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Nintendo's demise overexaggerated?


jason
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Nintento released numbers showing that income was up, althought they lowered their projections for the full year. You can find the article here: Nintendo announces profits rise, but drops full-year projections.

 

Net income for the nine months ended December 31st increased by 97 per cent year on year to 67.8 billion Yen (503 million Euro) on revenues of 419 billion Yen (3.1 billion Euro), with the vastly increased profitability coming despite a small 4.6 per cent decline in sales.

 

With the DS going strong and new software planned as well as the release of RE4 and the coming Pennant Chase baseball, Nintendo looks like they're in good shape heading into the next round of the console wars.

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Looks like that first article was the rosy side of the story. These other article range from thinking things are ok and not much has changed, to "Nintendo took a fiscal beating".

 

Nintendo Q3 profit down, cuts forecast

 

Nintendo Shares Decline After 3rd-Qtr Profit Fell, Forecast Cut

 

Nintendo Financials: The game giant takes another hit.

 

Nintendo's Profit Falls 43%; Revenue Is Flat

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They were sure as hell able to afford all that vinyl siding my Dad helped to put on their windows in their New York office this week.

 

Interpret that how you will.

 

Frankly if I were them I'd stick with the GameBoy, ditch the connectivity crap (it failed, Nintendo, get over it), and ditch the consoles. Then they sould put their software on the PS3 and the XBox 2 and finally get online. Super Smash Bros. Melee 2 and the next Mario Kart, Tennis, and Party games would be massive hits if they went online.

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Market share aside, I think Nintendo's real issue is their lack of mindshare. I would argue Nintendo is (unfortunately) becoming less and less relevant in the industry.

Nintendo's influence diminishes with each generation of home consoles. I would expect that eventually it may become difficult to sustain multiple platforms. They need something to make themselves "cool" again.

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I think you're right Camp, but I don't think that it's irreverisible. Also, considering the fact that the demographic that started gaming is growing up and having kids, Nintendo has major opportunities as far as creating a system that can cater to adults *and* children. They recently hired someone to revamp their image (as seen in the touch is good campaign that launched the DS). We'll see how that works out.

 

Also worth considering: what is the third spot in the game console market worth? Can the market support three consoles? Is third place large enough to keep a company viable? So many talk about Nintendo slipping from dominance; so what? Do they have to be in first in order to release games like Metroid? Isn't the market growing to the point that three consoles can easily supported? I'm open to other arguments.

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Can the market support three consoles? Is third place large enough to keep a company viable?

 

I think it's possible. The problem is that whichever company is in third place is always perceived the loser. Once that perception takes hold, the inevitable talk of demise begins. That alone makes third place the spot you do not want to be in.

 

As for Nintendo, I still think it's a little early to say that the company is doomed (people have been saying that for years). However, I do think they have an uphill climb ahead of them. There's a lot that needs to change over there if they want to have a shot at competing with Sony and MS in the next generation.

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In my estimation, Nintendo is losing (or going to lose) on most important issues. Obviously, Nintendo is not winning the console battle. I also do not think Nintendo is positioned properly to compete with the PSP, and we will be seeing proof as soon as Sony can make enough PSPs to catch up with demand. Software used to be Nintendo's ace, but it is not any longer in my eyes. In the past, a 'big' Nintendo franchise usually indicated that I would be getting the absolute best example of a particular genre. Now, other companies top Nintendo's top offerings on a routine basis (see Beyond Good and Evil and Zelda:WW, or Mario Sunshine and any of Sony's 3-D platformers).

 

This does not mean Nintendo is doomed. There is still room for Nintendo to be profitable, even at third place. If Nintendo wants to be more successful, it has to get third parties back on board. Playing to the kid demographic and making silly statements like "We aren't competing with Sony and Microsoft" aren't going to cut it. The PS2 probably has more and better children's titles to begin with! My question to Nintendo executives would be: if you're not in direct competition, what happened to your console market share? ;)

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The Nintendo is doomed stuff is silly. They are still making quite decent profits, and they are sitting on boatloads of cash. Just because they are in 3rd place (debateable, in and out of 2nd place) doesn't mean they are doomed. They are making profits still, and they have plenty of cash onhand to experiment. The Gamecube has made money, and the GBA has made plenty. And the DS hasn't flopped but has done very well to date.

 

Now if they lose the handheld market dominance - and not losing just 50% of it, losing more than that - I can see their demise as being possible.

 

I, for one, will buy the new nintendo console, most likely. They've proven to me in this generation that they are still worth buying. I still find they have the best, most comfy and ergonomically friendly controller (except for playing fighting games). And any Nintendo product is worth it just for fricking Mario Kart :D

 

I think Nintendo needs to work with what they have, and concentrate on expanding into a few more niches. With the new console, it's finally time for online play. Mario Kart online. Animal Crossing online. Online puzzle games. Get some more 3rd party support - or develop their own department - for RPGs. The only reason that all the RPGs are PS2 is because the most RPGs are for Sony's console ever since FFVII. Make it backward compatible with GC. Etc.

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The Nintendo is doomed stuff is silly. They are still making quite decent profits, and they are sitting on boatloads of cash.

 

It's not silly at all.

Any who argues that Nintendo is in a bad position financially is fighting the wrong fight. That's not the issue -yet.

The real sense of doom is due to Nintendo's fading position as a dominant force in the game industry. Not only are they not the 800lb gorilla anymore but Nintendo has also lost the trendsetter, the 'creative pulse of the industry' position they once held. There are numerous developers we all look to for insight as to where gaming is going and, for many people, Nintendo is quickly falling off that list.

As I said above, the point isn't market share -it's mindshare. Nintendo is becoming less and less relevant to the general public every day.

 

I want to see Revolution be the homerun we all hope for from the big (but shrinking) 'N'.

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Well, from a 30-something gamer that grew up on Pong, Nintendo to me = kids games.

 

I hate kids games simply because, I'm not a kid anymore. Nintendo, in my opinion, is the Disney of the gaming world.

 

I'm not in anyway trying to be a prick. This is just my perception of Nintendo. Fact is, I'd REALLY HATE to see the big "N" leave the scene. More competition is better for all of us. Nintendo being in the game is better than just Sony/Microsoft.

 

The Nintendo 64 was my last product from them. After Turok, Goldeneye and, Doom64, I had had nothing to play. Gave it away to my gf's daughter for free. Doom64, btw...was suprisingly excellent!!! I was astonished at how much they were able to get outta that machine. Very, very creepy game.

 

There was one secret level where everything was shrouded in mist. All these wooden poles were erected that had the remains of people hanging from chains. The only sounds you could hear were the wind and the ringing sound of chains softly hitting against each other. There were no demons running around. Just you, by yourself. Waiting....for them....

 

Then some trigger mechanism must've been tripped and, literally, all hell broke loose.

 

Awesome! One of those gaming moments you remember and, that one belonged to Nintendo/Id Software.

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There was one secret level where everything was shrouded in mist.

Wasn't everything shrouded in mist in N64 games? :D

 

I kid. I loved the N64 and still have it. I still have Conker, Mario 64, Ocarina of Time, No Mercy, and WCW/NWO Revenge. I understand that the Big N has this kiddie image, but the Gamecube has turned out some fantastic games. Eternal Darkness, REmake, RE 4, The Wind Waker, Donkey Konga, Viewtiful Joe, Metroid Prime series, Rogue Squadron Series. I am even a fan of Mario Sunshine and the new Zelda looks far from kiddie. I think the reason the Big N still has a kiddie image is because people refuse to believe they are not just a kiddie company. IMHO, if people were willing to give Nintendo a shot, they would see that they offer great games for all ages.

 

-Dean-

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The problem is that whichever company is in third place is always perceived the loser.

 

"Place" matters not. Software sales do. And of course, marketshare affects your software sales, among other things. Xbox has good software sales relative to their marketshare. PS2 has excellent software sales because they have a huge marketshare. As long as Nintendo can maintain software sales, for whatever reason, they are fine. What does the graph of their software sales over the last decade look like? It would be interesting to see their chart of their sales since N64... that might show where they're going and where they need to be.

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I'm not sure that the "kiddie" image is so much a weakness for Nintendo as their overall lack of vision. When the Gamecube first hit the scene I expected it to be a successer to the Dreamcast in terms of creativity. Of the 3 new systems Gamecube held the most appeal to me and was the system that I bought with high hopes. Aside from a few great games the Cube seems to be little more than a graphical upgrade from the N64. Lack of online play is easily my biggest complaint. While games like MarioKart Dash looked like fun, I had no interest in purchasing them because they merely looked like prettier versions of games I already own on N64. Had games like MarioKart, Mario Party & Mario Tennis been online, I think a ton of people like myself would of snatched it up in a second.

 

I hope the hell Nintendo understand that they need an online plan right out of the gate on their next system. While a huge Super-Mario or Zelda title at launch would be nice, it won't be enough to make me buy a new Nintendo console. But give me a few games like Mario Golf online" or perhaps a Donkey Kong Football with online play :drool , and I'll not only buy the new system, but I'd stand in a long line at launchday to get my hands on one.

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Not only are they not the 800lb gorilla anymore but Nintendo has also lost the trendsetter, the 'creative pulse of the industry' position they once held. There are numerous developers we all look to for insight as to where gaming is going and, for many people, Nintendo is quickly falling off that list.

 

I guess I see them is one of the last bastions of creativity and willingness to take chances (along with Sega) amongst the console companies.

 

Nintendo DS - chancy.

Zelda WW Cartoon-style - chancy (even many of us who hated the look were converted once we played it).

Gamecube controller - unique and different - my favorite controller, very comfy and ergonomic (only flaw being that the d-pad is too small).

GBA/GC connectivity - gimmicky, but have you played Pac Man Vs.? It's awesome multiplayer fun.

 

And what they do with hardware: The wavebird is one great piece of hardware.

 

I think Nintendo has learned their lessson, because they used to be top dog, lost half to Sega through arrogance (Genesis) and went even further in decline. They show they care about their customers (look at the liberal DS return policy) and take chances to make good games. I feel like Sony has the same thing going that Nintendo used to: arrogance of the top dawg.

 

 

And for all the people that complain about no online was Nintendo's big failing - Nintendo is right. It's a waste of money and time at this point. The numbers of console owners online is very small. Even most Xbox owners aren't online and the damn thing comes with network adapter built it. They offered an adapter for GC if any 3rd party companies wanted to do it. No bites except Sega (imagine that) w/ Phantasy Star online.

 

The 3rd party companies aren't bothering with online, either. Namco's upcoming Tekken 5 has no online for any console (DAMN THEM!). I went hunting for a game to play online with my PStwo. There's not much - mainly just a handful of FPSs. Even the folks I know with PCs online don't have their consoles online (that is probably the reason).

 

Ya online console owners, mainly xbox owners (including me, now) are a small, small minority of console gamers. The statistics show this to be true. It would have been a money suck from Nintendo for not enough reason.

 

Now next gen: I expect some sort of nice, easy methodology for online gaming from Nintendo. It's getting to the point that it could actually help their bottom line. Rumors of the DS being online through some sort of tunneling tech are flying left and right.

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They offered an adapter for GC if any 3rd party companies wanted to do it.

 

...with almost zero support from Nintendo themselves. Nintendo also created a specific funding segment to help create games like Final Fantasy Chronicles that took advantage of the GBA connectivity. Now I see many folks saying Nintendo was right to avoid online gaming but the alternative was somehow better? GBA/GC connectivity was an utter failure. You can count the games that actually did something entertaining with it on a couple of fingers. I would have preferred the money go to Nintendo creating games like Mario Kart Online which would have been a huge success for them and would have helped begin and grow an online plan that would help Nintendo in the next generation of consoles. Similiar to what Micrsoft and to an extent Sony has done.

 

Asking whether or not online gaming is profitable is the wrong question. It is a growing segment of today's console market and to avoid it all together shows the exact reason why Nintendo has completely lost the mindshare of today's gamer. Why sell you what you obviously want to play when we can sell you whatever it is we concocted as the next evolution in gaming this week. Why bother adopting the CD as the chosen medium for the N64, it's not what we feel the future will be, so we will continue to shovel expensive cartridges. You want online play? Nope, it's not going to be the future. GBA/GC connectivity is the ticket though! It's the typical Nintendo attitude and it's cost them in the past two generations and rightfully so. In terms of how to handle thier non-handheld consoles, I'd say Nintendo has learned little to nothing and continues to make the same mistakes again and again. Succeeding in a market you dominate with zero competition is one thing (and even that is soon to change). Doing so in the current console environment is another.

 

You already noted that you want Nintendo to release the Revolution with a solid and easy methodology for playing online games but the point that I am trying to make is that while Nintendo is trying to build thier online audience, Microsoft already has 1.4 million people familiar with thier online service who will more than likely jump right back onboard. Sony being the market leader is also in a great position to exploit it's already existing online base. You can also bet the farm that Sony will release the PS3 with some form of online service ala XBL as well. They may go a different route with implementation and pricing of course, but I believe they will put an even greater emphasis on online play next gen. Both of these companies have had years to implement changes, perfect thier online strategies and most importantly to make mistakes. All the while Nintendo has done nothing and will more than likely have to deal with all of these types of problems at a time when it may hurt them the most. I find that to be shortsighted.

 

In terms of software, I still consider Ninty to be one of the best around. Thier software is the very reason I own a Gamecube and it will more than likely be the reason I buy the "Revolution" when it hits store shelves.

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I agree with everything Futurevoid said. In fact, it is as if my thoughts were channelled directly into his keyboard. If memory serves correctly, I think there was some type of fiasco between Nintendo and Sega regarding PSO's release. I don't remember exactly what happened, but I do remember that the release was put in jeopardy by Nintendo's foot-dragging ways.

 

Asking whether or not online gaming is profitable is the wrong question.

Furthermore, while the online gaming itself may not be profitable right now, it has a cascading effect on software sales and brand loyalty. Games are sold through word of mouth every minute people are playing on XBL. It's a convenient peer pressure mechanism, and I'll admit to having bought more than a couple games just to keep up with my core group of online friends. Furthermore, Microsoft has extra brand loyalty going into the next generation from people who want to continue on with their friends lists.

 

Nintendo seems overly focused on short-term profitability and unwilling to make costly long-term strategic investments. Remember, Nintendo greed and shortsightedness are the sole reasons the Playstation brand even exists. Just a few years ago, the Xbox was the laughingstock of the gaming community. It's amazing how quickly arrogance and complacency can change the landscape.

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