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

[Squilliam]

Well that is an option but right now MS and SONY aren't eating much into Wii's profits? Maybe when Wii price is forced down so low that profits are too small then that would be the right time to release something to compete with PS3/X360?

They are releasing a 3DS in part because the DS sales have peaked and are on their way to decline. So the only way to increase their handheld profits is to release a new product.

Wii1 != PS2, PS2 had broad Dev support and so could continue after Sony exited to Dev for the PS3. Nintendo IS the market for the Wii and when they leave it collapses, and if they don't by strattling the fence they canabilize the Wii2 market. That is probably the worst possible outcome, an obsoleted Wii with little/no new growth potential and a Wii2 unable to get on track and establish itself as the new IT item because it's hamstrung by continued Nintendo Wii1 support.On top of that your core market, tween-n-unders and soccer moms, are the most fickle and trend concious there is, playing them wrong could be devastating. Wii2 could very easily = GC2.

You contradict yourself here. The Wii 2 will be hamstrung by continued Nintendo support of the Wii and yet the Wii will collapse without Nintendo support? Which one is it, either they continue to support the Wii after the release of the Wii 2 or they don't.

As crazy as it sounds, Nintendo may be in the worst shape of the 3 going into the next gen. This is mainly because good things happened for them this gen more than things they made happen, so to try to plan to move forward they have to sit back and hope good things for them to continue. I think Sony can in hindsight atest to that being a less than desirable strategy.

How could they be in the worst shape in the next generation? They are the only console company with multiple authentic 10-20M+ selling franchises. So assuming they get all the 3rd party support at the same time which is almost a given because of the multi-platform nature of the 3rd parties at present it will again be their first party which makes up the difference. As the incumbent top selling console they start with all the momentum they need.

 

[Xenus]

It's not a contradiction at all once Nintendo releases the Wii 2 they are stuck between a rock and a hard place so to speak. If they don't support the Wii it will certainly die without them. If they do support it they risk not giving their audience a compelling reason to go to the Wii2 and thus hurting it's potential growth and profits. Also the Wii was sold on having a unique interface Nintendo is at risk of Sony and Microsoft cannibalizing that market when the Wii isn't as unique anymore. Nintendo has gotten themselves into the point where they may have to do something risky and innovative with each generation to set themselves apart and it likely will not always work. While I wouldn't say they are in the worst position of all 3 but the lack of 3rd party support like the PS2 means the situation isn't all roses for them either.

 

[upnorthsox]

You contradict yourself here. The Wii 2 will be hamstrung by continued Nintendo support of the Wii and yet the Wii will collapse without Nintendo support? Which one is it, either they continue to support the Wii after the release of the Wii 2 or they don't.

No I didn't though I coud have been clearer, If Nintendo tries to straddle the fence and support both Wii1 and Wii2 then the Wii2 will be hamstrung by Wii1 owners with little reason to upgrade and Wii1 slowly obsoletes into irrelevance. If they throw all their support to Wii2 then Wii1 collapses. It's as simple as that. IMO they should and have no choice but to throw all support towards Wii2 but it's a move with risk involved.

How could they be in the worst shape in the next generation? They are the only console company with multiple authentic 10-20M+ selling franchises. So assuming they get all the 3rd party support at the same time which is almost a given because of the multi-platform nature of the 3rd parties at present it will again be their first party which makes up the difference. As the incumbent top selling console they start with all the momentum they need.

This quote is missing something....oh yes:

" please be aware that the material in this quote reflects past performance and historical information only, and that such performance and information is not necessarily an indication of future performance. "

Better.

That said, I meant toughest position going in not worst shape which I aknowledge is not the same.

 

[Squilliam]

It's not a contradiction at all once Nintendo releases the Wii 2 they are stuck between a rock and a hard place so to speak. If they don't support the Wii it will certainly die without them. If they do support it they risk not giving their audience a compelling reason to go to the Wii2 and thus hurting it's potential growth and profits.

I have not seen any other console in any other generation transition suffer from this dilemma whether they were leading by an excessive margin (PS1/PS2) or were trailing (Xbox/Gamecube/N64). In all respects the process has been to release a new console and wind down support for the older generation.

Also the Wii was sold on having a unique interface Nintendo is at risk of Sony and Microsoft cannibalizing that market when the Wii isn't as unique anymore. Nintendo has gotten themselves into the point where they may have to do something risky and innovative with each generation to set themselves apart and it likely will not always work. While I wouldn't say they are in the worst position of all 3 but the lack of 3rd party support like the PS2 means the situation isn't all roses for them either.

Nope. The Wii sold on having an accessible interface and compelling games. You don't hit >30% attach rate over a 70M strong console userbase without first being a compelling game. In any case, Nintendo doesn't need to do anything risky because all risks are calculated risks. They of course knew their interface worked before they hit the market, it isn't some crapshoot. The same applies to the design of the DS as well. A lack of 3rd party support for the Wii in this generation didn't kill them, nor would you expect they would lack that 3rd party support next generation if the 3DS is any indication of what to expect.

No I didn't though I coud have been clearer, If Nintendo tries to straddle the fence and support both Wii1 and Wii2 then the Wii2 will be hamstrung by Wii1 owners with little reason to upgrade and Wii1 slowly obsoletes into irrelevance. If they throw all their support to Wii2 then Wii1 collapses. It's as simple as that. IMO they should and have no choice but to throw all support towards Wii2 but it's a move with risk involved.

It hasn't been a problem raised for any generation of consoles previously, see above. Besides anything else, as a publicly traded company Nintendo are pretty much compelled to expand the market and increase profitability over time. If profitability and sales start to waver they are compelled to release a new product in order to increase revenues and profits.

 

[Arwin]

I have not seen any other console in any other generation transition suffer from this dilemma whether they were leading by an excessive margin (PS1/PS2) or were trailing (Xbox/Gamecube/N64). In all respects the process has been to release a new console and wind down support for the older generation.

Are you sure? Playstation 1 and 2 were both well supported for up to five years after the release of their successors, whereas the Xbox1 was killed off in favor of the 360 pretty much instantly. Definitely quite a difference.

If profitability and sales start to waver they are compelled to release a new product in order to increase revenues and profits.

The 3DS may be enough for that. They're not in a hurry, but once the 3DS is out they'll probably be looking to get something new to follow up the Wii. But for them it is much more important to have another great concept to sell to the consumer at a day 1 profit, so they're much more likely to keep to their own schedule than follow that of any of their competitors at this point, I think, unless they feel that their competitors is releasing something that could actually threaten to take away their marketshare quickly and permanently. But even then they need a good 'idea'.

 

[Mobius1aic]

I'm getting a sick, twisted pleasure out of Sony's failings with the PSP lately as well as their search for profitability with the PS3. I could only hope that something would happen to MS as well, though I think they are setting themselves up for some real shit too by having so many system bundles and accessories, much like the old pre-8 bit systems. It's absolutely ridiculous. While the Wii could be judged in a similar manner, at least what you get in the system package is pretty much ready to go for playing all but a few games out for the Wii. Yes, I consider the Wii to be an underpowered POS, but of course that didn't matter when casuals were brought in by droves to buy games that didn't need extreme graphics. The next videogame crash is on the way, yes indeed. The industry needs another slap in the face again to learn some humility and humbleness.

 

[Squilliam]

Are you sure? Playstation 1 and 2 were both well supported for up to five years after the release of their successors, whereas the Xbox1 was killed off in favor of the 360 pretty much instantly. Definitely quite a difference.

Quite a difference yes, but I have never seen it given as a real reason not to start a new generation when the sales of the current generation hardware and software and with it overall profits are falling. At that point its best to consider competitor actions and its also best to consider releasing a new generation of consoles. Like with the 3DS, the DS is still selling very strongly but they are still replacing the system in 2010/11.

The 3DS may be enough for that. They're not in a hurry, but once the 3DS is out they'll probably be looking to get something new to follow up the Wii. But for them it is much more important to have another great concept to sell to the consumer at a day 1 profit, so they're much more likely to keep to their own schedule than follow that of any of their competitors at this point, I think, unless they feel that their competitors is releasing something that could actually threaten to take away their marketshare quickly and permanently. But even then they need a good 'idea'.

I believe they would indeed have a good idea. In any case it wouldn't be too bad if the next Wii was simply a Wii HD. Both of their competitors have done well simply by focusing on improving graphics and the online component. This is their one big advantage in releasing a new console, anything they release will have games which look significantly better than their previous generation and probably better than the current HD consoles without breaking the bank. Since Microsoft and Sony have already paved the way, they can keep development cycles shorter for their games as Nintendo games should translate well to HD without incurring massive increases in costs.