[saturn]

It seems to me that Nintendo was somewhat blindsided by the rapid consumer adoption of HD televisions. They've really dropped precipitously in price over the last few years, and as a consequence the Wii has aged very rapidly, perhaps more rapidly than expected. I for one would probably be in the market for a Nintendo system but the chance of my buying a non-HD console in 2012 is approximately zero.

I'm sure they are rushing to get the new system ready and when they do it'll be back onto the gravy train for Nintendo.

[roc]

I think they were more blind-sided by the rapid consumer adoption of gaming on mobile devices that were not dedicated-gaming devices.

The Wii showed no sign of slowing due a lack of HD. It seemed to slow simply because it was an unexpected and wholly unprecedented mainstream success whose sales were simply not sustainable. It was always going to taper off and it's possible some of Nintendo's loss is attributable to not curtailing manufacturing quickly enough and having too much inventory.

But the loss story seems to be primarily a mobile one. Nintendo took a PS3-like approach with the 3DS, approaching a newly competitive landscape by trying to bury the competition with advanced technology. And, much like Sony, advanced technology alone wasn't enough to pull in consumers at higher prices. Things are definitely looking up as they've gotten more quality software onto the platform and prices have dropped.

But were I a stockholder I would be nervous about their plan to cut the 3DS price below-cost. Customers are ever-more price conscious with hand-held software and expecting revenue from $30+ mobile titles to make up for a loss on hardware is perhaps not a wise strategy. One would hope their manufacturing advances and thus cost cuts are not far behind the promised price cuts.

Similarly, the Wii U finds itself in a very different competitive landscape. It may well make Nintendo a solid profit even if it never achieves the breakout success of the Wii. But it may not start strong out of the gate, if the launch software can't make a compelling case for the technology. It's first-year profits may not be enough to offset another bad year from the 3DS.

[christoph]

I think that's only one factor. The major shift in gaming that's hit them has been consumers transitioning from purchasing £20-£40 shrink wrapped games to £0.69-£1.99 downloads with further revenue from in-app purchases.

I've not "yet" seen the signs that they are adjusting to this model on their next console. The one area they may be able to focus on that's not taken care of at the moment is the party/family type games that made the Wii so successful.

Nintendo is a very old company that has altered it's business many times, so there's not reason to believe they won't change themselves again.

[wvenable]

I don't have high hopes for Nintendo; they have publicly stated they don't believe that $1-$3 downloads are where they should go and clearly they'd prefer to continue to sell that same content for $20-$50 in store. Nintendo will have to fail significantly before they change their business model.

[sliverstorm]

It isn't like Microsoft or Sony is embracing the $1-$3 price point for their AAA titles, either.

[talmand]

Exactly, I don't under this "Nintendo will fail because they aren't offering games in the $1 to $5 range for the Wii like I see on my iPhone" attitude. We're not seeing any of the console makers considering such a thing. You can make a point like this for the DS market maybe but isn't it a success?

Plus I've seen talk of increasing mobile game prices to offset the increasing production costs.

When we see a game of the production and complexity level of Modern Warfare 3, Battlefield 3, or Skyrim with a retail price of $3.99, only then will Nintendo fear for their console sales.

[christoph]

People didn't buy the Wii for those titles. The consumers wanting to play the "high gloss" AAA titles, played them on either the 360, PS3 or a high-spec PC. The Wii only got terrible ports of the MW series which I know of nobody seriously playing. The Wii sales figures for them are ridiculously low compared to the other platforms. As far as I can tell < 1 million sales.

Admittedly the Wii did have AAA games in it's own right (Mario Galaxy 1 & 2, Zelda, Metroid), but these appeal to a very different demographic. The games that really made the Wii successful were Wii Sports (45 million sales), Wii Play (23 million sales) and Wii Fit (18 million sales).

How many Wii's did Nintendo sell at Christmas time every year on the basis of Wii Sports or Wii Fit alone? How many of these are now collecting dust under televisions with no additional software purchased for them? The major thing Nintendo got right last time was not making a loss on their hardware.

[talmand]

I wasn't saying a $3.99 MW3 on the Wii, I'm saying that price point for that game regardless of platform. The idea that console makers will quake with fear because people purchase crappy games on their phones for a few bucks will translate to poor sales for consoles and console games is an amusing notion to me.

But I have to say I agree with every statement you made about Nintendo. Everything you said is true. Therefore Nintendo did exactly what they set out to do, to make a profitable and successful console. This makes Nintendo a failure how?

Most of the people I see who complain about the lack of software on the Wii are most likely not Nintendo's market. I have a Wii and my two daughters will happily play it whenever we let them, which would be every day if we didn't restrict it a bit.

The problem they may have with supposed lackluster interest in their console is when they release the WiiU. The question is whether people who are unhappy with their Wii will update to the WiiU. I can't say for sure whether I will or not. But people said the same thing with the GameCube to the introduction of the Wii.

Not directed totally at you, but in my experience most naysayers have no idea what they are talking about.

[tomkin]

No, but they openly embrace digital downloads. Nintendo came kicking and screaming and with a pretty poor end result. The Wii pulled a Blackberry – alienate your base audience and fall short on expectations.

I was once what you'd consider a die-hard Nintendo fan, but like a Blackberry user, one day you have to shed the melon collie and realize you're endorsing a company that can't pivot.

[wvenable]

The majority of titles for Nintendo consoles aren't AAA tables. Most titles are of the variety that are free to play on Facebook.

Nintendo makes a tiny few good titles and they endlessly resell their back catalog.

[saturn]

I don't think Nintendo could swing the $1 model anyway. They don't have a ubiquitous cellphone. They're just selling game consoles to people who want to play games.

Nonetheless, I would imagine there are an awful lot of (older) gamers for whom the retail price of the game is basically irrelevant compared to even one hour spent playing it. Bluntly, I want an excellent quality game that is going to richly reward the time I spend in it and I couldn't give a shit how much it costs. Doubly so when it comes to my family. Hopefully Nintendo (and the other console manufacturers) continue to cater to us!

[mamp]

It's not that people weren't willing to pay for Wii games above mobile game prices, they clearly did. The problem is that mobile phones became more powerful than the Wii and DS faster than Nintendo probably imagined, and the value was lost. The other factor about the Wii which worried me was that 3rd party authors didn't have the success that Nintendo's own games had on the console. It seems that Nintendo have only themselves to drive game innovation.

[talmand]

I've owned nearly every Nintendo console and my memory seems to be that this has been true the entire time. The highly successful games for Nintendo consoles have been Nintendo games, despite a few exceptions here and there. I wouldn't be surprised to find out that most people purchase Nintendo consoles for the purpose of playing Nintendo games. I personally see nothing wrong with that as long as the buyer's are happy with it.