Nintendo makes first operating profit in four years

[theyarecomingforyou]

as for the controller. while it can be seen as gimmicky and dates, as I did before. IT works very well, yeah the pro controller is more comfortable. BUT the ability to watch TV while playing actual console games with an actual controller in front of me is awesome.

In other words... using a tablet is awesome. That only supports my point, which is that Nintendo should drop proprietary hardware and embrace mobile.

 

As for Nintendo struggling with a larger library. no really. you do realize the Wii U was the first console in generations where they actively tried to be a "powerhouse" and cater to 3rd parties. it was also the first console where they had to start taking a loss. Nintendo can do just fine on their own, in fact they do better on their own when they don't cater to everyone else. 

The Wii U didn't cater to third parties any more than previous Nintendo consoles. Third parties weren't interested because the console was too underpowered and Nintendo's policies to restrictive. The Wii U resulted in a loss because Nintendo opted for an extremely expensive gimmick in the form of the tablet controller, which wasn't as innovative or compelling as the Wiimote.

 

Which Sega already did, and look what happened to them after that? They became less and less relevant in game market.

Sega had a fraction of the software catalogue. Further, Sega only embraced software after the company had all but collapsed - Nintendo is in a better position.

[kozukumi]

In a years time Nintendo could release a machine with power parity to the PS4 for under

[WinMacLin Guy]

It was a gimmicky console that tried to recreate the success of the original Wii. It was also massively underpowered, with a weaker CPU than the PS3 or X360. Not only that but tablets are evolving so quickly and the Wii U controller was horribly dated from the get-go.

 

Nintendo really needs to focus on games and move away from hardware. Releasing its games on Steam would be a major money earner, same with mobile (Android, iOS). It wouldn't surprise me to see Nintendo release a branded Steam Machine console that comes bundled with their games, as that would provide a large games catalogue (something Nintendo has always struggled with, especially with mature games) and provide minimal risk (they wouldn't be heavily subsidised). Certainly I think Nintendo needs to be bold, as a Wii U 2 isn't going to help the company.

 

What you mentioned is not really bold. It is simply doing what everyone else is doing. Nintendo does not need to have the most powerful system nor does it need to directly compete with PS and Xbox. Nintendo's strength has typically been to create unique and inexpensive systems typically bundled with a game. The Wii would not have been nearly as successful as it was if it were priced close to Xbox 360 nor would the DS have been successful if it were sold at $250; Nintendo made this pricing mistake with both Wii U and 3DS: they initially priced the 3DS at $250 (which failed to sell) and they sold the basic Wii U set at $300 and the higher-end Wii U with a bundled game for $350. It should be noted that as soon as Nintendo dropped the 3DS's price, sales exploded. Furthermore, with this generation being an exception, even if Nintendo sold lower volumes of its consoles they were always still able to generate a profit from their systems (even in this generation, after 2012, Nintendo was able to generate a profit from the 3DS). 

 

Aside from the overly expensive systems, Nintendo (and Sony as well) also had to deal with another business issue that was largely out of their hands. Between early 2011-late 2013, the yen was performing unexpectedly strongly against the US dollar. Both Nintendo and Sony's businesses (along with the businesses of other multinational Japanese companies) rely on the assumption of a weak yen, because they can use the currency to their advantage in pricing their systems and making a profit. So it does not really come as a surprise that Sony, Nintendo, Sharp, Panasonic, and other multinationals made losses or had dramatically lower profits during that period (now that the yen is back down, you can see that many of these companies including Nintendo and Sony are recovering).

 

One other argument I would like to make against going third-party is that not only will the company lose a significant source of revenue, but they will also have to deal with fragmentation, increased software development costs (porting, optimizing for other systems), and increased competition on other systems. With the exception of well recognized franchises (Mario, Zelda, potentially Metroid, and StarFox) and evergreen titles (Mario Kart, Super Mario Bros, Legend of Zelda, Smash Bros), they will be less able to take risks with less known/new franchises and niche titles (fragmentation and increased porting costs will make these titles less financially viable). These niche titles/ new franchises are less risky to do on their own platform because they have more influence on the install base of their own systems, and they also do not have to worry about additional costs incurred by porting or fragmentation of their audience on different platforms. Now one might say that going onto other systems will actually increase the exposure to these more niche franchises, and that certainly is a possibility, but it does not make it any less risky because to fully reach that audience, because once again you have invest more to port to different platforms so that you can overcome fragmentation, and you need to do more heavy marketing on other platforms due to increased competition.

 

Also, I do not believe Nintendo needs to focus on M-rated AAA titles (having a few more M-rated games is nice, but they should not change the focus of their business around these titles). I say this because again, Nintendo does not need to nor should compete directly with the Xbox and PlayStation. Furthermore, Nintendo's non-M-rated tend to sell fine on their own systems; looking at the 3DS, Nintendo has plenty of annual hit titles that go onto sell millions, and while the Wii U situation is less than ideal, their biggest hits on that system are non-M-rated titles. 

 

My view on what Nintendo needs to do is quite simple. They need to go back to making inexpensive hardware, which their own software can take advantage of. It does not need to be the most powerful, it does not need to be a comprehensive home entertainment system (although some basic streaming, browsing, and playback capabilities would be nice), they have to build it so that they make a profit right out of the gate and easily develop for it. They have to fix their software planning, which I believe is horribly broken: they unofficially discontinue consoles a year in advance to focus on their next-gen systems, the Wii had one good year left between 2011-2012 but Nintendo let it die because they had to focus all of their resources on Wii U and 3DS, and despite these early discontinuations their systems launch to an initial launch fanfare but are left in a long drought until the subsequent titles release months later; moreover, they need to create a common hardware and software architecture to make porting between their handheld and home consoles easier. They need change their anti-consumeristic network policies; Network IDs should not be tied to the hardware, and users should not need to call customer service when they want transfer something between systems, and also they need relax their policies on digital game sharing and having multiple games on different systems.

[HawkMan]

In other words... using a tablet is awesome. That only supports my point, which is that Nintendo should drop proprietary hardware and embrace mobile.

 

 

No, playing on a tablet is horrible. a controller with a screen allowing you to play off "screen" is awesome.  quite less selectively.

And cater to third parties is exactly what they did, it just didn't work out. 

[Gotenks98]

To bad tool little and way too late. Considering there are already emulators for those consoles out there its pointless to do this. The only ones where they would make any sales would be those too ignorant to use emulators.

http://kotaku.com/nintendo-says-no-nx-and-no-smart-device-announcements-a-1703550475

See they are still working on their next console.

If they dont come up with something at least close to xbox live or psn in terms of online features this new console will be dead on arrival. Also they need to wait until the next version of Xbox/PSX and top the specs of those consoles to ever get back on top again.

[+Zagadka Subscriber²]

Region locking is so damn stupid. I think I read the other day that Iwata was considering removing the region locking. I am not sure what exactly the obstacle is.

A combination of different laws, distribution companies, and copyright systems in different countries/regions. You can't just take something for sale in Japan and sell it in the US without the FCC regulations being met and tariffs on imports... then do the same process for Europe, Australia, and other places. Plus you then need a company with the proper copyright license to distribute in each of those regions.

 

There is also the possible "stop piracy" thing, but that stopped being relevant since the Internet grew to its current size (no longer needing a physical disc).

[compl3x]

I thought region locking was something companies largely imposed upon themselves and consumers to control certain markets (staggering), pricing control, control grey market selling etc.  Why would region locking have anything to do with copyright, distribution, or "different laws"? If you had a title which had IP that wasn't licensed in that area you could just not officially sell it there. All companies have to meet FCC standards in order to be able to sell certain products in the relevant territories that it wants to, what does that have to do with companies who decide to region lock their consoles?

 

Your point is largely moot (if not flat out wrong) considering that other companies have dropped the whole region locking thing. PS3 had developer options to region lock but only one game ever embraced it, much to the frustrations of its fans. The PSP's UMDs weren't region locked and the Vita/Vita TV doesn't region lock its games. The PS4 doesn't region lock and Sony discourages devs from using the option they have to do it.

 

The X1 was going to be region locked but I guess when MS was relenting on every other bad decision they made they abandoned that idea too. I think Chinese consoles are region-locked but I mimagine that is more so the Communist state can control what is played as opposed to any desire by MS to lock the content.

 

Nintendo is just dragging their feet for reasons which aren't entirely clear. I guess it is fitting that the first console maker to introduce region locking will be the last to abolish it.

[+Zagadka Subscriber²]

Why would region locking have anything to do with copyright, distribution, or "different laws"?

... because not following laws tends to be illegal? Even Windows has to meet international laws and ships differently.

[compl3x]

I meant 'be specific about what laws apply to region locking?' Are you saying laws force companies to region lock their products? Which laws do this? 

 

I think you might be confusing region locking and anti-competitive/antitrust laws.

[Mr. Gibs]

Seeing how this is their first operating profit in a while, why would they be stupid not to? Apparently the money isn't flowing in.

It took Sony 4 years to make the PS3 profitable. Consoles are expensive investments, pretty much all three makers used to take on huge losses at first. Things are only starting to change with the current gen which MS and Sony have said are profitable from day one. Microsoft is able to hide the losses by making billions in profit elsewhere, Nintendo has enough cash reserves to last many decades, and Sony well has nothing.

NX is supposed to use a similar architecture to the Xbox One and PS4 which should help significantly lower the cost.

[sinetheo]

I was thinking of them a week ago.

 

Man they messed up big.

 

1990's kid: Oh Mommy NES and gambeboy oh ah

2000's kid: Meh gamecube lame  I like my ps better. Oh Mommy can I get a Gameboy DS?

2010's kid: Meh Wii HA! Oh Mommy can I get a cool iPhone to run candycrush and other games?

 

They are going into irrelevance. They lost the console wars. The mobile wars are lost to smartphones.

 

Where does that leave Nintendo? The only thing they can do is make their own kid phone with an app store or sell the games on Google's and Apples stores since they ban other stores. But man why bother if you are a game developer to port for this kid centered phone when I can release the app for Android and hit everyone.

 

Time to sell stock if I were a shareholder last decade. Nintendo might not ever recover long term. Maybe I am a pessimist but they should have been on the ball in the 2000's with the launch of the iPhone. Maybe a cool uber version of Android back in 2010 or 2011 before it took over might have given them a chance. It seems they do not want to take a risk.

 

100% of kids seem to have a smart phone already which can play games and their consoles are frandkly inferior for awhile now to MS and Sony.

[kozukumi]

snipped

 

100% of kids seem to have a smart phone already which can play games and their consoles are frandkly inferior for awhile now to MS and Sony.

 

My daughter is 13 and she has an iPhone 5c and an iPad mini. She plays a lot of games on the iPad and iPhone for sure but she also has a 3DS and a Wii U which she plays on loads too. Almost all of her friends have a 3DS also. Not as many with a Wii U, most have an Xbox 360 which actually belongs to their brothers. They quite often sit down and play Mario Kart on the Wii U when they are round though. The idea that kids only play on phones isn't exactly true. Sure they do play games on their phones but they also still play on dedicated gaming platforms be it mobile or TV based.

 

I think the future for mobile gaming is still pretty safe for Nintendo. The 3DS is selling just fine and would have from day one had they not gone with such a steep price on release. Same with the Wii U most likely. Nintendo priced themselves a bit too high this generation.

 

With smartphones getting so powerful these days I think that could lead to good things for dedicated mobile gaming devices. Mass production of powerful mobile CPU and GPUs will bring the prices down. Beautiful HiDPI screens are getting cheaper and cheaper. Nintendo could release a pretty solid product for

[Ian W]

They lost the console wars.

That is an interesting claim to make when one considers that the Wii outsold its competition in the seventh generation.

[HawkMan]

NX is supposed to use a similar architecture to the Xbox One and PS4 which should help significantly lower the cost.

 

Well nothing is known about NX except rumors and that they are/were working on it. heck it's not even fully known if it's a home entertainment system or a handheld yet(though signs are it's a home console), as for internals and architecture, that's completely unknown. 

[sinetheo]

That is an interesting claim to make when one considers that the Wii outsold its competition in the seventh generation.

 

Have reference?

 

The Wii U has bombed. Everyone is buying the PS4 and xboxONE and even the PS3 I would image is probably outselling the wiiU. The U seems to be geared for little children and by the time they hit elementary school they get laughed at their friends for using an uncool system.

 

I am a Nintendo fan boy from back in the day but even I concede they lost the mindshare and marketshare for their core audience. The parents who remember how cool they are not the ones in the market who drive the demand. The kids are and I bet most have no clue Nintendo used to be cool back in the day?

 

The DS was kind of cool last decade but smart phones are where it is at if I were to write a game today. Not the Nindento DS.

[Mr. Gibs]

Well nothing is known about NX except rumors and that they are/were working on it. heck it's not even fully known if it's a home entertainment system or a handheld yet(though signs are it's a home console), as for internals and architecture, that's completely unknown.

Oh well sure but thats the most realistic rumor so far

[Ian W]

Have reference?

Here you are. http://www.geekwire.com/2013/xbox-360-wii-ps3-won-console-generation/

 

The U seems to be geared for little children and by the time they hit elementary school they get laughed at their friends for using an uncool system.

This is laughable by itself. In what way could one consider the Wii U to be geared towards little children? Because of its 'family-friendly' focus?

I am a Nintendo fan boy from back in the day but even I concede they lost the mindshare and marketshare for their core audience.

What is Nintendo's core audience

[+Zagadka Subscriber²]

It does seem that the mobile market is very changed with phones and tablets rising and the need for another, very limited, portable device being a poor investment.

[HawkMan]

Oh well sure but thats the most realistic rumor so far

 

When we don't even know what kind of  system it is, it's all guesswork and seeing as nintendo hasn't cared a bit about what everyone else does, I wouldn't say so. 

[DeusProto]

 I for one would love to see Nintendo get out of the console market (I wish all consoles would be a relic of history personally) and instead develop their franchises for PC and perhaps mobile. Mobile for 2D Mario platform games, J-RPGs, etc and Desktop for the 3D ones.

 

I'd love for the Super Mario franchise and Legend of Zelda to be available on desktop and/or mobile platforms. Not just remakes, but new games as well.

 

New Super Mario Bros is the best mario game IMO since Super Mario World. I always prefer the 2D ones over 3D, same for J-RPGs. 

 

At least emulation brings games locked in a proprietary console to PC -- eventually. 

 

I have a Wii that someone gave to me as a gift after losing interest in it. As soon as Wii emulation became mature enough it has collected dust since you can get higher resolution graphics, use save states, and other features when using an emulator that you don't get playing the real thing. 

 

My Nintendo DS still gets some use -- but only because the fact that it has two screens makes DS games less viable for playing on a single 1920x1080 screen in an emulator. 

Edited January 15, 2016 by DeusProto