Fortune Magazine: How Nintendo is beating Sony and Microsoft

[ssampier]

Glad to see Nintendo finally getting some respect. In my mind, they were gasping for air until the Wii came out. Previously, they were rehashing Game Boy consoles and releasing boring games for N64 (Mario Kart is one exception). Then the GameCube came out and not much had changed; more generally boring games (with a few exceptions).

The Wii was going to make or break the company. Glad they are still around.

 

[Ankh-Morpork Guard]

Glad to see Nintendo finally getting some respect. In my mind, they were gasping for air until the Wii came out. Previously, they were rehashing Game Boy consoles and releasing boring games for N64 (Mario Kart is one exception). Then the GameCube came out and not much had changed; more generally boring games (with a few exceptions).

The Wii was going to make or break the company. Glad they are still around.

Truthfully, I think everyone(including myself) should have started paying Nintendo a bit more attention when the DS came out. Or at least once it proved to do something that seemed stupid(touching is good) and ran with it in such a way that they just knew exactly what they were doing. They found game models that were just plain fun, even if it wasn't the most amazingly looking or deep plot...fun.

It was a perfect preview of what happened with the Wii, save for the cries about the name.

 

[Vigilance]

Truthfully, I think everyone(including myself) should have started paying Nintendo a bit more attention when the DS came out. Or at least once it proved to do something that seemed stupid(touching is good) and ran with it in such a way that they just knew exactly what they were doing. They found game models that were just plain fun, even if it wasn't the most amazingly looking or deep plot...fun.

It was a perfect preview of what happened with the Wii, save for the cries about the name.

Yep.

There's also some lessons to be learned from a failed console here: the Nokia NGage.

That lesson is that specialization is good. Game consoles are dedicated computers. You can try to grow them beyond that all you want, but the console's primary purpose (as a gaming device) still has to be top notch in order to drive sales.

In other words, the PS3 isn't worth a premium price as a game console. The fact that it's an all-in-one entertainment center won't drive sales, anymore than the Nokia working as an MP3 player and a phone could drive its sales.

And the PSP is in sort of the same boat imo, though the jury is still out on that system. The price cut seems to have helped it A LOT. Now we need to see a steady stream of great games for it, and it will have a good chance of sticking around.

Trying to marry it to a video format (UMD) that was interesting, but overpriced, almost sunk the PSP, because people frankly never gave a damn about UMD. They wanted games, and two GTA games isn't enough to sell a console, especially not when they come to the console everyone owns (the PS2) shortly thereafter.

Sound familiar? Sounds like the exact strategy Sony is employing with the PS3.

Price your console way higher than the competition, keep your install base mired at about 1/3 to 1/2 of your competition, spend most of your first party support dollars propping up a video format no one cares about, then look around in disbelief when the 3rd party support flocks to the superior game console (that also happens to be outselling you by a huge margin).

Way to learn from your mistakes guys.

And btw... I'm not one of those "gloating" Nintendo fanboys someone mentioned above, any more than Fortune Magazine is. I think the game industry is vastly improved by a healthy presence from Sony, Nintendo and MS. I just call BS when I see it, and Sony's strategy post PS2 Slimline has been BS.

Chuck

 

[ssampier]

That's a good point, I had nearly forgotten about the DS. When it came out, I was thinking it was innovative and different, but those things don't necessarily sell a system (Virtual Boy was both of these things, but with more eyestrain). As you mentioned they gambled and hit it big.

Further, yes, being "all things to all people" does not equal success. I'm sure the only people that really care the Ps2 can play DVDs are younger kids; the true selling point is the games.

 

[John Crichton]

As much as Nintendo has done well (I love my Wii, BTW!) it's them coming back to the party. It's about damn time. Still, they are going to need more games to keep this going (read: competing with the PS3/360). The big guns are still a way off with the PS3 and the 360 has some killer stuff on the horizon. The PS3 won't see real growth until late 07/early 08. It doesn't need to as the PS2 is still selling and competitive in the market.

As an owner of all the consoles, I am most impressed with the PS3 as a next-gen machine. It is rock-solid compared to the 360 (hardware issues) and the Wii, as fun as it is, still worries me a bit, just like the last 2 Nintendo consoles. The problem is obvious with the PS3 - the games, not the price. If there were real killer titles on it (or maybe just one) it would be doing better. Motorstorm & Resistance are excellent but not must haves. We'll see what happens when Lair hits.

I should also mention that while I do own all three, I haven't used any of them all that much recently or even bought a game since God of War II. The PS3 gets used for movies/TV and that's about it.

 

[werk]

The problem with the playstation 3 is the problem with Sony.

 

[Ankh-Morpork Guard]

Remember, though, that the Wii still has some big guns on the horizon, too. Super Mario Galaxy, Super Smash Brothers Brawl, and Metriod Prime 3 being foremost...and there IS something to be said about them being out this year, while the PS3 is still waiting on thiers.

I still think we'll see the Wii develop like the DS, especially with third party games. At first, no one really knew what to do with the DS and Nintendo was just cranking out the games with anything they could think of to use the touch screen. Then, after publishers started to see what you could really DO, they began jumping in with some amazing games and it hasn't stopped. As the Wii is selling much like the DS, getting the same kind of criticisms(just a party game, too odd, a fad, not enough power compared to competitors[PSP]), and showing the same initial third party game slump...I see no reason that this won't happen.

Really, there's already been talk about third party publishers starting to jump in after a few months of seeing what can be done.

If the PS3 keeps waiting, its only going to keep hurting Sony. The second the Wii passes enough time to finally get past the "Its just a fad" comments, like the DS did, people will start to REALLY take notice even moreso. If Sony just relies on the PS2 to drive them, then the PS3 is going to only fall farther behind both the 360 and the Wii. The price shows no real sign of changing, and even if it does, Sony will lose even more money selling the systems.

While I love the PS2, and still turn it on to play some great games all the time, I just can't get behind Sony for this generation. They're trying too hard to rely on "We're Sony, buy us because we're amazing" rather than actually...well...anything else. Nintendo's jumped back into the game and is using what they've learned from the handheld market to dominate, and whether people like it or not, this is staying strong, Wiis are still near impossible to get a hold of because people are buying them so fast. And Microsoft is watching all of this and LEARNING. They're doing what Sony should be doing, adapting. The 'kid friendly' insult for the Wii is something that MS is going to try more with their system...because its selling.

While Nintendo is taking the lead, MS seems to be taking a very smart road and seeing what works, then adapting that to their system...while at the same time playing to their own strengths. Sony, however, is just trying to do the same old thing, which is failing terribly.

 

[John Crichton]

Remember, though, that the Wii still has some big guns on the horizon, too. Super Mario Galaxy, Super Smash Brothers Brawl, and Metriod Prime 3 being foremost...and there IS something to be said about them being out this year, while the PS3 is still waiting on thiers.

I'm never worried about the 1st party stuff from Nintendo, it is there on every console. I'm always concerned about the 3rd party stuff. It is looking up for the Wii, but I'll wait and see if it gets more attention than the N64 & GC.

 

[Vigilance]

The problem is obvious with the PS3 - the games, not the price. If there were real killer titles on it (or maybe just one) it would be doing better. Motorstorm & Resistance are excellent but not must haves. We'll see what happens when Lair hits.

But that's the rub isn't it? I mean, how do you let GTA go to the 360 at the game's launch? Sony clearly had no idea that getting GTA all to itself for a year or so was a major part of their dominance at the end of the last generation.

And also, I'll say it again: it's the price.

If the consoles were comparably priced, it would be a slugfest. But the PS3, from what I've seen, just hasn't done anything to justify its higher price point. Even MS have admitted now that the "sweet spot" in the market is a $200 console. On almost the same day, Sony said they were thinking about "adjusting" the price of the PS3.

Basically, both console makers are now trying to figure out how much MORE money they can afford to lose on their consoles to try and compete with the Wii.

I think the two dominant consoles of this generation will be the Wii and PS2 (assuming Sony doesn't start refusing to license games for the console in an attempt to force an upgrade).

We're already seeing this trend, with game publishers making Wii games and then porting them to the PS2. The consoles seem graphically similar and things I've read from publishers make it clear that the port isnt that difficult.

Though it isnt coming out, this is where the PS2 Manhunt 2 game came from. Rockstar had made it for the Wii and the PSP, and from there it wasn't hard to port it to the PS2, which is still attractive because everyone has one (with more slimlines sold everyday).

 

[Ankh-Morpork Guard]

Really, I wouldn't say its the price OR the games that are hurting the PS3. Its both. The price is so high that its hard to justify spending that much for the games that are out, but at the same time, the games just don't justify the price.

So the real problem is on both ends, which is worse than it being one or the other.