Nintendo Bets on Games, Not Faster Consoles, for Profit Growth

[T-Dub]

This is a very interesting financial article about Nintendo (http://www.bloomberg.com/apps/news?pid=10000101&sid=aapU6wLzEhXI&refer=japan) for fanboys and haters alike. What's interesting is that this article is written for and by the people in the financial sector and neatly sums up some of the classic Nintendo arguments, including the age old target audience jabs,

As Sony and Microsoft showcase their latest devices at the Tokyo Game Show today, Kyoto-based Nintendo is betting that by keeping the hardware of its new Revolution console simple, it can keep prices low to target children and women [sic].
and the retaliatory profit ones.

Nintendo's strategy has worked so far. The company hasn't posted an annual loss since introducing the original Nintendo Entertainment System in 1985.

Sony's games business took a 51.1 billion yen operating yen loss in the first year after the PlayStation 2, because of costs from adding a DVD player to the console. Microsoft, which loses money on sales of the Xbox and makes money on game sales, has lost $2.4 billion in the past two years in its division.
Finally there is this crushing (at least to we fanboys) quote:

Gamers who had the first Magnavox's Pong and Atari consoles in the 1970s are now in their mid-20s and 30s and are demanding more sophisticated games that the consoles made by Sony and Microsoft can provide.

[markster3000]

This notion that pure graphical power alone provides "more sophisticated games" it a truly unfortunate claim.

I hardly think that more accurate blood spray, or the reflection of the sky in a pool of water truly makes a sophisticated game. If anything, these intense graphical demands will simply make games more expensive to make, drawing resources away from making a quality gameplay experience.

And is it just me, or can they not to math?
Someone playing pong in the 70's would now be at least 40.

[TrackZero]

This notion that pure graphical power alone provides "more sophisticated games" it a truly unfortunate claim.

I hardly think that more accurate blood spray, or the reflection of the sky in a pool of water truly makes a sophisticated game. If anything, these intense graphical demands will simply make games more expensive to make, drawing resources away from making a quality gameplay experience.

And is it just me, or can they not to math?
Someone playing pong in the 70's would now be at least 40.

Well, I played pong in 83' and I'm 25 now (granted I was 4 at the time). So I can imagine only adding a few years on to me, you could easily now be in your 30s.

But I do agree with your sentiment regarding graphical power != sophistaction. Which, while it isn't always the case, usually you will find that the more a game is heavy on graphics, it's also heavy on the complexity of it's controls. Also, since males are generally more visually attuned, it makes sense that the "hardcore" male gamer demographic does prefer it. So it definitely is a stereotype, but there is some foundation in it.

Also, it makes sense for Nintendo to take this stance. While Sony and Xbox are vying over one portation of the market, it leaves the rest wide open for Nintendo to supply a product to. This is not to say that the rest of the market plays inferior games, merely that the gameplay elements/controls are usually quite different from what the "hardcore" crowd goes for (which, IMHO is hilarious, because anyone I know who considers themselves a gamer still plays Nintendo titles). Anyways, it's all about market demographics, don't take anything literally, games are still games and quality always matters, despite who the claimed target audience is.

Anyone chiding me about playing "kiddie games" doesn't have a clue and can cram their infantile thinking up their ass. There's no reason I can't beat someone down in CounterStrike and enjoy a game of Mario Sunshine.

[Phades]

Well, I played pong in 83' and I'm 25 now (granted I was 4 at the time). So I can imagine only adding a few years on to me, you could easily now be in your 30s.

But I do agree with your sentiment regarding graphical power != sophistaction. Which, while it isn't always the case, usually you will find that the more a game is heavy on graphics, it's also heavy on the complexity of it's controls. Also, since males are generally more visually attuned, it makes sense that the "hardcore" male gamer demographic does prefer it. So it definitely is a stereotype, but there is some foundation in it.

Also, it makes sense for Nintendo to take this stance. While Sony and Xbox are vying over one portation of the market, it leaves the rest wide open for Nintendo to supply a product to. This is not to say that the rest of the market plays inferior games, merely that the gameplay elements/controls are usually quite different from what the "hardcore" crowd goes for (which, IMHO is hilarious, because anyone I know who considers themselves a gamer still plays Nintendo titles). Anyways, it's all about market demographics, don't take anything literally, games are still games and quality always matters, despite who the claimed target audience is.

Anyone chiding me about playing "kiddie games" doesn't have a clue and can cram their infantile thinking up their ass. There's no reason I can't beat someone down in CounterStrike and enjoy a game of Mario Sunshine.

Gaming on Nintendo systems still has the image of being for kids. Even my wife, who is not even slightly a gamer, thinks that's true. When I bought my Gamecube she asked me why I'd want it when I had an Xbox and PS2. She said, "isn't that the system that's meant for little kids?" Now, while I wouldn't quite reiterate what you said in your last statement to her, I did let her know that wasn't the case. :)

All that said, I don't care what Nintendo's image is. I know they'll continue to make great games and I'm sure I'll continue to own one of their systems.

[markster3000]

hmm... looking back on the math... yeah, it seems I oversimplified my calculation.

Yeah, Sony and Microsoft have gone the "business sense" route, and are continuing to target a core demographic. The people who are the most intrerested in the current product, and will continue to spend the most money per capita on new games.

Meanwhile, if Nintendo can grab the rest of the market, then certainly the lower per-capita returns will pay off. Much like how the Game Boy was positioned for quite a while. It was a much more cross-demographic hit, and served Nintendo well.

[TrackZero]

hmm... looking back on the math... yeah, it seems I oversimplified my calculation.

Yeah, Sony and Microsoft have gone the "business sense" route, and are continuing to target a core demographic. The people who are the most intrerested in the current product, and will continue to spend the most money per capita on new games.

Meanwhile, if Nintendo can grab the rest of the market, then certainly the lower per-capita returns will pay off. Much like how the Game Boy was positioned for quite a while. It was a much more cross-demographic hit, and served Nintendo well.

Yeah, regardless of what the demographics are, it's clear Nintendo continues to rake in mad cash hand over fist. They don't need to cut out their profit margin with high development and hardware costs, which is a much smarter route.

[RMan]

I think people will be surprised how good the revolution games can look compared to PS3 and Xbox 360 games, and if developers get on board, they could appeal to traditional/hardcore gamers as well as the casual gamer market. It’s hard to say how the “hardcore” crowd will react to the controller (they’re a pretty heavily conditioned group who’s often not open to change nearly as much as they think), but I’ve got high hopes and high expectations for their system, they seem to be on the right track.

As far as the sophistication rising with graphics costs, that’s often because the games that are getting the heavy graphics push are the ones that are pretty much the same in all other regards. They advance graphics because that’s an obvious, although expensive, way to improve their product, and they become more sophisticated because every iteration they may add a feature in order to appeal to their market.

[mister_slim]

Nintendo really is playing by completely different rules than MS and Sony. I don't think the focus on 'innovation' is a great long-term business plan, because it's hard to schedule innovation, but if they can do well enough during the lean times (N64, GC) they can blow the doors off every so often.
It’s hard to say how the “hardcore” crowd will react to the controller (they’re a pretty heavily conditioned group who’s often not open to change nearly as much as they think), but I’ve got high hopes and high expectations for their system, they seem to be on the right track.
That will be interesting, but I think one quality FPS would convince a lot of people (in the same way that Halo did for MS).

[DaXIthR]

Interesting read, I suppose...but it's hardly like the cover been's blow off of any of the three system, least of all the revolution.

The proof is in the games.

Assuming, no machine gets an insurmountable lead before the last one makes it to market, we would do better to speculate at that point.