Games industry on Revolution
- Thread starter pipo
- Start date
This is my theory on the GC and it's role within Nintendo
First off everyone looks at the GC and compares it to say Xbox or PS2 and say's it's a failure due to it's lower market share. What they ignore is that the GC is just one of Nintendo's avenues for generating revenue, and likely their least efficient one at that.Sony and MS have one primary platform from which to generate revenue, their home consoles, so of course all their effort and resources will be poured that way resulting in greater visibility, amount of games and therfor market share.
People(mainly techie power whores) assume that since the home console is the pinnacle of power and technology that it has to do the best. They like the home console, and dismiss handhelds as an after thought, and therfor Nintendo must be failing if their preferred type of platform isn't doing well.
My guess is that Nintendo actually makes more money per unit on each handheld game than on their home console games. For example they might be able to make 3 handheld games for $500,000 a peice($1.5 million total), and sell them each for $40. By contrast it could cost them $1.5 million just to make one big home console game and sell it for $50. Much more expensive, not much more to sell it for results in a lower rate of return on investment.
Handhelds give Nintendo a much more efficieint way to make money, and we all know how Nintendo likes efficiency. While the others are spending millions on one game hoping for that next big blockbuster to recover their investment, Nintendo quietly goes about raking in the moola one little handhled game at a time.
So if this is the case why even have a home console?Visibility,reputation, image etc.
People expect Nintendo to have a home console, and feel it shows they can compete at that high level. The home console is more about protaying an image, selling the Nintendo name, characters and keeping the reputation of quality up. The home console is a very visible platform competing at the higest levels. It's most important for Nintendo to show quality rather than quantity at that level. The suceess of big home console games generates passion and excitement, which hopefully trickles down to thier handhelds resulting in better sales. And the sales of the handheld games allows them the freedom to take more chances with their home console games or take more time with them putting more emphasis on quality rather than quantity, the sucess of which reinfoces the success of their handhelds. .
It's like how Chevy makes the Corvette. They don't expect it to be the highest selling car in the world, but they know the passion and excitement it creates about Chevroletdraws people into showrooms. People get might get a hardon over the Corvette, but Chevy understands most people will drive home in a Cobalt.
First off everyone looks at the GC and compares it to say Xbox or PS2 and say's it's a failure due to it's lower market share. What they ignore is that the GC is just one of Nintendo's avenues for generating revenue, and likely their least efficient one at that.Sony and MS have one primary platform from which to generate revenue, their home consoles, so of course all their effort and resources will be poured that way resulting in greater visibility, amount of games and therfor market share.
People(mainly techie power whores) assume that since the home console is the pinnacle of power and technology that it has to do the best. They like the home console, and dismiss handhelds as an after thought, and therfor Nintendo must be failing if their preferred type of platform isn't doing well.
My guess is that Nintendo actually makes more money per unit on each handheld game than on their home console games. For example they might be able to make 3 handheld games for $500,000 a peice($1.5 million total), and sell them each for $40. By contrast it could cost them $1.5 million just to make one big home console game and sell it for $50. Much more expensive, not much more to sell it for results in a lower rate of return on investment.
Handhelds give Nintendo a much more efficieint way to make money, and we all know how Nintendo likes efficiency. While the others are spending millions on one game hoping for that next big blockbuster to recover their investment, Nintendo quietly goes about raking in the moola one little handhled game at a time.
So if this is the case why even have a home console?Visibility,reputation, image etc.
People expect Nintendo to have a home console, and feel it shows they can compete at that high level. The home console is more about protaying an image, selling the Nintendo name, characters and keeping the reputation of quality up. The home console is a very visible platform competing at the higest levels. It's most important for Nintendo to show quality rather than quantity at that level. The suceess of big home console games generates passion and excitement, which hopefully trickles down to thier handhelds resulting in better sales. And the sales of the handheld games allows them the freedom to take more chances with their home console games or take more time with them putting more emphasis on quality rather than quantity, the sucess of which reinfoces the success of their handhelds. .
It's like how Chevy makes the Corvette. They don't expect it to be the highest selling car in the world, but they know the passion and excitement it creates about Chevroletdraws people into showrooms. People get might get a hardon over the Corvette, but Chevy understands most people will drive home in a Cobalt.
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NBK - Steve
Newcomer
Powderkeg said:
Sweet mother of Jesus! I know they made a lot of money but $8 Mill in "net" profit!?
ninzel said:
I'm arguing against your silly claim that consoles are the only source of revenues, or even gaming revenues for either Sony or MS.
For instance, Age of Empires franchise has sold around 20 million games so far. At $40 per game, that comes up to $800 Million in revenue from just one game franchise.
Add in MS Flight Simulator. Heck, just add in MS Flight Simulator 2000, all by itself. 21 million copies sold, more than any console game released between 2000 and now. I bet that generated a bit of revenue.
And these are PC games, not console games.
Sony is the same way. The produce PC games, and those games sell rather well. Some, such as Everquest continue making them money well after the initial sale.
So, your long winded rant was based on the false belief that MS and Sony don't generate money from games other than their consoles. Figure they each actually make a few hundred million to a billion dollars per year off of PC gaming, and adjust the rest of your theory to match that.
Powderkeg said:
Yep you missed the point. I'm comparing the the role of the home console relative to each compnies overall strategy. Everything you typed is irrelevant.
Maybe bullet points in crayon next time will be less long winded and easier to understand for you. I doubt it though.
Just to help you out a little more I said one primary way to generate revenue not the ONE AND ONLY, and I was talking gaming revenue which I figure most people would be clear on since I was talking about home consoles.
But like with the Sony CEO article you skim and read what you want.
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Obviously its too early to make a decision on the Revolutions retail potential, but I agree with the article that it looks very, very difficult for Nintendo. Some people are going to be naturally resistant to change, and I think the very nature of the controller is an obstacle to alot. I also think its not without practical issues such as lack-of-feedback.
That and support will almost certainly be weak from 3rd-parties for the first year (both in quantity of titles and - I suspect- implementation of revmote).
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They aren't the biggest company out there, but damned if they don't have (one of) the best revenue-to-profit ratio of any major company.
Also, its lame to change points and make qualifiers on your statements after the fact.
Oh and Nintendo disagrees with you and your last comparison was inane to say the least.
That and support will almost certainly be weak from 3rd-parties for the first year (both in quantity of titles and - I suspect- implementation of revmote).
$8 'Bill'. The two major markets (OS[home+server]/Corporate Customer Support) for MS are hugely profitable, and don't require capital spending and since they don't need to stock inventory - they just manufacture discs when they're bought by wholesaler's - its just incredibly efficient. Having a monopoly helps tooNBK - Steve said:
.They aren't the biggest company out there, but damned if they don't have (one of) the best revenue-to-profit ratio of any major company.
Actually I think Sony have more focusses than you're admitting (PSP+PC+PlayStation(console)+Mobile), and a big part of MS games strategy is PC games and development tools in specific, as well as Xbox and portable devices. Both companies have rather fleshed out strategies, IMO.ninzel said:
Also, its lame to change points and make qualifiers on your statements after the fact.
Oh and Nintendo disagrees with you and your last comparison was inane to say the least.
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Ty said:
I never said minor, I said that the handhelds were their primary focus as opposed to the others which focus primarily on their home consoles. Have you never wondered why after all complainsts about the GC's styling for example, they have never redesigned it, but they have done how many tweaks and redesigned to their handhelds? It would have been simple enough to put a different more stylish case on the GC and addres that, or shrink it's size even more, yet they let it be.
Ingenu said:
How so. I think if you look at Nintendo as a whole they clearly are a company that can move systems and software when they want to. I think the redesigns of thier handhelds(GBA, MICRO and DS) clearly show where their priorities have been. Most companies focus their resources where they have their priorities. Nintendo has moved very quickly and decisively to adress compainsts about thier handhelds and thrown alot of support behind them by way of software. By constrast they haven't even adressed the most minor and superficial of complainsts about the GC, and let it languish on store shelves.
I think you are going to see a renewed focus on the home console this gen once again with the REV,simply because now with online distribution they can bring over that same cheap develoment costs formula the home console with small downloadable content.
My take is that they knew the NGC was going down hill and they could hardly do anything more to prevent that, they already had a new Zelda in the pipes, released lots of games for it...
Then SONY tried to get a foot in the handheld market, and Nintendo reacted accordingly protecting its stronghold. The new designs were both a reaction to SONY and a choice from the new management to get ride of the "kiddie" image some people like to attach to the brand.
Iwata decided not to compete head to head, but instead chose to go back to what games are all about : gameplay, fun and experience; and so the DS (could it be anti PSP ?) came to life, was redesigned, taking public considerations into account, showing that Nintendo was changing (for the best would I say)
The Revolution is just the same idea pushed forward in the Home market, the DS worked in the handheld market, and even people which were praising the PSP are now prefering the DS (at least lots of people I know), the Revolution have a great potential...
What I mean is that they HAD to focus on handhelds when SONY tried to get some market here, because they (previous management) downplayed competition in the Home market, and that lead Nintendo where it is today.
They didn't really have a choice, it was the only logical thing to do...
What Nintendo needs, is much better 3rd party support, with more exclusive titles, enough top games in every genre to make everyone happy.
Then SONY tried to get a foot in the handheld market, and Nintendo reacted accordingly protecting its stronghold. The new designs were both a reaction to SONY and a choice from the new management to get ride of the "kiddie" image some people like to attach to the brand.
Iwata decided not to compete head to head, but instead chose to go back to what games are all about : gameplay, fun and experience; and so the DS (could it be anti PSP ?) came to life, was redesigned, taking public considerations into account, showing that Nintendo was changing (for the best would I say)
The Revolution is just the same idea pushed forward in the Home market, the DS worked in the handheld market, and even people which were praising the PSP are now prefering the DS (at least lots of people I know), the Revolution have a great potential...
What I mean is that they HAD to focus on handhelds when SONY tried to get some market here, because they (previous management) downplayed competition in the Home market, and that lead Nintendo where it is today.
They didn't really have a choice, it was the only logical thing to do...
What Nintendo needs, is much better 3rd party support, with more exclusive titles, enough top games in every genre to make everyone happy.