Nintendo profits, Sony and Microsoft struggle

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gleebergloben1
Posts: 687
Joined: December 31st, 1969, 7:00 pm

Nintendo profits, Sony and Microsoft struggle

Postby gleebergloben1 » December 5th, 2008, 11:22 am

This is an article from Forbes magazine, which highlights why Nintendo is doing so well. Say what you will about Nintendo, but many people (including myself) thought that the Wii would only be a niche market before it came out. Now they're king of the mountain. Here's part of the article:

"More casual players aren't as likely to be attracted by hardware features, so it's all about delivering a fun, easy-to-use and addicting game experience," says Anita Frazier, toy and video game analyst at NPD Group.

Another factor in enticing those casual users is keeping its console cheap. "The key thing about Nintendo is they want their things to be at price points that anyone can respond to," says Hiroshi Kamide, director of research at KBC Securities Japan. Nintendo's strategy is to buy inexpensive components instead of making them in-house, allowing the Wii to sell for $260 while the PS3 costs $300.

But here's the winning point: Unlike its competitors, Nintendo has figured out how to make money from its console sales. Sony loses money on each Playstation sold. Microsoft might just break even. But every Wii brings in $6 of operating profit for Nintendo, says David Gibson, an analyst at Macquarie Securities.

Nintendo also sells 60% of Wii games itself, compared with 30% for Microsoft and 15% for Sony. Wii users are expected to buy the most games this year, 220 million, compared with 120 million PS3 games and 125 million for the Xbox 360.

The top three Wii games--"Wii Play," "Super Smash Brothers Brawl" and "Super Mario Galaxy"--are all Nintendo's own titles, but the top three for PS3--"Grand Theft Auto IV," "Call of Duty 4: Modern Warfare" and "Assassin's Creed"--are all from outside developers, not from Sony.

By making most of its games itself, Nintendo risks sacrificing the chance to earn licensing fees from as many third-party developers as its competitors. It also prices games cheaper--at $50 versus $60 for the other two consoles. But so far the gambit has paid off: Wii locks in fans because many of its most popular games appear exclusively on the Wii. And Nintendo has a higher gross margin on game software than the others at 65%, compared with between 50% and 60%.

The entire article can be found here:

http://videogames.yahoo.com/feature/wii-s-future-in-motion/1270287



JasonhasRSI1
Posts: 712
Joined: December 31st, 1969, 7:00 pm

Nintendo profits, Sony and Microsoft struggle

Postby JasonhasRSI1 » December 5th, 2008, 11:53 am

Sorry to be a jerk, but did anybody not know this? Seems like we get the "Nintendo actually profits off of console sales!!!" post around here every three months or so.

andrew

Nintendo profits, Sony and Microsoft struggle

Postby andrew » December 5th, 2008, 11:59 am

Most of us failed to realize this. I should have seen it though. This can be a similar argument of dvd vs blu-ray. Blu-Ray offers the high def picture but for most of us dvd picture ( in this case xbox graphics) are more than good enough and don't require additional equipment investments. The Gamecube may have struggled in an equal environment but a high def switch will be more gradual helping the Wii. That and of course controller innovation was key as well as a good starting price point.

steer

Nintendo profits, Sony and Microsoft struggle

Postby steer » December 5th, 2008, 12:38 pm

Here is a disconnect I dont get -

You hear record growth, look how many consoles sold in the past 2 years in my fun with numbers topics.

Gaming is hotter than ever- ads all over the tV -

And yet many companies are struggling?

Why?

Viper821
Posts: 1043
Joined: December 31st, 1969, 7:00 pm

Nintendo profits, Sony and Microsoft struggle

Postby Viper821 » December 5th, 2008, 1:46 pm

[quote]Gaming is hotter than ever- ads all over the tV -

And yet many companies are struggling?[/quote]

That's easy: it's called creative accounting. Just like a company I worked for wouldn't ever give a raise because they were 'losing' lots of money (and showed the numbers to prove it) yet they had no problem spending millions on expansion and growth. You can twist statistics anyway you want to make yourself to be much poorer or richer than you are and my experience has taught me those who cry they are poor are usually anything but.

If any gaming company is struggling, it's because they spend far too many resources on following fads and inventing cheap gimmicks (like opening cutscenes that nobody cares about) rather than creating fun, original titles.


Zenzerotron

Nintendo profits, Sony and Microsoft struggle

Postby Zenzerotron » December 5th, 2008, 2:27 pm

Here's what I don't get.......

Wii is the hottest, #1 selling console, but it get the least 3rd party support. Why/how is it 3rd party games  DON'T sell well on Wii?? Or  is this a false perception??

If I were a 3rd party publisher, I'd want to make games for the console with the biggest installed base, it'd equal more sales, you'd think.


Luke

Nintendo profits, Sony and Microsoft struggle

Postby Luke » December 5th, 2008, 2:28 pm

If it weren't for the Red Ring Of Death debacle, I'm sure Microsoft would be sitting pretty good right now.

steer

Nintendo profits, Sony and Microsoft struggle

Postby steer » December 5th, 2008, 3:39 pm

Maybe Nintendo should take some of their creative ppl in game making and shuffle them to accounting! j/k


CalusReyma

Nintendo profits, Sony and Microsoft struggle

Postby CalusReyma » December 6th, 2008, 9:15 am

[QUOTE=Zenzerotron]Here's what I don't get....... Wii is the hottest, #1 selling console, but it get the least 3rd party support. Why/how is it 3rd party games  DON'T sell well on Wii?? Or  is this a false perception?? If I were a 3rd party publisher, I'd want to make games for the console with the biggest installed base, it'd equal more sales, you'd think. [/QUOTE]
Nintendo hasn't had decent third-party support since the SNES era. A lot of developers defected to the PlayStation when it first came out, and Nintendo has struggled in the third-party stakes ever since.

Also, due to the poor performance of the N64 and GameCube, most developers had written the Wii off before it was even released, and threw most of their weight behind the PS3 and Xbox 360. The Wii's success pretty much took everyone by surprise, resulting in a mad rush by publishers to get something, anything out for the console—hence the glut of shovelware on the system.

Good games take time to develop, and the Wii's only been out for just over two years. Here's hoping 2009 will be a better year for the Wii software-wise.

Zenzerotron

Nintendo profits, Sony and Microsoft struggle

Postby Zenzerotron » December 6th, 2008, 12:32 pm

I was complaining before that most of 2008 didn't have anything worthwhile on Wii, but 2009 is looking GREAT

Koropina 2
House Of the Dead Overkill
MadWorld
Wii Sports Resort

Already, 2009 has great things that are up my alley. I can do without the Mario-sports crap that made up 2008. Even if these 4 are the only games that 2009 has for me, I'll be a happy Wii owner again



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