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Nintendo Shifts Focus from Consoles to Games (1 Viewer)

John Kilroy

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Reading between the lines one could infer that the GameCube will be their last console.

From USA Today:

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."
 

Romier S

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I think its a little early to say Nintendo will be out of the hardware business for good. I could be a possibility as it sounds like they want to put focus more on games than furthering hardware technology in the next generation.

The games have always been Nintendo's strong point and I can't blame them for wanting to focus on that. To be honest if Nintendo were to move away from hardware in the next generation and concentrate completely on games (ala Sega) I would still support them as vehementley as I do Sega. Its truly remarkable that their franchises are some of the most popular even today and really a testament to how good their games really are.

It would be odd not to have a Nintendo system though, its the same kind of shock I had playin Sonic on the Gamecube. It took awhile to get used too. At the very least it sounds like they are really in for the long ride with Gamecube. Thats always good to hear!
 

Kelley_B

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Who wants to go into a new generation with only one or two consoles??? I love buying the hardware more than I love buying the games, odd huh. Now what would be cool is to see Sega and Nintendo team up together and build one badass console next generation, but it won't happen.
 

Dave Falasco

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Not wishing to stir any ugly political waters here, but if Nintendo does decide to focus on developing software only in a few years, I wonder if they would kind of align themselves with Sony to oust the Xbox? Square is already developing for the two of them. It's not inconceivable that Rare would also start developing for Sony. Nintendo developing only for Sony would pretty much sound the bell for future iterations of the Xbox, I would imagine.

On the other hand, money talks as they say, and that doesn't seem to be in short supply up in Redmond...

Still, a scary thought for Xbox fans.
 

Morgan Jolley

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I think Nintendo was more saying that they would rather make a game console that only plays games as opposed to a game console that goes online and plays other types of media (which is what the XB and PS2 are doing). They would rather focus on making stellar games and good consoles than multifunction consoles and ok games.

At least, I hope thats what they said.
 

Romier S

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It won't pursue online games, judging them as still too limited in appeal.
While I in no way shape or form believe that online gaming is the wave of the future (The day there are no longer single player games is the day I quit gaming). I do think this is a mistake. The online console market is still in its infancy but can only get bigger and better. By avoiding any kind of online plans Nintendo is not looking at the audience of gamers that *WANT* online gaming. That number grows more and more each day.
I liken it to the Big N choosing the cartridge format for the N64. It was a mistake, I hope they dont make the same one here...
 

Dave E H

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Nintendo hopes to come up with profitable games more quickly without compromising on their appeal, he said.
I think that quote screams 'write once, port everywhere' to me. Sell as many copies on whatever system that's out there - that's a good way to recoup your investment in a title.

However, I still hope they keep doing portables - unless someone else comes up with one. I love my GBA!
 

Derrik Draven

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As much as I don't care for either Nintendo or their games, I'd hate to see them drop out of the rat race. Granted, it might leave more customers for the Xbox but, it also is one step closer to a "Sony only" console world.

Competition keeps these companies from making boring, bland, minor improved consoles. If Sony would become the only game in town, the PS4 might become a turd due to no competition.

Yes, it's still early to say Nintendo is definitely dropping out of the hardware bizz but, those are some pretty damn strong words for their new top dog. He isn't talking in euphemisms and he sounds pretty straight forward. Guess we'll wait and see.
 

Masood Ali

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The online console market is still in its infancy but can only get bigger and better. By avoiding any kind of online plans Nintendo is not looking at the audience of gamers that *WANT* online gaming. That number grows more and more each day.
Actually Nintendo is putting as much effort into their online plans as there exists a market for online console gaming worldwide, which is a very small effort for a very small market. The Dreamcast had mild success online at best (well, the entire console had mild success at best). Sony is just beginning to start their online business, which is a very miniscule part of their overall console business. And MS is banking a lot of money on a yet unproven market (only because MS has the money to do it). It would be foolish for Nintendo to drop $2 billion like MS did on their online structure because it's bad business.

The next generation might see enough console gamers going online to make the market enticing enough to invest in, but right now online console gaming is not going to be a straw that breaks Nintendo's back (it's more like a hair).
 

Romier S

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The article now has been posted on Gamespot:
Nintendo's focus
Its a bit clearer than what was posted above. It appears that Morgan is partly correct. Nintendo seems to want to avoid the "set-top" box ideas Sony and Microsoft are going for as they would rather focus on the gaming content.
At the same time Nintendo the article also shows signs that the Big N may be going to a more software based platform and avoiding the hardware side of the business. This quote for instance:
It would be foolish for Nintendo to drop $2 billion like MS did on their online structure because it's bad business.
I never said they should. I can only comment on what the new head of Nintendo said and I think its a mistake. I agree that the console online market is unproven at this point but to not have any kind of plan or place any effort into trying to partake in a cut of that "hair" as you put it, is also not a good business decision.
 

Jason Seaver

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Who wants to go into a new generation with only one or two consoles???
Won't happen; even when companies are getting out of the business, there always seems to be at least three, whether it be Atari/Mattel/Coleco, Nintendo/Sega/Atari, Nintendo/Sega/NEC, Nintendo/Sega/Atari/3DO/Sony, Nintendo/Sega/Sony, Sony/Microsoft/Nintendo...

If Nintendo gets out of the business, someone else will likely jump in. My money's on AOL Time-Warner; if the future is online games/set-top boxes, they'll almost have to in order to prevent Microsoft from taking too much market share. And if they get good, exclusive games from franchises like Batman, The Matrix, and Looney Tunes, that could cement their credibility in a hurry.
 

MikeAlletto

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We have 900 billion yen ($7.25 billion), but one of our rivals, Microsoft, has 5 trillion yen," he said. "This is a high-risk business. There may come a time when we would have to make intensive investments."
But all of MS's 5 trillion has to go toward PC software, PC hardware and ads for those as well as video games and gaming hardware. Nintendo just does games. If you think about it MS has its hands in a lot more stuff than Nintendo does, it only makes sense they have more money.
 

Romier S

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But all of MS's 5 trillion has to go toward PC software, PC hardware and ads for those as well as video games and gaming hardware. Nintendo just does games. If you think about it MS has its hands in a lot more stuff than Nintendo does, it only makes sense they have more money.
:laugh: Well of course Mike. I think you need to tell that to Nintendo!
 

Jeff Kleist

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I'd love to see Nintendo go Sega's route. They have always had a quality software division. Since GBA sells itself, they don't need to worry about it too much. It'll be great
Think about it, A good Power-Stone style game (NOT the crapfest Smash Bros) of Sega vs Nintendo. It'd be bigger than Capcom vs SNK!
 

Camp

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"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."
I shold start by saying, no one loves Nintendo more than I do.

But....they've been dropping that same line for 2 years now. "Everyone [except Nintendo] makes boring games"..."there's no innovation in games today"..."developers are out of ideas"...blah, blah, blah.

Even the great Nintendo hasn't made a really revolutionary game since Mario64. At some point I'm going to stop believing their propaganda and expect them to deliver on the revolutionary game front.
 

Eric Nees

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N64 sold 35 million consoles worldwide. If they hit their 50 million target with Gamecube, I don't see why they'd drop out of the hardware side of things. Sega was in much worse financial trouble, only after multiple failures of systems and add-ons did they finally throw in the towel.

The biggest problem I see for Nintendo is that everyone else seems to want to turn their consoles in to the hub for all entertainment in the household. Nintendo may have to extend their relationship with Panasonic and make their next console just as much a DVD/Tivo/WebTV/Whatever as much as it is a game console. Sony and Microsoft are definitely going that way, Nintendo may have to just to stay competitive.
 

Chris Bardon

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Honestly, I think that Nintendo could make more money from being just a software publisher. A lot of people love their first party games, and I think that they could reach a wider audience on something other than a Nintendo console, since in recent times the quantity of great titles has been lacking on Nintendo boxes.

An interesting scenario:Microsoft buys Nintendo. If they're serious about winning the console war, let them do it on both fronts. You have the more "mature" xbox games for parents, and the more "family friendly" Nintendo titles. Couple this with access to the back catalogue, and you've got a LOT of potential for MS. Only problem is that I don't think that the company is for sale...

The only exception is the portable market. Nintendo owns this, and as long as Game Boy sells, Nintendo will make hardware.
 

Chad Ellinger

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Nintendo could be very successful being a software publisher, but I doubt they'll move away from hardware.

Nintendo's software divisions (especially Miyamoto) have always been heavily involved in their hardware design. I've gotten the impression from interviews that Nintendo's hardware is tailored to their software design.

Not only that, unlike other companies, I don't think Nintendo has taken a loss on hardware, except with a minimal loss on Gamecube. That's why Nintendo can afford to have a smaller library of titles than Sony or Microsoft.
 

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