Nintendo GOing Forward.

[Entropy]

Instead of looking at one NPd result, look at the whole core console market for the past five generations. It's been steadily increasing, culminating in the fastest launch of a new generation ever, while Nintendo's share of that core market has been steadily decreasing.

Rangers wasn't looking at the month, he was looking at accumulated sales throughout this generation.
Your reasoning is exactly the one that Microsoft displayed when they predicted this generation to range from 400 million to one billion. The future will show who is right. I very much doubt that stationary game consoles is a growth market going forward. Unless, possibly, if you include GoogleTV, FireTV, AppleTV and similar platforms, but I don't think that is what you're arguing.

Yep. But had they launched with a decent product in 2012 capable of offering a next-gen experience (a high end 2012 console would probably be comparable to XB1 is my guess), they'd be the one with the install base, the library, and still be relevant for all cross-platform titles.

Possibly. But we'll never know that, will we?
Personally, I doubt that launching with a beefier GPU and a 128-bit GDDR5 interface would have made much of a difference to their fortunes, even though I would have preferred such a design myself. It's academic at this point, and there is no way to turn back the clock and redo the experiment.

Didn't work and likely wasn't going to because the Wii audience were mostly fad buyers. They bought Wii, played some waggle games, then shelved it and took to tapping games on their smartphones.

20/20 hindsight.
Doesn't mean that the decision didn't make sense at the time. It may still gain them some sales down the road as their library expands.

If we ignore Wii as an outlier, the console market has shown what it takes to be successful. The right product at the right price with all the games. Relying on just exclusives is a path doomed to failure. Nintendo got a lucky stay of execution. Maybe if their execution on the tablet idea wasn't quite so lame, they'd have managed a success, but Wii U's chances never looked that good. Prior to release we heard noises of Nintendo aiming to be more 3rd party friendly. Turns out that was bunk and they produced a platform pretty much irrelevant for third parties. I guess Nintendo's whole 3rd party strategy was to release the Wii U and hope it sold gangbusters, creating an audience of such size that devs wouldn't be able to ignore it.

First off, I think it would be ill advised to dismiss the Wii. It teaches some interesting things. Just because Nintendo hasn't been able to replicate that success with the WIiU, doesn't invalidate the Wii as an example.

Secondly, I don't think it was ever the idea to be on equal porting footing with the PS4 and XBOX One, rather the goal was to get ports from the PS360, and thus flesh out their library, particularly in the beginning. It was not a total failure either, and if the console had gone on to sell well after the initial launch, we might have seen more of it too.

It is telling that you still believe that stationary consoles is a growing market. If that's where you're coming from, then small wonder that you don't see Nintendos plans for the future as the best idea going forward.

 

[Shifty Geezer]

Secondly, I don't think it was ever the idea to be on equal porting footing with the PS4 and XBOX One, rather the goal was to get ports from the PS360, and thus flesh out their library, particularly in the beginning. It was not a total failure either, and if the console had gone on to sell well after the initial launch, we might have seen more of it too.

It was a daft strategy if so! Who releases a new console to get the old games from the past 5 years?? Likelihood is most people who wanted to play those games already bought a console to do it, or would buy a really cheap PS360 to play the back catalogue. Plus Nintendo didn't ensure those ports would happen.

It is telling that you still believe that stationary consoles is a growing market.

The games industry is increasing. The console as is may or may not grow over this next gen, but I've frequently been an advocate of its eventual demise and a move towards streamed content. But regardless, plot the number of consoles sold each generation start from the NES and you see growth, clearly. PS2 messes things up a little as it had such long legs, while Wii isn't a particularly good stat to include either, but it's impossible to interpret the upwards growth of the numbers with an obvious downturn in the console businesses future. Likewise, Nintendo's ever diminishing share of that market is also unavoidable.

If that's where you're coming from, then small wonder that you don't see Nintendos plans for the future as the best idea going forward.

What plans?! Is their intention to be a tiny niche company serving 10-15 million consumers every 5 years with a new, outdated box of electronics? If console gaming is a shrinking market as you suggest, where does Nintendo stand in that with the smallest share of a declining market?

Note I'm not against innovation, and that's probably a smart move (Nintendo being the first with an official VR console may do them well). I'm not saying a vanilla console with nothing special is the only path for Nintendo. In fact, I'm not even advocating hardware at all. Nintendo are seemingly in a no-win position. Placing themselves outside the traditional generation boundaries, they've isolated themselves and I'm not sure how they could ever get back in, short of an uber console. But I'm not advocating that. I'm mostly arguing against the ideas that Nintendo is doing okay and has options, rather than suggesting ways out. As I see it, best option for them and the industry is Nintendo to go 3rd party. Or do something incredibly un-Nintendo-y.

 

[Goodtwin]

I think Nintendo was unprepared for how quickly Sony and Microsoft would have new consoles on the market. They were probably expecting new consoles from them in 2014 and maybe even 2015, keeping the PS3 and 360 as the primary multi platform consoles for the majority of Wii U's life expectancy.

I too believe that Nintendo simply going with more powerful hardware wouldn't have changed its fortunes very much. Even if the Wii U were 2-3x more powerful, games like Mario 3D World and Mario Kart 8 would still look pretty much the same as they do now. Nintendo hasn't exactly been limited with their games by the hardware. Wii U has had the majority of third party multi plats for two straight years, and they have sold very poorly. 6 million Wii U gamers out there, and they aren't interested in the same types of games PS and XB gamers play. There are two console manufactures catering to the large third party publishers, Nintendo doing the same is hardly a surefire way to find success.

I think 2016 would be the perfect year to launch a new console/portable hybrid system. By then Nintendo could release a Gamepad like portable that can stream to the TV. By then Nintendo would be able to create a portable that outclasses the Wii U by a respectable margin, and can become a hybrid system that all Nintendo fans alike can get behind.

 

[Fourth Storm]

Insisting on hardware backwards compatibility is what made them design (and name) the WiiU they way they did. So far, it hasn't helped them in the marketplace - their Wii customers haven't been carried over to a significant extent. Yet, at least.
Given the cost and, even in the best case scenario, partial failure of backwards compatibility as a sales driver, I would assume that Nintendo feels free to make whatever choice suits them going forward. Their wording is vague enough to allow a wide span of interpretation.

It certainly won't hurt their next console to have a built in library of critically acclaimed games (if they continue their current streak) which only ~12m-15m people will have had access to prior. That and I don't think Nintendo's fans will forgive them if they reboot virtual console and eShop yet again. They claim the hardware and online infrastructure are in place on Wii U (I still think it reeks of bs when Iwata says they could not achieve this on prior systems because of some hardware/OS barriers) for an account based system to take over.

In regards to your back and forth with Shifty, I am not quite sure where I stand. Nintendo have stated that they are attempting to eek out a middle ground between performance and power/size. At this, I must say they have succeeded, as nomatter how old the IP inside their console, the system pushes graphics well beyond what we've seen on tablets and cell phones, paper gigaflops be damned. The question is whether there is a market for such a mid-tier device in the future. While I don't think the majority of Android/iOS apps are necessary on a TV, people will still need a way to watch their Netflix and Hulu (until every TV has them built in at least - I think we're getting there). The mass market rides on buzz, which Nintendo will need to find a way to create once again, and Mario ain't gonna do it for them against the likes of Amazon and Apple.

On the technical side, after a bit more pondering/looking into process nodes, I wonder if Nintendo might not go with an FD SOI solution for their SoC. This seems to be a cheap, low power solution and the 28nm node is looking to extend for years to come. Global Foundries could provide and they also look to be buying IBM's fab division, which fits Nintendo's agenda if they stay PPC. If this is the case, Nintendo might opt to go for something even less capable than Xbox One. That Nintendo see the gap between portable and home console narrowing indicates to me that this is a distinct possibility.

Please Ninty, for you next console drop hardware Backward Compatibility completely! You need third parties badly!

Nintendo do need third parties, but it's the Minecrafts and Angry Birds that will work for them more than Assassin's Creed and Call of Duty. A large library of games is useless if they are not the games that the audience is clamoring for. EA Sports titles pretty much failed on Wii, even though they existed. Those players want graphics and online features which Nintendo will never be able to match. Whether we like it or not, Nintendo thrive on being the big fish in their own small pond. Their consoles are primarily platforms to sell their own software. Having a large library of third party titles does give them some royalties, but more importantly, it increases the perceived value of the system so that more people buy the console and, subsequently, Nintendo games.

 

[Cjail]

I too believe that Nintendo simply going with more powerful hardware wouldn't have changed its fortunes very much. Even if the Wii U were 2-3x more powerful, games like Mario 3D World and Mario Kart 8 would still look pretty much the same as they do now. Nintendo hasn't exactly been limited with their games by the hardware. Wii U has had the majority of third party multi plats for two straight years, and they have sold very poorly. 6 million Wii U gamers out there, and they aren't interested in the same types of games PS and XB gamers play. There are two console manufactures catering to the large third party publishers, Nintendo doing the same is hardly a surefire way to find success.

I disagree.
If WiiU had been a proper next-gen console Ninty would have been in a much, much better situation.
Nity had the chance of head-start in the next-gen race and wasted it.
Now they can only arrive after Sony and MS.

 

[Shifty Geezer]

6 million Wii U gamers out there, and they aren't interested in the same types of games PS and XB gamers play. There are two console manufactures catering to the large third party publishers, Nintendo doing the same is hardly a surefire way to find success.

So Nintendo should just accept their niche market and shrink to fit? Give up on home consoles altogether? Create a handheld, and then a 'home console' that basically just gets those handheld games on the TV?

 

[Rangers]

Nintendo still have an option. Wait for new tech like HBM, and then release a powerful machine based on it. Provide easy dev support (x86) so their PS4/XB1 games port over with a few settings dialled up so it's the best machine for the current titles, providing a machine offering an entry-level experience when next-gen comes around (if there are consoles then), and offering best ever visuals on Nintendo's first-party and exclusives to appeal to the AAA core gamer.

The problem here is it would be what I would call a "tweener" console. You'd already have millions and millions of PS4 and Xbox One install base, so, millions of gamers already committed to those platforms. And the lead time on this would be in the years, when could we expect this machine, 2016? 2017? By the time this machine starts ramping up and gaining any traction, there'd be rumblings of much more powerful XB2 and PS5 nipping it's hype in the bud. Basically, exactly what happened to the Dreamcast (although even worse). Dreamcast was doing well, until oh, here comes PS2.

TBH I see very few real options at all for Nintendo. I still like my microconsole idea, but like the idea of streaming games, the problem is Nintendo's thinking just isn't very advanced, particularly in the areas of internet or online. These may or may not be workable ideas, but we can be almost certain Nintendo cant pull them off, where another company might.

Looks like they're just going to struggle along with Wii U in the console space for the forseeable future. 3DS as well looks to slowly drop off as phones squeeze that market. In the end though, I guess Nintendo just wont be generating enough revenue sooner or later, as a poor selling 3DS and poor selling Wii U are all they eventually have left. In this light it's no surprise they left E3, there's really no reason for that expense when the revenue isn't there to support it, have to cut costs where possible. Maybe they try to branch into health and leave gaming.

 

[Goodtwin]

So Nintendo should just accept their niche market and shrink to fit? Give up on home consoles altogether? Create a handheld, and then a 'home console' that basically just gets those handheld games on the TV?

In a way, yes, but your acting as if that is a small tiny little market. 40 million 3DS's say hi. Its not giving up on the home console market, but the reality is hardware is progressing to a point where a hybrid system makes sense. I believe that if an option existed to stream 3DS games to your TV, it would be a popular feature. I am thinking this hybrid system could easily be more popular than the 3DS, and could sell in the 50-60 million units range. Hardly niche.

 

[Cjail]

Tablet and mobile are more popular then 3DS already.

 

[Goodtwin]

Tablet and mobile are more popular then 3DS already.

Yes, but that's not where the majority of gaming revenue comes from. Mobile and tablet are more popular than any dedicated gaming device, what's your point? Seriously, I mean no disrespect in my question, I just don't see how its relevant to Nintendo's business model.

 

[Shifty Geezer]

40 million 3DS's say hi.

What will their next handheld sales be like? 40 million? Or more like 20 million thanks to mobile? What if it's ten million, spread over 5 years of sales? What it won't be, looking at the evidence at hand, is more than 40 million. Nintendo's market isn't growing - it's shrinking. And that isn't an end to the problem, because sooner or later investors are bound to respond and realise Nintendo isn't where the money's at. The moment they do their vulture thing, Nintendo's financial position will take a beating leaving them in a weaker position to launch a new strategy.

Yes, but that's not where the majority of gaming revenue comes from. Mobile and tablet are more popular than any dedicated gaming device, what's your point? Seriously, I mean no disrespect in my question, I just don't see how its relevant to Nintendo's business model.

Nintendo have lost core gamers to rival machines. They'll now lose casual handheld gamers to mobile. They're being squeezed from all directions and don't have a clear strategy. Carrying on as is means they'll eventually get squeezed into nothingness. Or maybe reduce to a smallish firm living of 10-20 million loyal handheld fans for decades.

 

[Exophase]

What will their next handheld sales be like? 40 million? Or more like 20 million thanks to mobile? What if it's ten million, spread over 5 years of sales? What it won't be, looking at the evidence at hand, is more than 40 million. Nintendo's market isn't growing - it's shrinking. And that isn't an end to the problem, because sooner or later investors are bound to respond and realise Nintendo isn't where the money's at. The moment they do their vulture thing, Nintendo's financial position will take a beating leaving them in a weaker position to launch a new strategy.

You talk as if no more 3DSes will ever be sold even though it's only been out 3.25 years (which is more like 45m than 40m). For comparison, DS sold 66m by the 39 month mark, then went on to sell over 150m. Now I'm not saying 3DS sales will see the better part of their growth after this point like DS did, but it seems extreme to say that it's certain that a handheld after 3DS would not to sell more than 40m in its lifetime. There isn't any real evidence to suggest that.

 

[Shifty Geezer]

Fair point, it's still selling. However, aren't its sales declining? Handhelds are hardly a strong growth industry in this age of smartphones.

 

[Exophase]

Fair point, it's still selling. However, aren't its sales declining? Handhelds are hardly a strong growth industry in this age of smartphones.

Yes, and its sales have been coming in well below Nintendo's projections. Still, I have pretty high confidence that it'll top out at least clearing 70m, unless Nintendo replaces it with something else pretty soon.

 

[orangpelupa]

also if they lower the 3ds price again, something like 3DS -> 2DS price, and 2DS -> even lower.

but maybe Nintendo really cant lower price. Due to supply and design constrain? Its only they that use stereo low-res display, only they use PICA 2000 gpu, etc..
its not like oculus rift that can use screen from phones and benefit from advancements and price drops in phone tech

 

[Goodtwin]

@shifty

Just to be clear, yes, I do agree that Nintendo's marketshare potential for its next plaform will be smaller thanks to the things you have mentioned, but I still think Nintendo would be better off financially staying in the hardware market, even if their market potential is capped around 50 million units. The market for desktop PC's is shrinking thanks to smart phones and tablets, but that doesnt mean Microsoft should stop seeing desktop PC's as a viable product in the market, it just cant expect to sell as many as they once did. Nintendo has positioned itself into a more niche market, but niche markets, although small, can still be very profitable. I work in the HVAC/R business, and although Geothermal is a niche market compared to the traditional Air Conditioning market, its very profitable for those that have embraced the product. Sony and Microsoft have embraced the dude bro gamer segment, and Nintendo releasing a me too product isnt going to suddenly sway all those gamers from the PS and XB to a Nintendo platform.

 

[liolio]

Well it is relevant as people play on their phones and tablets and the mobile (/Android experience) is only to get better.

I don't know if you guys followed that Google I/O event yesterday but damned that was dense.
They announced many things including things that would meanly pressure the handheld+microconsole approach.
Multiplayer with one playing on a phone, another on a tablet, another on the Tv and others on the network should happen this fall.

If NIntendo has something ready by 2016, Android TV will celebrate its 3rd birthday when Nintendo new systems will celebrate their first.

I wonder if that is workable at this point, I wonder where Google will be at that point.
Google is moving really fast, too fast for Apple and MSFT it seems. The density of yesterday presentation impressed me, so many advancements, on all (relevant for Google) fronts.
By the same timeline Windows 9 should be there too.
Nintendo would really need to pull something impressive at a low price. I've seen no sign of a reorg of a massive scale to get up to speed.

Speaking of the 3ds market size, with the different models it is tough to know the actual user base, the number of sold devices used to be more relevant as I believe NIntendo used to do more money out of the hardware, now they are mostly left with games.
Ultimately it seems that the system is not making enough money (and triggered losses at launch).

So clearly the competition is relevant even if not completely direct type of competition, we speak a niche which volume and profitability seems to go down, that limits the risks and investments one can reasonably on such a market.
The "other side" has volume and is more profitable.

Edit:
I slept on that post lol, the post I answered is actually nowhere near mine.

 

[Exophase]

Its only they that use stereo low-res display, only they use PICA 2000 gpu, etc..

They license the GPU, there's no supply constraint in IP, and they probably negotiated the costs of a very long term licensing contract before they made their final decision to use the part. So I doubt that DMP is charging them an amount that isn't competitive, maybe tens of cents per unit.

The 3D display on the other hand could be a big cost problem. I bet they're kicking themselves over this one. The $40 difference between 2DS and 3DS pricing is no joke. Nintendo keeps making these costly interface changes that they're then stuck with until the end of time because of their backwards compatibility policy. Just imagine every Nintendo handheld from here on out needing two screens with resistive touch and 3D...

I also think they could be paying more than they need to using a Fujitsu process that's far from leading edge, along with exotic Fujitsu FCRAM.

 

[Grall]

They obviously don't NEED either 3D (because of the 3D effect slider which can be set to zero, and because of the 2DS as well now), and they obviously don't NEED resistive touch either. How the touch input is generated is irrelevant from a software standpoint, it could just as well be capacitive on a future handheld (we can be certain this will be the case), and a 3DS game running in emulation mode would be absolutely none the wiser...

 

[wco81]

Well Rys and I both have a Wii U and love it...

But yes, tech hungry kids want latest/greatest hardware to run the same game as on a PC...


I'm still looking forward to an hybrid home server console with mobile consoles as pads.
Doesn't need to be extra powerful, but something akin to the Vita + PS4/XBone could be nice in a few years.

Shortening the Wii U lifespan would be a very bad commercial move, customers aren't likely to be happy about it, and it's best to keep your customers happy rather than try to appeal to people who you hope will become your customers...

Honestly, who here would buy a Nintendo console if they announced something akin to the XBone/PS4 for christmas ?

If they updated the components to give it more power as well as better components for the WiiU Pad, like a better screen with capacitive multitouch, it would be a more attractive product to many who've bought PS4/X1.