NPD April 2008 (Post #16)

[RancidLunchmeat]

It seems to me that MS and Sony were beaten this gen by a competitor that does not compete with them... Or at least does not compete at all fronts... .

That's the key, and it's why Dobwal's continued insistence on the failure of the Sony & MS business model isn't correct.

MS and Sony aren't selling hardware at a loss intending to recover the losses and profit based on software sales.

MS is adding digital distribution to the mix and Sony added physical distribution. The Wii doesn't have the hardware capability to do either of those things.

In fact, I'd go so far as to say that Nintendo is the one who either needs to reevaluate their business model for the next generation, or gamble on their current model being sustainable and repeatable why Sony and MS benefit from additional established revenue sources.

Additionally, at some point, Nintendo's current business plan (cheap, immediately profitable low-powered hardware), will start to eat it's own and compete more heavily with their own handheld market than with the console market.

 

[dobwal]

I never quite understood the appeal of the wii...

I never quite understood the appeal of crappy games such as Pirates of the Caribbean or Shrek, but crappy tie in movie games tend to end up in the annual top ten titles based off software sales. Who tends to purchase these types of software? Parents.

There are alot of pre teen/teen gamers who's source of games come directly from their parents. The Wii is the perfect alternative for this group in comparision to the 360/PS3 who are marketed to young adults with games based on very mature themes. The Wii marketing is centered around fun for all ages and offers a large quantity of quality games based on that theme.

I think a lot of us has bought into the belief that the market is mostly populated by young adult males that hunger for Halo, GT, GTA, GeoW, GOW, FF, Madden, Metroid and Zelda. But the market is very diverse and young adult males, while well represented and this core group buys more games than anybody, aren't the only people gaming. Barely any of the elite franchises has an attached rate above 10% which probably means 60%-70% of the market doesn't own Halo, COD4, AC, GeoW, Madden or GTA4. Also, this would also bare true for last gen with those respective franchises.

The Wii is more successful because it has more widespread market appeal than the 360 and PS3 who's narrow focus and has proven to be a liability this generation.

 

[Scott_Arm]

What if they are of equal importance?

A comparison can be made to books. Some people just read books for the story alone, and don't really care how this story is delivered. Some people read books for the quality of the writing as well of the story. I fall into the latter here, games with terrific graphics are simply more immersive to me.

There are obviously ways to get around this on the Wii, and that's to stylize games heavily. MadWorld looks fantastic, for instance. The problem I have is the VAST majority of Wii games just end up looking like dated console or PC games, and to me it's the equivalent of reading a book written on a 8th grade English level instead one written on a university-level.

That analogy doesn't really work. Is the quality of the writing the graphics or the gameplay or both?

I've played through many games with poor graphics because the gameplay was fantastic. I've never ever played through a game that had poor or bad gameplay just because of the graphics. You look at the graphics for an hour or so to see what the deal is and then you quit.

I agree that great graphics can help a game immensely, but gameplay can overcome poor graphics, where good graphics do not overcome poor gameplay.

 

[Scott_Arm]

That's the key, and it's why Dobwal's continued insistence on the failure of the Sony & MS business model isn't correct.

MS and Sony aren't selling hardware at a loss intending to recover the losses and profit based on software sales.

MS is adding digital distribution to the mix and Sony added physical distribution. The Wii doesn't have the hardware capability to do either of those things.

In fact, I'd go so far as to say that Nintendo is the one who either needs to reevaluate their business model for the next generation, or gamble on their current model being sustainable and repeatable why Sony and MS benefit from additional established revenue sources.

Additionally, at some point, Nintendo's current business plan (cheap, immediately profitable low-powered hardware), will start to eat it's own and compete more heavily with their own handheld market than with the console market.

PS3 and 360 are in the negative right now, regardless of Microsofts and Sony's plans for distribution. Wii is reaping truckloads of cash. By the time next-gen rolls around Nintendo would be able to add a Bluray drive cheaply, if they chose to. It's a non-issue. The Wii brand will be strong and they will have opportunities to push digital distribution if they want, but I doubt they will. They'll stick to games and leave the digital distribution(for movies/tv) to your cable/satellite provider. They're already doing digital distribution for games with Wii Ware. They'll be in a good position next-gen to have a device with more storage capacity for larger games. They'll provide unique experiences on their console vs handheld so that they don't poach sales from each other, though all game machines do to a certain extent already. That and they'll probably try to make extend interoperability between the two to encourage people to have both. I think all three companies are in a good position, but Nintendo is obviously making the most money, which is never a bad thing.

 

[RancidLunchmeat]

So it's your opinion that Nintendo intends to follow its current strategy of pigeon holing itself as strictly a low cost gaming device.

And that's fine. But neither Sony nor MS have that goal and are eying revenue streams far greater than simply hardware and software profits.

I also don't see have N can have it both ways. They have significantly lower cost hardware (which is profitable) because that hardware has significantly lower capabilities. Capabilities that are often high-lighted through graphics, but extend far beyond that.

MS and Sony didn't just make high-powered consoles so they could have the most flash. They made high powered consoles because they had to in order to have the additional capabilities.

If MS isn't profitable already, they will be very soon and probably would have already been profitable if not for their manufacturing problems. So their business plan appears remarkably successful. An error in execution doesn't mean the plan was a failure.

Sony should be profitable by the end of this generation as well. Especially if the impact of Cell and BR are ever properly considered.

The fact that N might be more profitable doesn't mean that MS and Sony weren't successful in their own rights. Especially when you consider how very difficult it is to measure things like the establishment of digital distribution (or breaking down the psychological barrier to pay by click), and the $ impact of establishing BR as the successor to DVD.

Bottom line is that interpretation of these numbers that results in a belief that MS and Sony would have been better off going the under-powered route, or that MS and Sony will look at these numbers and think they need to do that next generation ignores the basic reasons MS and Sony got into this market to begin with.

 

[Asher]

That analogy doesn't really work. Is the quality of the writing the graphics or the gameplay or both?

I've played through many games with poor graphics because the gameplay was fantastic. I've never ever played through a game that had poor or bad gameplay just because of the graphics. You look at the graphics for an hour or so to see what the deal is and then you quit.

I agree that great graphics can help a game immensely, but gameplay can overcome poor graphics, where good graphics do not overcome poor gameplay.

That's not the point at all, I never said you need either/or...you need both for most good games. The hardware on the 360/PS3 not only provide better graphics, but better gameplay that isn't possible on the Wii (look at LBP or Banjo Kazooie). The graphical fidelity on the "HD consoles" can only improve the overall experience. It's still possible to have good games on the Wii, but there is a limit to how good these games can be and limit as to the types of games that can exist due to the hardware.

I think the analogy holds perfectly well. I've never read a book with a good story that's been written poorly, and I've never read a book with a terrible story written well. I look for a balance of both -- the same is true with games.

 

[dobwal]

That's not the point at all, I never said you need either/or...you need both for most good games. The hardware on the 360/PS3 not only provide better graphics, but better gameplay that isn't possible on the Wii (look at LBP or Banjo Kazooie). The graphical fidelity on the "HD consoles" can only improve the overall experience. It's still possible to have good games on the Wii, but there is a limit to how good these games can be and limit as to the types of games that can exist due to the hardware.

I think the analogy holds perfectly well. I've never read a book with a good story that's been written poorly, and I've never read a book with a terrible story written well. I look for a balance of both -- the same is true with games.

When looking at the market as a whole, graphical fidelity is the most overrated feature of a console or any gaming platform for that matter.

Best Selling Console Software of 2007 in the US (NPD)
1. Halo 3 (Xbox 360) -- 4.82 million
2. Wii Play w/ remote (Wii) -- 4.12 million
3. Call of Duty 4: Modern Warfare (Xbox 360) -- 3.04 million
4. Guitar Hero III: Legends of Rock (PlayStation 2) -- 2.72 million
5. Super Mario Galaxy (Wii) -- 2.52 million
6. Pokemon Diamond (Nintendo DS) -- 2.48 million
7. Madden NFL 08 (PlayStation 2) -- 1.90 million
8. Guitar Hero 2 (PlayStation 2) -- 1.89 million
9. Assassin's Creed (Xbox 360) -- 1.87 million
10. Mario Party 8 (Wii) -- 1.82 million

Best Selling Software of 2006 in the US (NPD)
1.Madden NFL 07, PS2, EA—2.8 million
2.New Super Mario Bros., DS, Nintendo—2 million
3.Gears of War, Xbox 360, Microsoft—1.8 million
4.Kingdom Hearts II, PS2, Square Enix—1.7 million
5.Guitar Hero II, PS2, Activision—1.3 million
6.Final Fantasy XII, PS2, Square Enix—1.3 million
7.Brain Age: Train Your Brain, DS, Nintendo—1.1 million
8.Madden NFL 07, Xbox 360, EA—1.1 million
9.Ghost Recon: Advanced Warfighter, Xbox 360, Ubisoft—1 million
10.NCAA Football 07, PS2, EA—1 million

Top 10 PC Games of 2007 in US (Corrected)
1. World of Warcraft: The Burning Crusade – (Vivendi) – 2.25 million
2. World of Warcraft– (Vivendi) – 914K
3. The Sims 2 – (Electronic Arts) – 534K
4. The Sims 2 Seasons Expansion Pack – (Electronic Arts) – 433K
5. Call of Duty 4: Modern Warfare – (Activision) – 383K
6. Command & Conquer 3: Tiberium Wars – (Electronic Arts) – 350K
7. MS Age of Empires III – (Microsoft) – 313K
8. Sim City 4 - (Electronic Arts) – 294K
9. MS Flight Simulator X - (Microsoft) - 280K
10.The Sims 2: Bon Voyage Expansion Pack – (Electronic Arts) – 272K

Top 10 PC games of 2006 in US
1. World Of Warcraft, Vivendi
2. The Sims 2, EA
3. The Sims 2: Open For Business Expansion Pack, EA
4. Star Wars: Empire At War, LucasArts
5. The Sims 2 Pets Expansion Pack, EA
6. The Elder Scrolls IV: Oblivion, Take-Two
7. Age Of Empires III, Microsoft
8. The Sims 2 Family Fun Stuff Expansion Pack, EA
9. Civilization IV, Take-Two
10. The Sims 2 Nightlife Expansion Pack, EA

If graphics were so important to the general market, you would think they would coorelate well with software sales. They don't. Highend graphics games are well represented in the top 10 yearly but so are titles who most redeeming quality resolves around their gameplay and/or genre.

 

[Shifty Geezer]

Very hokey stat interpretation that. There are other factors like price, you know! Cheaper boxes tend to get more install base which means more sales. You really need to look up titles per platform - do people prefer to buy the best-looking options on their hardware, or do less-than-stellar visuals manage to top the sales charts?

 

[Scott_Arm]

The hardware on the 360/PS3 not only provide better graphics, but better gameplay that isn't possible on the Wii (look at LBP or Banjo Kazooie).

Sorry, but I just don't agree with that in terms of gameplay being better. Sure, the 360 and PS3 have more power available that could lead to some fairly complex gameplay elements. I'd say different rather than better. Sometimes the best games are very very simple. Look at how addictive a game like Geometry Wars is, or Tetris for that matter. You can make a fantastic game on a technically limited system. You can even rehash an old game like Contra on the DS, and it still holds up despite being a game from the 80s.

 

[Brodda Thep]

Sure, the 360 and PS3 have more power available that could lead to some fairly complex gameplay elements. I'd say different rather than better. Sometimes the best games are very very simple. Look at how addictive a game like Geometry Wars is, or Tetris for that matter. You can make a fantastic game on a technically limited system. You can even rehash an old game like Contra on the DS, and it still holds up despite being a game from the 80s.

Contra woudln't hold up on new consoles though. The gameplay is horrible.

And I would say that the game play possible on the Wii is a subset of what is possible on the Wii. (Though you would need an add on controller.)

I just find it funny that so many people automatically assume the gameplay on Wii is better just because the graphics are worse. The gameplay is pretty horrible on the Wii. I own one and I can't stand most of the games I have played. Why did I buy one? I love Mario, Zelda, and Metroid. But I actually feel ripped off. That hardware is not worth $250. You get far more value out of Xbox/PS3.

I am almost worried about the future of gaming. Everyone seems to think that Wii is opening up the market. But I almost wonder if people will get the Wii, try the games, be bored, and then think "This is all that gaming offers? I haven't been missing out on a thing." and then never try it again. I am probably being overly pessimistic here. But I bought my Wii in November and haven't turned it on this entire year.

 

[RancidLunchmeat]

I don't believe any of these consoles, even the Wii, has hit what would have been referred to last generation as 'the mainstream'.

Sure, the Wii is less expensive than the 360 or the PS3, but it is not only more expensive than the primary selling points that were established as 'mainstream' last generation, it is degrees of magnitude more expensive when you factor in the additional controller, the special 'gear' for things like Wii Fit, etc.

None of these consoles are selling to people that bought consoles last generation at the $199 to $149 price point. Those consoles were significantly less expensive to the consumer and they also had extremely large and varied catalogs by the time they hit those price points.

The Wii got a marked advantage over the PS3 and 360 because those people who wanted something 'new' could more easily afford the Wii. The Wii got a marked advantage because of its collection of IP and the uniqueness of the experience.

I don't think those things can be disputed or discounted.

But I also don't think that the facts demonstrate, let alone prove, that what was referred to as 'the mainstream' is purchasing the Wii this generation instead of the PS3 or 360.

I think by the time the 360 and PS3 are competing for that mainstream segment at the $199 and $149 price points, they will not only have a vastly superior library (in terms of raw numbers as well as diversity), they will also offer all the added benefits that were a result of their high initial price point. (Such as Live! and digital distributions, or BR). And I really don't think it will matter at what price the Wii drops to, there will be a point where it simply can't compete. Now, perhaps the Wii2 will be launched at the time, at a similar price point and will have those features, but I don't see that as a likely event.

I think Nintendo timed things very well, with a unique strategy that has clearly been extremely successful for them.

But I don't think Nintendo's success in being able to launch a profitable gaming system demonstrates in any way that there were inherent flaws in MS's or Sony's business model.

I still think the evidence is quite strong that if it weren't for the manufacturing issues with the 360, MS would already be raking in the money, proving their strategy. Similarly, when the PS3's exclusive IPs come to market and their price hits mainstream, they'll have difficulty keeping them on the shelves as well.

There comes a point where the price of a desk-top box that streams media content on demand into any household (the 360) and the price of a blu-ray player is going to be too good to pass up for the mainstream consumer. It won't matter how low the Wii is priced at that point, it simply doesn't have the features.

Of course, at this rate, everybody might already own a Wii by then. But how does that really impact the 360 or the PS3's bottom line?

Clearly, the only fear here is that developers will choose the cheaper route and start to ignore the 360 and the PS3 in order to sell more units at a lower profit to those that have the Wii.

I've seen no evidence of that happening. It looks to me like everybody involved in this generation is poised to be profitable and not only be profitable, but in the case of MS and Sony, also poised to cash in long-term on their current strategies.

 

[Scott_Arm]

I just find it funny that so many people automatically assume the gameplay on Wii is better just because the graphics are worse. The gameplay is pretty horrible on the Wii. I own one and I can't stand most of the games I have played. Why did I buy one? I love Mario, Zelda, and Metroid. But I actually feel ripped off. That hardware is not worth $250. You get far more value out of Xbox/PS3.

I don't think anyone has ever assumed that. They either like the gameplay or they don't, from having played it. None of the systems are inherintly poor at offering gameplay. It's simply a matter of what games are available. There are good games on every system, depending on what suits your tastes. Value is subjective. I know some people that bought Wiis and don't use them. I know some people that bought 360s and don't use them. Same for PS3. It's simply a matter of the games you want to play.

I am almost worried about the future of gaming. Everyone seems to think that Wii is opening up the market. But I almost wonder if people will get the Wii, try the games, be bored, and then think "This is all that gaming offers? I haven't been missing out on a thing." and then never try it again. I am probably being overly pessimistic here. But I bought my Wii in November and haven't turned it on this entire year.

Depends what they're looking for in a game. There will be some that feel exactly that. There will be others that get hooked. It's the same for any console/handheld in the history of gaming. I haven't used my Wii a ton this year either. I played No More Heroes, Pro Evolution Soccer 2008 and Super Smash Brothers Brawl. They're all good games (No More Heroes being more flawed than the others), but none of them are going to fall into my all-time lists. Hopefully the games that interest me will pick up. But I still think it was a good purchase. I've had quite a few games for it and gotten quite a bit of use out of it.

 

[joker454]

I think Nintendo timed things very well, with a unique strategy that has clearly been extremely successful for them.

Yup, big time. Wii is a huge hit with female gamers, an enormous segment worth billions that MS and Sony decided to mostly ignore. It's also a huge hit with parents buying a 'new' console for younger kids. Nintendo has pretty much locked those two markets down. My hats off to them, they have figured out how to sell Gamecubes at a 400% markup.

 

[RancidLunchmeat]

Exactly, Joker.

And just because I don't believe the Wii will have the traditional impact as 'market leader' that the PS1 and PS2 enjoyed in the past, doesn't mean that their success shouldn't be noted and celebrated.

The only questions at this point are the Wii's impact on future generations of gaming, and because neither MS or Sony had 'profitable gaming console' as their primary strategy, I don't really see how one significantly impacts the others.

 

[speedsix]

Just wanted to say that this is an absolutely terrific post. I've had a hard time trying to describe my own feelings towards the Wii. I can see Nintendo clearing house in NPD every month, but I find myself not caring at all. I've got a Wii, I bought into the hype somewhat, but it's the least used system of my three by a huge margin. The only game I'd say I truly enjoyed on it was Super Mario Galaxy. Smash Brothers just isn't the same now that I don't live in a dorm, Mario kart isn't the same now that I'm not a child, etc.

I don't want to rehash the "is the Wii in a different market?" argument, but in my mind it undoubtedly is -- and I'm not in that market.

I feel exactly the same and agree 100%. How can a system that's selling Wii Fit be in direct competition to the machines selling the GTAs and the Halos?? It's like putting the 360's sales up against Monopoly or Scabble. I really couldn't care less how many units Nintendo shift, good for them.

 

[Nesh]

Exactly, Joker.

And just because I don't believe the Wii will have the traditional impact as 'market leader' that the PS1 and PS2 enjoyed in the past, doesn't mean that their success shouldn't be noted and celebrated.

The only questions at this point are the Wii's impact on future generations of gaming, and because neither MS or Sony had 'profitable gaming console' as their primary strategy, I don't really see how one significantly impacts the others.

Yeah but their success is falsely compared and contrasted by many with MS and Sony's offerings as if it succeeded better on the same targeted markets.

They offer different experiences and target different segments. It is not like Nintendo provided a better overall experience and better overall quality gaming. It offered appropriate gaming to the ignored and more casual segments at extremely affordable prices. A fact that many do not want to accept and prefer to present Nintendo as a player who competed directly and outclassed Microsoft and Sony in the same areas.

Even the media compares Wii with its competitors as if they are the same kind of product and the console that took over the throne of the 1st place. Ist place in what when Wii offers different experience and targets different markets?

But this generation is much different than the old. It is not like the SNES vs MD, or Saturn vs PS vs N64 or PS2 vs XBOX vs GC.

This generation is wrong to talk about "1st 2nd 3rd place"

I think what Wii managed to do was to make clearer the different consumer segments in the gaming industry and target the ones that fitted better to its offerings.

If we want to talk about Wii's success we should define it accordingly and attribute it to the correct things.

 

[acaeus]

I don't think anyone has ever assumed that. They either like the gameplay or they don't, from having played it. None of the systems are inherintly poor at offering gameplay. It's simply a matter of what games are available. There are good games on every system, depending on what suits your tastes. Value is subjective. I know some people that bought Wiis and don't use them. I know some people that bought 360s and don't use them. Same for PS3. It's simply a matter of the games you want to play.

I do. It's really hard for me to believe that gameplay wouldn't lose focus if more resources were allocated for eye candy. Sure, we've got exceptions, huge games with huge budgets, but we call them AAA titles and they aren't that common.

Now, assuming the development budgets are fixed, not that large, and linked to the possible income from sales, it is not difficult to imagine resources can only be shifted, not added at whim.

 

[Scott_Arm]

I do. It's really hard for me to believe that gameplay wouldn't lose focus if more resources were allocated for eye candy. Sure, we've got exceptions, huge games with huge budgets, but we call them AAA titles and they aren't that common.

Now, assuming the development budgets are fixed, not that large, and linked to the possible income from sales, it is not difficult to imagine resources can only be shifted, not added at whim.

I think that's somewhat different than Brodda Thep was saying. I think he meant people assume the Wii has better gameplay than the 360 and PS3 because it doesn't have equivalent graphics. I don't think I've ever heard anyone say anything like that. I've heard them say the wii remote is better, or more interesting, for whatever reason, but I don't know anyone that wouldn't have been happy with better graphics on the Wii if it didn't cost them extra.

You're saying if the Wii budgets remained fixed, and they put more of that budget into the graphics, the games wouldn't be as good? I would probably agree with that argument for any of the three consoles.

 

[Asher]

Sorry, but I just don't agree with that in terms of gameplay being better. Sure, the 360 and PS3 have more power available that could lead to some fairly complex gameplay elements. I'd say different rather than better. Sometimes the best games are very very simple. Look at how addictive a game like Geometry Wars is, or Tetris for that matter. You can make a fantastic game on a technically limited system. You can even rehash an old game like Contra on the DS, and it still holds up despite being a game from the 80s.

The reason I used "better" instead of "different" is because those simplistic games that are undeniably fun are still possible on the "HD consoles", but they are better in that they have the capability to do something more as well.

 

[Scott_Arm]

The reason I used "better" instead of "different" is because those simplistic games that are undeniably fun are still possible on the "HD consoles", but they are better in that they have the capability to do something more as well.

I just think that fun is something that exists outside of the technology. It's the strange creative genius that some developers have and others don't. Technology allows for better sound, graphics and simulation, but I don't think it will necessarily make games any more fun to play. Maybe in theory you could say the HD consoles should have an edge, but in practice I don't think it is true. The human element is too large.

Gettin' a little too far off topic here ...