Are Sony and Microsoft vulnerable to being royally thrashed by Nintendo?

[Squilliam]

If we consider this current generation of consoles, Sony was being beaten quite severely on the home console market and was taking massive losses for a time. This in part or in whole led them to take their eye off the handheld market in order to stem the bleeding in their core home console market which gave Nintendo the opportunity move in with the 3DS and set the tone of the next generation of handhelds almost to the point where the PSP2 has been written off in the industry before release.

Now in the home console market both Microsoft and Sony appear to be setting themselves up for a longer generation of home consoles by releasing their peripherals in order to cash in on Nintendo's success without going through the pain of setting a new generation of consoles in motion. If they are caught in what is essentially a half measure they could get caught flat footed if Nintendo as the incumbent releases a real next generation successor to the Wii especially if Nintendo follow their strategy of moving up market with their hardware/software releases.

They would then have the opportunity to set the tone of the next generation of hardware in their image entirely and they wouldn't be short of third party support at launch and soon after, especially if they manage to reconcile their controllers with the fullest range of game genres. What can half measures do against a full blooded new console release? They would already caught with relatively low adoption rates and publishers would then have the opportunity to craft game experiences completely from the ground up following a new Nintendo paradigm which may be hit or miss on consoles which were not designed for such controllers from day one.

The idea of the motion controllers from Microsoft and Sony is to steal current Wii owners and take part of Nintendo's own market for themselves. However this may leave them in a situation where they themselves are facing having their own console userbase stolen from under them and having parts of their own market taken from them by Nintendo whilst at the same time be relegated to obsoleteness by the mere presence of a next generation console. They could lose the Wii upgraders to Nintendo instead because only Nintendo can truly offer an authentic Nintendo next generation Wii as that platform was defined by the mass market games Nintendo themselves created.

 

[Rangers]

Not really.

For starters, Nintendo will never release a "real next gen" console again. It's against their very DNA at this point. They do not have the stomach to sacrifice the ginormous profits they reap, by shelling out for expensive new hardware. And they dont have the size as a company to take the massive hardware losses like Sony and MS have done, even if they wanted to, which they dont.

I honestly dont forsee all that bright a future for Nintendo in consoles. Wii, while still enormously popular and profitable, is fading a little at a time and it seems little can be done to resuscitate it (for example, Mario Galaxy 2 had no real effect, and it's a complete graveyard for third parties at this point). Likewise, the next Nintendo console will need a "gimmick", and MS already beat them to the motion control endgame with kinect imo. The other gimmick option is 3D, but Sony and MS will have 3D options with much better graphics. Of course, there could be an unforseen gimmick I'm missing (I knew their next handheld would need a gimmick, but I didn't forsee glasses free 3D!)

OTOH, the 3DS looks like a smash

 

[Rolf N]

For starters, Nintendo will never release a "real next gen" console again. It's against their very DNA at this point. They do not have the stomach to sacrifice the ginormous profits they reap, by shelling out for expensive new hardware. And they dont have the size as a company to take the massive hardware losses like Sony and MS have done, even if they wanted to, which they dont.

Nintendo is actually filthy rich and well prepared to absorb massive up-front costs. Their cash stockpile is nearing 1 trillion JPY/10 billion USD.
http://www.nintendo.co.jp/ir/en/news/index.html

... not saying they will do that. Historically, they do seem to prefer just sitting on their wealth.

 

[Rangers]

Nintendo is actually filthy rich and well prepared to absorb massive up-front costs. Their cash stockpile is nearing 1 trillion JPY/10 billion USD.
http://www.nintendo.co.jp/ir/en/news/index.html

... not saying they will do that. Historically, they do seem to prefer just sitting on their wealth.

Well, do they want to lose about 4-6 billion of that by subsidizing high end hardware of that like PS3/X360? In fact with a likely poor market prognosis for that hardware, ala Gamecube? I dont think so.

Nintendo is in an unbelievable profit position. Unfortunately for them I dont think it can get any better, and will almost certainly get worse (already has, since Wii is not as popular as it's height, DS either, plus DS piracy, which explains why Nintendo shares are down some 50% from highs)

 

[Akumajou]

~snip

The Nintendo Wii, much like the GameBoy challenged super duper ultra tech in favor of functional gameplay, new gameplay and new audience... despite Wii's success it has still not reached PS2 sales numbers and think about that, Nintendo would prefer to reach such numbers as they would sell and make a killing in console sales and despite piracy they might enjoy large game sales, their established franchises have almost always been million to multi million sellers.

Read up on your post NES history, Nintendo has NEVER released a "next gen" console update before their competitors, Sega did that, really, really badly thats one of the many reasons they are not in the hardware arena so your argument just went up in flames right there.

Sony in a Conglomerate corporation that makes TVs, electronics, owns music studios, film studios, etc Playstation being established by Ken Kutaragi being the newest division and currently walkman is just another ipod competitor, reality is Sony makes alot more things and alot of different kind of money where they have to struggle and innovate to stay competitive.

Microsoft, well they make windows OSs and MS Office that has or enjoys a monstrously world wide established consumer base that really does not have a competing alternative, Linux Red Hat, open office are currently just blips in their radar, very tiny ones. The kind of money Microsoft makes is theoretically way too much that they have to donate the money to charities because its just too much, if anyone can actually realistically afford to jump into a next gen leap and be first about it, its Microsoft, not Nintendo, and Sony would fall into a trap if they tried.

If however an organized alternative OS would show up (Unbutu/Red hat having the better chance) and an organized group of game developers were to all of a sudden devote to OpenGL and deliver selling games as well as them having some company that would dedicate themselves to making a non playable graphic estimation synthetic benchmark that gave meaningless scores to tell you that your non-MS OS's e-penis is yay large then maybe there would be a cause of concern for Microsoft's income, or most of it.

Nintendo is very smart and conservative, once they break that tradition they are Sega-ing themselves in the Zelda.

3DS is something they can definetly do because they have so much control over it, they have a loyal fanbase and they actually know how to really make top quality games, virtua boy was also such a thing only it really escaped the testing stage, not like everything they make is gold, there have been flops, 64DD and currently piracy.

 

[Danalys]

It's interesting that in a year they'll have a portable with better graphics than the Wii. As the Wii followed the DS with pointing and gestures (one actually on the screen the other from a distance,) the next home console may follow the 3DS. Having the same basic controls, and a fixed function graphics pipeline designed for a somewhat standardised graphics engine.

Now if you can get that graphics engine to a point where more polygons wont make a difference, textures are loaded fast enough like in ID tech 5 that it can always add more detail just in time, the lighting is using realtime global illumination, and subsurface scattering etc. then they reach a point of diminishing returns so great that other competitors can only match you.

Same could be done with physics. Once cloth simulation, hair simulation, deformable and collapsible materials can be modelled to a good enough degree there isn't anywhere else to go, and cartoony physics are still possible just setting properties differently, or they are simple enough just making them part of the program control that sets up different game types.

 

[obonicus]

The idea of the motion controllers from Microsoft and Sony is to steal current Wii owners and take part of Nintendo's own market for themselves.

I wonder how accurate this is. Maybe as a test, but do MS and Sony really think that they can take the audience with no console generation reboot? I subscribe partially to the idea that this is them priming themselves for when Nintendo makes its move, though the marketing these companies are pushing at these products pokes holes in my theory.

I think that when Nintendo makes its move it won't come out with anything radically more powerful than the PS360, something that is even generation-compatible with them. Under those circumstances, though, PS3 and 360 actually might be better off if they attempt to split the market the way the Wii did, so 3rd parties can't release their titles on PS4/720 and on Wii HD at the same time. If Sony, MS and Nintendo go for similar tech, with a similiar 'core audience' approach, Nintendo will crush them utterly. On the other hand, I'm not sure how well the industry can withstand another generation of split markets.

 

[AlphaWolf]

I wonder how accurate this is. Maybe as a test, but do MS and Sony really think that they can take the audience with no console generation reboot? I subscribe partially to the idea that this is them priming themselves for when Nintendo makes its move, though the marketing these companies are pushing at these products pokes holes in my theory.

They don't need to take the whole audience just make inroads. A reboot can build some buzz, but so can marketing dollars. I fully expect to see a move or kinect ad every commercial break in the xmas season.

I think that when Nintendo makes its move it won't come out with anything radically more powerful than the PS360, something that is even generation-compatible with them. Under those circumstances, though, PS3 and 360 actually might be better off if they attempt to split the market the way the Wii did, so 3rd parties can't release their titles on PS4/720 and on Wii HD at the same time. If Sony, MS and Nintendo go for similar tech, with a similiar 'core audience' approach, Nintendo will crush them utterly. On the other hand, I'm not sure how well the industry can withstand another generation of split markets.

Microsoft and Sony don't want to become the Wii, they just want a share of the Wii audience. MS and Sony will release powerful consoles when they reboot, whenever they decide they need to do that. As for the industry, aren't all 3 console manufacturers currently profitable?

 

[obonicus]

They don't need to take the whole audience just make inroads. A reboot can build some buzz, but so can marketing dollars. I fully expect to see a move or kinect ad every commercial break in the xmas season.

Maybe, but a big push means they're very serious about these peripherals this generation, but there's a whole bunch of other things that make me think they're not so serious, so I'm not sure what to conclude. (I thought the PSP Go was a test and not a serious effort, but then Sony sent a bazillion of the things to retailers.)

Microsoft and Sony don't want to become the Wii, they just want a share of the Wii audience. MS and Sony will release powerful consoles when they reboot, whenever they decide they need to do that. As for the industry, aren't all 3 console manufacturers currently profitable?

Publishers are struggling, but it's hard to determine why thanks to 2009 being such a bad year in general. Analysts have been talking about a slump in software (which I think is premature).

I'm not so sure they'll release very powerful consoles, though. Stringer has spoken VERY positively (he sounded smitten) about Nintendo's strategy with the Wii. As to MS, I think we're seeing a change in E&D's strategy. We've seen a few isolated analysts complaining about E&D lately and we've seen a few important people jump ship. I don't know what'll happen, but given the rumblings about the two camps inside MS regarding Kinect's price, and given that the 'profit' ones won out, I'm rather confident that we won't see loss-leaders ever again.

 

[Xenus]

I'm pretty sure both Microsoft and Sony will release loss leaders next gen for one simple fact. As complimentary as they are of Nintendo and the money they are making neither will want their console to look significantly worse then the competition. They don't want to get stuck going to the Wii route while the competition has a high tech console. So without absolute certainty of what the other will do they will always opt high tech for as long as they can afford to.

 

[RancidLunchmeat]

MS and Sony also have to release more powerful loss-leading consoles once again because they both want their consoles to have a bigger role than just games.

And with MS and Sony both profitable now and really owing the time to profit curve due to missteps in execution, rather than strategy, there's no reason for them not to follow suit.

 

[Teasy]

Well, do they want to lose about 4-6 billion of that by subsidizing high end hardware of that like PS3/X360? In fact with a likely poor market prognosis for that hardware, ala Gamecube? I dont think so.

Nintendo is in an unbelievable profit position. Unfortunately for them I dont think it can get any better, and will almost certainly get worse (already has, since Wii is not as popular as it's height, DS either, plus DS piracy, which explains why Nintendo shares are down some 50% from highs)

4-6 billion?, that's a total exageration, Sony and Microsoft won't lose anything near that kind of money this generation and neither would Nintendo. Not that they need to release a cutting edge console to be competetive graphically. GameCube was a true next gen system and very competetive in power without being cutting edge and they didn't lose a penny on it.

Nintendo will probably go with something a couple of times more powerful then PS3 or 360, while Sony and MS will go with something a bit more powerful then that. I really don't think we'll see a PS2 to PS3 leap this time around.

MS and Sony also have to release more powerful loss-leading consoles once again because they both want their consoles to have a bigger role than just games.

Last time I checked the whole spiel was making their console the center of the living room. So exactly what none gaming task would they need this system to achieve that would require them to go for a PS2 to PS3 style leap in power?

 

[Arwin]

Part of my long post in the motion controllers thread is relevant here:

Sure, it is a possibility. But against that are a lot of the same arguments - next year Nintendo will launch the 3DS, so it is highly unlikely that a Wii successor will launch before 2012. Do you think that the current 360 and PS3 base will then jump into that platform? This Wii will either have the same performance as the current HD consoles, in which it can hope for a few ports of the existing HD library, but in general will have a tough time competing with the vast library that these two consoles have already ammassed, or Nintendo will launch something 'next-gen', in which case it will take longer for third parties to develop titles for it, especially when they are completely uncertain what their market will be - it's a big gamble to assume that hardcore HD gamers will jump ship to Nintendo rather than wait the 1-2 years for next gen 360 and PS3.

The way I see it, hardcore and casual are currently fairly neatly split into two (although there is a fair bit of overlap in the middle, with certain sports game genres that should be classified as casual still being more popular on HD consoles, and some hardcore Nintendo titles drawing in non-casuals on the Nintendo front).

The key question may well be: is it easier for the HD consoles to open up to the casual crowd, or is it easier for the SD console to open up to the hardcore crowd? I think the HD consoles have the advantage in anything but price right now, but as soon as these consoles go under $300 (which the 360 is at already), this advantage will become less and less relevant.

 

[AlphaWolf]

Maybe, but a big push means they're very serious about these peripherals this generation, but there's a whole bunch of other things that make me think they're not so serious, so I'm not sure what to conclude. (I thought the PSP Go was a test and not a serious effort, but then Sony sent a bazillion of the things to retailers.)

Sure they're serious about their peripherals, they see a huge market of casual gamers they can suck in. It's a mostly untapped market for them, I'm sure they see the peripherals as another way to extend the life of this generation. And while I said they will reboot with powerful consoles, they are in no way eager to do so before it becomes necessary.

The portable market is a different entity.

Publishers are struggling, but it's hard to determine why thanks to 2009 being such a bad year in general. Analysts have been talking about a slump in software (which I think is premature).

And you think this is because of competition between platforms? I'm just guessing but perhaps a worldwide recession had something to do with it.

I'm not so sure they'll release very powerful consoles, though. Stringer has spoken VERY positively (he sounded smitten) about Nintendo's strategy with the Wii. As to MS, I think we're seeing a change in E&D's strategy. We've seen a few isolated analysts complaining about E&D lately and we've seen a few important people jump ship. I don't know what'll happen, but given the rumblings about the two camps inside MS regarding Kinect's price, and given that the 'profit' ones won out, I'm rather confident that we won't see loss-leaders ever again.

So smitten that Sony would be willing to release a console with half the performance the next xbox and concede the 'power gamer' market to them? I don't think so. Peripherals for consoles have always been on the profit side of the equation, no reason to expect that kinect would be an exception.

 

[obonicus]

Sure they're serious about their peripherals, they see a huge market of casual gamers they can suck in. It's a mostly untapped market for them, I'm sure they see the peripherals as another way to extend the life of this generation. And while I said they will reboot with powerful consoles, they are in no way eager to do so before it becomes necessary.

It's not an untapped market at all, though. And both solutions are priced way higher than the Wii. Up until this price was announced, people thought MS would be selling Kinect at a much lower price point, and that we'd see $200 arcades with Kinect included.

And you think this is because of competition between platforms? I'm just guessing but perhaps a worldwide recession had something to do with it.

Like I said, 2009 was a bad year for everyone, it's too soon to draw conclusions, either way. I'm conceding that the recession hurt people. On the other hand, I suspect that not having a PS2-like 'everyone's on this platform' has also hurt publishers. Add to that though HD dev costs have gone up 360+PS3 install-base seems actually to be down from where the PS2's install-base was last-gen and there might be a perfect storm brewing.

So smitten that Sony would be willing to release a console with half the performance the next xbox and concede the 'power gamer' market to them? I don't think so.

Whether MS launches with a powerful console or not is exactly what we're speculating on, you can't just say 'they will' and build an argument from that. I don't think it's clear at all -- Nintendo's successful and highly profitable strategy certainly must seem tempting. That's not to say that we'll see a Wii-like upgrade, but I don't think we'll ever see PS2->PS3 leaps ever again, for a few reasons.

Peripherals for consoles have always been on the profit side of the equation, no reason to expect that kinect would be an exception.

You're missing the point of what I said. Rumors indicated internal strife about whether to launch Kinect at a more approachable price or to go for profitability. People, even here, were doubting the $150 price tag to the very last moment because it didn't mesh with the 'Kinect is our new platform' message echoed by MS' talking heads. The fact that the $150 price tag won out suggests a shift in strategy towards Kinect. Given all the shakeups at E&D (and apparently they posted a net loss this quarter) I wouldn't be surprised if this shift is more broad. I think the notion that 'MS can just throw money at any problems' will become even more false than it was already.

 

[AlphaWolf]

It's not an untapped market at all, though. And both solutions are priced way higher than the Wii. Up until this price was announced, people thought MS would be selling Kinect at a much lower price point, and that we'd see $200 arcades with Kinect included.

It's reasonably untapped by microsoft and sony. It's not really 'way' higher. Yes and Sony was going to give everyone a pony with a PS3.

Like I said, 2009 was a bad year for everyone, it's too soon to draw conclusions, either way. I'm conceding that the recession hurt people. On the other hand, I suspect that not having a PS2-like 'everyone's on this platform' has also hurt publishers. Add to that though HD dev costs have gone up 360+PS3 install-base seems actually to be down from where the PS2's install-base was last-gen and there might be a perfect storm brewing.

There's tons of games that have sold and done well. If publishers are suffering perhaps they should address those problems in house.

Whether MS launches with a powerful console or not is exactly what we're speculating on, you can't just say 'they will' and build an argument from that. I don't think it's clear at all -- Nintendo's successful and highly profitable strategy certainly must seem tempting. That's not to say that we'll see a Wii-like upgrade, but I don't think we'll ever see PS2->PS3 leaps ever again, for a few reasons.

The argument is quite simple. They will push for a competitive edge, because they can. And they have a lot more at stake than just casual gaming, they have their streaming, their hardcore market, their download and online. They are going to build on these things not abandon them because last time around, the Wii did well.

You're missing the point of what I said. Rumors indicated internal strife about whether to launch Kinect at a more approachable price or to go for profitability. People, even here, were doubting the $150 price tag to the very last moment because it didn't mesh with the 'Kinect is our new platform' message echoed by MS' talking heads. The fact that the $150 price tag won out suggests a shift in strategy towards Kinect. Given all the shakeups at E&D (and apparently they posted a net loss this quarter) I wouldn't be surprised if this shift is more broad. I think the notion that 'MS can just throw money at any problems' will become even more false than it was already.

Rumors. Peripherals have always been profitable (heavily so). When MS wants to see red ink, they will launch a new console. People like to believe things are going to be cheap, because they don't have to eat the cost. The reality in business is not so simple, MS would need to justify kinect as a loss leader to their share holders. Failure would have significant consequences, it still could, but its more palatable.

 

[Squilliam]

Not really.

For starters, Nintendo will never release a "real next gen" console again. It's against their very DNA at this point. They do not have the stomach to sacrifice the ginormous profits they reap, by shelling out for expensive new hardware. And they dont have the size as a company to take the massive hardware losses like Sony and MS have done, even if they wanted to, which they dont.

They wouldn't have to. They just need to be efficient and pick up the technology when its in the right level of maturity before they jump in.

I honestly dont forsee all that bright a future for Nintendo in consoles. Wii, while still enormously popular and profitable, is fading a little at a time and it seems little can be done to resuscitate it (for example, Mario Galaxy 2 had no real effect, and it's a complete graveyard for third parties at this point).

The Wii whilst enormously profitable is fading all the time? They had the highest selling holiday season of all time not too long back. The sales may be down a mere 20% but that doesn't mean anything if they can do a 3DS and reboot with powerful hardware to make both the core and casual markets excited at the same time with full support from third party publishers. Nintendo currently are the only ones in the market with a bright future, if Microsoft EDD and SCE were independant game companies they would probably be bankrupt.

The Nintendo Wii, much like the GameBoy challenged super duper ultra tech in favor of functional gameplay, new gameplay and new audience... despite Wii's success it has still not reached PS2 sales numbers and think about that, Nintendo would prefer to reach such numbers as they would sell and make a killing in console sales and despite piracy they might enjoy large game sales, their established franchises have almost always been million to multi million sellers.

Nintendo made more in a year than Sony did with the PS2 IIRC.

Read up on your post NES history, Nintendo has NEVER released a "next gen" console update before their competitors, Sega did that, really, really badly thats one of the many reasons they are not in the hardware arena so your argument just went up in flames right there.

Sony never lost money on a hardware generation, Sony never came less than first etc. Precedent is meaningless. Just because they have never done something, doesn't mean they never will.

I wonder how accurate this is. Maybe as a test, but do MS and Sony really think that they can take the audience with no console generation reboot? I subscribe partially to the idea that this is them priming themselves for when Nintendo makes its move, though the marketing these companies are pushing at these products pokes holes in my theory.

My suspicion is that they want some of the market Nintendo has held for themselves alone for the entirety of the generation up until now. They're at the point where they are fast running out of their target demographics and they need something new to expand their audience and keep their consoles relevant. They are the ones who can't afford to start a new generation because their model of losses is far too expensive and dangerous as the process shrinks fall off their regular schedules.

I think that when Nintendo makes its move it won't come out with anything radically more powerful than the PS360, something that is even generation-compatible with them. Under those circumstances, though, PS3 and 360 actually might be better off if they attempt to split the market the way the Wii did, so 3rd parties can't release their titles on PS4/720 and on Wii HD at the same time. If Sony, MS and Nintendo go for similar tech, with a similiar 'core audience' approach, Nintendo will crush them utterly. On the other hand, I'm not sure how well the industry can withstand another generation of split markets.

I don't think a generational leap with the Wii 2 being left as a laggard relative to the other consoles like this generation is even possible if the Wii 2 comes out with modern technology even at a relatively modest thermal and cost profile. They simply do not have the chance to increase the heat generation or cost of their consoles any further, the market simply will not bear it and the only way to do so would be to come out much later in the next generation and risk having the Wii 2 substantially ahead in sales.

Part of my long post in the motion controllers thread is relevant here:

Sure, it is a possibility. But against that are a lot of the same arguments - next year Nintendo will launch the 3DS, so it is highly unlikely that a Wii successor will launch before 2012.

Nintendo has released a handheld and home console 12 months apart before. Besides, they could come out in early 2012 and still struggle with supply right up until Christmas. Beyond that, being the incumbant will ensure a lot of third party support across the board.

Do you think that the current 360 and PS3 base will then jump into that platform? This Wii will either have the same performance as the current HD consoles, in which it can hope for a few ports of the existing HD library, but in general will have a tough time competing with the vast library that these two consoles have already ammassed, or

I doubt they would release anything as powerful or weaker than current generation hardware. It makes little sense, especially given the fact that a DX11 GPU can be vastly more efficient than the current DX9 GPUs in the consoles today. Beyond that the entirety of the library on the consoles is irrelevant as people don't tend to buy games which are older than one or two years old and theres nothing stopping people from holding onto their present generation consoles for favourite titles etc.

Nintendo will launch something 'next-gen', in which case it will take longer for third parties to develop titles for it, especially when they are completely uncertain what their market will be - it's a big gamble to assume that hardcore HD gamers will jump ship to Nintendo rather than wait the 1-2 years for next gen 360 and PS3.

In 2011/2012 the current HD consoles will be between 5 and 7 years old depending. There will be a lot of people who will buy one simply because they are bored with the current generation of console hardware and are looking for something new. Third parties needed little encouragement to develop core games for the 3DS launch even though the DS wasn't always considered to be a strong platform for core games. Beyond that its unlikely that the Wii 2 would struggle to pick up third party titles like GTA, Final Fantasy etc.

Even if the console is in the order of 4-5* more powerful than current generation hardware it wouldn't mean that production costs or development time would have to increase substantially if at all. Any game would look better than the current generation titles, and likely a lot of the early titles would probably be higher fidelity versions of current generation titles with a 3D option available. Beyond that, many of the assets produced today are made at a higher level of fidelity than are actually represented on screen in order to be ready for reuse in the next generation.

The key question may well be: is it easier for the HD consoles to open up to the casual crowd, or is it easier for the SD console to open up to the hardcore crowd? I think the HD consoles have the advantage in anything but price right now, but as soon as these consoles go under $300 (which the 360 is at already), this advantage will become less and less relevant.

Consider the DS -> 3DS transition. Nintendo has stated often that their intention is to go for the downstream gamers first (casuals) and then move upstream to the core. The 3DS tells us what kind of console the Wii 2 is going to be because the DS told us what kind of console the Wii was going to be.

 

[obonicus]

It's reasonably untapped by microsoft and sony. It's not really 'way' higher.

MS and Sony don't have a part in it, but that doesn't make it untapped. Why is it that people pretend that Nintendo is not dominant in this market? The price difference is enough to make these alternatives seem quite weak.

Yes and Sony was going to give everyone a pony with a PS3.

There's no point in being obtuse here. People were saying it, even here on B3D. People thought MS was going to push Kinect a lot harder, based on what they had been saying.

There's tons of games that have sold and done well. If publishers are suffering perhaps they should address those problems in house.

This is called sticking your head in the sand. You're not addressing any of what I said, just going 'oh well, I don't think it's a problem'.

The argument is quite simple. They will push for a competitive edge, because they can.

That's not an argument, it's an article of faith. Who says they can? Aren't you saying below that shareholders don't want to lose more money? Especially since you're using what you think is established fact to further argue that Sony will take the route as well.

And they have a lot more at stake than just casual gaming, they have their streaming, their hardcore market, their download and online. They are going to build on these things not abandon them because last time around, the Wii did well.

Why would it be necessary to push the tech to do all the things it does today?

Rumors.

Some of them are, yes. And? Is that like disbelieving an illusion? Not all of them are rumors; the shakeups at E&D aren't rumors, nor is the way MS dropped Kin. We had MS executives going 'you'll be surprised at how we accessibly we price this'. Was it a case of an executive being out of touch with the audience or was it that Kinect's price wasn't final until really recently?

Peripherals have always been profitable (heavily so). When MS wants to see red ink, they will launch a new console. People like to believe things are going to be cheap, because they don't have to eat the cost.
The reality in business is not so simple, MS would need to justify kinect as a loss leader to their share holders. Failure would have significant consequences, it still could, but its more palatable.

Last year Kinect was being put forth as a console relaunch. Up until this year they were saying the same things, it's more recent that the relaunch was de-emphasized. And I'm not convinced that MS shareholders will be that eager to eat another loss-leader, period. And the same goes for Sony.

 

[Carl B]

GameCube was a true next gen system and very competetive in power without being cutting edge and they didn't lose a penny on it.

Exactly the point I was going to make. GameCube is often considered a market failure, but it didn't lose money. With the way technology moves, Nintendo could quite readily choose to release a console a year+ after its competitors and enjoy the technology gains from that time period to put out a competitive console hardware wise. And I think GameCube demonstrated also that beyond graphical parity, Nintendo can actually design quite an elegant system from a hardware perspective; it just wasn't as exotic as the PS2's hardware, and thus of less interest to some folk from a tech perspective.

I think to broadly paint Nintendo as forever having abandoned hardware is the same as to have been one of those folk that for whatever reason five years ago was convinced that Nintendo would exit hardware altogether; I was never one of those. Nintendo makes money, they'll move into whatever niche they feel allows them profits. Though as an aside, right now their most immediate threat lies in the increasing mobile phone gaming space.

Wii sales are slowing, but Kinect and Move I'm just not feeling - the whole motion space has lost its novelty for the moment IMO.

 

[obonicus]

I think to broadly paint Nintendo as forever having abandoned hardware is the same as to have been one of those folk that for whatever reason five years ago was convinced that Nintendo would exit hardware altogether; I was never one of those. Nintendo makes money, they'll move into whatever niche they feel allows them profits. Though as an aside, right now their most immediate threat lies in the increasing mobile phone gaming space.

I don't think Nintendo will ever go for a loss-leader again, though. I think we'll see the 3DS step forward applied to a home console.