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Chittagong · Jun 29, 2005

Nintendo is taking a completely different strategic path from the competition. In fact, I believe Dyack is genuine here:

Q: The official PR line of why your company and Nintendo discontinued your relationship was "business is business", is that all there really is to it?

Dyack: You know, I spoke with Matt from IGN about it, but at the end of the day, Nintendo is going down a strategic path where we believe they want to make smaller, simpler games. But Silicon Knights is not built for smaller, simpler games. We love those guys but as much as we tried to come to a half-way point to make a Silicon Knights game that fits within a strategy that Nintendo wants, we just really couldnt do it. So its really strategic differences. The industry is massive, so we both could be right, but at the end of the day, we have to take the company in directions that we think will be successful for us, and that is the bottom line. So its pretty straight forward.

Many would love to see Nintendo create a kick ass Game Boy with a PSP quality screen and super processor, and a full next generation home entertainment system that would beat PS3. This isn't the path of profitability for Nintendo, however - I believe.

They might be on the wrong path for fanboys wishing to see them humiliate Sony on traditional turf, but they are on the correct path for the shareholders.

My interpretation of Nintendo's strategic thinking is:

1. THERE IS NO MONEY FOR #2 IN THE TRADITIONAL CONSOLE RACE
Nintendo has realized that in the high-spec hardware race the
- margins on hardware are incredibly small to negative
- first-party games are huge, 10-20M USD risks every time
- taking in account HW margin and 1st party risk, lifetime platform profitability will be achieved only by market leader
- Nintendo hasn't got in traditional terms an edge on Sony, so why waste cash trying like MS

2. SONY VS. MICROSOFT BATTLE WILL DRAIN THE MARKET FROM ANY PROFIT
With two resourceful companies fighting for number one spot, the market profitability will be destroyed. The following means will be used:
- Hardware pricing below profitability
- Cuts in third-party margins
- Excessive marketing campaigns

3. NINTENDO PROFITS BY CHANGING INTO A DIFFERENT MARKET SETTING
Nintendo DS is a manifestation of Nintendo's thinking - an affordable device that plays simple yet fun games, with low-spec components and day one profitability on HW.

4. USE THE NARROW YET TALENTED DEVELOPMENT BANDWIDTH WISELY
Nintendo's development and 2nd party management resources are very limited but extremely talented. Nintendo can maximize the benefit of them by using them to do a multitude of smaller projects. Nintendo DS software (in Japan) has shown the most astounding shift we've seen in 10 years towards entirely new types of content - simpler, shorter, more accessible titles. Key examples of very recent franchises are:
- Elektroplankton
- Nintendogs
- Brain Training for Adults
- Made in Wario
- Polarium
- Daikasso! Band Brothers
- Another Code
- Simple DS

5. CATER A LIMITED "BIG SCALE" OFFERING OF SURE HITS
Nintendo realizes that within the people who buy simple and fun devices there is some, albeit limited, appreciation for deeper and more immersive games. Hence, Nintendo keeps on bringing out a limited amount of big scale blockbusters, such as Zelda and Metroid.

6. CREATE NEW CHANNEL OF DISTRIBUTION TO OVERCOME RETAIL SHORTHAND
Nintendo has been experimenting on online distribution and DRM with iQue for some while. These learnings will be leveraged on Revolution and the back catalog.

7. TAKE HOME CONSOLE TO A SIMILAR ROUTE AS DS - NOT CUTTING EDGE BUT FUN
Everything we know about Revolution shows that it follows the DS example of innovating through simpler games and intuitive controls. Key factors for Revolution are
- Day 1 profitability on hardware due to lower spec components
- Deliver bare acceptable minimum to minimize cost, as with no HD
- Innovate on interface to create new types of games, the "revolution"
- Very easily accessible hardware that is easy to fire up for short gaming sessions

8. LEGITIMIZE NEW "SIMPLE GAMING" APPROACH WITH MARKET NEED
Nintendo's rhetoric has been for a long time that "games have become too complex" and "gamers have gotten bored". They key here, I believe, is that Nintendo believes that it cannot have a competitive edge on complex games in a big scale - their development pipeline doesn't scale to 10-20 games per year, nor does their 2nd party management capability.

The conclusions I would make at this point is that

- Expect difference between Revolution and PS3 / Xbox 360 reflect difference between PSP and DS
- Nintendo will not be doing high end multimedia devices
- Nintendo will not be doing "PSP killers" or "PS3 killers"
- Nintendo will do simple and affordable devices
- Microsoft and Sony will compete traditional market to zero profitability
- Nintendo will make a lot of money

The only things I can quite fit into my theory are

- online gaming
- Play-Yan and DVD compatibility

Agent Icebeezy · Jun 29, 2005

Chittagong said:
Nintendo is taking a completely different strategic path from the competition. In fact, I believe Dyack is genuine here:

Many would love to see Nintendo create a kick ass Game Boy with a PSP quality screen and super processor, and a full next generation home entertainment system that would beat PS3. This isn't the path of profitability for Nintendo, however - I believe.

They might be on the wrong path for fanboys wishing to see them humiliate Sony on traditional turf, but they are on the correct path for the shareholders.

My interpretation of Nintendo's strategic thinking is:

1. THERE IS NO MONEY FOR #2 IN THE TRADITIONAL CONSOLE RACE
Nintendo has realized that in the high-spec hardware race the
- margins on hardware are incredibly small to negative
- first-party games are huge, 10-20M USD risks every time
- taking in account HW margin and 1st party risk, lifetime platform profitability will be achieved only by market leader
- Nintendo hasn't got in traditional terms an edge on Sony, so why waste cash trying like MS

2. SONY VS. MICROSOFT BATTLE WILL DRAIN THE MARKET FROM ANY PROFIT
With two resourceful companies fighting for number one spot, the market profitability will be destroyed. The following means will be used:
- Hardware pricing below profitability
- Cuts in third-party margins
- Excessive marketing campaigns

3. NINTENDO PROFITS BY CHANGING INTO A DIFFERENT MARKET SETTING
Nintendo DS is a manifestation of Nintendo's thinking - an affordable device that plays simple yet fun games, with low-spec components and day one profitability on HW.

4. USE THE NARROW YET TALENTED DEVELOPMENT BANDWIDTH WISELY
Nintendo's development and 2nd party management resources are very limited but extremely talented. Nintendo can maximize the benefit of them by using them to do a multitude of smaller projects. Nintendo DS software (in Japan) has shown the most astounding shift we've seen in 10 years towards entirely new types of content - simpler, shorter, more accessible titles. Key examples of very recent franchises are:
- Elektroplankton
- Nintendogs
- Brain Training for Adults
- Made in Wario
- Polarium
- Daikasso! Band Brothers
- Another Code
- Simple DS

5. CATER A LIMITED "BIG SCALE" OFFERING OF SURE HITS
Nintendo realizes that within the people who buy simple and fun devices there is some, albeit limited, appreciation for deeper and more immersive games. Hence, Nintendo keeps on bringing out a limited amount of big scale blockbusters, such as Zelda and Metroid.

6. CREATE NEW CHANNEL OF DISTRIBUTION TO OVERCOME RETAIL SHORTHAND
Nintendo has been experimenting on online distribution and DRM with iQue for some while. These learnings will be leveraged on Revolution and the back catalog.

7. TAKE HOME CONSOLE TO A SIMILAR ROUTE AS DS - NOT CUTTING EDGE BUT FUN
Everything we know about Revolution shows that it follows the DS example of innovating through simpler games and intuitive controls. Key factors for Revolution are
- Day 1 profitability on hardware due to lower spec components
- Deliver bare acceptable minimum to minimize cost, as with no HD
- Innovate on interface to create new types of games, the "revolution"
- Very easily accessible hardware that is easy to fire up for short gaming sessions

8. LEGITIMIZE NEW "SIMPLE GAMING" APPROACH WITH MARKET NEED
Nintendo's rhetoric has been for a long time that "games have become too complex" and "gamers have gotten bored". They key here, I believe, is that Nintendo believes that it cannot have a competitive edge on complex games in a big scale - their development pipeline doesn't scale to 10-20 games per year, nor does their 2nd party management capability.

The conclusions I would make at this point is that

- Expect difference between Revolution and PS3 / Xbox 360 reflect difference between PSP and DS
- Nintendo will not be doing high end multimedia devices
- Nintendo will not be doing "PSP killers" or "PS3 killers"
- Nintendo will do simple and affordable devices
- Microsoft and Sony will compete traditional market to zero profitability
- Nintendo will make a lot of money

The only things I can quite fit into my theory are

- online gaming
- Play-Yan and DVD compatibility

This is coherent, more than likely, understandable, and great overall.
Realizes this is GAF, gets scared at the logic being tossed around.........

SantaC · Jun 29, 2005

fantastic post. I remember that you once was a pr person for Nintendo right?

monchi-kun · Jun 29, 2005

no expecations = no disapointments?

awesome strategy!

Tiktaalik · Jun 29, 2005

Sounds possible to me, although the thing is, simple games lend themselves quite well to the handheld platform, where people are playing in short bursts, but I don't know how well that style of play works with a console.

Chittagong · Jun 29, 2005

SantaCruZer said:
fantastic post. I remember that you once was a pr person for Nintendo right?

Yep, Club Nintendo. Not that I would have been privy to long-term strategy docs or such. But Nintendo was quite a mess back then, I must say.

First they got burnt in the high spec race with N64 (but neglected CD-ROM), then they got stuck between high-end and simple with GameCube and as a result failed to get a clear position in the minds of consumers (GameCube is the "not as good as Xbox or PS2 console", not the "simple and fun console with unique content"). Only Pokémon saved their ass.

Now I believe they are on the right track. Only thing that worries me is that they haven't been able to implement the same scale of change in US and Europe as in Japan - DS is much more here the "new Game Boy with some added wacky shit but worse than PSP gfx" than in Japan, where it's truly something different and unique.

SantaC · Jun 29, 2005

Chittagong said:
Yep, Club Nintendo. Not that I would have been privy to long-term strategy docs or such. But Nintendo was quite a mess back then, I must say.

First they got burnt in the high spec race with N64 (but neglected CD-ROM), then they got stuck between high-end and simple with GameCube and as a result failed to get a clear position in the minds of consumers (GameCube is the "not as good as Xbox or PS2 console", not the "simple and fun console with unique content"). Only Pokémon saved their ass.

Now I believe they are on the right track. Only thing that worries me is that they haven't been able to implement the same scale of change in US and Europe as in Japan - DS is much more here the "new Game Boy with some added wacky shit but worse than PSP gfx" than in Japan, where it's truly something different and unique.

Expect difference between Revolution and PS3 / Xbox 360 reflect difference between PSP and DS

Question is, will third parties port games to Revolution if it looks that much worse?

Kifimbo · Jun 29, 2005

Great synthesis.

Cheerilee · Jun 29, 2005

In fact, I believe Dyack is genuine here:

I believe he's being genuine about what he thinks, but I don't believe he has any inside info on Nintendo's current plans. In fact, I think he said that he doesn't know anything at all about the Revolution, except of course, that it looks sleek.

Mrbob · Jun 29, 2005

MS and Sony will drain the market to zero profitability? Ahahahaha. Decent analysis in some parts but too much hyperbole there.

Tony HoTT · Jun 29, 2005

It would have to look like Gamecube still if your going to make the comparison between DS vs. PSP and Xbox360 vs. Revo.

Chances are it's going to look a lot better than Gamecube games so I don't buy that the hardware will be that much weaker. It's completely counterproductive. I don't want to aim this at anyone in particular but a lot of people seem so unimpressed by the next-gen screenshots and video we have now that they must have convinced themselves the Revolution won't have better graphics than the Gamecube.

CrimsonSkies · Jun 29, 2005

If only some company would create a game controller that could save the industry.

cja · Jun 29, 2005

Every Revolution game announced so far is a big budget, human resource hog of a title and they are likely to have budgets in the range of $10-20m. It doesn't cost peanuts to employee the people at Retro, EAD or HAL.

Too much is being made of DS and lower resolutions on Revolution. Nintendo were doing exactly the same in 1989. The Game Boy was luddite compared with Game Gear and Lynx while the successor to the NES was to have an inferior graphics resolution to the Megadrive/Genesis. None of this stopped the SNES from being the most impressive hardware in the massmarket console space during the early nineties.

Chittagong · Jun 29, 2005

ruby_onix said:
I believe he's being genuine about what he thinks, but I don't believe he has any inside info on Nintendo's current plans. In fact, I think he said that he doesn't know anything at all about the Revolution, except of course, that it looks sleek.

Yep, that's what I meant. Nintendo sure hasn't let him into their current plans, but he does have a pretty good background for speculating.

Mrbob said:
MS and Sony will drain the market to zero profitability? Ahahahaha. Decent analysis in some parts but too much hyperbole there.

There isn't really a way to know at this point. It depends on how badly MS wants to buy marketshare and how keen Sony is to stick with it - and how much Sony can afford to pay in the battle.

My assumption is that seeing the current financial situation, Sony can't afford to take the bloodbath route but will instead surrender volunteerely a decent amount of market share until a balance is reaced. In this case, there will be profitability left.

The situation is very much like the cold war or the prisoner's dilemma. In the prisoner's dilemma there are two prisoners who have both the possibility of informing the cops about their buddy in an attempt to cut their sentence short. If both bet on being selfish and betraying the other, both loose and get long sentences. If only other betrays, the other looses and gets a long sentence and other one wins and walks. If neither betray each other, the overall result is the optimal - two short sentences in lack of evidence, but neither will reach their original aspiration - walking free.

radioheadrule83 · Jun 29, 2005

I was going to say something similar to Tony Hott..
the DS lacks some basic elements completely aside from polygon power that make many games look worse than PSP equivilents. Revolution will quite probably still have a lot of ATIs latest bells and whistles as far as 3d effects are concerned. Not even the potential advantages the other consoles could have over Rev in terms of resolution - that wouldn't even make this a worthy comparison. It's going to be far less discernable than the gulf between DS and PSP. Totally different products, totally different price ranges.

Nintendo won't commit to the idea of having the cheapest console even though affordability is their goal. They're not ripping out everything and having it function on tiny pulleys and levers - as much as some people want to believe it.

Good post Chittagong. I can very much see Nintendo rationalising it this way.
I don't know if they're right... or if there even is a right or wrong ..
just looking foreward to owning one.

Cold-Steel · Jun 29, 2005

Nintendo should merge with a larger Japanese company that would allow them to retain their independence but give them the cash flow to compete with Sony and Microsoft.

Mrbob · Jun 29, 2005

Chittagong said:
There isn't really a way to know at this point. It depends on how badly MS wants to buy marketshare and how keen Sony is to stick with it - and how much Sony can afford to pay in the battle.

My assumption is that seeing the current financial situation, Sony can't afford to take the bloodbath route but will instead surrender volunteerely a decent amount of market share until a balance is reaced. In this case, there will be profitability left.

The situation is very much like the cold war or the prisoner's dilemma. In the prisoner's dilemma there are two prisoners who have both the possibility of informing the cops about their buddy in an attempt to cut their sentence short. If both bet on being selfish and betraying the other, both loose and get long sentences. If only other betrays, the other looses and gets a long sentence and other one wins and walks. If neither betray each other, the overall result is the optimal - two short sentences in lack of evidence, but neither will reach their original aspiration - walking free.

Ummm, yeah.

Lets just say I disagree greatly. Heck, MS designed the Xbox 360 so they could have a better chance at making money! You must have missed some great Ballmar quotes. He is all about making a profit. Not sinking Xbox into another money draining pit.

Chittagong · Jun 29, 2005

Yep, I'm confident that Revolution will support OpenGL 2.0, new shaders and a great polygon and fill rate, so the DS vs. PSP comparison was not applicable in that sence. I would count on not being able to tell a big difference in graphics when playing on a SD screen.

Keep in mind, however, that the difference between DS and PSP is not only the processor, but the screen quality, the extensive media functionality, the excessive amount of interfaces, a next generation media format used. Nintendo designed it smart, Sony extreme.

Revolution is also a very efficient design. Revolution doesn't seem likely to have neither Bluray nor 20 GB HDD (512MB flash only), no Dolby Digital or HDMI, Ethernet port is an unknown, no USB, no WIFI base station it seems. In other words, no unnecessary cost. Only the core essentials. Only thing that seems excessive to me are the 4 GameCube controller ports - where they really necessary, couldn't they have supported Wavebirds in the wireless controller solution?

I bet the Revolution motherboard is the most beautiful motherboard designed by man.

Chittagong · Jun 29, 2005

Cold-Steel said:
Nintendo should merge with a larger Japanese company that would allow them to retain their independence but give them the cash flow to compete with Sony and Microsoft.

It might not help - cash flow or bank accunt aren't Nintendo's problems, they are extremely wealthy. Hell, they make more profit in absolute terms than Sony, iirc.

I'd say the problem is the gaming market structure and dynamic that doesn't allow for business with the 20% operating margin Nintendo is used to providing shareholders with.

shpankey · Jun 29, 2005

ATI has pretty shitty OpenGL drivers... their cards excell at Direct3D however. Dunno why Nintendo would want to go with OpenGL 2 with an ATI card unless they can get them to make some decent drivers for it.

AssMan · Jun 29, 2005

Every week, I swear to f'ing god.

I want Pikmin 3 for Revolution. Co op single play, being able to control at least 50 or more pikmin at a time, and online mode. =P

ge-man · Jun 29, 2005

shpankey said:
ATI has pretty shitty OpenGL drivers... their cards excell at Direct3D however. Dunno why Nintendo would want to go with OpenGL 2 with an ATI card unless they can get them to make some decent drivers for it.

You're assuming that Hollywood or whatever the GPU is being called is an off the shelf design. Flipper just barely resembles anything ATi had before or since and I would not be shocked for the same thing to occur with the Revolution's GPU.

monkeyrun · Jun 29, 2005

looks like Sony needs a DS killer, not the other way around...

Monk · Jun 29, 2005

I don't think that the difference will be as severe as the DS vs PSP. It will at the very least be more powerful than the GC. That much we know. By how much we don't know. But I think atleast Xbox 1 quality is possible.

ge-man · Jun 29, 2005

Chittagong said:
Only thing that seems excessive to me are the 4 GameCube controller ports - where they really necessary, couldn't they have supported Wavebirds in the wireless controller solution?

Things like the DK bongos are still wired. If they dropped the ports Nintendo could not claim full backwards compatability with the GC.

edit:Xbox 1 quality is low balling the Revolution IMO. We already know that Nintendo spent a comparable amount of their GPU when compared to MS, for instance. I think folks should look at what cja said further back in the thread about the perils of reading too much into this resolution issue.

Sanjuro · Jun 29, 2005

Chittagong said:
Nintendo's new strategy

Let the wookies win

Slurpy · Jun 29, 2005

Dyack is full of it, as he always is. I somehow doubt thats the reason for departure.

Shao · Jun 29, 2005

Well written and can understand the opinions expressed, however don't agree with them whatsoever.

First of all I don't buy Dyack's quotes and never did, Nintendo got into bed with SK for their big epic games because they could supposedly do them better than Nintendo, more experience and what not. However SK undoubtedly bombed hard and lets be honest haven't shown many signs of producing that Halo or big killer hit unlike say Retro which came good.

This is Dyack dressing up the split imo, maybe the plans were different, maybe performances were not matching well with expectations, but Nintendo is not a stupid company.

Nintendo knows full well that big and epic games are still essential. Hell big and epic franchises are much in demand right now. Just look at Zelda, Metroid, and the forever in development Mario 128, as you can see they are striving for MORE epic games, just as they did when they launched the GC and acquired SK. Both these didnt do as well as hoped and Nintendo has found alternatives, but not shifted to a short and simple philosophy. Thats just a mis-understanding of Nintendo's philosophy imo. Mario 128 represents this, they won't release it until they can overcome Mario 64 - if thats not dedication to big and epic games I don't know is.

You basically said Nintendo won't try to be number one this generation - wtf? Nintendo is gonna try damn hard to be number one, its gonna try and get the big developers back on side. It's gonna try to lose the kiddy image.

Nintendo isn't downplaying the big epic story, they are downplaying the huge Hollywood production costs and extensive use of movies which developers are committing to at the expense of originality. Encourage developers to risk big new ideas. OR small ideas. Drop the "safe" games and go for the risky ones. Expensive, epic or not is not necessarily the issue, gameplay and originality is.

Using recent DS games as evidence doesn't cut it either I'm afraid. I wonder how long Nintendogs spent in development. Yes Nintendo is trying to change the face of gaming and DS goes a long way as part of that strategy, but these are just first generation handheld games and non-games which are expected to be fairly short and sweet. By simplifying games, Nintendo could actually be making them more complicated, its not a shift from 4 buttons to one button, its a shift from existing interface to new more natural and human interface. Thats my interpretation of Nintendo's use of the statement "simple games".

Miyamoto's quote: "When Link grabs a lever, I would like for the user to actually pull it rather than press a button". We can speak to puppies and stroke them using a mic and a stylus as opposed to the traditional menus, d-pad and button. Simpler or more complex? The only certainty is its more human, more natural.

Ok there is alot of emphasis on short sweet games, but that is simply striking a balance which every good games system needs - a strong and varied game portfolio.

cvxfreak · Jun 29, 2005

Chittagong said:
Revolution is also a very efficient design. Revolution doesn't seem likely to have neither Bluray nor 20 GB HDD (512MB flash only), no Dolby Digital or HDMI, Ethernet port is an unknown, no USB, no WIFI base station it seems. In other words, no unnecessary cost. Only the core essentials. Only thing that seems excessive to me are the 4 GameCube controller ports - where they really necessary, couldn't they have supported Wavebirds in the wireless controller solution?

Wait, I thought the Rev had USB ports?

cja · Jun 29, 2005

Chittagong said:
Revolution is also a very efficient design. Revolution doesn't seem likely to have neither Bluray nor 20 GB HDD (512MB flash only), no Dolby Digital or HDMI, Ethernet port is an unknown, no USB, no WIFI base station it seems. In other words, no unnecessary cost. Only the core essentials.

Revolution does have USB ports, not sure what you mean by WIFI base station (router?) but its wi-fi support is superior to X360s and seems more fleshed out than PS3s. You also seem to be using a composite of X360s and PS3s hardware specs to try and make out Revolution has no unneccesary costs. 512MB of flash ram built-in is an unneccesary cost according to Sony while wi-fi as standard, Blu-ray, standardised flash ram, and HDMI are unnecessary costs from Microsoft's point of view.

dog$ · Jun 29, 2005

Hm, I've read this thread and I still see nothing which is new about Nintendo's strategy; it all sounds like the same rhetoric they've used since the Nintendo 64 days.

In fact, let's dig a little deeper into these points...

1. THERE IS NO MONEY FOR #2 IN THE TRADITIONAL CONSOLE RACE
So where does that put #3 in the traditional console race?
Nintendo can dance around and insist until they're blue in the face that they don't directly compete with Sony and Microsoft, but, much like DS vs PSP as a recent example, consumers will view the companies as being in competition regardless. DrPepper is still in competition with Coke and Pepsi, even though DrPepper tastes nothing like the competition.

2. SONY VS. MICROSOFT BATTLE WILL DRAIN THE MARKET FROM ANY PROFIT
Right, just like there was zero profitability in the entire videogame market from the Nintendo/Sega competition during the 1990's.
what.gif

3. NINTENDO PROFITS BY CHANGING INTO A DIFFERENT MARKET SETTING
This is not unique to Nintendo.
All companies are perpetually looking to expand their demographic appeal.

4. USE THE NARROW YET TALENTED DEVELOPMENT BANDWIDTH WISELY
So this is something that Sony and Microsoft isn't trying to do?

5. CATER A LIMITED "BIG SCALE" OFFERING OF SURE HITS
Again, this is something that Sony and Microsoft isn't trying to do?
Oh, wait, they're not; their schedule of offerings isn't nearly as limited.

6. CREATE NEW CHANNEL OF DISTRIBUTION TO OVERCOME RETAIL SHORTHAND
This is not unique to Nintendo.
Did Nintendo ever have any situation of "retail shorthand"?
Oh and yes, everyone loves Steam.

7. TAKE HOME CONSOLE TO A SIMILAR ROUTE AS DS - NOT CUTTING EDGE BUT FUN
Oh, so when something isn't cutting edge yet sells well, it's because it's "fun"?
I guess Wario Ware Twisted is extremely unfun, eh?

8. LEGITIMIZE NEW "SIMPLE GAMING" APPROACH WITH MARKET NEED
Nintendo will legitimize their approach because they'll have enough fans to buy into whatever they put out.
Fans will buy into whatever Nintendo puts out because ... they're Nintendo.
Just because Nintendo knows how to consistently sell its products to its fanbase doesn't mean they're finding new markets.

Monk · Jun 29, 2005

dog$ said:
1. THERE IS NO MONEY FOR #2 IN THE TRADITIONAL CONSOLE RACE
So where does that put #3 in the traditional console race?
Nintendo can dance around and insist until they're blue in the face that they don't directly compete with Sony and Microsoft, but, much like DS vs PSP as a recent example, consumers will view the companies as being in competition regardless. DrPepper is still in competition with Coke and Pepsi, even though DrPepper tastes nothing like the competition.

You are right and wrong.

While the Rev will be competing in the traditional game market, they(Nintendo) are going after the market that don't play games unlike in the Dr. Pepper analogy.

2. SONY VS. MICROSOFT BATTLE WILL DRAIN THE MARKET FROM ANY PROFIT
Right, just like there was zero profitability in the entire videogame market from the Nintendo/Sega competition during the 1990's.
what.gif

Wonder where Sega is now.

3. NINTENDO PROFITS BY CHANGING INTO A DIFFERENT MARKET SETTING
This is not unique to Nintendo.
All companies are perpetually looking to expand their demographic appeal.

Yet the DS is more successful at it than the psp when it comes to that. (40% of ds owners are women)

The rest I agree with you.

Deku · Jun 29, 2005

Mrbob said:
MS and Sony will drain the market to zero profitability? Ahahahaha. Decent analysis in some parts but too much hyperbole there.

Profitability declines once competetion intensifies.

That's the most basic truth of business analysis. Porter's 5 forces predicts this. And the fact that it is MS vs. Sony and both are going to try and kill each other, I could see profitability going for a dive.

The power balance will shift to the software providers, where they'd need to be paid off for exclusives while their third party games see increasingly tight margins due to high development costs and price cutting.

dog$ · Jun 29, 2005

the market that don't play games

Who was it that made the thread here... Blackace?
Someone recently asked just what in the hell is a "non-gamer" and I don't recall a specific definition being agreed upon. Furthermore this is yet another point where I'd state that this stance isn't unique to Nintendo; Sony and Microsoft are always going to try to find ways to get new customers. A true "non-gamer" wouldn't play videogames no matter who made them anyway, right?
Oh and

Wonder where Sega is now.

See my question about #3 in the marketplace.

Monk · Jun 29, 2005

dog$ said:
Who was it that made the thread here... Blackace?
Someone recently asked just what in the hell is a "non-gamer" and I don't recall a specific definition being agreed upon. Furthermore this is yet another point where I'd state that this stance isn't unique to Nintendo; Sony and Microsoft are always going to try to find ways to get new customers. A true "non-gamer" wouldn't play videogames no matter who made them anyway, right?

The people who make the game is irrelevant, but the fact is that most games and consoles today cater to those that already play games. Often a lot of people who find todays gaming too complex say that early games with two buttons were more attractive to them. Even those that bought ps2's say that aside from sports games that some how "made sense" other games are just too complex for them. Designing a system around the philosophy makes gaming more accessible towards these gamers.

The one thing I don't understand about the DS is why on earth the DS has so many buttons, imo that is scaring away too many possible customers. The fact that it was miyamoto who added them is an even more odd event.

Mrbob · Jun 29, 2005

Deku said:
Profitability declines once competetion intensifies.

That's the most basic truth of business analysis. Porter's 5 forces predicts this. And the fact that it is MS vs. Sony and both are going to try and kill each other, I could see profitability going for a dive.

The power balance will shift to the software providers, where they'd need to be paid off for exclusives while their third party games see increasingly tight margins due to high development costs and price cutting.

Yeah and Sony's entry into the portable market is going to cut off Nintendo's profits as well. Give it time. One of the reasons I see Sony entering the portable market is that they want to make up the cash they are going to lose next gen as I don't think PS3 will be as dominant. But...what you stated and what Chittagong said are two different things.

KINGMOKU · Jun 29, 2005

Cold-Steel said:
Nintendo should merge with a larger Japanese company that would allow them to retain their independence but give them the cash flow to compete with Sony and Microsoft.

:lol Nintendo raked in more profits then Sony, yet they need to merge with a "larger" Japanese company.

:lol

Holy crap, do people think before they post?

Deku · Jun 29, 2005

Mrbob said:
Yeah and Sony's entry into the portable market is going to cut off Nintendo's profits as well. Give it time. One of the reasons I see Sony entering the portable market is that they want to make up the cash they are going to lose next gen as I don't think PS3 will be as dominant. But...what you stated and what Chittagong said are two different things.

Yes it will, but if Nintendo refuses to compete head on, the effect won't be the same.

The point being made by the opening poster makes a lot of sense because there's no one here or anywhere who is going to argue MS and Sony's strategy is anything but the same. They're going for exactly the same market, same demographic, same everything.

When everything is the same, emulation is not enough, you have to spend a ton more to get a slight edge and it will destroy profitability in that regard.

One of Porter's 5 forces also discreibes market differentiation, and that's where Nintendo is placing itself. By differentiating its products so that there is intrinsic value in them, and that is something that will affect how profitable it is.

Mrbob · Jun 29, 2005

Deku said:
Yes it will, but if Nintendo refuses to compete head on, the effect won't be the same.

The point being made by the opening poster makes a lot of sense because there's no one here or anywhere who is going to argue MS and Sony's strategy is anything but the same. They're going for exactly the same market, same demographic, same everything.

When everything is the same, emulation is not enough, you have to spend a ton more to get a slight edge and it will destroy profitability in that regard.

One of Porter's 5 forces also discreibes market differentiation, and that's where Nintendo is placing itself. By differentiating its products so that there is intrinsic value in them, and that is something that will affect how profitable it is.

Grabbing a share of 130 million consoles sold is much nicer than having 20 million and shrinking market all to yourself.

kaching · Jun 29, 2005

Chittagong, not that I like to make a habit of stroking people's egos, but we get precious few posts like this one that are thoughtful, balanced and overall objectively considered before posting that I just have to tip my hat. If I had more time, I'd entered into discussion about it, but I just wanted to at least say this much.

G-Fex · Jun 29, 2005

I don't understand.

It seems to make a certain amount of sense but this means the revolution will have simple capabilities then and no touch controller?

Mrbob · Jun 29, 2005

G-Fex said:
I don't understand.

It seems to make a certain amount of sense but this means the revolution will have simple capabilities then and no touch controller?

Don't read too much into his comments. It is all speculation on his part.

G-Fex · Jun 29, 2005

I really hope no touch controllers, that'll be just stupid and too easily breakable somehow.

just like N64 joysticks.

Shao · Jun 29, 2005

Ok I dont know why so many people are adamant that "Nintendo is not competing".

Get a grip folks, they ARE competing and you only have to look at their E3 press conference to see that, they mention competitors more than anyone else because they're being more aggressive than in the past. This "differentiation" is just wrong I'm afraid. Its not differentiation at all.

In a nutshell both Sony and Nintendo try to win new customers by changing the perception of gaming:

Sony - power, style, expand product abilities to cater for mainstream audiences i.e. multimedia capabilities. People who don't like games will like it for the lifestyle factor. Ultimately make gaming COOL and fashionable.

Nintendo - also change the image of games, from child's toy/geeky hobby/high end technology nuts to natural human instinct to play, have fun and socialise. Nintendogs represents this.

B-B-Bomba! · Jun 29, 2005

So it's OK to like Nintendo ... as long as you're a shareholder?

Fuck, what if the 'revolution' in control methods is that the damn thing uses GC controllers?

Monk · Jun 29, 2005

B-B-Bomba! said:
Fuck, what if the 'revolution' in control methods is that the damn thing uses GC controllers?

0.0 You can't be serious.

Link316 · Jun 29, 2005

Deku said:
Yes it will, but if Nintendo refuses to compete head on, the effect won't be the same.

they can keep saying they're not competing with Sony or MS, but that's really not up to them

Jonnyram · Jun 29, 2005

Link316 said:
they can keep saying they're not competing with Sony or MS, but that's really not up to them

If it's a company strategy not to compete with Sony or MS, then that is obviously going to be the basis for design decisions made on their new products. You don't have a clue what you're talking about.

gameboya · Jun 29, 2005

I can GURANTEE everyone right here right now, for the traditional hardcore/fanboy gamer who wants all the flare with teh gfx, sound, and HD etc.. you will be VERY disapointed with what Nintendo is going to offer with the Revolution in general. There might be a few games in the mix to cater to them, but Nintendo is going in a completely different direction and it's going to piss a lot of people off imo. The funny thing is, it's probably most people who didn't want to give Nintendo a chance in the first place, it's the type who are happy with the same old rehashed sh!t that has been flooding the market (and yes I include Nintendo in that area with all the mario spin offs).

I will bet ANYONE here I have an incredible grasp as to what the "new" Nintendo controller or interface is going to be, but you would probably go on laughing at my theory, so wtf, why not give you the low down.

Think of a more basic smaller version of a Tablet PC. Almost like a touch screen PDA device, with wifi, voice recognition and a cpu (possibly same used in DS) for gfx displays and text etc.. The touch screen pda can be used to draw, select menus and screens, for example, a game show type game in which each person has their own pda like screen and a game like mario party asks you to draw what is on the screen, and the person with the closest matching drawing wins the round etc.. it can go waaay beyond this but it allows for games to be incredible easy and intuitive. No f'ing buttons to get confused with, leave that for the STANDARD gamecube controller which I beleive the Rev. will ship with and the pda like device for games completely geared for that new type of gaming device, which imo is incredible because there are no limitations to how you want to represent your game. It will also of course feature voice recognition, they already proved how intuitive and creative you can get with Nintendogs, and considering the massive sales that game had on a system that has recenely come out, you can gurantee Nintendo is going to use this as an example of creating a different market.

forget the whole gyro thing, it's not going to happen and imo doesn't make things "simpiler", it makes it more complex when you think about it.

Think of DS but with a bigger single touch screen along with everything else DS has to offer. Think of how EASY this will be for Nintendo to implement considering they already have a perfect working template "DS" It's right in front of our eyes, yet no one thought about it. Even Nintendo dropped hints as to why the Rev will differ from the rest and DS was being used as an example. Everything fits with their philosophy regarding my theory. From cost of producing this device thanks to DS already being a success and people who have a DS will see the similarity when Revolution comes out and say, "wow I really love how easy it is to play games on my DS, this looks very similar" to a device which really doesn't make people who are new to gaming uncomfortable.

Well there you have it, the secret unveiled. This will come to fruitation, I gurantee it.

Amir0x · Jun 29, 2005

Who the hell are you, gameboya?

Secondly, your idea is horrific and is counter-intuitive to nearly every single genre on the market. If you're suggesting that people can just decide to use the Gamecube controller for all the other types of games, then I don't even know what to say except I hope Nintendo is not that stupid. And, in fact, I don't think they are.

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