Nintendo: The End of an Era?
I have been bored to death lately and worn out from the heat. So I downloaded an emulator program and have been playing all of the old Nintendo eight-bit boxy graphics classic like Super Mario, Zelda, Donkey Kong and the rest. So I am getting a little bite from the nostalgia bug at seeing Nintendo struggle so mightily.
Seemingly the company that I and most of my generation grew up on is spiraling the drain, unable to keep up with competitors like Apple and Microsoft.
The unexpectedly weak demand for Nintendo's 3DS hand-held player, which displays 3-D games without glasses and was launched with much fanfare earlier this year, are a setback for a company that had been betting on a new hit to turn around its waning fortunes. The company cut its profit forecast for the year ending in March by more than 80%.
Nintendo's disclosure that it sold just 710,000 3DS devices in three months, down from 3.6 million the prior quarter, comes as the videogame industry undergoes a painful transformation. Consumers are favoring devices from Apple Inc. and cheaper games that can be played online or easily assessed and played with friends via smartphones.
So now the question for all of you would be takeover and buyout kings: who should buyout Nintendo? Can the former video game industry King return to its former glory? From speaking to a few Japan based friends, I have always had the impression that Nintendo gets a GM-like protectionist treatment from the Japanese government and won’t go down easy even if losses are great.
The video game industry has recently been hit with the oversaturation effect already felt by the music and film industries worldwide. Companies like Apple, Sony and Microsoft have eclipsed Nintendo in almost every aspect of operations and product quality. Though the Wii gave Nintendo a huge boost a few years ago, that affect has itself lagged and now seems like ancient history.
Its natural that products and companies reach a maturity level upon which only a fall is possible. The Nintendo story is a bit different for me, however, as I watched the company grow from nothing to a global giant to this decaying mess that it is today.
Curious to hear what you younger guys from the PS/Xbox generation think of Nintendo’s prospects and if you would even try and turn it around at this point?
Its raining again…I’m going to going to go shoot some ducks.
I think the handled gaming device market is dead. Nobody will pay £200+ for a PSP or DS and then £30 for games when there are smartphones with games just as high quality and for a fraction of the cost dc, which are also phones, internet browsers and everything else. Nintendo's main strength is in what it has created, namely the game series such as Zelda, Donkey Kong, Mario. It should work on developing superb quality smartphone versions of these games as it's main source of income, and put the actual devices lower on the priority list.
I grew up playing the super nintendo but then switched to PS as soon as it came out. I got a lot of love for nintendo. It's sad to see them go down this way but I don't really see them making a comeback. It would be very hard to think that Apple can pull die-hard gamers from the Xbox and PS3 platforms to play bullshit iphone games....I just don't see it happening. Nintendo's market is littered with "casual" gamers and this is why they are suffering.
Everybody was taking shots at Sony a fews years back when they dropped the PS3 and they were selling the consoles at a loss, now you see how well that has paid off. Xbox and PS3 have created ADDICTS, while nintendo has created the casual gamer who will get together with his family to play WiiSports (how often does this happen?...not that often).
In any case, I wish Nintendo the best, but I think they may have to do what SEGA did a while back and just concentrate on making games. They've lost the console war with the likes of Sony, Microsoft...and now Apple...its pretty sad.
Nintendo's strengths come from Mario, Pokemon, and Zelda. However those resources are all but exhausted. If they can get new developers with more unique plot lines similar to that of Sony's they might have a chance. They're also branded as a family fun game system which makes it seem more kiddish and less cool to the teenage and young adult user base.
While Xbox and PS3 maybe be like Facebook, Nintendo is looking more like a myspace that's trying to start a google+
Revamp the gaming style. Rebrand itself as the cool games rather than the family, cartoon games. Might have a chance.
If not, I think Microsoft would have good usage of acquiring Nintendo since their new Kinect for the Xbox might complement the Wii. Perhaps even make cross-platform gaming possible?
It's hard for me to say, because I also grew up with Nintendo in the late-80s. The brand itself is still worth a ton even if the Wii (as novel as it was for a time) is pretty much dead.
I could see someone buying the firm for the brand and a relaunch (or console integration) once the stock really gets cheap. It's down about 50% YTD so if anyone thinks they can get this thing going again (I doubt it'll be a PE firm) this is a time to do it.
I just looked at their most recent public balance sheet (Mar-11) and they have about $11B USD ($886B JPY) in cash/current assets on their sheet. If someone thinks the brand is worth anything I think they are likely to be acquired assuming the government doesn't interfere.
We´ve been hearing that Nintendo doesn´t have future for about 2 decades, and they always managed to come back. Currently, their product line is weak, but I´m sure they´ll come up with something new. They always do...
What they need is a nice, big, original, fun hit that appeals to a wide fanbase.
I mean, think about how crazy Mario must have sounded when it was first proposed!
"Okay guys, we're gonna have this Italian plumber, right? And he's gonna go running through thos brightly colored world, eating mushrooms and flowers so he can spit fire and grow tall and stuff. And if anything gets in his way...he can just step on them and end their lives. How cool is that?"
Point being, you never know when the next big hit is going to be. you just have to let your creators and writers do their work.
Some pretty good points have been raised here. That Nintendo is targetting the 'non-gamer/casual' crowd while Microsoft's XBox and Sony's PS3 are targetting more serious 'gamers'. Initially, Wii had done well because Nintendo decided to expand into the wider fanbase - families, even grandparents buying the Wii so they can play together with their younger family members.
The problem though, is casual gamers don't purchase too many titles - they stick with a few (Mario Party, the Wii sport-type group games, etc) and that's it. Conversely, more serious gamers (generally those in the 14-25+ age group) that are XBox360 and PS3 devouts, continuously buy games/worthy titles. These companies don't make money on console sales (in some cases, as pointed out, they are selling at a loss). It's the titles (at $40 to $60 a pop) that bring in the moolah.
I think Nintendo needs to re-attract some of the big-name series that drive game sales (re: 3rd party developers). They are far too dependent on their few franchise names like Mario, Zelda, and Pokemon. But what about Halo, Final Fantasy, Grand Theft Auto, Metal Gear Solid series, Call of Duty, Gears of War, etc? Nintendo needs to also up their graphics and horsepower of their hardware so they can convince THESE types of big sellers, and not be seen as a just a gimmicky 'kiddie machine'.
I grew up with Nintendo, and I remembered Super Nintendo was the shit. It completely overtook Sega Genesis (which was also a 16-bit system, and came earlier). Why? Because they had far more games and brand-name titles. And then when it was between the newbie Sony's Playstation (32-bit) vs. Nintendo's cartridge N64 - the PS won because had WAY MORE great games - they were willing to find more 3rd party developers and they signed exclusive rights to some of these games (again, final fantasy, GTA, etc.). Conversely, Nintendo got arrogant (thought they could just rely on their own franchises, kept the cartridge system when 3rd parties mentioned they are better off using CDs, didn't make more 'Mature' games - which target young adults that actually HAVE money to buy more games vs. families, etc...) and has not been top dog ever since.
Sony themselves have also lost some market share because they haven't been able to retain exclusive rights to certain titles. They have also lost some fans to XBox360 because Microsoft has a few popular games like Halo that are exclusive. But both these firms recognize what makes one sustainable - the scope and quality of games, and to some extent - having a game system that is flexible enough that it encourages game developers to make games for that system.
And I agree with everyone in the thread that Nintendo needs to attract the more serious gamers. I think the Wiimote, while a great and innovative product, does nothing for the serious gamer. Hardcore gamers aren't looking to get a workout while they play video games. They want to sit on their asses drinking Red Bull while they game for hours on end. Major League Gaming just wrapped up its Anaheim event yesterday and not a single Wii game was played there. The games that were played were Call of Duty: Black Ops on the PS3, Halo: Reach on the Xbox 360, and Starcraft 2 on the PC. Nintendo doesn't have anything with the competitive merit of these titles, and a big reason why is the Wiimote. Gaming with motion sensitivity is still relatively new and it's impossible to be extremely precise with a Wiimote, which sucks because first-person shooters like CoD and Halo require precision and there's no way that a real-time strategy game like Starcraft 2 can succeed without a keyboard and mouse. So among the gamer crowd, the Wii is viewed as sort of a novelty, and there's no way that Nintendo can continue making money unless they rebrand themselves to attract the more serious gamers.
Agreed - I believe the Wiimote system will likely be a commerical success like Wii was initially, but it won't do anything for the serious gamers that actually purchase titles.
Thanks for the hardware details. Admittedly, I haven't looked at the new Nintendo system 'under the hood' so to speak, but I recall watching the trailers and intros and was not impressed (though they again choose to focus on some Mario add-on as their demo).
All in all, nintendo needs: - Attract more serious gamers that will provide continuous revenue streams (frequent games purchase, online subscriptions, etc) - More 'highly anticipated' games - through 3rd parties and Nintendo itself - Somehow attract more exclusive rights to highly anticipated games besides cash cow Pokemon - Hardware that will encourage developers of potential or already 'hit' games to make games for Nintendo (which seems, is being done, according to design)
Understandably, Nintendo went the Wii route to avoid a horse-power, graphics-focused pissing contest with Sony and Microsoft in the first place. And I initially thought it was smart of them to target a wider audience. But save a few marketable 'anticipated' games, they haven't done a good job providing fun games to keep these folks buying.
So a company with US$10.5b in cash and management responsible for its recent successes still in place is circling the drain? The DS and Wii account for 57% of the installed base in the combined home and portable console markets. Apple would kill for that level of market share. Business has been slow over the past 12 months, but debt loads are low and the company does not have the clusterfuck of liabilities and management incompetence of GM.
Hard to argue against the point that the 3DS hasn't done well, but the DS performed pretty poorly initially as well. Nintendo also has a new home console coming out next year, so I would reserve judgment until then. The new system may be a flop too for all we know, but the company has a pretty solid financial position and can silence its doubters if it can turn its product portfolio around and draw third party software studios back to its platforms.
Long term, the company has issues it will need to worry about, but until cloud farms are rendering and transmitting live games to users, there will be a market and demand for dedicated gaming hardware. The Apple 1-year forced obsolescence hardware model cannot dominate this industry until then.
Monkey-shitting the OP for poor research.
MSFT's move into the video game business has really hurt Nintendo. I remember when i was growing up everyone had a N64 and we had Golden eye matches constantly. The next generation of gaming devices was the start of Nintendo fall from grace.
The Gamecube was a total failure and relied way to heavily on the Mario/Zelda brands. While every American teenager switched to GTA and Halo the big N kept coming out with 'kiddy games". This trend got even worse with the Wii which has the graphical capabilities of a fish.
Nintendo's next big mistake was completely missing the boat on online gameplay. When i visit home all my teenage brother does is COD all day and night with his friends on Live. The kid is so fucking hooked its unbelievable. MSFT could charge 500 a year for a Xbox Live subscription and him and his buddies would mow lawns all summer to pay for it. Wii Sports just doesn't attracted those kinds of gamers.
@ Tracer: Not too long ago, Nokia was at the top of the cell phone market. Apple has turned things around in a few short years. As I mentioned in my earlier post, Nintendo was easily displaced by Sony as the game consol king back in the mid-late 90's, when Nintendo previously had the lion's share of the market. Sure, the company's financial position can be solid, but it can change if they don't adjust vs. their competitors accordingly.
Nintendo's new system is like Wii v2, where you're also holding an iPad like device, which also allows you to have another point-of-view besides just you and the screen. It's cool and innovative, and I would imagine it will have a similar success as the Wii initially did. But whether it's a "success" will depend on whether Nintendo and 3rd party developers can make numerous interesting games using that new innovative system that can drive sales. Otherwise, the novelty will wear off like the Wii did.
No disagreement here. Nintendo certainly doesn't have an impenetrable position in the market and things could spiral downwards fast. But the WSJ and OP's circling the drain/end of an era hyperbole is a little much. Nintendo created the gaming market as we know it and has a business philosophy/model that very much parallels that of Apple.
Nintendo released the Virtual Boy around the time the N64 began to lose ground to the PSX. The system was a huge flop, far worse than the 3DS. Nintendo responded with the GBA which was a huge success. If any company in the gaming market can turn it around it's Nintendo. MSFT and Sony have invested so much R&D spending on their high-tech loss-leading consoles that they cannot reasonably afford to develop successor platforms in the immediate future.
Nintendo's failure is that the Wii has essentially become an add-on for the XBox and PS3. They MUST make a system with more horsepower. I feel like they should forfeit this generation to MSFT and SNE, and start building something remarkable for next-gen. A thing to note is that failure in one generation isn't totally crippling. For example, PS2 kicked the panties off Xbox and Gamecube last-gen, but MSFT game back with a vengeance this gen.
Nintendo's strength lies in its enormously famous titles. The answer is evolution not revolution for Nintendo. What I mean is that they do not have to go out and create a whole new line, but just need to re-imagine fan favorites. Just off the top of my head, they can remake the Pokemon series to make it more Fable-esque. I would love to start off at Pallet Town with my Pikachu and decide whether or not I want to be a member of Team Rocket or a Pokemon master.
As for handheld gaming, the next PSP's and NDS's basically have to be gaming smartphones.
EDIT: This is how fucking hardcore Xbox gamers are: http://blog.games.yahoo.com/blog/866-xbox-addict-dies-from-blood-clot/
The end of the Nintendo Era was when the PS1 and Sega Genesis came out. They went from 90+% market share to around half and have been declining ever since the N64 and GameBoy.
This statement is only partially correct. Sega Genesis came BEFORE Super Nintendo, which was VERY successful and was probably when Nintendo was at it's peak of its reign.
PS1 and N64 were the next era, and someone pointed out earlier - PS1 dominated N64 and ended Nintendo's reign.
'GameBoy' - the original version - came out late 80s.
I meant it more as a declining thing. I doubt I was the only one who watched that CNBC (or maybe History Channel) documentary about the rise and fall of Nintendo.
End of an era? It can't be too bad, the Wii has sold almost as much as the PS3 and Xbox 360 combined. It needs to ditch the handheld retarded sh*t though, no one plays those anymore.
But it also costs1/3 as much.
The down fall was no allowing users interactions like that of xbox and ps3
I mean not voice chat....really?
I feel like at this point, though, its kind of akin to RIM entering the uber-smart phone market. I think the ship may have sailed and they are going to have to look elsewhere and carve out their own niche/introduce something that totally shifts what everyone is looking for.
Sapiente ut aliquam doloribus ut debitis explicabo et. Nam inventore sunt aut voluptate ducimus ut quo. Voluptatem iste sint eos cum. Magni reiciendis vel illum dignissimos alias. Voluptatem eos ipsum voluptas porro temporibus nihil.
Sed qui voluptatem alias veniam sed rerum voluptatum. Quibusdam sint voluptas facilis fuga. Repellat hic sit maiores hic laudantium quae autem atque.
Placeat cumque ut autem minus voluptatem. Saepe qui omnis numquam est veniam et magni dolores. Id earum perferendis dolore totam eligendi voluptatibus adipisci.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...
Nesciunt itaque molestias corrupti non. Illum quia cumque corporis sint a repudiandae facere. Dolorem vel magni quia cum. Provident voluptatibus possimus nostrum deserunt repellendus ut aut. Voluptas asperiores et magni aut harum dolorum omnis.