might be able to put more polish and ship extra content with the games. Being able to focus on the artistic aspect of games instead of having to create new technology is good correct?
I imagine developing for 360 and PS3 might mean some games are rushed out the door in order to keep an already high budget down.

 

[Shifty Geezer]

Great news, and with lower costs devs might be able to put more polish and ship extra content with the games.

It's mostly the content that costs so much. If you want to keep costs down, you want to reduce content, not add more!

 

[ninzel]

It's mostly the content that costs so much. If you want to keep costs down, you want to reduce content, not add more!

Yes I realize that that sounds counter productive, but if they are used to budgeting for say $10,000,000 games for 360 or PS3 and they can get a game out the door for$ 2,000,000 on Wii, even spending an extra $250,000 on some extra stuff like a "making of.." video might not seem like a bad idea and they would still be ahead. I guess there are different ways to approach it.

 

[pc999]

I wonder if things like mods of SP maps for MP or even mods of the same maps for alternative SP levels and such would be very high cost.

Anyway things like more modes for MP or mission replays with diferent objectives and such should be , realatively (to XB360/PS3), easy and cheap to make.

On a second thought dev cost still incrised a lot, as the averange for GC is less than 1M unfortunate we cant qualify the gfx by the increase of dev costs (or can we,as I am wondering if being 1/3 of the rez as anything to do with this "but they could be as little as a third of the high-end next-gen titles..."?).

 

[Shifty Geezer]

Yes I realize that that sounds counter productive, but if they are used to budgeting for say $10,000,000 games for 360 or PS3 and they can get a game out the door for$ 2,000,000 on Wii, even spending an extra $250,000 on some extra stuff like a "making of.." video might not seem like a bad idea and they would still be ahead. I guess there are different ways to approach it.

I don't understand the economics of extra value content. In a collectors/special edition where you charge more for the content, it's part of the product you're selling. If you can't make more money with that investment, why would you do the work? In your case why would a company spend $250,000 on a 'making of' movie or any other extras when the game is going to cost the same as without? They could save themselves the cash and get a nice Christmas bonus!

Anyone got any insider insightfulness on how extra content finds it's way onto games? Perhaps some devs here have worked on projects where extra content is included and can say why it was included.

 

[Teasy]

"They can't compete dollar for dollar with the investments that Microsoft and Sony can make, so they've taken a different approach," said Brian O'Rourke, an analyst with research firm In-Stat. "It has good solid technology, but not cutting-edge technology."

Makes me laugh when analysts speak and show just how clueless they are

 

[Guden Oden]

It's going to be interesting seeing if Nintendo's gamble will pay off with its Wii, and seeing if people will enjoy playing with it or not.

...Ok, ENOUGH of that silly innuendo, haha!

What I want to say is, will people accept a cheaper and less powerful console, or is technology all that really matters? Looking at the portable market, nobody's been able to budge Nintendo out of its place of utter domination, not those offering sometimes vastly more powerful products such as the Lynx and the Neo-Geo Portable, and not those offering roughly on-par hardware either.

Sony seems to have been able to carve itself a permanent niche with the PSP, unlike almost all other contendors, but one would be foolish to say they seem to be in a commanding position. However, to say the same situation can be extrapolated to the stationary console market would probably be very foolish. We have to accept, I think, that those who game at home and those who game on the go seems to a pretty large extent to be two separate markets, with different views, needs and requirements.

Then there is the software availability side to it as well, and where it is absolutely true that the platform that offers the widest range has a huge advantage, it is also equally true that Nintendo has only been able to offer this range on the Gameboy ever since the SNES era ended. N64 and GC only offered fairly spotty third-party support, and knowing how much they benefit from 100% support from everybody on the portable side, it's quite remarkable Nintendo voluntarily allowed that support to wane on the stationary front.

Hopefully they've at long last realized the errors of their ways, and will truly drive hard for a full range of 3rd party games from all sides, not just a few blips here and there like FF: Crystal Chronicles and such.

Wii won't make or break Nintendo, not even the stationary console side of the company, but it could be an important junction. Fortunately, Nintendo seems to have a lot of 'go' right now, and with maybe the exception of that unfortunate product name, also seem to have done most things right. Now, we just need to see what they got up their sleeves with Wee^h^h ii; and those clouds of fog will be dispelled in just another few days.

Wii, I'm so excited!!!

 

[DuckThor Evil]

Makes me laugh when analysts speak and show just how clueless they are

What was so clueless about that?

 

[Teasy]

What was so clueless about that?

The claim that Nintendo don't have enough money to produce a console with cutting edge graphics. As well as the idea that they don't have cutting edge technology available to them.

 

[DuckThor Evil]

The claim that Nintendo don't have enough money to produce a console with cutting edge graphics. As well as the idea that they don't have cutting edge technology available to them.

Well it didn't really say that they don't have technology available to them just that Wii is not cutting edge. I agree with you that Nintendo could have made a console that is cutting edge, but I really can't see them throw away their cash in the same way as MS for example, because the risk of losing money would be too big, in that sense I can understand the claim "Nintendo can't compete dollar to dollar with Sony and MS".
Maybe it's a bit too extreme to say they can't compete, but Nintendo is differentiating itself from the other two, maybe they saw competing with the MS and Sony straight on as a dead end and thus made different strategy?

 

[Teasy]

"Nintendo have solid technology, but not cutting edge technology", sounds to me like he's talking about the technology the company has available to it. Could be wrong I suppose, he might be talking about Wii in particular even though he doesn't mention it specifically.

Maybe it's a bit too extreme to say they can't compete, but Nintendo is differentiating itself from the other two, maybe they saw competing with the MS and Somy straight on as a dead end and thus made different strategy?

That's exactly it yes, its not that they can't compete financially, its that they don't want too, it would be a pointless money losing excercise.

 

[Shifty Geezer]

"Nintendo have solid technology, but not cutting edge technology", sounds to me like he's talking about the technology the company has available to it. Could be wrong I suppose, he might be talking about Wii in particular even though he doesn't mention it specifically.

I think, my guess, he's saying Nintendo as a compnay don't have the tech to compete, based solely on the fact that their hardware being released isn't on the same tech level as their rivals. DS and Wii aren't technologically on a par with Sony's PS efforts, which, he concludes, shows they aren't capable of better tech. The fact this tech is often bought in my companies is neither here nor there

I'm sure Nintendo could happily blow a billion on a new piece of hardware, but their business strategy is taking a different route. It's certainly worked well in the handheld space. And there's plenty of companies that do well by not being cutting edge. In fact, the best quality companies tend to be a darned sight smaller and less fiscally endowed than the mainstream cheap-and-cheerful companies, whether cars, hi-fis, computers, or anything. Selling lots cheap is usually a better way to make money than a few expensive.

 

[Teasy]

I think, my guess, he's saying Nintendo as a compnay don't have the tech to compete, based solely on the fact that their hardware being released isn't on the same tech level as their rivals. DS and Wii aren't technologically on a par with Sony's PS efforts, which, he concludes, shows they aren't capable of better tech.

Yeah that's exactly how I read it, a rather simplistic view from someone who obviously knows nothing about the console industry.

 

[DuckThor Evil]

I think, my guess, he's saying Nintendo as a compnay don't have the tech to compete, based solely on the fact that their hardware being released isn't on the same tech level as their rivals.

They can't compete dollar for dollar with the investments that Microsoft and Sony can make, so they've taken a different approach," said Brian O'Rourke, an analyst with research firm In-Stat. "It has good solid technology, but not cutting-edge technology.

I could be wrong, but to me that seems that he is talking about Wii (the bold part) not Nintendo as a company, I'm not saying that he is 100% correct and I think he should have used different words to get his message through.

 

[ninzel]

I don't understand the economics of extra value content. In a collectors/special edition where you charge more for the content, it's part of the product you're selling. If you can't make more money with that investment, why would you do the work? In your case why would a company spend $250,000 on a 'making of' movie or any other extras when the game is going to cost the same as without? They could save themselves the cash and get a nice Christmas bonus!

Anyone got any insider insightfulness on how extra content finds it's way onto games? Perhaps some devs here have worked on projects where extra content is included and can say why it was included.

Well whatever I think you're being a bit arguementative for the sake of it now. I just thought that with the extra money they save on making Wii games they could include some extra content whatever it may be, to differentiate it's product or give it more value to the consumer, all the while still spending less than on developing for the other systems. I don't see what so hard to grasp about that. Especially if it's a multiplatform game.
The reason could be as simple as to make the game better, or enhance multiplayer. Point is the lower dev costs means that devs who care to may use that extra room to go the extra mile to put out a more attractive product. Some will just pocket the extra cash,but not every dev works works the same.

 

[Shifty Geezer]

The reason could be as simple as to make the game better, or enhance multiplayer. Point is the lower dev costs means that devs who care to may use that extra room to go the extra mile to put out a more attractive product. Some will just pocket the extra cash,but not every dev works works the same.

Well you might be right, and I'm not arguing otherwise, just asking for reasons why some devs will go that extra mile. I'm one of those people who hates almost all the extras on DVDs and think them a waste of time, so to me added content is normally worthless! If I were creating a game, I'd create the game and not bother with sundry extras that, to my mind, most people won't give a hearty hoot for, unless I were to sell those extra for a premium in collectors editions. I'd be interested to hear points from people who think extra content is worth including because it's something I don't understand. I guess if I were really passionate about a development and new the players shared in the passionate, extra content might be considered for love of the game, without any economic considerations.

 

[ninzel]

Well you might be right, and I'm not arguing otherwise, just asking for reasons why some devs will go that extra mile.

Some devs are better and care more than others? I'm sure the same applies to any other system. Why do some devs go the extra mile and make better games. I don't know personal work ethic,pride?
And in terms of extra content,I'm talking anything. Maybe a making of DVD is not the best example who knows. It could simply mean a lengthier single player game, or more multiplayer maps, or whatever.