[freehunter]

Why are you of the belief that Nintendo needs to bow out of the hardware business? I could see this line of thinking in... 2004? But in the last 5 years Nintendo has seen wildly uncontrolled profits rolling in from the DS and Wii. The 3DS is beginning to pick up now too, after a slow launch.

Nintendo has a viable, innovative product in the gaming industry. They make games for their platform because their platform is unique and their games take advantage of that. Because of this, they are raking in cash from all directions.

[betterth]

    Why are you of the belief that Nintendo needs to bow out of the hardware business?

Because 2011 was incredibly rough on Nintendo -- they lost $500 million last year. Even Nintendo says that Apple and Facebook (iOS and Facebook games) are a huge reason for this first-in-a-generation-loss, and let's face it, they're doing jack shit to accommodate a changing industry.

What has Nintendo done for a long time? A console, a handheld, fill it full of first party games.

So, even though they fully admit that these huge losses are because of an industry that is fundamentally changing, what is their strategy?

A console*, a handheld and fill them full of first party titles.

Oh, except this time, the console will have a controller that sports a huge touchscreen, so clearly they're taking on iOS (this is sarcasm).

    >Because of this, they are raking in cash from all directions.

Yeah, that massive loss of -$500,000,000 they raked in last year must be soothing investor worries...

[freehunter]

R&D isn't free. Companies lose a lot of money at the start of a hardware cycle, this always happens to everyone. The Wii has sold 90m units and unlike their competitors, Nintendo makes a profit on every unit sold. In the past year they've had the 3DS and the Wii U in development. That's an investment.

iOS isn't the competitor to the Wii U. Making the Wii U more "iOS-like" would not change a thing (except lose more money for Nintendo). While the handheld market is dying, the console market is very much alive, and Nintendo has no competition.

Every generation, someone declares Nintendo dead. This happened even with the NES, when entering the video game market was a death sentence for any company. Something tells me you don't know a single thing about the console industry.

[betterth]

"Something tells me you don't know a single thing about the console industry."

It takes a fanboy to swallow a FIVE HUNDRED MILLION loss without batting an eyelash.

Something tells me you don't know a single thing about business or investing.

Nintendo can't win at consoles and lose at business all day long. Unlike Sony and Microsoft, they can't be loss leaders. Xbox can run 500,000,000$ losses and be fine.

Nintendo can't.

You know what the difference between past-Nintendo haters and new ones?

In the past, Nintendo ALWAYS profited. Every weak console = profit. They have never lost $500,000,000 in a single year.

But hey, MASSIVE losses are nothing, right?

[InclinedPlane]

"iOS isn't the competitor to the Wii U."

iOS is the competitor to everyone. It's easy to pretend that niches aren't connected, but they are. With every brand of entertainment it's about money and time. You can't spend money and time that you've already spent elsewhere. If iOS games are first past the gate and successfully use up everyone's money/time allocations for gaming then they win. Regardless of whether they are competing against other touch-based games, casual games, or first-person shooters, MMOs, and even movies.

People have been declaring Nintendo to be on the ropes for the last few console generations. But that doesn't excuse the fact that Nintendo is facing far more serious competition than they ever have before, and they don't appear to be keeping up. Nintendo's previous problems were of the "not making as much money as fast as other companies were, for a while" sort, now they are seeing actual losses. Nintendo got lucky with the Wii. They innovated their asses off and came up with something that resonated with a new, larger gaming market. But now their innovation has stalled out, while that market segment is being cannibalized by other folks.

If Nintendo were trying something truly innovative (like the DS or the Wii) then perhaps there would be justification for people to mute their criticism to some degree, and give them the benefit of the doubt, but that doesn't appear to be the case. They appear to be flailing and clueless, that's not a good sign.

[freehunter]

> But now their innovation has stalled out, while that market segment is being cannibalized by other folks....

...he says, on the eve of the next generation of consoles, four months before they'll be fully detailed and fleshed out.

When E3 rolls around, come back to this post and we'll see who was right.