IC_Freeze

this report seems to think so:
http://www.avault.com/news/displayne...=10172002-8585

Groucho

Rumors like this have been circulating for a long time (including many threads in this forum), but there's nothing to support them. What I don't understand is how the article can state:

"Sony's PS2 console is expected to account for 63 percent of sales, followed by Nintendo's GameCube with 21 percent and Microsoft's XBox with 16 percent."

And conclude from that that Nintendo will leave the console business but Microsoft won't?

AgtFox

The thing I always find funny is that when these analysis reports are done, they never take into effect Nintendo's money maker...the GameBoy and its siblings. I'm not trying to skew this into a pro-Nintendo post, but it is important to know that the GameBoy is the reason Nintendo is still and will still be around for years to come.

110 million units of the GameBoy have been sold since its start in 1989...just think about that, 110 million units. I'm not sure on the number of Advance's sold up to this point, but I'd be willing to bet it is above 10 million.

It is true that Nintendo is in the game to bring great games to the consumer and thankfully the GameBoy is around to line their pockets with money to continue making great games.

Aghama

The people who argue that Nintendo should get out of the console business in order to make more money have a point. The people who argue that Nintendo must get out of the console business don't.

chess

but it would be great if they made those great games for other systems...a la sega.

really, first party games are really the only reason to own a gamecube at this point, and it doesn't really make a lot of sense to buy a console for one developer...unless, of course, they happen to own the two best franchises of all time.

AgtFox

I don't know...many people have been doing this for a long time. At the foundation, I bought my PS2 for Square, my GameCube for Nintendo/Rare (who recently went X-Box) and my X-Box for Halo, niche Sega titles (which were announced before I got my X-Box) and Project Ego (Fable). The other exclusives are just icing on the cake as far as I am concerned.

Even though I do not like them, the GameCube also has an exclusive on the Resident Evil games (except for RE Online).

Get Me Coffee

The end of Nintendo hardware will be a dream come true! I hate the fact that I bought my GC for only a few series of games. Hell what are you going to do? You love those first party games! So you have to do the plunge and buy a Nintendo console. But if they went software only…. you would have one ultimate system with Nintendo great games and other awesome games. It would be a sweet deal.

The likeliness of all this is slim. Hell I don’t see Nintendo dropping their console line. If anything, I see Nintendo later one changing its model to focus more on other target groups to gain market share. Nintendo needs to regain the teen+ market.

tha_dvd_man

It may be 21% compared to Microsoft's 16% now, but MS at this point has more to gain than Nintendo does. They also have a lot more money to lose than Nintendo does, which was part of MS's long-term plan from the beginning.

joltaddict

Agree 100%.

jeffdsmith

If Nintendo ever were to go 3rd party or second party, I pray that whomever is making the consoles will let Nintendo have some serious input into the hardware. Nintendo's software is always top notch, but I think their hardware inovations and improvemnets get over looked. If Nintendo became software only I think the industry as a whole would suffer a huge loss.

joltaddict

I think the N64 controller was the best of all time.

Ralph Wiggum

The great part about these rumors is that I have yet to see one with any sort of data comparing Nintendo's profitability as it currently is vs. an educated guess as to what it would do as a 3rd party. The only reason that is offered is Nintendo's small market share which is still larger than Microsoft's.

That said I do think that three consoles is too many. IMO the PS2 is the only system with a complete (variety of high quality games in all genres). The other two systems really work best as additions to a PS2.

Josh H

I second that. I hope they either stick around, or persuade whoever they join up with to at least put out a cheaper gaming only machine in addition to their set-top box, as I have no interest in paying more for a bunch of features I don't need.

Plus as you said, their controllers consistently become my all-time favorite each generation.

Josh H

I'd liked to see this as well. It would be something like this.

Current situation: Profit on games + profit on licensing fees from third parties + profit on controllers and memory cards - whatever they lose on each console - fees paid out to obtain exclusives like Resident Evil=net profit.

Third Party: Profit on games + profit from selling exclusive agreements (assuming they don't simply partner with sony or MS) + money saved by not having a console losing money with each sale + money saved by not having to pay for exclusives for their console - profit they made in the past on controllers and memory cards - licensing fees paid to sony and MS to publish their games=net profit


So basically if the profit they make on licensing fee's from third parties, hardware accessories and not having to pay licensing fee's for their games outweighs the profit they stand to make by going third party and cutting their loses on each console the sell, buying exclusives, etc., they have no reason to even consider leaving the hardware industry.

If it's vice versa, then they have a good reason to consider it.

I'd love to see an analyst actually put some best estimate figures into these categores (and any revenues or expenses I overlooked) so we'd have something to go by.

Gallant Pig

I hope they stay in the console game. More competition is a good thing, and they can control their product better (they will know the hardware inside and out). Also they seem to like keeping the cost down so it's not hard to afford it and another console.

zero

W O R D

Groucho

That's the thing...Nintendo KNOWS that people will buy their first party games and that they are strong sellers. People are so loyal to their franchises, particularly Mario and Zelda, that they will buy the console just to play those games. If they can get get a good profit margin off the console, Nintendo is killing two birds with one stone.

The rumors of Nintendo going third party are based more on wishful thinking than on fact. I could see them teaming up in a partnership with Sony or Microsoft however, so that they could continue to make the Gameboy and maintain the handheld/console link.

joltaddict

Problem with that is nobody gets a "good profit margin off the console". Its a loss leader for them all to some extent or another. So its less wishful thinking than questioning why it wouldnt be more profitable to sell your strengths and ditch the high cost/low profit sector. jeffdsmith brought up a good point in one of these theads in the past that it may not be about maximizing profits for them, its more likely a issue of corporate identity or pride of worksmanship. Id buy that before the arguement that theyre following the most profitable path available to them.

Lastblade

I hope not.

I think it sucks that Sega exited hardware business, and if Nintendo follow suit, then all we will have are 2 corporate giants trying to sell us setup boxes that will be your entertainment center, record your TV shows, hook up to Internet, do your laundry, do the dishes, wash your cat, walk your dog, vacuum your carpet, clean up your room, download porn, all-in-one multipurpose jack-of-all-trade system. Oh yah, it might play games too.

Sigh...

Get Me Coffee

Also don't compare Sega hardware to Nintendo hardware...two different species in my book.

Josh H

That's definitely a major factor in whether they go third party or not.

If they do their own projections, and find out they could increase their profit margins a little by going third party, they're not likely to do it simply because of company pride. They've always seemed to care more about doing things their own way, than doing things only to increase their profit margin.

But if they do their projections and find out they can make a lot more money by going third party (while still making the gameboy) then it's likely that the bottomline will outweigh company pride.

The question is how much of a difference in profit margins it will take for them cast their company pride aside and go third party.

And there's no way to speculate on it as we don't even have a clue as to their current profit margin, much less what the profit margin would be if they go third party. And we certainly don't know how much the third party profit margin woud have to exceed the current margin for them to cast their pride aside.

arwild01

I never bought a PSX. The system never really excited me and there were too many great games on the N64. (IMHO Mario 64 and Zelda: Ocarina of Time are the two best games of all time).

I did buy a PS2, and I have a TON of games for it, but that's because I can pick up a bunch of titles cheap at Fry's and I have a full-time job now.

I recently picked up an XBOX because the new Sega "bundle" was too good to be true.

My favorite games of this generation? I'd have to say Mario Sunshine and Eternal Darkness. I will have to give props to FFX, Maximo, Halo, GTA3, and possibly a few others.

When it comes right down to it, I've been spending more time playing my Gamecube then any of my other consoles. With Metroid Prime on the Horizon and Zelda to follow early next year things aren't looking real good for my other systems. In fact, the only Xbox games I'm interested in right now is Halo2 and PD:Orta.

In short, Nintendo still makes killer systems, the best controllers, and some of the best games around. If anything, I feel like their market share has been improving with the older gamers in this generation (thanks to ED and Resident Evil, etc).

I only see their positioning strengthening.

-Alan

einTier

I would say they do, but I think they can't. They've locked themselves into a model, and it's going to be hard to break out without accepting quite a bit of risk.

Actually, what they are doing is kind of smart, but it could backfire on them in a big way. They've decided to be "the second console". The whole teen|adult market they've pretty much left to Microsoft and Sony. They can't compete there, so they'll let those two gorillas beat up on each other for a while. In the meantime, they'll sell their systems to parents who want a "safe" system for the kids (like cigarettes, hook 'em while they are young) and to the people buying a second system for exclusive titles.

Most people I know with two consoles have either a PS2 or XBox and a Gamecube. The Gamecube is cheaper, and has a better exclusive title library than PS2 or XBox.

I think Nintendo just wants to survive this round, and see what shakes out in the next -- or next two. I think if one of the other consoles drops out of the market, they might try to re-assert dominance again, but they aren't going to risk it here. They'll play it safe and wait it out.

Why is it dangerous for them? Because if they try to compete directly with MS and Sony, they will alienate their core market -- parents. Not only that, but Nintendo, while rich, does not have the money to play with Sony or Microsoft.

Get Me Coffee

einTier,

I agree with you completely. Nintendo is on the sidelines. Focusing on the parent group is fine, but it does shortchange them. Think of it this way. How many years will Nintendo be dominant in the younger group? A pure estimate of the age range 6-13 (13 is pushing it) After that, mommy and daddy will have less than zero say on which game system they use. And so beings the end of Nintendo in there lives and the beginning of choosing PS2 or XBOX. And PS2 and XBOX have a much larger bracket in age range. Nintendo's focus on parents is good but it does shoot them in the foot! Lets face it, kids do what's cool and if parents think the GC is cool, they don't.

I do see Nintendo trying to focus a little more on the teen+ group. But a perfect formula would be to have the parents and teens...but this is extremely hard to balance.

gcribbs

Nintendo will not leave the console market.

They make a lot of money off the console market and they will not take the risk as a third party company unless they are forced to.

They are in second place not third. I see no reason for them to be worried since they will extend their lead with the exclusives coming out in the next few months.

Both the PS2 and GC are profitable as consoles. Only the XBox is losing money which MS expected to do this generation. It seems that all three consoles are doing what they expected this generation.