Article from USAToday about Nintendo/hardware/software
06-06-02 | 03:38 PM
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Article from USAToday about Nintendo/hardware/software
From USAToday.
Text bolded by me.
Nintendo plans to expand its share of the video game market by focusing on making better games rather than on building increasingly powerful game players, its new president said Thursday.
The Kyoto-based game maker that brought the world Pokemon and Super Mario must take a new and distinctive approach as an entertainment company to compete with rivals Sony and Microsoft, said Satoru Iwata, who took his post last week.
"We can't be optimistic about the game market. No matter what great product you come up with, people get bored," he said, referring to game players at a meeting with analysts at a Tokyo hotel. "I feel like a chef cooking for a king who's full."
Sony's PlayStation 2 machine has been leading the pack with 30 million sold worldwide in the three-way game war that also includes the Nintendo GameCube and Microsoft Xbox.
Nintendo has shipped about 4 million GameCube machines, while Microsoft is expecting to ship 3.5 million to 4 million Xbox consoles by the end of June. All three makers have slashed machine prices recently to woo game fans around the world.
Iwata, a 42-year-old game software developer who joined Nintendo two years ago, said selling a game console is totally different from selling, say, a washing machine.
People won't imagine buying another washing machine unless it breaks down, he said. But Nintendo wants to make great games so even people who own a Sony PlayStation 2 will go out and get a GameCube.
Although Iwata declined to give details of what Nintendo has in the works, he gave one example of where his company hopes to differ: It won't pursue online games, judging them as still too limited in appeal.
Nintendo is also planning more games that link the Game Boy Advance, the company's hit portable machine, with GameCube. It will exploit its lineup of exclusive games like Mario and Zelda, while working more with outside game developers.
"The element of surprise is critical. But delivering surprise is becoming extremely difficult," said Hiroshi Yamauchi, Iwata's predecessor who built his tiny card-maker into a global video-game giant. "Game developers are running out of ideas."
Yamauchi, 74, who is stepping down after five decades at the company's helm, said that developing games has grown too time-consuming and expensive. Nintendo hopes to come up with profitable games more quickly without compromising on their appeal, he said.
In the latest fiscal year ended in March, Nintendo posted a profit of 106 billion yen ($849 million), up 10% from the previous year, on a 20% rise in sales.
While scoffing at the focus on machine sales, Iwata said he remains determined to sell GameCube, targeting 50 million in worldwide sales by March 2005.
"The effort to produce machines with better technology has reached its limit," Iwata said. "If things continue, they may lead to the decline of the entire game industry."
The Kyoto-based game maker that brought the world Pokemon and Super Mario must take a new and distinctive approach as an entertainment company to compete with rivals Sony and Microsoft, said Satoru Iwata, who took his post last week.
"We can't be optimistic about the game market. No matter what great product you come up with, people get bored," he said, referring to game players at a meeting with analysts at a Tokyo hotel. "I feel like a chef cooking for a king who's full."
Sony's PlayStation 2 machine has been leading the pack with 30 million sold worldwide in the three-way game war that also includes the Nintendo GameCube and Microsoft Xbox.
Nintendo has shipped about 4 million GameCube machines, while Microsoft is expecting to ship 3.5 million to 4 million Xbox consoles by the end of June. All three makers have slashed machine prices recently to woo game fans around the world.
Iwata, a 42-year-old game software developer who joined Nintendo two years ago, said selling a game console is totally different from selling, say, a washing machine.
People won't imagine buying another washing machine unless it breaks down, he said. But Nintendo wants to make great games so even people who own a Sony PlayStation 2 will go out and get a GameCube.
Although Iwata declined to give details of what Nintendo has in the works, he gave one example of where his company hopes to differ: It won't pursue online games, judging them as still too limited in appeal.
Nintendo is also planning more games that link the Game Boy Advance, the company's hit portable machine, with GameCube. It will exploit its lineup of exclusive games like Mario and Zelda, while working more with outside game developers.
"The element of surprise is critical. But delivering surprise is becoming extremely difficult," said Hiroshi Yamauchi, Iwata's predecessor who built his tiny card-maker into a global video-game giant. "Game developers are running out of ideas."
Yamauchi, 74, who is stepping down after five decades at the company's helm, said that developing games has grown too time-consuming and expensive. Nintendo hopes to come up with profitable games more quickly without compromising on their appeal, he said.
In the latest fiscal year ended in March, Nintendo posted a profit of 106 billion yen ($849 million), up 10% from the previous year, on a 20% rise in sales.
While scoffing at the focus on machine sales, Iwata said he remains determined to sell GameCube, targeting 50 million in worldwide sales by March 2005.
"The effort to produce machines with better technology has reached its limit," Iwata said. "If things continue, they may lead to the decline of the entire game industry."
06-06-02 | 06:38 PM
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Just to reiterate my thoughts on the subject. I don't want Nintendo to bail on the GCN, no way no how. I do think they will take a hard look at going pure 3rd party for the next generation though. They have a lot to gain by going from a 5 million user base to a 35 million user base. Also I would like to say I hope they don't do this, I love the competition. I just think it's going to happen. This article seems to hint at this.
06-06-02 | 07:06 PM
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Gamespot's article more clearly gets the point across. I don't think he's suggesting dumping the Gamecube...just that the focus should be on the games, not the hardware or whatever incidental benefits the hardware may offer.
06-06-02 | 07:10 PM
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Originally posted by ctyner
Gamespot's article more clearly gets the point across. I don't think he's suggesting dumping the Gamecube...just that the focus should be on the games, not the hardware or whatever incidental benefits the hardware may offer.
Gamespot's article more clearly gets the point across. I don't think he's suggesting dumping the Gamecube...just that the focus should be on the games, not the hardware or whatever incidental benefits the hardware may offer.
Oh I totally agree, and I didn't want to imply that. I think Nintendo will be supporting the hell out of GCN for a long while. Just the next generation we may not see a Nintendo console. But the article you mention says this:
In a meeting with analysts on Thursday, newly appointed Nintendo president Satoru Iwata revealed the company's new direction. Nintendo plans to expand its share of the video game market by focusing on making better games rather than on building increasingly powerful consoles, its new president said Thursday.
"We have a sense of crisis, that price cuts in software could destroy the game industry," he said. "The effort to produce machines with better technology has reached its limit," Iwata said. "If things continue, they may lead to the decline of the entire game industry."
06-06-02 | 08:31 PM
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Those statements don't sound at all like he's looking at going third-party. It sounds more like he's trying to say that the games business is about games, rather than being about hardware.
I think, rather, Nintendo is planning to pursue hardware solutions similar to the Gamecube, which, instead of going for power, like the XBox, aspires to a cheaper price and a smaller physical unit. Nintendo apparently sold the Gamecube at $199 for a profit, while Microsoft and Sony lost money when they launched at $299 (Sony cut costs and was making money on PS2 before the price cut).
All things considered, the Gamecube is an excellent solution, extremely competitive in price, and more than competent in power, plus, in my opinion, it has the best controller and the best aesthetic.
Sega's decision to go third-party followed a string of failed ventures, and a period of several years of losses. Sega made their decision only when facing bankruptcy. They went third-party because they could no longer maintain their business the way it was going. That's why they killed the Dreamcast after only two years; They were on the verge of bankruptcy.
Nintendo's first party stuff is much more profitable than Sega's, and I'm going to go out on a limb and say Nintendo's games are better. I'd even say Nintendo is the best developer in the world. I can think of only one other company that puts out games with a level of care and quality that is similar to Nintendo's and that's Blizzard, who only puts out one game every three years.
Nintendo's breakdown as a hardware player is probably better than they could do as a third party. First of all, Gamecube will probably have at least 10 million users by Christmas. Mario alone will see to that. Second, Nintendo makes a lot more money off their first party stuff than third-party companies do. Nintendo owns the production facilities for their media, so they don't lose any money on that (and they make money off of third parties). Also, they don't pay anyone royalties. Plus, they get free money for all the third party Gamecube games that get sold.
From what Itawa said, it looks like Nintendo plans to try to sell a Gamecube to everyone who wants to play Mario, rather than going third party and selling Mario to people who won't buy a Gamecube.
I think, rather, Nintendo is planning to pursue hardware solutions similar to the Gamecube, which, instead of going for power, like the XBox, aspires to a cheaper price and a smaller physical unit. Nintendo apparently sold the Gamecube at $199 for a profit, while Microsoft and Sony lost money when they launched at $299 (Sony cut costs and was making money on PS2 before the price cut).
All things considered, the Gamecube is an excellent solution, extremely competitive in price, and more than competent in power, plus, in my opinion, it has the best controller and the best aesthetic.
Sega's decision to go third-party followed a string of failed ventures, and a period of several years of losses. Sega made their decision only when facing bankruptcy. They went third-party because they could no longer maintain their business the way it was going. That's why they killed the Dreamcast after only two years; They were on the verge of bankruptcy.
Nintendo's first party stuff is much more profitable than Sega's, and I'm going to go out on a limb and say Nintendo's games are better. I'd even say Nintendo is the best developer in the world. I can think of only one other company that puts out games with a level of care and quality that is similar to Nintendo's and that's Blizzard, who only puts out one game every three years.
Nintendo's breakdown as a hardware player is probably better than they could do as a third party. First of all, Gamecube will probably have at least 10 million users by Christmas. Mario alone will see to that. Second, Nintendo makes a lot more money off their first party stuff than third-party companies do. Nintendo owns the production facilities for their media, so they don't lose any money on that (and they make money off of third parties). Also, they don't pay anyone royalties. Plus, they get free money for all the third party Gamecube games that get sold.
From what Itawa said, it looks like Nintendo plans to try to sell a Gamecube to everyone who wants to play Mario, rather than going third party and selling Mario to people who won't buy a Gamecube.
06-06-02 | 10:26 PM
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I see nothing hinting at Nintendo going third party in his statements. As Scandal said, I think he was simply sayin gthat they will stick to systems similar to the GCN in the future. By this I mean gaming only systems, with out a bunch of bells and whistles that most (casual) gamers don't care about.
Nintendo is very profitable in it's current form. The going to a user base of "35 million to one of 5 million" is a silly statement too. The GCN base will grow rapidly as the AAA titles come out. Planet Gamecube published an article today where Nintendo projects to sell 50 million GCNs by 2005. They'll probably never reach that level, but I would be surprised if they didn't sell at least 20-25 million world wide by 2005.
At any rate Nintendo makes tons of money and is a very proud company with a loyal fan base. I'd be shocked if they ever went third party.
Sega was in a completely opposite situation.
Sega killed their consumer confindence with the Sega CD, 32x, and Saturn debacles, which led to relatively poor sales of the Dreamcast, factor in the the rampant Piracy, and Sega had no choice but to go third party.
Personally, I wouldn't mind if Nintendo went third party. Heck I'd jump for joy if they annouced that they were going third party next generation and all of their games would be on the Playstation 3. It would mean I'd only have to shell out cash for one console next generation.
But it's not going to happen. As long as the video game market is alive, their will be a Nintendo console, and some form of the GBA, out there.
Nintendo is very profitable in it's current form. The going to a user base of "35 million to one of 5 million" is a silly statement too. The GCN base will grow rapidly as the AAA titles come out. Planet Gamecube published an article today where Nintendo projects to sell 50 million GCNs by 2005. They'll probably never reach that level, but I would be surprised if they didn't sell at least 20-25 million world wide by 2005.
At any rate Nintendo makes tons of money and is a very proud company with a loyal fan base. I'd be shocked if they ever went third party.
Sega was in a completely opposite situation.
Sega killed their consumer confindence with the Sega CD, 32x, and Saturn debacles, which led to relatively poor sales of the Dreamcast, factor in the the rampant Piracy, and Sega had no choice but to go third party.
Personally, I wouldn't mind if Nintendo went third party. Heck I'd jump for joy if they annouced that they were going third party next generation and all of their games would be on the Playstation 3. It would mean I'd only have to shell out cash for one console next generation.
But it's not going to happen. As long as the video game market is alive, their will be a Nintendo console, and some form of the GBA, out there.
Last edited by Josh Hinkle; 06-06-02 at 10:28 PM.
06-06-02 | 10:48 PM
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Here's one of planetgamecube's editors take on the news.
Rick says: Does this mean that Nintendo is abandoning the hardware race, like Sega? NO.
Nintendo has merely stated that the GameCube is good enough for now, and seems to be implying that the traditional 5-year lifespan of their consoles is a thing of the past.
Quite frankly, this may be a blessing, too. Let Microsoft and Sony race to get the best hardware out next ... let them reveal their hands, which would give Nintendo a chance to trump. Hardware IS important, but Nintendo seems content to wait until there is a NEED for a technology boost.
Of course, there's also the fact that they want to continue to exploit the handheld/console link capabilities of the Game Boy Advance and the GameCube. New hardware would certainly throw a wrench into those plans.
Rick says: Does this mean that Nintendo is abandoning the hardware race, like Sega? NO.
Nintendo has merely stated that the GameCube is good enough for now, and seems to be implying that the traditional 5-year lifespan of their consoles is a thing of the past.
Quite frankly, this may be a blessing, too. Let Microsoft and Sony race to get the best hardware out next ... let them reveal their hands, which would give Nintendo a chance to trump. Hardware IS important, but Nintendo seems content to wait until there is a NEED for a technology boost.
Of course, there's also the fact that they want to continue to exploit the handheld/console link capabilities of the Game Boy Advance and the GameCube. New hardware would certainly throw a wrench into those plans.
06-06-02 | 10:59 PM
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After reading some more articles, I think all he meant was that Hardware is as powerful as it needs to be right now, and it is time for the industry to focus on improving gameplay, rather than building more powerful hardware.
I mean, look at the GCN, X-Box and PS2 games, how could hardware improve them currently. More polygons, better framrates maybe, higher resolutions? Who cares? Those are negligible improvements and don't improve gameplay like say a hardware advancement allowing the move from 2-D to 3-D did.
I think that's all he meant. There's no need to rush into new hardware. The current systems will be adequate for several years, likely longer than the normal 5 year window. Until HDTV's beocome more rampant, or hardware advances to the point to do something as substantial the change from 2-D to 3-D was, why bother with new hardware. Just focus on making the games the best they can be and making innovations in that area for now.
Sounds like a plan to me, as gameplay is all I care about, and buying new systems every few years gets old, especially when the improvments are marginal. I mean are the new systems that much better than the Dreamcast graphically? Are the games more fun? Not really.
I mean, look at the GCN, X-Box and PS2 games, how could hardware improve them currently. More polygons, better framrates maybe, higher resolutions? Who cares? Those are negligible improvements and don't improve gameplay like say a hardware advancement allowing the move from 2-D to 3-D did.
I think that's all he meant. There's no need to rush into new hardware. The current systems will be adequate for several years, likely longer than the normal 5 year window. Until HDTV's beocome more rampant, or hardware advances to the point to do something as substantial the change from 2-D to 3-D was, why bother with new hardware. Just focus on making the games the best they can be and making innovations in that area for now.
Sounds like a plan to me, as gameplay is all I care about, and buying new systems every few years gets old, especially when the improvments are marginal. I mean are the new systems that much better than the Dreamcast graphically? Are the games more fun? Not really.
06-06-02 | 11:26 PM
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Comparing today's consoles' graphics to the Dreamcast is a pretty silly example because the Dreamcast is one of the nextgen consoles that merely jumped ship early.
Consoles will look better and better. It won't be until 3 or 4 more generations until graphics will be at a pinnacle. There are definitely different ways to interpret what the Japanese president says, that's for sure.
Here's a question: how many people ended up owning an N64 by the end of its life? Was it 25 million people? What about Playstation, how many people owned those by the end of its life? I seriously don't know, so that question isn't rhetorical or something.
Consoles will look better and better. It won't be until 3 or 4 more generations until graphics will be at a pinnacle. There are definitely different ways to interpret what the Japanese president says, that's for sure.
Here's a question: how many people ended up owning an N64 by the end of its life? Was it 25 million people? What about Playstation, how many people owned those by the end of its life? I seriously don't know, so that question isn't rhetorical or something.
06-07-02 | 12:15 AM
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GP, the PS1 is not dead yet. I really think the comments here are correct. He is saying that the GCN is good enough to last until well into 2005. I think he is right. Although I will probably wait until next year now to buy one. I was planning on getting it in the next month or so but I want to be sure before spending money on another console now.
06-07-02 | 01:36 AM
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Originally posted by Gallant Pig
Comparing today's consoles' graphics to the Dreamcast is a pretty silly example because the Dreamcast is one of the nextgen consoles that merely jumped ship early.
Consoles will look better and better. It won't be until 3 or 4 more generations until graphics will be at a pinnacle. There are definitely different ways to interpret what the Japanese president says, that's for sure.
Here's a question: how many people ended up owning an N64 by the end of its life? Was it 25 million people? What about Playstation, how many people owned those by the end of its life? I seriously don't know, so that question isn't rhetorical or something.
Comparing today's consoles' graphics to the Dreamcast is a pretty silly example because the Dreamcast is one of the nextgen consoles that merely jumped ship early.
Consoles will look better and better. It won't be until 3 or 4 more generations until graphics will be at a pinnacle. There are definitely different ways to interpret what the Japanese president says, that's for sure.
Here's a question: how many people ended up owning an N64 by the end of its life? Was it 25 million people? What about Playstation, how many people owned those by the end of its life? I seriously don't know, so that question isn't rhetorical or something.
http://www.gamesinvestor.co.uk/History/2001_/2001_.htm
06-07-02 | 02:25 AM
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Originally posted by gcribbs
the PS1 has around a 90 million unit installed base.
http://www.gamesinvestor.co.uk/History/2001_/2001_.htm
the PS1 has around a 90 million unit installed base.
http://www.gamesinvestor.co.uk/History/2001_/2001_.htm
OK I just read the N64 sold 35 million worldwide. 90 million vs 35 million? Pretty big disparity there.
My point has been made. Nobody knows what's going to happen in the future. It'll be interesting to see how it plays out.
I think we can all agree that Nintendo makes some great games that will only get better in the future no matter what console they end up on.
Last edited by Gallant Pig; 06-07-02 at 03:05 AM.
06-07-02 | 01:40 PM
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Originally posted by Gallant Pig
OK I just read the N64 sold 35 million worldwide. 90 million vs 35 million? Pretty big disparity there.
OK I just read the N64 sold 35 million worldwide. 90 million vs 35 million? Pretty big disparity there.
More profit is made on each game sold, than on each console sold, so Nintendo likely rakes in a profit closer to Sony's (playstation and games only, not other equipment) than one would think after looking solely at the number of consoles sold.
06-07-02 | 02:28 PM
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another factor that I just thought about is that Nintendo is the only one of the three that really has to worry about the hardware AND the software. what games have sony and MS come out with? ok yes there are some such as Halo but they are not usually console selling games. people who buy Nintendo buy it for the 1st party games. that can put a real strain on a company. people often complain that Nintendo is too slow and too careful. I think it is wise especially since video games is its sole business, unlike Sony and MS
06-09-02 | 03:01 PM
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I agree that Nintendo generally makes better first party games, and they make more of a profit off of them but a low base means less sales. Even if Sony releases a crap game more people might buy it than one of Nintendo's big games. I mean, come on we are talking a 30 million base as opposed to a 3.5 million base. That being said, Nintendo will never drop out of the Hardware game. I think the profits made from the GBA will keep them going.
06-09-02 | 05:50 PM
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If you look at the sales figures during the N64 years you will see Nintendo 64 games all over the top ten lists every year. With a third of the consoles they had much bigger single sellers than anyone else. Of course they had much fewer overall titles so total Playstation software sales would be much higher, but Nintendo has proven they can survive with quality over quantity.
The Game Cube seems to be following this tradition (though the Game Cube has more third party support than the N64) so I'm sure Nintendo will be just fine.
People that want to play Nintendo games seem very willing to buy Nintendo hardware to play it. I really wonder if their software sales would jump that drastically by going multiconsole. I'm betting the increase would not be as much as people believe.
The Game Cube seems to be following this tradition (though the Game Cube has more third party support than the N64) so I'm sure Nintendo will be just fine.
People that want to play Nintendo games seem very willing to buy Nintendo hardware to play it. I really wonder if their software sales would jump that drastically by going multiconsole. I'm betting the increase would not be as much as people believe.
Last edited by darkside; 06-09-02 at 05:53 PM.
