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Author Topic: PSP - When does Nintendo get scared?  (Read 2615 times)
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leo8877
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« on: March 24, 2005, 11:03:42 PM »

I won't be getting a PSP, but of course I follow the gaming world and it's many iterations.

For those in the know, when does Nintendo get scared about the PSP?  It seems pretty obvious that it's going to be a smash hit and take market share away from the Gameboy.

Discuss.
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« Reply #1 on: March 24, 2005, 11:11:51 PM »

Nintendo should have been scared of the PSP awhile ago.  If they're not scared by now, they're just ignorant.  Or they have something better up their sleeve (which is hard to believe).
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« Reply #2 on: March 24, 2005, 11:14:16 PM »

Haven't you heard that they are planning anorher Game boy this year? They are scared.
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leo8877
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« Reply #3 on: March 24, 2005, 11:22:16 PM »

Quote from: "Rob_Merritt"
Haven't you heard that they are planning anorher Game boy this year? They are scared.


I've heard rumors, but isn't that just stupid?  You just released the DS (which is blah, IMO) on the heels of the really successful SP, and now you want people to spend another $xxx to buy something else?  WTF, Big N?  I'll believe it when I see it, it just doesn't make sense.
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Tebunker
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« Reply #4 on: March 24, 2005, 11:24:53 PM »

It's impossible for PSP to not take market share from Nintendo, they have like 95% of it!

I think Nintendo has been conscious of Sony from the start, and if you look at the coming games for the DS they have some really cool looking games coming down the pipe. They also have 100 bucks on them in price point, and in general a different part of the market, DS is more aimed at the Teenager market and PSP is clearly aimed and the 18/21 and up market with more disposable income.

If I hadn't read some Reggie Interviews recently I'd probably be more down on Nintendo, but He seems to know what up with the gaming market, he even knocked his predecessors and company for not being online and bringing different games with more appeal to the market. I don't think I've ever heard a single person who works for Nintendo criticise Nintendo publicly like he did in all his GDC interviews.

We can't really comment on the PSP vs DS thing for a couple of months anyways, but as it is now, the DS is winning, and is consistently winning even in Japan. I think in the states, where there is a greater wealth of disposable income, you'll see the PSP fair a lot better than the DS, but I don't think Nintendo is scared.

Lastly, we won't see the next GB system for 18 to 24 months, so I wouldn't even factor that into the discussion.
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« Reply #5 on: March 24, 2005, 11:37:36 PM »

Quote from: "leo8877"
I won't be getting a PSP, but of course I follow the gaming world and it's many iterations.

For those in the know, when does Nintendo get scared about the PSP?



when parents are willing to buy psps for their 6/7 year olds, that's when nintendo might start getting scared. &, tho, as mentioned above, their market share basically has to take a hit, i still think that day's a ways off...
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Kevin Grey
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« Reply #6 on: March 25, 2005, 01:13:32 AM »

As Tebunker noted, there is no way the PSP can't take away market share.  How significant is an entirely different question.

Despite the impressions of the media, the DS has done extremely well here and in Japan and just had an outstanding launch in Europe.  Although having been released within two weeks of each other in Japan, the DS still has twice the market share in Japan as the PSP.  

I truly think they are aimed at two different market segments.  The DS will continue to do well with the core demographic that has made the GBC and GBA so successful (which skews younger I would imagine).  For that demographic the much lower price point as well as existing GBA franchises destined for iterations on the DS will be enough.  

I think what the PSP is going to do is bring people to the handheld market  who have never been interested in it before, not necessarily convert current GBA owners.  

If Nintendo can hold on to the majority of its current portable player base I think they will remain wildly successful.

Since the era of the Genesis and SNES the market has proven it can easily except two competitors in the console arena so I see no reason not to believe that to be the case in the portable arena.
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« Reply #7 on: March 25, 2005, 04:07:19 AM »

I think Nintendo is in a "Catch-22" situation.  The DS, which was aimed at an older market than the GBA, ended up selling to kids who interpreted it as the successor to the GBA.  That means Nintendo now has to market more kids games to the DS, which potentially means it loses it's "cool factor" with teens and adults.  

As for when the new GameBoy comes, I think it will be sooner rather than later.  Have you checked out the release schedule for the GBA in the second half of this year?  It's extremely sparse right now, much as is the XBox.  Either there is a new GBA coming or everyone is waiting until some undetermined future date to announce what they are planning.
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« Reply #8 on: March 25, 2005, 08:35:50 AM »

Quote from: "Tebunker"


I think Nintendo has been conscious of Sony from the start, and if you look at the coming games for the DS they have some really cool looking games coming down the pipe. They also have 100 bucks on them in price point, and in general a different part of the market, DS is more aimed at the Teenager market and PSP is clearly aimed and the 18/21 and up market with more disposable income.


Price doesn't seem to matter that much if the device has that "it factor" buzz to it though, and I think the PSP can get that, and in some ways already has. You see it with people paying $300-400 for a ipod just for music. The $100 price diffrence didn't seem to help Nintendo with the Gamecube.
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Kevin Grey
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« Reply #9 on: March 25, 2005, 08:55:40 AM »

Quote from: "Jumangi"

Price doesn't seem to matter that much if the device has that "it factor" buzz to it though, and I think the PSP can get that, and in some ways already has. You see it with people paying $300-400 for a ipod just for music. The $100 price diffrence didn't seem to help Nintendo with the Gamecube.


Hard to say what the effect of the $100 price difference on the Cube was because who knows how dismal their market share would be without it?  

And the price point always makes a difference.  The original Playstation achieved the majority of its sales once it dropped to $150 which seems to be the magic pricepoint for consoles.  $250 for the PSP will definitely get the early adopters and hopefully start generating buzz but I don't think its going to get Sony significant marketshare.  

The biggest longterm threat to the PSP IMO is the cost of the unit itself to manufacture.  Sony is taking a bath on each system sold while Nintendo is supposedly making money on the DS hardware.  Sony is using the same tactic that Microsoft used with the Xbox- sell the hardware at a loss in order to gain marketshare.  The difference here is that Sony does not have MS's large cash coffers.  The company as a whole hasn't been doing very stellar and the games division is already incurring substantial debt from R&D on the PS3.  I don't think Sony will be able to hold out for four years losing money on this field like MS has.  

Hopefully manufacturing advances will let Sony drop the price on the PSP fairly rapidly.
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wankerjr
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« Reply #10 on: March 25, 2005, 03:08:03 PM »

Quote from: "Jumangi"
Price doesn't seem to matter that much if the device has that "it factor" buzz to it though, and I think the PSP can get that, and in some ways already has. You see it with people paying $300-400 for a ipod just for music. The $100 price diffrence didn't seem to help Nintendo with the Gamecube.


I think that depends on the target audience. Remember that the GBA SP market is skewed heavily toward the younger market. More parents don't have too much of an issue dropping $80 for their 5-8 year olds though almost all do worry about their kids breaking the darn thing by carelessness. I've even met 60-70 year olds that have bought a GBA SP for themselves due to some of the "slower non-twitch" games they can enjoy.

If the non-hardcore gaming market gives slight pause to the GBA's price tag, ranging from $100 to the current price of $70 (depending on sales & stuff), how much more are they going to pause at the $250 price tag?

True Sony may not be targeting the younger demographic but I'm sure there are kids who will be forced to choose between PSP, XBox 2 (or whaterver it's called), or a PS3. Unless the PSP cuts it's prices on its PSP hardware and software I don't think it will overtake Nintendo anytime soon. Like Kevin mentioned Sony cannot take a continual loss on the PSP from a business standpoint for a long time in order to gain significant marketshare since their video games division has been the only profitable division of the Sony family for quite a while.
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« Reply #11 on: March 25, 2005, 03:49:05 PM »

Quote from: "leo8877"
I won't be getting a PSP, but of course I follow the gaming world and it's many iterations.

For those in the know, when does Nintendo get scared about the PSP?  It seems pretty obvious that it's going to be a smash hit and take market share away from the Gameboy.

Discuss.


when sony can wrest japan out of Nintindoes cold dead fingers.
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« Reply #12 on: March 25, 2005, 04:05:09 PM »

I love reading that the Gameboy is targeted for 6 year olds, because I have tons of games for my DS (I count the GBA games in this) that I think are above the level of a six year old.  I have proof of this because my son is six and he isn't going to be fully grasping games like Advance Wars and Final Fantasy Tactics.  He does like his Minish Cap, though. smile  That's my boy.

At any rate,  I have both a PSP and a DS and I love them both for differing reasons.  I don't thin kthe PSP is going to put Nintendo out of business and I think there is plenty of room in the market for both.  I also don't subscribe to the theory that more games, regardless of quality outweighs fewers great games.  I maintain that I would rather get fewer releases, assuming they are great games than 50 games a month I am unwilling to buy because they lack innovation or quality.
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« Reply #13 on: March 25, 2005, 04:29:52 PM »

Quote from: "DiscoJason"
I love reading that the Gameboy is targeted for 6 year olds, because I have tons of games for my DS (I count the GBA games in this) that I think are above the level of a six year old.  I have proof of this because my son is six and he isn't going to be fully grasping games like Advance Wars and Final Fantasy Tactics.  He does like his Minish Cap, though. smile  That's my boy.

At any rate,  I have both a PSP and a DS and I love them both for differing reasons.  I don't thin kthe PSP is going to put Nintendo out of business and I think there is plenty of room in the market for both.  I also don't subscribe to the theory that more games, regardless of quality outweighs fewers great games.  I maintain that I would rather get fewer releases, assuming they are great games than 50 games a month I am unwilling to buy because they lack innovation or quality.
I agree that less games with more quality would be a good thing.  however there has to be some watershed point there you are just putting the damn things out so slow you lose the admitidly short attention span of those that live in this time.  Our boys at the big N got dangerously close to that mark with the gamecube.
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« Reply #14 on: March 25, 2005, 04:47:44 PM »

Quote from: "AttAdude"
I agree that less games with more quality would be a good thing.  however there has to be some watershed point there you are just putting the damn things out so slow you lose the admitidly short attention span of those that live in this time.  Our boys at the big N got dangerously close to that mark with the gamecube.


Also a very valid point.  For the DS, they are indeed going pretty slow, but it launched at Christmas with some title and then we went into the normal beginning of the year slump for games which affects all platforms.  From March on, there is at least one game per month that I am interested in for the DS and that is good enough for me.  Others need more games per month and I can understand why that is too slow for them.
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« Reply #15 on: March 25, 2005, 04:48:43 PM »

I think if Nintendo markets their DS games at the GBA game price of $30, while the PSP sticks to $40-$50 on top of the higher hardware price, that will probably be enough to keep many people in the DS camp (parents buying stuff for their kids).

I also think the DS has a more 'sturdy' look to it than the PSP.  Frankly, I worry about dropping the PSP and 'breaking' it much more than I do with the DS, which gives me the impression of being quite a solid little gizmo.

I own both (I'm strangely impulsive when it comes to gaming), and while I can certainly see the appeal of the PSP, I don't think I'd be buying one for my kid, even if he were a teenager (if he worked and saved up for it, I'd let him get it, but then he'd have to work a bit more to save up the extra cash).

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Scott
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« Reply #16 on: March 25, 2005, 05:02:07 PM »

I'd think the biggest worry for Nintendo is losing market share.  The Gameboy really keeps Nintendo in business.  If they lose any market share, or a significant amount, it probably really hurts.  Sony has a lot of products, and the successful PS2 line.  Sony can afford to spend money on the PSP to get market share.

If Nintendo and the GBA start losing significant market share, that may cause a big hit on the whole company, the Gamecube's successor, etc.  I'm not sure Nintendo, as a company, can afford to lose a lot of market share at this point.
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« Reply #17 on: March 25, 2005, 05:04:45 PM »

I think Nintendo has sucked since the N64 myself.  

I even saved up money to by the then, Ultra 64, only to find out they were going to delay it and use expensive carts.  PS got my money instead and I never looked back.

They should be scared.  They suck at hardware development.  Period.
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« Reply #18 on: March 25, 2005, 05:19:10 PM »

Quote from: "Scott"
I'd think the biggest worry for Nintendo is losing market share.  The Gameboy really keeps Nintendo in business.  If they lose any market share, or a significant amount, it probably really hurts.  Sony has a lot of products, and the successful PS2 line.  Sony can afford to spend money on the PSP to get market share.

If Nintendo and the GBA start losing significant market share, that may cause a big hit on the whole company, the Gamecube's successor, etc.  I'm not sure Nintendo, as a company, can afford to lose a lot of market share at this point.


Nintendo is doing quite well financially.  While the GBA is of course a big part of that they are also the only console manufacturer to make money on their hardware from its introduction.  For all of the doom and gloom that surrounds Nintendo based on lack of marketshare they still consistently make hundreds of millions of dollars in profit.  Under their current business model they can likely continue to be profitable on console hardware even if lack of 3rd party support has made them negligible on gaming culture as a whole.  

Microsoft has lost literally billions on the Xbox (they just posted their first profitable quarter following the Halo 2 juggernaut).  Sony *cannot* afford to lose billions on the PSP.
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« Reply #19 on: March 25, 2005, 10:06:56 PM »

Quote from: "Eco-Logic"
I think Nintendo has sucked since the N64 myself.  

I even saved up money to by the then, Ultra 64, only to find out they were going to delay it and use expensive carts.  PS got my money instead and I never looked back.

They should be scared.  They suck at hardware development.  Period.


I also think Nintendo has been going downhill since the N64. My gripe with them is their stubborn clinging to their stupid cartridge-type media. Ugh. I mean the N64 was a blurry mess, because of the damn cartridges.

Going with cartridges for the N64 was the single biggest mistake in the history of Nintendo. It cost them the Final Fantasy franchise along with many others. Then they continued the lunacy with those mini-DVD's for the Gamecube. Did they learn nothing from the N64 mess? Stuff that was in the Xbox and PS2 versions, gone from the Gamecube version cause it just couldn't fit on the disc.

Now the DS has those mini-cart things which can hold from 128 MB to 256MB of info, compared to the 1.8 GB that the PSP disc can hold.

*sigh*

Will Nintendo ever learn???  frown
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« Reply #20 on: March 25, 2005, 11:30:46 PM »

Yeah, I think there are definitly a lot of misperceptions hanging around 'the internet community' as far as how companies are doing finacially.

First off, all of the basic financial information on how each company is doing is publicly available off of each companies website (I think I've posted links to them in the past).  They spell out in pretty good detail just how much money each company  either making or losing on various segments of their business.

A few common perceptions:

A) Nintendo is in financial trouble; GBA is the only thing holding it up - FALSE.

Nintendo's financial statements
Everybody gets caught up in market share %, but in reality the only thing that actually matter is profitability.  While the GBA does bringing in a huge amount of dough, you might be suprised to find out that the console division is still quite profitable and bringing in a decent amount of money. If for some reason Nintendo lost all of its handheld marketshare, it is still completely viable as a console only company - especially when compared to Microsoft who's console division lost almost $900 million in each of their first two years.  While BigN doesn't have as much $$ in the bank as MS, according to the 2004 statement they still have close to $9 billion - they aren't going anywhere soon (neither is Microsoft).

There is some bad news though when you look thru the document - in 2004, the N64 outsold the Gamecube (ouch).


B) All three companies take a bath/break even on selling their consoles, and make it up later in software sales - FALSE.
The Xbox is the only one of the three that initially was losing a lot of money on hardware sales.  As the prices of components have fallen over the last few years, they are actually close to or past the break even point right now.

The Gamecube was close to break even on launch - they initially made a tiny profit off of each gamecube sold (financial reports differ from $10 to $30/unit), but overall the ARPU was still pretty low.

The PS2 actually had a decent profit margin on hardware right out of the gate - much larger than the Xbox or Gamecube.  The way that their financial numbers were initially spun, it looked like they were losing money - in fact, this was due to the initial ~$2 billion dollar investment they made up front on development of the hardware.  Because of that initial investment, they were able to keep their ARPU high right out of the gate and are still making a tidy sum off of sales of the original PS2 model.

C) Animal Crossing isn't the best game ever made - FALSE.
I mean, c'mon, can we at least agree on this??  smile
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Jumangi
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« Reply #21 on: March 25, 2005, 11:39:29 PM »

Quote from: "wankerjr"
Quote from: "Jumangi"
Price doesn't seem to matter that much if the device has that "it factor" buzz to it though, and I think the PSP can get that, and in some ways already has. You see it with people paying $300-400 for a ipod just for music. The $100 price diffrence didn't seem to help Nintendo with the Gamecube.



If the non-hardcore gaming market gives slight pause to the GBA's price tag, ranging from $100 to the current price of $70 (depending on sales & stuff), how much more are they going to pause at the $250 price tag?


Not sure you really read my post there. Apple is going to pass 10 million units for the ipod soon. Thats 10 million for a $300+ machine for playing just music. Of course the 10yr old market isn't going to be affected by this machine but anyone say 15 and older? I frankly don't see Nintendo having a chance there even with the DS. I hear people who are even gamers being wary of the DS and saying they are holding off unitll they see something really neat from the 2 screens/touch stuff. The PSP fits in with the general tech/gadget crowd very well with its sleek design, great screen and movie/music ability(granted its a medioce music player overall witht the propriatary memmory and no easy to use interface for management).

I'm not saying the PSP  will kill Nintendo in the handheld market in a snap. But if Nintendo isn't careful I do see the potential for Sony to take the lead as a whole like they did in the home console market. I just don't think the DS is going to be a big success.
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« Reply #22 on: March 25, 2005, 11:57:22 PM »

Quote
They should be scared. They suck at hardware development. Period.


Don't know much about hardware, do you?


Quote
Ugh. I mean the N64 was a blurry mess, because of the damn cartridges.


As opposed to the crystal clarity found on the PS? Please, if it wasn't pre-rendered it looked like crap.
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« Reply #23 on: March 26, 2005, 12:31:57 AM »

I think the DS is a unique piece of hardware, and Nintendo will need to worry when it becomes apparent that developers really don't know what to do with it. The PSP is a very slick, very powerful, but very traditional gaming device. That's not a bad thing. It's totally in Nintendo's court right now to show gamers why the DS offers something the PSP can't even come close too. Gimmicky map/camera controls are not enough.

Also, I don't think it's fair to judge Nintendo quite yet - I'm not sure if it's wishful thinking, but I have a nagging suspicion that the GB Evolution is closer than gamers think.
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« Reply #24 on: March 26, 2005, 02:21:27 AM »

Quote
Now the DS has those mini-cart things which can hold from 128 MB to 256MB of info, compared to the 1.8 GB that the PSP disc can hold.


There is no maximum spec for storage on the DS.  It was initially 128 Megs when announced but advancements in memory technology enabled them to upgrade to 256 megs in short order.  There is already  speculation that they could be up to 1 Gig within a year or two.
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« Reply #25 on: March 26, 2005, 03:52:33 AM »

Quote from: "Kevin Grey"
Quote
Now the DS has those mini-cart things which can hold from 128 MB to 256MB of info, compared to the 1.8 GB that the PSP disc can hold.


There is no maximum spec for storage on the DS.  It was initially 128 Megs when announced but advancements in memory technology enabled them to upgrade to 256 megs in short order.  There is already  speculation that they could be up to 1 Gig within a year or two.


How much will that up the price of the cartridge though? I mean 1 Gig mem cards for the PSP are like $150. That is the whole problems with this kind of media. CD/DVD based media is cheap as hell to make, not so with cartridge media.

It would also still leave them with about half the space of the PSP UMD's.
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« Reply #26 on: March 26, 2005, 04:05:19 AM »

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Quote from: "Kevin Grey"
Quote
Now the DS has those mini-cart things which can hold from 128 MB to 256MB of info, compared to the 1.8 GB that the PSP disc can hold.


There is no maximum spec for storage on the DS.  It was initially 128 Megs when announced but advancements in memory technology enabled them to upgrade to 256 megs in short order.  There is already  speculation that they could be up to 1 Gig within a year or two.


How much will that up the price of the cartridge though? I mean 1 Gig mem cards for the PSP are like $150. That is the whole problems with this kind of media. CD/DVD based media is cheap as hell to make, not so with cartridge media.

It would also still leave them with about half the space of the PSP UMD's.


No argument on the space issue- though with N64-PSX texture limitations it won't need 1.8 most likely.  Its still more than an order of magnitude increase of N64 era limitations and puts it in league with the 650 MB or less that most PSX games shipped on.  It also introduces the real possibility of FMV and voice acting- again almost unknown for the N64.  You won't fit Final Fantasy VII on one of these things but the vast majority of the rest of the PSX games could be accomodated on the DS.  


As far as cost I think the idea is more constant cost=space improvements over time.  Cost of manufacturing a 512 MB cartridge next year could be the same a 256 MB cartridge this year, a 128 MB cartridge last year, etc.  Supposedly thats the reason for the increase to 256 MB currently- it was incurred with little effect on manufacturing cost.  

The same will apply for those 1 GB memory sticks for the PSP- they will likely be quarter of their current cost in a few years.
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« Reply #27 on: March 26, 2005, 05:15:29 AM »

For the record, the maximum size DS cartridge is 1 gigabit; the max size of a UMD disk is 1.8 gigbytes.  If you do the conversion, that means the UMD can hold about 14x the amount of data as a DS cartridge.
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