How can Nintendo coax 3rd party developers to the Wii?

I remember my first gaming experience. It was a game & watch clone which consisted of moving a commando side by side to shoot enemy soldiers. It would be equivalent to an el cheapo mobile phone game nowadays.

Then I gradually graduated to consoles and the pc with platformers like Mario and Commander Keen. The rest is history.

There is no secret genetic trait that bestows special powers of button mashing ability to modern day gamers. It is built through experience and unhindered by a fear of technology.

Thats why it can be kinda snotty and elitist to look at the customers of games like Brain Training and Wiifit with disdain as some sort of inferior species of gamer. In many instances, this is their "game & watch", ie: their entry into the world of gaming and should be targeted by videogame developers as such.


Nintendo is having some success in converting new customers to more complicated games like Mario Galaxy and Mario Kart but a quick look at the Wii back catalogue will reveal

a) Top tier Nintendo games which receive the most marketing effort including Wiifit, Mario games, Zelda etc

b) Lesser known Nintendo games which are usually sent out to die without advertising including Battalion Wars 2, Wario Land: Shake it, Disaster: Day of Crisis, Excite Truck, Fire Emblem etc

c) Shovelware: companies trying make a quick buck by targeting casual gamers with el cheapo games

d) Shovelware mark 2: companies trying to make a quick buck with a cheap port of games from other formats.

e) Top and medium quality 3rd party games lost in the miasma of shovelware: eg: Zack and Wiki, No More Heroes, Boom Blox, Blastworks, De Blob etc.


The average consumer doesn't read game blogs or trawl around message boards arguing with fanboys about which console has the bigger penis. When making a purchasing decision they rely on traditional forms of advertising like television, word of mouth, the cover art and the display presence at the store.

For this reason, its no surprise that the big sellers are the Nintendo games that receive the most marketing....by an overwhelming margin.

A feature the Wii has to its advantage is its lower development costs, so even a 3rd party game like No More Heroes which sold 500 000 copies can earn a tidy profit and justify a sequel. However at face value it wouldn't seem as lucrative as a big success on the X360.


How can Nintendo change this status quo?

It is pretty simple imo..... 5 words

Heart

Foundation

Tick

Of

Approval


I am Australian....so I don't know the international equivalent but the tick of approval is a sticker that is stuck onto healthy products like lean beef.

picktickal5.jpg


Companies have to follow rigorous (supposedly) health guidelines to get their products approved.

If you think the average consumer has it tough making informed decisions at the videogame aisle, try shopping in a supermarket and gaze at the tens of thousands of different products.

It can be very time consuming buying the right foods that will keep you nourished and not give you cancer or heart diease in 20 years.

Thats why the branding of the Tick of Approval can have such a powerful effect. Customers trust that someone has done the tests to work out which foods are healthy and they can make a quick buying decision when they see the label.


In this way, Nintendo could use the power of their brand to help out and showcase third party developers who try their best to make top quality games.

Now I know what some of you are thinking...

"WTF, Nintendo already tried that with their ironic NES Seal of Quality and there were full of shitty games with this label"

What you probably didn't know was that back then, Nintendo was battling license infringers like Atari and pirates who were making games for the console by bypassing the traditional paid model. The Seal of Quality was not to advertise that the game was any good to play but that the consumer was receiving a genuine Nintendo product which would work properly on the game system.


By bringing back a proper Nintendo Tick of Approval to showcase good games, this would give 3rd party developers the incentive to actually put the effort to make top quality games. It is more likely that retail stores would give these games a better display presence at the store in the belief that they would sell better. This free advertising would lessen the risk of failure and create competition to release the best games.


In fact..... kill two birds with one stone: have meaning interactions with the hardcore videogame community.

Neogaf, Beyond3d, Kotaku, Gamespot, 1up etc are bastions of hardcore intelligentsia and are full of consumers who will only buy quality games that are fun to play.

By giving gamers an avenue to voice their opinions on games they like, you get a twin pronged effect: free product testing and the likelihood that some gamers will feel engaged enough to be evangelists who will spread positive word of mouth to help the game and make the system successful.

Maybe call the brand the Gamer's Choice to show that the product has some sort of street cred.
 
Don't try to fix what isn't broken.

Honestly, as a gamer, I don't even want good 3rd party games to be developed for the Wii. I would much much rather they continue to be made exclusively for the HD consoles. Every dollar spent on Wii development/marketing by a 3rd party is a dollar that is wasted on me.

I have a Wii and pretty much only bought it to play Nintendo exclusives like Mario Galaxy. And coincidently, the exclusive Nintendo games are precisely what the casual gamers are buying it for too. And they are making truck loads of money with this strategy. So why are there so many pundits trying to "fix" Nintendo.
 
Thats all and well when everything is going right......but as shown by Sony this generation (financially), falls from great heights can be spectacular.

The videogame industry is still inherently one of the most risky ventures there is and in the light of the current financial crisis even more so.

Sure Nintendo is probably making more money than the entire industry combined....but at the same time Videogames are still a very volatile investment and if Nintendo can only rely on themselves to make games that sell, they risk taking the biggest hit if there is another revolution in the industry and someone else captures their core market.

Forbes recently let loose that Nintendo is making a margin of $6 on the Wii. Before the global meltdown it was reported that they were making $50.

That shows what a great effect the unwinding of the Yen Carry Trade and the subsequent strength of the yen (The australian dollar against the yen went from 104 yen to 57 yen in a short period of time) is having on the financial perfomance of Japanese export companies like Nintendo and Sony.

Profit margins are being slashed!!!

IMO, Nintendo is being alittle arrogant atm by sticking too much to the status quo with their games. I mean, they're selling virtually the same game in Animal Crossing: City Folk for the third time.

They should be doing more to be training new gamers to be repeat customers by using the power of their brand to ensure that a wide variety of games gain mass market exposure.

Look how easily the PS2 loss marketshare in the transition to the PS3

Success can be a bitch because it can can give you a false sense of security.

The development of a new brand to promote good quality games is a cheap way to show 3rd Party developers that Nintendo is willing to compromise and to help them achieve success.

It is a hell of alot cheaper than Sony and Microsoft's strategy of an all out spending war.

Sure its great for gamers in that they get an amazing looking game like Killzone 2....

but at the same time....it might send the company into bankruptcy.
 
btw..... when I say good games...... this doesn't necessarily mean FPS graphical spectaculars like Killzone 2

As shown with the dismal performance of COD WAW on the Wii.....it is kinda pointless selling a game when there are better versions on competiting consoles.

I want to see truly innovative games find a market that actually takes advantage of the Wii's strengths.

Thats why I'm so excited about Scribblenauts on the DS, it is an innovative game that takes advantage of the DS's strengths and has the potential to be a sales success.

At the same time, a great point and click adventure that makes use of the visceral feeling of using the wiimote to solve puzzles like Zack and Wiki on the Wii fails to find success because of inadequate marketing imo.
 
Forbes recently let loose that Nintendo is making a margin of $6 on the Wii. Before the global meltdown it was reported that they were making $50.

That shows what a great effect the unwinding of the Yen Carry Trade and the subsequent strength of the yen (The australian dollar against the yen went from 104 yen to 57 yen in a short period of time) is having on the financial perfomance of Japanese export companies like Nintendo and Sony.

Profit margins are being slashed!!!

No it only shows that the Forbes article had absolutely no clue what they were talking about and you shouldn't buy it just, because it said so. I don't think Forbes had reported anything about 50$ profit before and that it is now cutted. I think this is their first and badly flawed analysis. Usually the high strength of the currency hurts export, because it makes the exported product more expensive and less demanded, however Wii is currently shipping more units than ever before.

Explain to me how the strong yen has hurt Nintendo so far?
 
Don't try to fix what isn't broken.

Honestly, as a gamer, I don't even want good 3rd party games to be developed for the Wii. I would much much rather they continue to be made exclusively for the HD consoles. Every dollar spent on Wii development/marketing by a 3rd party is a dollar that is wasted on me.

I have a Wii and pretty much only bought it to play Nintendo exclusives like Mario Galaxy. And coincidently, the exclusive Nintendo games are precisely what the casual gamers are buying it for too. And they are making truck loads of money with this strategy. So why are there so many pundits trying to "fix" Nintendo.

Pretty much.

And the Wii has more shovelware than anybody, yet it sells greatly.

I have come to realize all who like hardcore games will by definition own a Xbox 360 or PS3.

Therefore there is no point to developing them on Wii.
 
No it only shows that the Forbes article had absolutely no clue what they were talking about and you shouldn't buy it just, because it said so. I don't think Forbes had reported anything about 50$ profit before and that it is now cutted. I think this is their first and badly flawed analysis. Usually the high strength of the currency hurts export, because it makes the exported product more expensive and less demanded, however Wii is currently shipping more units than ever before.

Explain to me how the strong yen has hurt Nintendo so far?

Nintendo is a japanese company so they report their earnings in Yen. However the bulk of their income comes from foreign markets like America, Europe, Britain, Australia etc

So the sudden unwinding of the carry trade means that profits are slashed when these foreign currencies are converted back to Yen. The british and australian currency especially has fallen pretty drastically against the yen

Thats the point I'm making with the profit margin of the Wii console. Forbes are reporting it as $6 bucks.........but before the crisis I remember reading an article (not forbes) which quoted a japanese analyst as estimating a $50 profit margin.
 
Nintendo is a japanese company so they report their earnings in Yen. However the bulk of their income comes from foreign markets like America, Europe, Britain, Australia etc.

So the sudden unwinding of the carry trade means that profits are slashed when these foreign currencies are converted back to Yen. The british and australian currency especially has fallen pretty drastically against the yen.

Yeah it seems Nintendo does mainly use local currencies in their foreign trade. I wasn't aware of that.

Thats the point I'm making with the profit margin of the Wii console. Forbes are reporting it as $6 bucks.........but before the crisis I remember reading an article (not forbes) which quoted a japanese analyst as estimating a $50 profit margin.

Yes, but those are two different analysis and the $6 figure just doesn't make sense, when you look at what the Wii has inside.
 
Yes, but those are two different analysis and the $6 figure just doesn't make sense, when you look at what the Wii has inside.

Lets assume Nintendo was making a US$50 profit margin a year ago when the american dollar received 111 yen.

In that time the retail price of the Wii has not changed....it is still US $250

However now the american dollar only gets 92 Yen


so a year ago, Nintendo was getting 27750 Yen with a profit margin of 5550 Yen.

Now Nintendo is only receiving 23000 yen for the same product......just due to the strong yen.

ie: a 4750 yen shortfall.

So to calculate a reduced profit margin due to currency fluctuation

(5550 - 4750) divided by 5550 = 0.144

0.144 multiplied by 50 dollars = 7.2 dollars.....which is close enough to the Forbes estimate to make it a significant source for the Wii's profit margin.

but of course only Nintendo knows the true situation and we're all chasing our tails trying to guess what the real profit margin is on the Wii.
 
Lets assume Nintendo was making a US$50 profit margin a year ago when the american dollar received 111 yen.

In that time the retail price of the Wii has not changed....it is still US $250

However now the american dollar only gets 92 Yen


so a year ago, Nintendo was getting 27750 Yen with a profit margin of 5550 Yen.

Now Nintendo is only receiving 23000 yen for the same product......just due to the strong yen.

ie: a 4750 yen shortfall.

So to calculate a reduced profit margin due to currency fluctuation

(5550 - 4750) divided by 5550 = 0.144

0.144 multiplied by 50 dollars = 7.2 dollars.....which is close enough to the Forbes estimate to make it a significant source for the Wii's profit margin.

but of course only Nintendo knows the true situation and we're all chasing our tails trying to guess what the real profit margin is on the Wii.

Well first of all that 50$ from year ago, sounds small also, and in your calculation it is assumed that the production costs of the Wii have remained the same, eventhough it is for certain that they are now less due to higher number of production, learning curve and advancements in processor manufacturing.

It's possible that the Forbes article uses some similar method of calculation what you presented, but it is false.
 
yup, true I haven't taken into account any cost reductions in manufacturing.....

but the point I'm really making is the the currency fluctuation has had a great effect on Nintendo's bottom line.

Thats why its important not to ignore a missed opportunity like luring 3rd party developers to your console.

Trying to created a new brand to promote good games and encouraging development on the Wii, would a cheaper option than making more first party games themselves.

Sony has the Platnium range to promote games that have sold well....... why can't Nintendo do the same except to promote third party games?
 
Nintendo probably doesnt even want to promote third party games.

Things are working on the Wii in such a way to really maximize their cash. They sell the same 3-4 (Wii fit, Wii play, Wii music, Mario Kart) titles that cost near nothing to develop over and over for years.
 
Nintendo probably doesnt even want to promote third party games.

Things are working on the Wii in such a way to really maximize their cash. They sell the same 3-4 (Wii fit, Wii play, Wii music, Mario Kart) titles that cost near nothing to develop over and over for years.

yup, no doubt that atm its pretty much hunky dory for Nintendo except for the annoying currency problems.

However I'm looking to the future....

a successful transition to a new console can be a very hard thing to do.

Nintendo loss marketshare with the release of the SNES and the N64 and was nearly made irrelevant during the gamecube era.

The only successful console transition in recent memory has been the PS1 - PS2 generation and really Sony was pretty lucky. Sega blew up spectacularly and left an 18 month window where Sony could thrive and fix up their manufacturing problems. Nintendo waited too long to have a powerful console that could be sold cheaply and Microsoft was the inexperienced newcomer with their own teething prolems.

In all likelihoods, the Wii will have an install base of 100 million + by 2011 and eventually reach saturation point like the DS is experiencing in Japan.

Traditionally this would usually entail a new console or a redesign.

IMO, this would the right time for Nintendo to phase out the old models and try to get Wii owners to upgrade to the much talked about WiiHD at the same pricepoint.

Thats why they shouldn't be resting on their laurels.

Nintendo has 2 or 3 good years to try their utmost to transform new consumers that are buying Wiifit or playing Wiisports into loyal repeat customers that will follow them into the transition of the new console.
 
There might be none. Everything that goes in the Wii is very mature, stable technology, not bleeding-edge expensive stuff.

Nintendo sold Gamecubes for 99$ few years back and probably not losing money on them. While not the same Wii does not really have much more in it. Even if the chips in Wii are old and small, they should be smaller that what they were at launch. Also I don't know how many gamecubes were manufactured near the end, but probably not more than few 100k in a month, whereas the manufacturing of Wii has been ramped up all the time and currently they make over 2 million of them in a month, that is bound to lower the unit costs for many reasons, for one when you apply fixed costs of the operation to the goods you produce, it really helps if you can divide the costs with a big number.

Basically I think it's crazy to assume that Nintendo wouldn't have benefitted from maturing manufacturing among other things.
 
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There might be none. Everything that goes in the Wii is very mature, stable technology, not bleeding-edge expensive stuff.

Moving to a smaller process will shave cost regardless of how stable and mature the technology if the tech is high volume like the Wii.
 
Moving to a smaller process will shave cost regardless of how stable and mature the technology if the tech is high volume like the Wii.

That'll depend on a few things considering just how tiny the main chips are already i.e. space for pads/interconnects. Broadway may likely be at the lower limit of scaling and making it any smaller than 20mm^2 may not be significant enough to matter. Hollywood's 24MB 1T SRAM ("Vegas") seems a likely candidate for scaling though.

At least on the manufacturing side, it may still be cheaper for them to use an older process (even 80nm, which is just an optical shrink of 90nm) as capacity for using newer processes will be more limited by comparison and not ideal for the high volume production that is necessary for Wii.
 
At least until someone proves that there's a market for upscale games on the Wii that's comparable to the same market on the HD consoles.

I think a big reason why upmarket games seem to sell better on HD consoles are the type of customers.

Avid Gamers are internet enabled and trawl messageboards and blogs looking for the latest news.

They are relatively cheap demographic to focus marketing on. All a company has to do release a pretty teaser video and it will spread like wildfire on the internet.

Look at how Konami broke the internet by releasing a "A Next Metal Gear is" cryptic puzzle which sent Neogaf absolutely batshit insane.

Like I mentioned before, The Wii audience doesn't read game blogs or trawl around message boards arguing with fanboys about which console has the bigger penis.
When making a purchasing decision they rely on traditional forms of advertising like television, word of mouth, the cover art and the display presence at the store.

Nintendo understand this and targets their key demographics accordingly. They have plenty of traditional advertising on television .....just about all day every day (not a week before a game is released).

From the top of my head, Nintendo ads that I can remember include

1)Wiisports - two well known australian olympians having fun and trying to one-up each other over a game of tennis

2)Wiifit - Olivia Newton John doing some yoga with some every-women

3)Brain Training - Olivia Newton John showing off her maths skills and helping a lady solve a problem

4)Mario Kart - Two people having fun using the MKwheel and playing the game

5)WiiMusic - A family playing musical instruments together

6)Animal Crossing - Spending time with your girlfriends and chatting on the Wiispeak.

Not to mention flogging the console on Oprah, Ellen and numerous number of talk shows.

Thats why I get bruises from the constant facepalms hearing companies like EA lament why they can't compete with Nintendo.

They don't understand the customer they're trying to sell the product to!!!

Obviously at the same time Nintendo could be doing alot more to help these clueless publishers out.....which is what this thread is about.
 
Thats why I get bruises from the constant facepalms hearing companies like EA lament why they can't compete with Nintendo.

They don't understand the customer they're trying to sell the product to!!!

The way Wii Music turned out, I suspect no one understands the Wii's market, including Nintendo. EA is actually trying pretty hard to get the Wii demographic, but the immediate reaction to something like 'All Play' is "LAZY!"
 
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