Nintendo Comments on Online Strategy
05-21-03 | 02:42 PM
#1
Thread Starter
DVD Talk Ultimate Edition
Nintendo Comments on Online Strategy
From USAToday:
http://www.usatoday.com/tech/news/20...e-debate_x.htm
http://www.usatoday.com/tech/news/20...e-debate_x.htm
Online game strategy splits industry
LOS ANGELES (Reuters) — It's a karaoke machine and a video conferencing center, a wireless jukebox and a DVD player. The latest and greatest gadget in home entertainment? No, just the well-worn video game console your kids already have in the living room.
In the turf war being fought to control space in the living room of the future, rivals Sony and Microsoft have made it clear that the current generation of game consoles were meant to be Trojan horses. The real pay-off would come when the machines were connected to a network.
Now, as both companies unveil the Internet-based services expected to be the next big thing for the $30 billion games business, sharp differences over their strategies have emerged along with a debate about how much consumers will be willing to pay for such online offerings.
Microsoft has bet big on its Xbox Live online service, unveiling new features and functions this month. It aims to lure users away from Sony's top-selling PlayStation 2 console and steal growth from Nintendo's trailing GameCube.
At stake is an early foothold in what many believe to be the future of gaming — the ability to sell, deliver and update games online without game discs, packaging or retail space.
Last week, Sony upstaged Microsoft by announcing that the No. 1 game publisher, Electronic Arts, would roll out online versions of its popular sports games exclusively for the PlayStation 2, or PS2.
Nintendo says its two larger rivals have staked too much on online games without thinking through the costs for consumers.
"I don't think its reasonable to make someone pay for a game and then make them prepare a network connection and charge a monthly fee," Satoru Iwata, president of Nintendo, told Reuters recently.
Doug Lowenstein, president of the Interactive Digital Software Association, the trade group representing game publishers, agreed: "Many potential online gamers are continuing to resist paying to play online."
Closed network, open network
Xbox Live, which launched last fall, is a networked system managed by Microsoft with the software giant maintaining passwords, e-mail addresses and user information. Subscribers pay about $50 a year.
Sony, on the other hand, has opted for an open system that lets game publishers design and manage their own online services and decide whether to charge customers.
In allying with Sony, Electronic Arts said it wanted greater control over its online network and user information than Microsoft offered and said it wanted to use online games to help driving sales of its existing blockbusters like Madden NFL and Harry Potter.
"At the end of the day, it's a retail sales multiplier," said Frank Gibeau, senior vice president of marketing at Electronic Arts.
EA, which for a long time separated its online business from its core games unit on its balance sheet, and at one time had hopes of a spin-off for the Internet division, consolidated the units earlier this year, conceding that EA.com would not reach profitability as fast as was hoped.
Vivendi Universal Games, which has largely shied away from online games, said it had some of the same concerns about Microsoft's plans for Xbox Live.
"I actually share the perspective that EA has to a large extent," Luc Vanhal, president of North American operations at VU Games, told Reuters. "Why would I be handing that asset over to Microsoft with nothing in exchange for it?"
Meanwhile, Nintendo's Iwata said his company was working on a service that would not require users to cough up regular fees for games.
"In the near future we are hoping to announce something that addresses this issue," he told Reuters.
Nintendo's GameCube sells for $150 and has a separate add-on for connecting to networks or the Internet.
While the $180 Xbox comes with a port ready to be connected to high-speed Internet access, it had always been a $40 add-on option for Sony's PS2. But this week Sony said it would introduce a new redesigned PS2 in June with network capability for $200.
LOS ANGELES (Reuters) — It's a karaoke machine and a video conferencing center, a wireless jukebox and a DVD player. The latest and greatest gadget in home entertainment? No, just the well-worn video game console your kids already have in the living room.
In the turf war being fought to control space in the living room of the future, rivals Sony and Microsoft have made it clear that the current generation of game consoles were meant to be Trojan horses. The real pay-off would come when the machines were connected to a network.
Now, as both companies unveil the Internet-based services expected to be the next big thing for the $30 billion games business, sharp differences over their strategies have emerged along with a debate about how much consumers will be willing to pay for such online offerings.
Microsoft has bet big on its Xbox Live online service, unveiling new features and functions this month. It aims to lure users away from Sony's top-selling PlayStation 2 console and steal growth from Nintendo's trailing GameCube.
At stake is an early foothold in what many believe to be the future of gaming — the ability to sell, deliver and update games online without game discs, packaging or retail space.
Last week, Sony upstaged Microsoft by announcing that the No. 1 game publisher, Electronic Arts, would roll out online versions of its popular sports games exclusively for the PlayStation 2, or PS2.
Nintendo says its two larger rivals have staked too much on online games without thinking through the costs for consumers.
"I don't think its reasonable to make someone pay for a game and then make them prepare a network connection and charge a monthly fee," Satoru Iwata, president of Nintendo, told Reuters recently.
Doug Lowenstein, president of the Interactive Digital Software Association, the trade group representing game publishers, agreed: "Many potential online gamers are continuing to resist paying to play online."
Closed network, open network
Xbox Live, which launched last fall, is a networked system managed by Microsoft with the software giant maintaining passwords, e-mail addresses and user information. Subscribers pay about $50 a year.
Sony, on the other hand, has opted for an open system that lets game publishers design and manage their own online services and decide whether to charge customers.
In allying with Sony, Electronic Arts said it wanted greater control over its online network and user information than Microsoft offered and said it wanted to use online games to help driving sales of its existing blockbusters like Madden NFL and Harry Potter.
"At the end of the day, it's a retail sales multiplier," said Frank Gibeau, senior vice president of marketing at Electronic Arts.
EA, which for a long time separated its online business from its core games unit on its balance sheet, and at one time had hopes of a spin-off for the Internet division, consolidated the units earlier this year, conceding that EA.com would not reach profitability as fast as was hoped.
Vivendi Universal Games, which has largely shied away from online games, said it had some of the same concerns about Microsoft's plans for Xbox Live.
"I actually share the perspective that EA has to a large extent," Luc Vanhal, president of North American operations at VU Games, told Reuters. "Why would I be handing that asset over to Microsoft with nothing in exchange for it?"
Meanwhile, Nintendo's Iwata said his company was working on a service that would not require users to cough up regular fees for games.
"In the near future we are hoping to announce something that addresses this issue," he told Reuters.
Nintendo's GameCube sells for $150 and has a separate add-on for connecting to networks or the Internet.
While the $180 Xbox comes with a port ready to be connected to high-speed Internet access, it had always been a $40 add-on option for Sony's PS2. But this week Sony said it would introduce a new redesigned PS2 in June with network capability for $200.
05-21-03 | 03:01 PM
#2
DVD Talk Godfather
I wonder if he's talking about the LAN system that Mario Kart's going to use. I think Nintendo has made it abundantly clear that, at least in this generation, they're not going to enter into online gaming. Even with users paying a monthly fee, it's way too expensive to setup, especially with their user base. And if they don't want to charge, what are they going to do?
05-22-03 | 10:11 AM
#3
DVD Talk Legend
no idea
I think from a business perspective Nintendo has the right idea. They really don't have the money (i have no idea really, just speculating) to set up a network. If it comes to a choice develop a network or develop more games/consoles I vote for the games. I am really glad they do not have SEGAs penchant for pursuing every little new technology.
but they do need to plan for the future...
I think from a business perspective Nintendo has the right idea. They really don't have the money (i have no idea really, just speculating) to set up a network. If it comes to a choice develop a network or develop more games/consoles I vote for the games. I am really glad they do not have SEGAs penchant for pursuing every little new technology.
but they do need to plan for the future...
05-22-03 | 12:24 PM
#4
DVD Talk Legend
This article isn't really about Nintendo as the thread title suggests. 
I personally think Nintendo is stupid for not pushing for online gaming. They sit on their thumbs and then the competition walks all over them - it's been the story of their lives for the past 8 years or so. I guess it's smart of them at the same time because their fanbase doesn't seem to be the type interested in online gaming.
Another thing... I don't know if this will be news or not on the forum since I didn't do a search... I have an insider tip that the Xbox Live service will be 6 bucks per month after the initial subscription runs out. That's not bad. Better than the 9 or 10 bucks most people were expecting.
I personally think Nintendo is stupid for not pushing for online gaming. They sit on their thumbs and then the competition walks all over them - it's been the story of their lives for the past 8 years or so. I guess it's smart of them at the same time because their fanbase doesn't seem to be the type interested in online gaming.
Another thing... I don't know if this will be news or not on the forum since I didn't do a search... I have an insider tip that the Xbox Live service will be 6 bucks per month after the initial subscription runs out. That's not bad. Better than the 9 or 10 bucks most people were expecting.
05-22-03 | 12:35 PM
#5
DVD Talk Hero
Originally posted by Trigger
Another thing... I don't know if this will be news or not on the forum since I didn't do a search... I have an insider tip that the Xbox Live service will be 6 bucks per month after the initial subscription runs out. That's not bad. Better than the 9 or 10 bucks most people were expecting.
Another thing... I don't know if this will be news or not on the forum since I didn't do a search... I have an insider tip that the Xbox Live service will be 6 bucks per month after the initial subscription runs out. That's not bad. Better than the 9 or 10 bucks most people were expecting.
I still rarely game online with my Xbox. I play online on my computer nearly every night.
So it doesn't really matter to me that my PS2 and GC aren't online. It's a nice feature of the Xbox, but not a huge selling point to me.
05-22-03 | 12:47 PM
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I was hoping I wouldn't have to ask, but I guess everybody else knows... What exactly is LAN? Local Area Network possibly? Can anyone take advantage of this, is it run through a phoeline, is it expensive, require a broadband modem, etc???
05-22-03 | 12:50 PM
#8
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Originally posted by Trigger
I have an insider tip that the Xbox Live service will be 6 bucks per month after the initial subscription runs out.
I have an insider tip that the Xbox Live service will be 6 bucks per month after the initial subscription runs out.
Xbox Live one year renewal/subscription - $49.99
Xbox Live monthly rate - $5.99
Xbox Live Voice Communicator - $29.99
Xbox Live Starter Kit - $69.99
05-22-03 | 12:50 PM
#9
DVD Talk Legend
Originally posted by IIG
I was hoping I wouldn't have to ask, but I guess everybody else knows... What exactly is LAN? Local Area Network possibly? Can anyone take advantage of this, is it run through a phoeline, is it expensive, require a broadband modem, etc???
I was hoping I wouldn't have to ask, but I guess everybody else knows... What exactly is LAN? Local Area Network possibly? Can anyone take advantage of this, is it run through a phoeline, is it expensive, require a broadband modem, etc???
05-22-03 | 12:53 PM
#10
DVD Talk Legend
Originally posted by ctyner
No insider tips necessary. Microsoft has already announced what the pricing will be, starting this Fall.
Xbox Live one year renewal/subscription - $49.99
Xbox Live monthly rate - $5.99
Xbox Live Voice Communicator - $29.99
Xbox Live Starter Kit - $69.99
No insider tips necessary. Microsoft has already announced what the pricing will be, starting this Fall.
Xbox Live one year renewal/subscription - $49.99
Xbox Live monthly rate - $5.99
Xbox Live Voice Communicator - $29.99
Xbox Live Starter Kit - $69.99
05-22-03 | 01:31 PM
#11
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I think from a business perspective Nintendo has the right idea. They really don't have the money (i have no idea really, just speculating) to set up a network. If it comes to a choice develop a network or develop more games/consoles I vote for the games. I am really glad they do not have SEGAs penchant for pursuing every little new technology.
I hate to say it but at least Sega had balls, maybe not as much business sense as Nintendo, but they knew that in order to be successful in business sometimes you need to take risks, their risks just didn't work out. Nintendo has become an aging dinosaur that refuses to change. Let's hope they get a more "new millenium" mindset
05-22-03 | 01:49 PM
#12
DVD Talk Legend
Originally posted by FalconH10
This is the same thinking that got them in trouble with the N64.
I hate to say it but at least Sega had balls, maybe not as much business sense as Nintendo, but they knew that in order to be successful in business sometimes you need to take risks, their risks just didn't work out. Nintendo has become an aging dinosaur that refuses to change. Let's hope they get a more "new millenium" mindset
This is the same thinking that got them in trouble with the N64.
I hate to say it but at least Sega had balls, maybe not as much business sense as Nintendo, but they knew that in order to be successful in business sometimes you need to take risks, their risks just didn't work out. Nintendo has become an aging dinosaur that refuses to change. Let's hope they get a more "new millenium" mindset
SEGA may have had balls but that sure doesn't help them now. They pushed too much too fast and alienated their fan base. I am glad that Nintendo is not doing that.
05-22-03 | 02:03 PM
#13
DVD Talk Hero
Originally posted by IIG
I was hoping I wouldn't have to ask, but I guess everybody else knows... What exactly is LAN? Local Area Network possibly? Can anyone take advantage of this, is it run through a phoeline, is it expensive, require a broadband modem, etc???
I was hoping I wouldn't have to ask, but I guess everybody else knows... What exactly is LAN? Local Area Network possibly? Can anyone take advantage of this, is it run through a phoeline, is it expensive, require a broadband modem, etc???
But even that brings up the question of how are you going to play on the internet? MS has X-Box live to match up games. Sony let's the developer handle the matching portion. If you are playing over the internet you still need a way to match up the games so you can find each other.
I haven't played anything on the PS2, but MS is very good at this since they have run an online gaming service before X-Box Live. The hard drive also gives an advantage to the X-Box since it lets MS update the service. They knew they wouldn't get things right the first time, so now they can update the clients and gradually test out new features. In the case of the PS2 the developer has one chance to get it right. This results in a lot of money down the drain on failed projects during the learning curve.
05-22-03 | 02:57 PM
#14
Retired
Nintendo's making the right move. They simply don't have the money to set up an X-box live network. MS will lose millions on Live this generation, and Nintendo can't afford to do that.
They could do peer to peer connections though, which would be a way for them to get in the online gaming arena at least a little bit with out investing much money (other than what it costs to incorporate into some of their first party games).
They could do peer to peer connections though, which would be a way for them to get in the online gaming arena at least a little bit with out investing much money (other than what it costs to incorporate into some of their first party games).
05-22-03 | 03:27 PM
#15
DVD Talk Hero
Either this morning or yesterday CNBC reported that Nintendo profits plunged 36% due to competion from MS. All MS has to do is eliminate Nintendo and turn it into an all software company like Sega to succeed in this generation.
05-22-03 | 04:24 PM
#16
DVD Talk Godfather
How did the article attribute the 36% loss of profit to competition from MS?
05-22-03 | 07:40 PM
#19
DVD Talk Legend
Originally posted by Breakfast with Girls
I think everyone here is forgetting that online gaming sucks.
I think everyone here is forgetting that online gaming sucks.
05-22-03 | 07:51 PM
#21
DVD Talk Legend
Originally posted by darkside
I haven't forgot that. I can't think of a worse way to play games than online with a bunch of cheaters and crybabies that turn of their consoles when they start to lose.
I haven't forgot that. I can't think of a worse way to play games than online with a bunch of cheaters and crybabies that turn of their consoles when they start to lose.
I've been playing games online for 8 years now and I love it... there's nothing like it. The first time I played against other people over the phone cables was the single most exciting time I've ever had with a video game.
05-22-03 | 08:26 PM
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Originally posted by Josh Hinkle
Nintendo's making the right move. They simply don't have the money to set up an X-box live network. MS will lose millions on Live this generation, and Nintendo can't afford to do that.
They could do peer to peer connections though, which would be a way for them to get in the online gaming arena at least a little bit with out investing much money (other than what it costs to incorporate into some of their first party games).
Nintendo's making the right move. They simply don't have the money to set up an X-box live network. MS will lose millions on Live this generation, and Nintendo can't afford to do that.
They could do peer to peer connections though, which would be a way for them to get in the online gaming arena at least a little bit with out investing much money (other than what it costs to incorporate into some of their first party games).
They are in last place and falling. Their market share has consistently decreased for the last decade. How can it be the right decision to be the only company to have no online plan and limit gaming options?
It isn't a billion dollar affair to include basic P2P software in games and to optimize the content for that. If they can include LAN play or GBA-GCN "connectivity," they can support very basic online gaming. I don't think Gamespy or Battle.net are financial blackholes...
Most Xbox Live gaming from what I've experienced is a P2P situation with individual Xbox owners hosting the games.
Nintendo didn't embrace online gaming because they are out of touch.
05-22-03 | 08:44 PM
#24
DVD Talk Legend
Originally posted by Trigger
Yeah, it's much better to invite the cheaters and crybabies over to your house
Yeah, it's much better to invite the cheaters and crybabies over to your house
Nintendo's problems have nothing to do with online gaming. Its just the fact they can't shake the kiddie image for their console and the 15-25 audience that is so important would rather play violent games. Mario is just not drawing in the gamers the way it once did. Grand Theft Auto and Halo have much more to do with the GameCube's problems than something as minor as online gaming.
If online gaming meant anything Xbox would be number one instead of a very, very distant second.
Last edited by darkside; 05-22-03 at 08:47 PM.
