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story for those of you that think nintendo should go software only

Old 09-17-02, 05:08 PM
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story for those of you that think nintendo should go software only

From Planetgamecube

text from story....

According to Nikkei.NET, after recording the highest profits for the third year in a row, without getting into any debt, Nintendo is the number one company on the Nikkei. No other company in the history of the Nikkei has acheived this status for three years in a row.

This news should not come as a surprise to those following Nintendo for the last ten years. With over six billion dollars in assets in the bank, along with their consistent record-breaking profits each term, Nintendo has always had a rosy outlook financially.


TRANSLATED TEXT FROM SITE:

The Nikkei top-rated company ranking and Nintendo are the 1st place.

Nintendo is at the three-year for the first time in first place -- When Nihon Keizai Shimbun did ranking evaluation of the top-rated company in the 2002 fiscal year using "NEEDS-CASMA" (corporate evaluation system by multivariable corporate evaluation system), Nintendo where financial structure is also strong came back the highest profit to the first place for the first time in three years in updating and no getting into debt at the term ended March, 2002.
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Old 09-17-02, 05:09 PM
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i guess they are doing ok the way they are...
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Old 09-17-02, 05:22 PM
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All of this due to the success of their Gameboy and Gameboy Advance handleld portables. Huzzah for them.
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Old 09-17-02, 05:24 PM
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still pretty impressive though .... 6 billion in assets is a S**t load of cash.
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Old 09-17-02, 05:26 PM
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This has always been my point. Nintendo would go software only (except for the handheld market of course) if they thought it would make them more money. They are in a totally different situation from Sega and there is no reason to abandon the console business if you are making money at it. Granted they won't show a breakdown of the console vs the handheld profits, but obviously the console side is not hurting them or they wouldn't keep posting record profits.

There is just no logical reason to leave a business you are successful at to join forces with the competition. This might change some time in the future, but if I was Nintendo I would start planning for the next console in 2006.
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Old 09-17-02, 05:33 PM
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But did you read that article from the Xbox rep? That console can walk on water and cure cancer! How can Nintendo compete?
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Old 09-17-02, 05:43 PM
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Originally posted by Groucho
But did you read that article from the Xbox rep? That console can walk on water and cure cancer! How can Nintendo compete?
It can't! That's the point and if you guys could get that through your thick skulls we could stop having this stupid argument...
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Old 09-17-02, 05:46 PM
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Not to mention that they know having a console works, and will make money. Going software-only would be risky. Their games would probably sell the same amount as they do now, except they'd only be making money on those(on the home console side of things), plus they'd only be making a certain percent of the money off them. Instead of the way it is now, getting 100% of the profits from their games, making money from hardware accessories(sure, our console is 50 bucks cheaper, but a 20 dollar memory card(probably costs 2 bucks to produce) is pretty much required :P ).. and doesn't every console maker get a cut of every game sold for the system? I think if anything, going software-only would lower the amount of profit they make.

Oh.. and according to this story on PGC (http://planetgamecube.com/news.cfm?action=item&id=3419), they can make gamecubes for 100 bucks now.. so they'd be making a large profit on those too.

Last edited by zig; 09-17-02 at 06:21 PM.
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Old 09-17-02, 05:56 PM
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Good news....for my GBA!
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Old 09-17-02, 06:37 PM
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Originally posted by zig


Oh.. and according to this story on PGC (http://planetgamecube.com/news.cfm?action=item&id=3419), they can make gamecubes for 100 bucks now.. so they'd be making a large profit on those too.
That pretty much destroys the argument that they're losing tons on hardware. On a related note, Microsoft and Nvidia had a bitter dispute over the cost of the Xbox GPU. They went to mediation, and the mediator ruled that Nvidia had to provide more chips to MS at a lower price. Nvidia said they would lose money on the chips at that price and their stock dropped. I don't think Nvidia will be willing to join up with MS again for the generally assumed to be in-development Xbox 2.

Of course, Microsoft could solve this problem the same way they seem to solve all their problems. They could just buy Nvidia.


The New York Times


September 12, 2002, Thursday, Late Edition - Final

SECTION: Section C; Page 3; Column 5; Business/Financial Desk

LENGTH: 200 words

HEADLINE: Technology Briefing Telecommunicationsispute Continues

BYLINE: Bloomberg News

BODY:
The Nvidia Corporation, the sole supplier of graphics chips for Microsoft's Xbox video-game console, must keep selling processors to Microsoft as the companies try to settle a pricing dispute, an arbitration panel ruled. In an interim ruling, the panel said Nvidia must supply Microsoft's "reasonable requirements of chipsets," without specifying the exact quantities, according to a Nvidia filing with the Securities and Exchange Commission. Nvidia expects the arbitration to be finished by the end of June. The ruling will remain in effect until the dispute is resolved. Microsoft contends that it should have paid at least $46 million less than it has for chips used to generate graphics in the Xbox, the filing said. In April, Microsoft asked an arbitration panel to order Nvidia to cut prices and to supply as many chips as necessary. Microsoft has been trying to save money on Xbox parts to lower the cost of the machine, which sells for $199 in the United States, less than it costs to produce. David Hufford, the product manager for Xbox, has said Microsoft will not replace Nvidia as a supplier because the processors were designed specifically for Xbox

Last edited by ScandalUMD; 09-17-02 at 06:41 PM.
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Old 09-17-02, 06:37 PM
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For the simple fact that in all likelyhood Nintendo won't be a player in 2005 when MS and Sony roll out their next generation consoles, they will automatically draw 3rd place. If they simply decide in 2005 or 2006 to go software only and produce games for both the PS3 and Xbox2, they'll happily play both ends against the middle and walk away with fat software profits rather than trying to launch their own console and suffer from lack of 3rd party support and low software sales. If they release a next gen console, history says it will be in Q4 2006 or 2007 and by then both the PS3 and Xbox2 will be in millions of homes while they are still struggling to find their market again. It will be this year all over again except this time there will likely be even worse for them. If there's a combined total of 20 million next gen consoles on the market and you could potentially reach all 20 million with your profit friendly software versus re-building your own user base again from scratch to push your software - which would you pick?

Nintendo has never really done what logic would dictate - they don't come to compete, they basically have been doing their own thing. Sometimes it has worked and sometimes it hasn't worked as well. I'm not saying that they will go software only - I never meant to suggest that. I just think it would be a possibility as well as a good idea. Nintendo will probably just come out with another console a year or so late as usual and continue to see their console market shrink as it has been since the NES and SNES.

This seems like a good idea from a gamer's standpoint as well - who wouldn't want to be able to play Grand Thef Auto, Halo and Mario Sunshine on one box? Them going software only brings us one step closer to that. Arguments against that are that competition keeps prices low, but then so do consumers. If games were 200 bucks a pop, nobody would buy them - we know this because of the failure of the NeoGeo. Nobody is going to want to spend more than 300 bucks on a game console either - we know this because of the failure of the Phillips CD-I technology. Gamers have made it clear what they are willing to spend on games and consoles and the market matches that price. So what of price drops? Well, with no competition, there's no real need for one. Sony took a long time to drop the price of the PS2 and PS1 because there was no real competition for a long time. That's a bad thing.

Another reason that's been brought up is the idea that the set-top box all-in-one is an abomination and an outrage. I personally think it's a good idea as long as the price of the unit doesn't exceed the 300 bucks I'm willing to shell out for a new console. I think most people would feel the same way. Would I use the Tivo functions? Probably not. Do I think it's cool that I could if I wanted to? Sure. It's not like Nintendo is above doing this either - they even had developed plans for the NES to double as a shop-at-home device. My father had clipped the article out of the Wall Street Journal over a decade ago.

If I am to predict anything about Nintendo aside from going software only - it would be that they will probably become a budget console maker. With Sony and Microsoft owning the peak of the technology curve and costing 300 bucks each, Nintendo can approach gamers with the stripped down gaming machine that does nothing but play games for around 100 bucks or so and the games should also be priced low as well. This means they can simply ignore other consoles and third party titles that cross all 3 platforms and focus on their own games that their hardcore fanbase continue to flock to. Would this be more profitable than going software only? Who knows? It's just an idea.

I certainly don't think they will ever stop making handhelds and as a company, they are still a stone-hearted corporate machine. That much has not changed.
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Old 09-17-02, 06:39 PM
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Originally posted by ScandalUMD
That pretty much destroys the argument that they're losing tons on hardware. On a related note, Microsoft and Nvidia had a bitter dispute over the cost of the Xbox GPU. They went to mediation, and the mediator ruled that Nvidia had to provide more chips to MS at a lower price. Nvidia said they would lose money on the chips at that price and their stock dropped. I don't think Nvidia will be willing to join up with MS again for the generally assumed to be in-development Xbox 2.

Of course, Microsoft could solve this problem the same way they seem to solve all their problems. They could just buy Nvidia.
Not to bring a MS debate can-o-worms to the table here, but I wouldn't mind if nVidia didn't come to the party next time around - ATI currently makes the best cards anyway.
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Old 09-17-02, 06:45 PM
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Originally posted by Trigger
Not to bring a MS debate can-o-worms to the table here, but I wouldn't mind if nVidia didn't come to the party next time around - ATI currently makes the best cards anyway.
Why would ATI work with Microsoft if Nvidia gets screwed over?

Also, I was wrong about Nvidia's stock price. They recorded better than expected earnings on the GeForce 4, and their stock rose recently. Also, if the final arbitration goes their way, they'll continue to make money on Xbox chips.

But Microsoft's strategy isn't the best way to make friends. They must be pretty desparate to cut their losses if they're willing to take their hardware partner to arbitration to force them to provide cheaper chips.
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Old 09-17-02, 06:55 PM
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Sega screwed over nVidia too, it seems to be a popular trend in the console market..
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Old 09-17-02, 07:05 PM
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nVidia screws everyone else over - that's why I'd be happy with ATI - they aren't going to lose any money if MS gives them less for their chips - it's all BS. nVidia makes those chips for pennies compared to what they charge MS for them.
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Old 09-17-02, 07:11 PM
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Pennies? 1.3 micron wafers are anything but cheap to fab, and only nVidia knows what kind of yield they're getting. Besides the fact that the design of the hardware cost a shitload of manhours, and that cost has to be recouped somewhere. DVD's cost little to produce, but the games still sell for $50.
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Old 09-17-02, 07:13 PM
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My Gamecube has ATI inside.
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Old 09-17-02, 07:15 PM
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ATI makes the Gamecube chip. Come to the dark side.
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Old 09-17-02, 07:20 PM
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Just to clarify, the latest ruling from the arbitrator regarding MS and nVidia only stipulates that nVidia must continue supplying chipsets to MS until the arbitration is resolved. That's not expected to happen until sometime next year and at that time, if the ruling is in favor of MS, then nVidia gets no additional money. However, if the ruling is in favor of nVidia, then MS will have to cut them a big check.

Also, that PGC article about Nintendo outsourcing console production does state a figure of $100, but I wouldn't read too much into that. It's only a tangential reference to the production cost and you really don't know what is included in that figure. If Nintendo's royalty payment to ATi for their chip isn't in that, then the actual cost/unit may be much higher than $100.

Finally, FWIW, my guess is that MS is working on their own graphics chip and won't be tapping either ATi or nVidia for XBox2. MS owns a bundle of SGI's graphics patents, so there's no reason why they should pay royalties to either company for use of their technology when they can go it alone. The only reason the XBox uses nVidia chips is because MS wanted/needed to get to market fast.
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Old 09-17-02, 07:27 PM
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Originally posted by belboz

Finally, FWIW, my guess is that MS is working on their own graphics chip and won't be tapping either ATi or nVidia for XBox2. MS owns a bundle of SGI's graphics patents, so there's no reason why they should pay royalties to either company for use of their technology when they can go it alone. The only reason the XBox uses nVidia chips is because MS wanted/needed to get to market fast.
Well now, going from owning patents to designing a graphics processor is a huge leap. Are you suggesting that they won't go with an Intel for the microprocessor next time as well? Putting together a gaming system and creating an integrated circuit are two totally different things, and MS has absolutely no competency in the latter.
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Old 09-17-02, 07:39 PM
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Actually a company called ArtX that made crappy integrated video cards for budget desktops made the chips designed for the Gamecube. By the time ATI bought out ArtX, the Gamecube's design was already finished... there is no ATI hardware inside your Gamecubes people. It's indeed branded with an ATI sticker because of a deal struck after they aquired ArtX, but make no mistake that the graphics technology powering the cube is old and beneath anything ATI currently produces. It's probably somewhere between a Rage and a Radeon 7000. I am not sure about the power and whatnot, but I know that ArtX used to make the crappiest chips ever and their company was almost in the dump until ATi picked them up. What I'm talking about is an actual ATi chipset (like the one for the Radeon 9700) inside an Xbox. MMMM yummy.
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Old 09-17-02, 07:48 PM
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And up until recently ATI made crappy video cards for OEMs. Your theory about the quality of the GC's GPU is totally speculation.
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Old 09-17-02, 07:59 PM
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Originally posted by Trigger
Actually a company called ArtX that made crappy integrated video cards for budget desktops made the chips designed for the Gamecube. By the time ATI bought out ArtX, the Gamecube's design was already finished... there is no ATI hardware inside your Gamecubes people. It's indeed branded with an ATI sticker because of a deal struck after they aquired ArtX, but make no mistake that the graphics technology powering the cube is old and beneath anything ATI currently produces. It's probably somewhere between a Rage and a Radeon 7000. I am not sure about the power and whatnot, but I know that ArtX used to make the crappiest chips ever and their company was almost in the dump until ATi picked them up. What I'm talking about is an actual ATi chipset (like the one for the Radeon 9700) inside an Xbox. MMMM yummy.
Well then why on earth did ATi buy them?
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Old 09-17-02, 08:16 PM
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Originally posted by zig
Well then why on earth did ATi buy them?
because their last chipset before death was eyecatching enough to get the attention of Nintendo... another case of too little too late - much like the Dreamcast.

As for a theory about Gamecube's GPU - I didn't make one. I stated that I'm not sure about the power and whatnot of the Gamecube graphics chip - all I know is a little bit about the history of the company that produced it. If you drew a theory out of that, then that's your mind working overtime - not mine. My saying it probably fell somewhere between a Rage and a Radeon was just a guess, not a theory - it was loosely based on the poor performance of the Cube against the competitors in the white papers someone posted awhile back. As for facts - it seems to produce pretty nice graphics and I imagine it's easier to code for than the PS2. I still don't see it being anywhere near as powerful as the Xbox, but that's another debate entirely.
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Old 09-17-02, 08:56 PM
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Man these threads rocket off topic so fast.
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