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Author Topic: Nintendo - doing quite nicely thank you...  (Read 3103 times)
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Dimmona
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« on: May 27, 2005, 03:43:06 AM »

Apparently Nintendo almost tripled its profits last year to the tune of $809 million.

I still don't understand why people say Nintendo is 'losing' the console wars, or that they should get out of the hardware business - they posted *a billion* dollars in revenue more than MS's Xbox division for 2004.  Somebody explain to me again how that is losing?
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« Reply #1 on: May 27, 2005, 03:47:46 AM »

Apparently, the DS really saved their bacon last year. Not bad for a "gimmicky gadget"! smile (Although, it should be noted that I sure don't own one. LOL)

They have definitely fallen to a distant 3rd now, after possibly briefly holding 2nd when they were down to $99 and the other 2 were still $199. If the X-Box could do... well... ANYTHING in Japan, it would be far, far ahead of Nintendo.

It also looks like Nintendo has seriously downgraded their earning predictions for the next fiscal year due to the floundering gamecube. So, not all is rosy in Nintendo-land. Too bad. I love my little cube, but I wish Nintendo would do whatever it takes to get better (MUCH better) 3rd party support.

For now, I'll just hope the Revolution's controllers don't blow chunks.
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« Reply #2 on: May 27, 2005, 03:53:04 AM »

I don't understand all the Nintendo hatred either.  However, what I really don't get is this commonly heard sentiment:  "I wish Nintendo would go out of business so they would make games for Sony and Microsoft."   :?:

If you like Nintendo games, why not just buy the $99 console and the games you desire?  I'd like it as much as the next guy if Nintendo attracted more 3rd party developers over to the Gamecube, but it won't stop me from purchasing the good games that are available.
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Dimmona
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« Reply #3 on: May 27, 2005, 03:55:28 AM »

Again I ask you - explain to me how exactly they are in 3rd place?  Posting a billion dollars more profit than the '2nd place' competitor makes it sound like they're doing just fine...


Oh that's right... I forgot that you guys measure it by # of Xbox vs Gamecubes.  Yeah... that's a good measure of a companies profitability...
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Calvin
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« Reply #4 on: May 27, 2005, 04:13:45 AM »

Please, for the love of everything holy do not try to tell us that you think that Nintendo is more profitable than MICROSOFT? Yeah yeah yeah, one makes games, one rules the world-one also has been the driving force or second only to Sony in console gaming for...30 years? So those damn bastards at Microsoft, idiots that they are, in 5 years managed to sell more units than Nintendo-but, they are actually posting losses while gaining market share? OMFGNOEZORS, THE HORROR!!??? How could it be? Certainly Nintendo must be superior in every facet of the imagination.

Its good for Nintendo-and gamers-that they are making a profit and continue to work on innovative games and shitty hardware-but if you think that just tracking units sold is a stupid apples-oranges comparison-well, measuring the profits of a 20-30 year old established, enormous video game company like Nintendo with a 5 year old fledgling Microsoft XBox division that is posting losses is equally meaningless.
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« Reply #5 on: May 27, 2005, 04:22:47 AM »

Quote from: "Dimmona"
Again I ask you - explain to me how exactly they are in 3rd place?


Simple.  Remove the handhelds from the equation.
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Calvin
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« Reply #6 on: May 27, 2005, 04:23:46 AM »

Quote from: "Laner"
Quote from: "Dimmona"
Again I ask you - explain to me how exactly they are in 3rd place?


Simple.  Remove the handhelds from the equation.
Damn you and your simple 6 words of logic that trump my enjoyable hyperbolic explosion. At least love me at the same time.
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Dimmona
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« Reply #7 on: May 27, 2005, 04:46:41 AM »

Quote from: "Laner"
Quote from: "Dimmona"
Again I ask you - explain to me how exactly they are in 3rd place?


Simple.  Remove the handhelds from the equation.


Gladly.  Now Nintendo only posts roughly a few hundred million dollars more profit than MS's home entertainment division.  Don't believe me?  You can download corporate earnings statements from both Nintendo and MS's website.  Oh wait, I forgot - fanboys like Rage don't bother to use facts.

Rage - umm, can you not read the word's "MS's Xbox division" in my original post?  WTH would you compare the profits of the rest of MS to Nintendo?  That would be like including Sony's TV/Walkman sales in their console numbers.

While you're at it, why don't you point out where I said or even implied that Nintendo is better in 'every imagineable way' than Microsoft?  I'm simply stating that the idea that Nintendo should give up on consoles (an idea you state constantly) is absolutely stupid.  Yes, the Xbox has more marketshare than Nintendo, but at the end of the day companies care about one thing: profitability.  Sure MS has made good strides with the Xbox, but that division is still a long way from it.
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« Reply #8 on: May 27, 2005, 05:06:20 AM »

Quote from: "Dimmona"
Quote from: "Laner"
Quote from: "Dimmona"
Again I ask you - explain to me how exactly they are in 3rd place?


Simple.  Remove the handhelds from the equation.


Gladly.  Now Nintendo only posts roughly a few hundred million dollars more profit than MS's home entertainment division.  Don't believe me?  You can download corporate earnings statements from both Nintendo and MS's website.  Oh wait, I forgot - fanboys like Rage don't bother to use facts.

Rage - umm, can you not read the word's "MS's Xbox division" in my original post?  WTH would you compare the profits of the rest of MS to Nintendo?  That would be like including Sony's TV/Walkman sales in their console numbers.

While you're at it, why don't you point out where I said or even implied that Nintendo is better in 'every imagineable way' than Microsoft?  I'm simply stating that the idea that Nintendo should give up on consoles (an idea you state constantly) is absolutely stupid.  Yes, the Xbox has more marketshare than Nintendo, but at the end of the day companies care about one thing: profitability.  Sure MS has made good strides with the Xbox, but that division is still a long way from it.


Ok this is all well and good except for a few things:
The fanboy label. Its stupid, its idiotic, its inane, its childish. Listen, call me a fanboy all you want. Yes, I take Nintendo to task, a lot. I think the company and its corporate officers represent the worst of Japanese arrogance and superiority towards the US in terms of gaming. I think other than their exclusives their games are mediocre and their hardware sucks. I have also owned every major Nintendo console (sans handhelds), as well as Sony, and now Microsoft. I am an equal opportunity fanboy/hater. I think the offwhite Xbox360 looks stupid. I think the name XBox360 is retarded. I think the lack of securing more killer apps is a mistake on MS's part. I think the 500million spent on Rare was the biggest waste of money in recent memory.

Need I list my complaints about Sony? Listen, believe me or not, but calling me a fanboy makes you look unimaginative more than it paints me into a corner where my opinions hold no merit.

The second thing, and most importantly: you continue to cite Nintendo's profitability vis a vis MS Games Division (Fair point about my above hyperbole). Dude, this is simple. Nintendo has been in this game for what(I honestly dont know), 25 years?? MS and the XBox for...5?? For the love of god man, how can you trumpet a few hundred million in profits for a giant in the console industry against a company that has released ONE product and made massive inroads in market share? The comparison just is utterly irrelevant at this point.
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Sarkus
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« Reply #9 on: May 27, 2005, 06:57:08 AM »

Profitability is one way of looking at success and market share is another.  Nintendo is clearly more profitable than MS's games division but they have a smaller market share, at least in terms of home consoles.  Great to hear that the big N profited almost a billion dollars last year, but wait, MS has something like 50 billion just sitting around in cash on hand.  Plus, N's success is due to it's domination of the handheld market, a domination that appears to be waning.

Nintendo's in trouble because as the market for games grows, it's share is not growing as fast as MS and Sony's share, making them a strong third place now but probably a weaker and weaker third going forward.  

Also, don't forget that MS has a history of losing tons of money while it learns a market and then dominating their competitors in the second, third or even fourth generation of their products.  We're just now seeing the end of the first generation for MS.
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« Reply #10 on: May 27, 2005, 07:15:34 AM »

i think it's important to note that profit wasn't the most important goal for MS in this generation of consoles.  they intentionally took significant financial losses this round in order to gain market share, and their plan worked very well.  their primary concern with the xbox was stealing enough of the market from sony and nintendo that they could stay in the business and start turning significant profits in future console generations.  MS and Nintendo have different goals right now...that's why simply comparing the financial gains/losses of these two companies isn't a good way to determine their relative success or failure.
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« Reply #11 on: May 27, 2005, 07:51:32 AM »

Quote from: "Dimmona"
Quote from: "Laner"
Quote from: "Dimmona"
Again I ask you - explain to me how exactly they are in 3rd place?


Simple.  Remove the handhelds from the equation.


Gladly.  Now Nintendo only posts roughly a few hundred million dollars more profit than MS's home entertainment division.  Don't believe me?  You can download corporate earnings statements from both Nintendo and MS's website.  Oh wait, I forgot - fanboys like Rage don't bother to use facts.


Uhh you shouldn't be talking about "twisting facts" as others have already pointed out.
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Andrew Mallon
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« Reply #12 on: May 27, 2005, 05:41:30 PM »

In terms of profitability, Nintendo may end up the clear winner this generation. I do think that the GC's shrinking market share will make it much harder for them to maintain current growth rates in the next generation, simply because it will be much harder for them to attract 3rd party support.

Nintendo's ultimate strategy may boil down to simply trying to outlast the competition. It will definitely backfire though if (and that's a big if), Microsoft learned enough lessons from this generation and the 360 can turn an overall profit. There was an interesting article in the Wall Street Journal earlier this week with an interview with the head of Microsoft's Home and Entertainment division. One of the implications was that if the 360 does not turn a profit, a third Xbox isn't very likely.

From an investor standpoint though, one does have to wonder what Microsoft is thinking. With four years of Xbox losses and probably at least two years of additional losses with the 360, it's hard to imagine Microsoft recouping their total losses on the Xbox in less than ten years. And I think that the whole, console as a "trojan horse" into the home for other services isn't going to fly no matter what company tries it.
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« Reply #13 on: May 27, 2005, 05:44:03 PM »

Nintendo can be as profitable as they want.  Doesn't mean jack for the number of games coming out.  Basically my GameCube hasn't been used since Resident Evil 4, and I doubt it will be used until Zelda.  Them posting a profit isn't making me go out and buy more games.  Profitability is great for the company, but why should I care about it one way or the other?  All three console companies are going to be around a long time.
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Dimmona
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« Reply #14 on: May 27, 2005, 06:29:46 PM »

Everybody keeps claiming that MS losses in its Xbox division is irrelevent, but I think it is *extremely* releveant for the future of gaming.

Food for thought:
Operating Income or (Loss)
Note: this is Sony/MS gaming divisions, not total corporate earnings
Quarter Nintendo Sony  MS
Q1 2003 N/A $113 ($277)
Q2 2003 $60 $15 ($245)
Q3 2003 $186 $20 ($273)
Q4 2003 $697 $659 ($397)
Q1 2004 $48 ($44) ($209)
Q2 2004 $161 ($27) ($339)
Q3 2004 $203 ($0) ($142)
Q4 2004 $605 $433 $84

Total: $1960 $1199 (3199)

So yes, that's a $5 billion dollar difference b/t MS and Nintendo, and a $4.5 billion dollar difference b/t MS and Sony.  

Microsoft's goal for the division is to make them money one way or another, plain and simple.  Their endeavour so far has been extremely unprofitable.  Yes, revenues have been slowly going up for MS - profits are always highest at the end of a consoles life.  While they will hopefully have much better vendor deals lined up this time out, it is still likely the Xbox360 will follow a similar trend of initial losses followed by rising profit.

I know their bankroll is endless and they are determined to come out on top, but at some point they are going to have to evaluate whether this endeavor is worth pursuing.  If you read Bill Gate's book, you know that the original Xbox (and now the Xbox360) is his wet dream - a Microsoft box in every house that is the home media center; the "PC/Home Media convergence" he has been touting since day one.  He has said on multiple occasions that this end goal is what makes the Xbox worth pursuing even in the face of losses, because at some point they hope to leverage their other business into this AllInOne box.

However given the fact that the competition isn't going away and will continue to get tougher, it seems that this goal may become unattainable (at least to the extent that Bill dreams about it).  If MS someday comes to the same conclusion, they may very well pull the plug.  And this scares me, because I love my Xbox and I already know I will love my Xbox360.
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« Reply #15 on: May 27, 2005, 07:26:05 PM »

Even if Nintendo's marketshare is shrinking, isn't the video game market as a whole expanding?  The piece of the pie is smaller, but the pie itself is much bigger.  I'm not sure if these numbers are correct, but I think the original NES only sold 50 million units, while the Gamecube is somewhere near 20.  The NES was during a time of little if any competition, so the numbers for the Gamecube don't look so poor in comparison.
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« Reply #16 on: May 27, 2005, 07:45:11 PM »

Quote from: "Dimmona"
Microsoft's goal for the division is to make them money one way or another, plain and simple.  Their endeavour so far has been extremely unprofitable.  Yes, revenues have been slowly going up for MS - profits are always highest at the end of a consoles life.  While they will hopefully have much better vendor deals lined up this time out, it is still likely the Xbox360 will follow a similar trend of initial losses followed by rising profit.

as was mentioned in my previous post and the comments of others (which you don't seem to acknowledge), MS's goal up to this point has NOT been to turn a significant monetary profit on their investment in the xbox.  they knew very well going into things that they would lose a large amount of money on the xbox and willingly did so in order to get their foot into the door of the video game console market.  from their perspective as a company with enormous financial resources, it was much more important for them to get the xbox into as many homes as possible and maintain the public's interest in their future offerings than it was to actually make any money off of their efforts to this point.  if MS is able to generate enough interest and loyalty in their products in early generations, people will continue to buy their products and they will eventually make a monetary profit.  when you look at financial reports, it's obvious that the time has not come yet for MS's xbox division to be highly profitable...but i'll bet the MS executives never expected that it would for several more years.  their "profit" in the current console generation has come in the form of market share and recognition as a viable force in the competitive gaming market.  when you have an enormous monetary surplus with which to work, you don't care much about losing a little in the early rounds if it will allow you to come out ahead in the coming years.  the MS business plan is looking much farther into the future than you seem to be considering in your arguments...
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« Reply #17 on: May 27, 2005, 08:08:18 PM »

People judge Microsoft more harshly due to the success of the original Playstation.  Sony entered the market and killed off one videogame juggernaut and reduced the other to a shadow of its former self.  Why is Microsoft having so much trouble when Sony isn't?  Why tolerate a whole generation with little or no profit?  Why aren't we seeing a 40/40/10 split between Sony, Microsoft, and Nintendo?
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« Reply #18 on: May 27, 2005, 08:25:27 PM »

Quote
 if MS is able to generate enough interest and loyalty in their products in early generations, people will continue to buy their products and they will eventually make a monetary profit. when you look at financial reports, it's obvious that the time has not come yet for MS's xbox division to be highly profitable...but i'll bet the MS executives never expected that it would for several more years. their "profit" in the current console generation has come in the form of market share and recognition as a viable force in the competitive gaming market


This is not entirely true. If you read between the lines of what Microsoft said when the console was released, they expected to lose up to $2 billion dollars before the Xbox divisions would start turning a profit. And they did expect the original XBox 1 to turn a profit eventually.

This didn't happen, due to a number of factors.  Componnent costs did not drop as fast as expected and some component costs have already completly hit rock bottom and won't go any lower and Microsoft is still losing ~$50 per console. You can see the effects of this in the departure of Ed Fries and Microsoft's divesture of much of its in-house games development. It's also one of the reasons why it is accelerating the roll out of the 360, because they can't make a profit on the Xbox at all.

So, now the XBox Division has already lost close to $2 Billion already and despite the Q4 profit (attributable to Halo 2), Microsoft has already said they expect losses to continue for at least 18 to 24 months. Microsoft can sustain losses in the XBox division indefinitely, but it doesn't neccessarily mean that they will have the desire to do so.

I'm not trying to sound dire here. I love my Xbox, but I think it's pretty evident that Microsoft is not where they want to be with the Xbox. They certainly have done better than anyone expected in terms of market share, but at a much higher cost than they expected. The 360 is big for them. If they turn a profit on it, Microsoft will have hit a clean home run. If they don't, then I think they'll seriously rethink what they're doing in the industry.
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« Reply #19 on: May 28, 2005, 06:30:16 AM »

I'm going to try and stop the fanboy wars for a while, or just feul the fire, we'll see in a bit, lol.

Ya know, the Xbox is one of the most godawful ugly consoles I have ever seen in my life (we wont compare it to the original Atari 2600, I meant for ths generation).

However, that being said, I hated everything the X-box stood for.  Mainly because I see microsoft as the evil empire.  I see Microsoft as everything I have hated about software development today.  So consider me not a big fan of anything Microsoft is and accept if I say something nice about them it's probably very begrudingly, fanboys.

Microsoft is good for Video Games.  They have raised the bar so much with 1 console it hurts my brain.  Imagine the console wars if it was just Sony and Nintendo for this generation. Sony has some good games, dont get me wrong, as does the Gamecube... Although I was not a fan of very many Gamecube games this generation... Vietiful Joe was amazing though.  But the X-Box had a LOT of games this generation, I dont mean the crappy ones, I mean the quality, I need this console to play this game games.  Not just Halo either, I cant imagine my life without Links, or Forza or...

Xbox's new console has a horrible name and a ugly look(but not nearly as ugly as the original one).  But I am looking foward to them help raising the bar for the next generation.  They did a lot right and hopefully they learned what they did wrong.

In the next generation, I am hoping the following things occur:
1) Nintendo works on making a better system that isnt 2 steps behind whats out there.  Instead of trying to do things thier way, they go with what more of us would like.  I dont care if its half an inch wide, I dont care if its able to play Atari 2600 games.  I want it to be able to play good games today.  Thier Handheld market shows they know how to make great games, they need to make a great console with a real online presence.

2) Sony has to do something different.  I dont know, but if I am deciding between a X-Box and a Sony Right now, I'm probably picking up a X-Box first.  The Playstation was a great system, the PS2 Was decent enough, but not great, if it wasnt for Grand Theft Auto and Virtua Fighter 4 Evolution, I mighta sold my PS2 by now.  They need to work on making quality games, they need to get better liscencin.  They also need to make thier system better for developers and get a better online presence, more like X-Box live.

3) X-box needs to keep Xbox Live for as long as humanly possible.  It is thier saving grace in my humble opinion.  Not Halo, no, X-Box live.  They need to get some more 3rd party liscencing.  They also need to make thier games better.  They need more decent RPG's.  They need to instead of getting a lot fo games, get great games.  Quality supplants quanity.  I want to see them take a nintendo approach to thier game design department.  I want them to not make sure they have the best system as much as the best possible games.

What about you guys?

*edited for spelling*
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« Reply #20 on: May 28, 2005, 07:32:05 PM »

1) I don't think Nintendo Revolution is going to be that far behind PS3 and Xbox 360 in terms of power.  They said Revolution would be 2-3x more powerful than the Gamecube, which is probably the only realistic claim made about any of the future consoles.  The downloadable content for the Revolution means that they have some online plans for future.  

2)  Since all the consoles are including the hardware to get online right out of the box this time, I think we'll see better online support for all three consoles.   Anyway, I think more people are online with PS2 than Xbox right now due to the larger installed base.

3) Xbox Live is the premier online system, but Xbox really needs more system-selling titles like Halo.  Their tech superiority is going to disappear in the next generation as third party games are likely to look as good on the PS3.  Plus, the PS3 has Blu-ray for the HDTV owners.  Xbox needs both quality and quantity.  Gamecube has plenty of quality games, but people tend to go into "I'm selling my GC" mode when two months pass without any interesting titles.
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« Reply #21 on: May 29, 2005, 05:50:51 AM »

Ive been saying this stuff for a while.  Nintendo isnt concerned with being #1, they are concerned with making good games and turning a profit.

The simple fact of the matter is most people don't understand Nintendo can make quite a bit of money (and more than their competition, even) by focusing on their costs and business.  They also exploit (in a good way) their owned properties better than any other company.  I will probably end up getting anything they make with Zelda and Metroid (maybe not the DS Metroid, however), and they have the whole Mario/Donkey Kong thing, and now Wario has caught on huge, etc.

Do they own Pokemon?
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« Reply #22 on: May 29, 2005, 12:27:34 PM »

I keep reading here that the Gamecube is definately in 3rd place..could someone substantiate this ?

And I don't mean in the USA, the console gaming market is the world, not the USA.
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« Reply #23 on: May 29, 2005, 06:42:47 PM »

Quote from: "Dinkytoy"
I keep reading here that the Gamecube is definately in 3rd place..could someone substantiate this ?

And I don't mean in the USA, the console gaming market is the world, not the USA.


http://www.consolegold.com/forums/viewtopic.php?t=5634&start=0&postdays=0&postorder=asc&highlight=console+sales+data

Those are the figures as of the end of 2004.  Nintendo really isn't doing as poorly as people seem to think.
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« Reply #24 on: May 29, 2005, 06:59:42 PM »

Quote from: "Temjin"
Those are the figures as of the end of 2004.  Nintendo really isn't doing as poorly as people seem to think.


Well, I would argue that they are doing more poorly than the overall numbers would suggest.  The gap in North America and Europe (the two largest markets) between XBox and Gamecube is significant enough; it's only XBox's near total failure in Japan that narrows the overall gap.

Nintendo's approach may very well result in long-term profitability but they face two issues - cultural irrelevance as the game market expands into game types they seem unwilling/uninterested in supporting and relative decline as their market share decreases irregardless of their actual sales growth and profitability.  I call it the Apple effect - Apple is still around and profitable, but it's such a small part of the game market that they hardly matter anymore.
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« Reply #25 on: May 29, 2005, 07:25:40 PM »

There is a 3 million unit gap in North America, a 2 million unit lead in Japan, and a < 1 million gap in Europe as of 2004.  I don't see that as very significant, especially since Sony has a 60 million unit lead on the Xbox.  Since Microsoft is bringing in the Xbox 360 this year, I think Nintendo might end up as number 2 this generation since they still have more than a year left with the GC and a new "non-kiddie" Zelda title coming out.
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« Reply #26 on: May 29, 2005, 07:27:40 PM »

Quote
I call it the Apple effect - Apple is still around and profitable, but it's such a small part of the game market that they hardly matter anymore.


But what's wrong with that?  If your company goal is to remain profitable then that's a feasible business model.
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« Reply #27 on: May 30, 2005, 07:05:01 PM »

Quote from: "Temjin"
 Since Microsoft is bringing in the Xbox 360 this year, I think Nintendo might end up as number 2 this generation since they still have more than a year left with the GC and a new "non-kiddie" Zelda title coming out.


I doubt that. GC sales even in their strongest territory of Japan have fallen to almost nothing now. The DS was the reason they made money this quarter.
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« Reply #28 on: May 30, 2005, 09:36:52 PM »

We'll see how things go in the next gen.  According to Nintendo, it will be very easy to program games for the Revolution.  That *was* the XBox's selling point, which Nintendo and Sony have just picked up on, so it should lead to some shake-out in this generation.

Now that the XBox has established itself in the console market, I cant see their former business model working this time- they will actually have to turn a good profit.  Since the Revolution is pretty trimmed down compared to the competitions 'media hub' approach, the consoles should easily capture the cost-aware segment of the market.  

The only thing they really need is a healthy variety of titles, and decent third party support will help that a lot.  After launch, they just need enough numbers to keep the third party games coming, but since Nintendo makes more money off their 'homegrown' titles, that has been where their focus lies.
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Harpua3
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« Reply #29 on: May 30, 2005, 10:51:05 PM »

This whole thread is childish, it`s not just the "fanboy" word that`s childish.  :wink:
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Semaj
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lol
« Reply #30 on: May 31, 2005, 01:15:20 AM »

I'm a fanboy? smile
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