Look at the Idiot

[Smashchu]

cube.ign.com/mail/(look for Buissness)

Really. This gut is so closed Minded, sdosn't look at present and future stuff and cant get his facts straight.
Think what you will but I think hes Dumb.

"Nintendo is profitable now, but it may not be in the future. A deeper evaluation of the company's fortunes and mind share would show that its command of the console market from the early 90s has dramatically decreased. Worse, it would also show that Nintendo loses more and more market share every generation, while both Sony and Microsoft gain it. "

Dosn't mean it wont change. And what consels have Microsoft sold.

"But what happens to Nintendo's cost-cutting measures when a legitimate competitor steps in? Look no further than PlayStation. At a time when Nintendo was all-too happy to keep proprietary and moneymaking cartridges as its medium for N64, Sony swooped in and took control of the console market with an advanced format. And when Nintendo tried to cut costs again with GameCube, slicing away a larger storage medium again and dropping DVD-playback and a digital out altogether, Sony furthered its lead with PlayStation 2. Here, Microsoft came in and -- to Nintendo's surprise -- stole away GameCube owners, not PS2 ones. Afterward, Nintendo's piece of the overall console pie was missing a whopping bite."

(he dosn't read)A) Nintendo used caturages because it didn't belive CDs where ready yet B). The gamecube wasn't a cost cut. There system is stronger then the PS2 and The small disk are for faster loading time.

"Perhaps a bigger problem still is that third party games sell worse and worse on Nintendo platforms, which have in recent years become so targeted to die-hard Nintendo fans who mainly want Nintendo-developed games. As a result, more and more third parties have abandoned for Microsoft and Sony, which has a huge impact on overall hardware sales. Grand Theft Auto 3 sold PlayStation 2 systems."

My rebutle is this. It sells lots of 1st party and still more profitable. Also since development cost will go (way)up next generation 1st party are needed. Sony and Microsoft cant make first party.

"Splinter Cell sold Xbox consoles. "

No thats Halo.

"Whether it says so publicly or not, Nintendo is not happy being number three in the console market. But it put itself there by refusing to take risks on hardware, which is exactly what the most recent evaluation of the company's business side cites as a positive move. "

Isn't the revolution is a risky move?

"Short term profits. But if Nintendo continues to lose more and more market share where consoles are concerned, will there come a time when its reach is too insignificant to sustain profitability? "

Dude Microsoft loses money with each consel sold. their first profitable quarter was in 2005.

"If there's a point to all of this, it's that Nintendo's business model is not nearly as shiny and happy as it appears to be in the short term."

the sales from 1998-2004
Nintendo-7 billion
Sony -3.5 billion
Microsoft-lost money
Looks preety shiny to me.
Edit:opps looks like Im the idiot now this is in the wrong forum. srry

[Andronicus]

The thing is, from a business standpoint, this guy makes a very good point.

You see, Nintendo does continue to make excellent profits, despite is lower market share, but it is losing market share, and unless it gains some in the next round, then these great profits cannot be sustained indefinitely - the market is changing, and this is a big issue for Nintendo to tackle, successfully I hope.

He's not "dumb", nor an "idiot" - he is presenting a valid argument that sheds light on something that Nintendo themselves are seeking to fix - diminishing market share.

Nintendo has suggested their desire to increase market share themselves.
Sure it looks good now, but if Nintendo doesn't take back some of what Sony and M$ have gained, then the profits will eventually shift away from them to the companies with the market share.

And remember, Nintendo has projected a lower profit for the next financial period than what they just announced, so this is a real business concern, that I am sure Nintendo are working to deal with.

Yes, this article does make some innacurate statements regarding certain points that you pointed out, but overall, this is a real situation.

That's all I can think of saying.
I'm just saying that this is a totally valid thing to argue.

[Fryguy64]

I agree that he hasn't sat down to analyze the data in front of him, and has once again fallen into the fatal trap of ignoring Nintendo's other sources of income: the Game Boy range, the DS, merchandising... Nintendo was keen to point out this E3 that the GBA has outsold the PS2 despite being released later. And before you say it, they are both videogame systems, and therefore are in the same market. The handheld and home console systems aren't separated by a big invisible barrier.

Despite that, good points are made, but not clearly or deeply enough. It's as if he picked up the arguments on some messageboard somewhere and bullet pointed them. He's not analyzing Nintendo's position, he's using basic facts to try and criticize it.

And that is why he is an idiot. What's the point of making a stand if you're not going to find out why you're making that stand?

[Andronicus]

Fine.

If you're arguing that he is an "idiot" on the grounds of his lack of proper research, then fine.

However, if the label "idiot" comes merely from the fact that he is expressing this argument, then that is not a good enough reason.

That is what I think.

[Dances in Undergarments]

I don't think that guy is an idiot. I visit IGN alot and I personally believe that he makes alot of good points and has alot of opinions I agree with constantly. Though I do hate how everyone (me included) pretends to know whats going to happen in the business world, when, quite frankly, not alot of us no anything about it. I could tell you who I think is going to win the English Premier League this year, but since I have never watched a game and have no intention of doing so, my opinions are completely invalid. So are alot of people's when talking about Nintendo's business plans. We can speculate, sure, but not alot of us really know what we are talking about.

[Fryguy64]

Grimsby City will win the Premiere League... you can be sure of that!!!! *also does not follow football*

I also don't believe someone is an idiot for holding an opinion opposite to my own so long as they don't ignore factual evidence for the sake of being stubborn.

The problem is, this forum is probably the only place on the internet where such ideals can be found

[Smashchu]

Maybe I was a little too strong saying he waas an idiot. More iggnorant. Your right Andronicus, Nintendo is losing Market share but they still have a heavy chunk of it. Also this drop is mainly because of the Gamecube. The other 3 consels have all sold well. The drop was because of the entry of other successfull systems. The revoultion wont do as bad as the Gamecube and it wont slope afterwards. His overall tone was of Dispare or that Nintendo will go out of Buissness. Even if the lose they consels they'll still own the Handheld. It wont be 7 billion but still be high.

Edit:I called him an Idiot because of not looking at Handhelds and he didn't take in Resent info or look at the futue. You cant predict some thing if you dont look at these.

[The Almighty Narf]

I think this article and this article would be quite informative.

[Smashchu]

One of the Best articels I ever read. This also helps us understand the Revolution.
They are making a consel they cant lose money on. It may not be as powerful but it will cost less monmey to produce, and from the looks at its anticipation(most polls in the US and Japan say "Revolution")Nintendo may remain Priofitable.This, I think will put Nintendo on top.
Also, Nintendo made the NGC(like the revolution will be)to be less costly to produce on since they know those company only make games. This may prosuade them to make games on their system.(because sonys an *ss an demands so much out of small developers).

[Andronicus]

OK.
GOod article - explains it all well.

Now, I'm speakng here from the perspective of a Commerce student, so I do understand the dynamics of the business world quite well - I'm no expert, but I know enough to make educated comments like this.

See, M$ is making a loss.
Many pro-Nintendo people (of which I am one) seem to take this to mean that M$ will always be making a loss.
Wrong!

You see, as with any project, you evaluate success vis what is called the net present value (NPV) of the project. This is the projected cash flows that the project will generate, discounted by the cost of capital (basically, the expense of the project) to get what it is worth in today's dollar terms. If this is positive all up, then the project gets the green light.

M$ is losing money NOW, but it is a necesssay cash outlay in order to take market share. A company such as M$ would have projected cash inflows for some later period, onc the costs of establishing themselves in the console market have gone down.
That will be soon, probably, and they will make the profits that they want to make.

That is the way it works, and so, that would be anny company's approach to a new industry - you expect to make a loss for a few years (with any business) before you turn a proffit margin.



Now, Nintendo is making HUGE profits off their handheld systems.
Their home console has lost market share, which they hope to regain much of with the Rev.

Note, however, that the PSP is aiming to do to the handheld market what the Xbox and PS1&2 did to the home console market.
This will take some market share from Nintendo.

Obviously, this means less sales go to Nintendo, and the net profits go down somewhat.
However, so long as the profit margin stays positive, then things still look very good for the company, and so there is nothing to worry about.
But, diminishing market share could potentially damage long-term ability to generate such high profits.
This explains Nintendo's new strategy to take the market by storm again and get some of those gamers back on-side.



OK.
That's what I think, and I'm sticking to it.
We can't ignore M$ and Sony, for they are now established competition.
BUT, the future for Nintendo does not seem as bleak as I think it is often made out to be.

End.
;D

[Smashchu]

I dont see much hope in the X-Box 360. Once PS3 and Rev come out Microsoft will lose. They arn't attacting new audiences and the fans dont want it as much. If the rev comes out with a smaller price tag, then they will sell better.
I think the casual gamers will turn to Rev then the PS3

[Dances in Undergarments]

What are you talking about? I'm a nintendo nerd who has only ever bought Nintendo consoles and mainly only Nintendo games, but if Rare can start making some high quality games (and, in particular, bring out a Banjo Threeie), then I'm gonna grab a 360. You can't really comment on where any of the 3 consoles are going right now because we don't know what games will be on the console.

[Andronicus]

DIU is right SmashChu...

There is no evidence to suggest that the Xbox360 will lose.
Heck, there's nothing to say it will do poorly at all.
The losses that M$ have incurred are styarting to turn around.

We can't go around simply saying that a company will fail in its console endeavours on the basis that a few people on forums said some things against the new console...

We simply don't know enough about the competition yet.
M$ isn't like Sega in the slightest, so I think the Xbox360 will be strong competition for Nintendo and Sony.

[Fryguy64]

Nice articles, and very entertaining to read. When the third one of those goes up could someone post it here?

Bless his little heart, Smashchu is just living the blind Nintendo fanboy dream that we all did at that age. I remember slagging off the competition throughout school, and trying to convert my friends to Nintendo with groundless assumptions.

Heck, we've probably all done it at some point in our lives ;D

Growing up means looking at it all through realistic eyes. Of course the X-Box 360 isn't going to fail - the system has a name for itself now... and a popular one. It has inherited many of the N64's gamers. If X-Box was going to fail it would have done so by now. It hasn't. PS3 isn't going to fail either, but for reasons that escape me... the Playstation series is consistently the least reliable (in terms of hardware performance and compatibility) and the most arrogant. I suspect the PS3 will be the same - as Sony execs sound like they're flying high and can do no wrong. Hopefully they'll pull an Atari They deserve it!

So as you can see, I'm not completely unbiased just yet

[Smashchu]

Have you guys seen what there ganna put in the PS3. Usless crap. IU dont remember all of it but on of them was the ability to talk to others online while playing a video game(this is a video chat not a text message). Really now. PS2 did well because people like DVDs but sony is stupid and thinks this will work for everything. Also there are 2 500$ grafics cards in each system so it will be $500+(maybe even $700). I dont see many sales in there future.