@MirkoS77 said:
Nintendo is losing money precisely because it has been poor with spending it. They are incurring these massive losses because they chose not to invest in areas of their business years ago that would now be benefiting. They didn't invest in expansion of their studios when they were sitting high on the Wii's success, only after things started going downhill did they realize and then do this. They didn't overhaul their online. They didn't (and still) don't invest enough in marketing.
Why do you think they have been losing money as they are? Nintendo had that immense bankroll from the Wii days, and at the time they did absolutely NOTHING with it, consequently they've lost hundreds upon hundreds upon hundreds of millions with no end in sight. And you're going to attempt to convince me that's well managed? Honestly?
I suppose it could be argued that Nintendo is fiscally conservative because it barely spends it. But thing being, they are a business. Businesses see and invest at the proper time so as to be ready for the future. Nintendo has shown to be completely reactive and not proactive in this sense, and that is anything but good management. It is fiscally irresponsible as a business not to spend where it is most needed at the time it is needed. Context is irrelevant here. We are speaking on current management that has been this boneheaded, because from your argument, that's the management they'd have if they go third party.
Nintendo has lost money for three years. Yes, that's pretty bad, but it has also never lost money for the 124 years it's been around before that. Currently, as it stands, with the Wii U and 3DS being albatrosses around their necks, just poorly designed and thought out machines where the value provided to the customer:cost of manufacturing ratio is too lopsided, they cannot cut down on their losses even if they wanted to.
That is what it comes down to- with the Wii U, Nintendo cannot abandon the machine right now, that would be disastrous. They have to keep making it, even though it provides littles to no value to the mainstream consumer. That said, it is still extremely expensive to make and manufacture, and each unit sold is a hit to their financials.
I will agree with your last point, however- Nintendo, in the last ten years, has shown a shocking aversion to reading market trends, and then try to beat them before they get there. 'Skate where the puck will be, not where it's been.' That's the best strategy for a smart company, and Nintendo is always trying to chase the puck to where it has been, always a few years too late. So I'll agree they never invest in the future, they're too busy catching up with standards that we've had since 2006. And that is precisely why I think it is so important for them to start the transition to third party business now- not only do they beat the rest of the industry to the transition (and make no mistake, the entire industry will inevitably eventually transition to the third party business model, Xbox and PlayStation included), but also because as a software manufacturer, given that Nintendo's games are already excellent, they won't have to worry about making consoles where they are scrambling to keep up with the demands of a market that simply moves too fast.
@mario-galaxys said:
There is a compelling case for the console makers to go third party for what is the point of home consoles if they are always underpowered compared to the PC?
Happily for you, I specifically outline in the OP that all console manufacturers will have to transition to third party sooner or later.
I just think it is in Nintendo's best interests to do it now.
@Sphire said:
Well, I've been posed the question before, so I've thought about it some. If they put Fire Emblem on PC, I'd very, very likely get it. I don't know about really old titles, I feel like there needs to be something rather new, to best gauge response. I guess they could use old titles to test out an online store like you were suggesting, but I think something from the Wii U generation would still be needed. Heck, it might mean they sell more Wii Us.
Potentially, but I am also being realistic here- this is a company that is more allergic to the idea of putting its software on hardware other than its own than Apple is (at least Apple puts Safari and iTunes on Windows, for example). Whereas the best case scenario would be Nintendo putting something like a new Fire Emblem, or Advance Wars, or an Animal Crossing on PC to gauge market response, it's also not likely to happen, unfortunately. The next best thing in that instance would be to put up a slightly touched up, optimized version of a high profile older game (such as maybe Ocarina of Time or Star Fox 64).
@Lulu_Lulu said:
If Nintendo dies... Gameplay Dies ! We sure as well can't depend on Sony and Microsoft to focus on gameplay.
Who said anything about Nintendo dying?
@santoron said:
Excellent read. While I could quibble with a point or two (and probably will down the line ;P ) there's no reason here, because I agree completely with the main point. It's a position that I've grown to (and not lightly) over the last year, but your post still gave me new food for thought.
This transition is inevitable for Nintendo. It is absolutely going to happen, in time. The biggest questions remaining are:
Will Nintendo make the move sooner from a position of strength, or later when their hands are tied?
and
Can the shareholders and the board find a CEO that can steer the transition in the best way possible?
At this point it's clear Nintendo will be given another round of hardware before the proverbial axe falls, but the handwriting is on the wall. It's a move that not only makes far too much business sense to ignore, but has also entered mainstream discourse. Once you have a profitable idea that keeps being publicly tossed about, you can't ignore it forever (inb4 FFVII remake).
I believe going another round is a mistake that will drain Nintendo's resources needlessly, but the last vote showed me the shareholders haven't "connected all the dots" yet on what needs to happen (or fear my question #2). Even if that were to change soon, I believe Nintendo will already be so heavily invested in new hardware (and games supporting the new hardware) that they'll feel compelled to roll the dice a last time. Another "Wii-like" success will probably stave off the inevitable another gen. Even though the business case still would clearly favor 3rd party, nobody quits while the press is calling them a "winner". But I don't think it's mean spirited to say I find the chances of another Nintendo install base remotely approaching that of the Wii/DS period to be slim.
The CEO question is the more vexing issue. To get Nintendo to where it should be on the other side of this transition you need Leadership that realizes the opportunity that this move provides but isn't tempted by some of the short term exploitation schemes being bandied about.
Someone that recognizes and values the creative culture that makes Nintendo the unique company it is, but isn't so entrenched in Nintendo's corporate culture that they make personnel decisions based on company politics and loyalty instead of on merit and fit.
Someone who has both the business acumen to handle the logistics of such an undertaking, and the charisma and outright showmanship to successfully frame it as a positive step forward and a result of Nintendo's success when both employees and the loyal Nintendo base will instinctively think of it as a step backward and an admission of failure or defeat.
Obviously Iwata isn't the guy. If Nintendo has someone worthy in upper management, I don't know of them. Of course moving outside of the company for a new CEO might be even less likely to present a candidate with all these attributes. But new leadership is paramount. Not finding the perfect CEO is understandable. It's almost impossible to envision the perfect person, let alone find them in the flesh. Only allowing the status quo to continue is unforgivable.
Sticking around for one more generation, while undesirable from the point of view of trying to get a head start, might still be a necessary idea if they decide they want to be in a more secure position, financially speaking, before they make such a dramatic change. So if they can make something that won't be as much of a market disaster as the Wii U was, and shore up their financials, and then make the leap to software, that might be a better idea for them (note, I don't envision this next platform to be a DS/Wii level success- just something between N64 and SNES, where it's successful enough to earn them some money. not successful enough to where the question of continuing hardware manufacture is really viable).
Anything beyond that though? That is disaster, right there. Two hardware cycles means we are looking at a minimum period of ten years, and it will be too late by then. Again, I need to point out that Nintendo is a company that has:
- Never developed for an x86 architecture
- Never developed for a system more powerful than the Wii U
- Does not have a conception of proper online framework and infrastructure
- Talented as it is, struggled with HD development after the move to it occurred 6 years later for them than the rest of the industry (i.e. they had six years to learn from everyone else's mistakes, and they didn't)
- And this is a good thing, but might be problematic here, insists on shipping nothing less than what it thinks is a perfect product, at least when it comes to games.
I am sure the issues here are immediately apparent- Nintendo will need extra time when it makes the transition, or the rest of the industry will murder it. So, with a 5-10 year head start, I fully anticipate Nintendo to have adjusted to PC game development by the time the other companies have also transitioned to this entirely third party model. It will take Nintendo a few years to make the transition fully- in this period, we might either not see too many new products from them, instead seeing only enhanced re-releases of their existing products, or their new games might be a step down from the highs they have achieved on the Wii U and 3DS, but it is necessary to lose the battle if they want to win the war, This is a sacrifice of a few years to secure their future. I think it is a fair trade off, and one that needs to be made.
As for the CEO question, I do not know what to say here. I guess Iwata technically could lead the charge, but he is, as you said, too entrenched in the company's corporate structure to really make a move like that.
@caryslan2 said:
As long as Nintendo has their handhelds, what incentive do they have to go third-party? The 3DS family has sold 45 million units so far, and the 3DS is the top selling system in Japan and doing pretty well all over the world
What Nintendo needs to do is leave the home console market to Sony and Microsoft. Let those two fight it out over that market. Nintendo needs to focus their efforts on their handheld line , put out a killer handheld and market it as the best way to play portable gaming. Yes, mobile gaming will be there, but 45 million in a market that people said was dead a couple of years ago is not bad.
In fact, the only reason why the 3DS' sales have fallen this year is because the lineup is not as strong as it was in 2013 and Nintendo is diverting resources to the Wii U. If the 3DS has all of Nintendo's focus, then it could be selling just as good as it did last year. Last year the 3DS has games that were system sellers, something that it is lacking in 2014.
Nintendo needs to walk away from home consoles, its a market they can't compete in. Focus on handhelds and portable gaming. The 3DS has made money for Nintendo, it has sold well. Why walk away from that? 45 million and the console is not even half-way through its lifespan.
Well, there are two incentives:
- The handheld market is contracting and will soon be dead: note that the 3DS is not just failing to meet the sales of the DS- that was to be expected, the DS was a monster- but also every other successful handheld ever, including the Gameboy/Color, Gameboy Advance, and even the PSP. The demand for dedicated handheld devices is falling, and Nintendo will soon be left dominating a niche market of maybe 10-20 million users, what good is that? Even their consoles sell that much.
- Their handhelds themselves are becoming an undesirable and unviable proposition from a development perspective. Note that Nintendo handhelds have always been known to marshall incredible third party support, and yet the 3DS, while still good on that front, is shockingly lacking in that area. Most people have jumped ship, to iOS and Android, as distasteful to you as it may seem, the market has made its will known, the transition has occurred, and its after effects will be continued to be felt over the next few years as the handheld market continues to contract further.
Handhelds will not be a viable hardware business within the next decade. Neither will consoles, but as far as Nintendo is concerned, they already aren't. The best thing Nintendo can do here, for a change, is to make a forward thinking move and just make the transition.
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