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Nintendo Co. Ltd. Message Board

  • eastofeastside eastofeastside Feb 4, 2013 1:39 PM Flag

    For the GOOD of the console industry Nintendo needs to go THIRD-PARTY NOW!!!

    Appeal to everyone to rally around this sentiment and spread it through out the internet.

    Wii U is on a death course that will take Nintendo to $10 a share and very likely lower.

    (as I predicted back in May of last year -- )

    As you know the console industry has been seriously hit by rise of mobile gaming and specifically the prominence of Apple.

    The next gen is forecasted to see smaller sales for Xbox 720 and PS4 than 360/PS3 enjoyed as a consequence of this.

    At the same time development costs will rise while retail game price is expected to stay the same and installed bases will be lower translating into less profits.

    The game industry needs the the two console major players to be as strong as possible. With the prospects for Wii U to be hopelessly bad now is the time to call upon Nintendo to do its part and abandon console hardware and help strengthen the only two viable platforms in the console industry --720 and PS4.

    It is a scenario where everyone will win in the long run including Nintendo and its shareholders.

    Please seriously consider the merits of Nintendo going third-party for the good of what remains of the console industry and do you part to spread this sentiment.


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    • I think it's way too early to judge. I agree the Wii U has had a horrible launch but I think it's too early to say it will fail. I'd even say it's too early to judge the PS Vita which has been out a year and is getting absolutely crushed 10:1 by the 3DS. A few games and a price cut and the Vita could pick up steam.

      I think saying Nintendo should exit hardware is a bit short sited. They are the ONLY manufacturer to make a profit on their home console last generation. MS and Sony both lost over $1 Billion and with the next generation starting they will not even break even despite the 360 and PS3 selling for the next few years. Sony in particular has no cash and with Vita faltering needs PS4 to be a huge success. Sony and MS appear to be positioned well, but Sony appeared to be set with the PS2 leading into the PS3 too and that hasn't worked out that great for them financially. Specs for PS4 and 720 will be better than Wii U and maybe that will matter. But power hasn't been the main driver in any generation of consoles so far. That said Nintendo does have its work cut out for itself and they mangled the end of the Wii generation and lost 3rd party support and "core" gamers. I think if they had launched Wii U (with a better name by the way) a year earlier it would have been better as it would have put a lot more pressure on Sony and MS who wanted this generation to drag as long as possible to recoup their massive losses. Unfortunately Nintendo got complacent assuming Wii would continue to sell despite almost nothing being released in 2012 (Mario Party 9 was about it).

      Several things could change the Wii U's current fortunes.

      #1 - games. The Wii U launch has a lot of titles but lacks anything that really drives a purchase. That is somewhat normal for most launches (360 had #$%$ titles and far fewer) but in this case early adopters are simply going to wait and see. Nintendoland and 2d Mario are great and people with the console will buy them (60% of Wii U buyers bought SMBU) but they don't have the "wow" factor that Wii Sports had, and there was just a 2D Mario released recently for the Wii so it's not unique enough for people to scramble to get a system just to play it. Some good games are coming and that may help sales. If reviews for the games are good (Pikmin, Bayonetta 2, Lego U, X, Wind Waker remake, Monster Hunter 3, Rayman) then more people will buy. Right now with a weak lineup and announcements for PS4 and 720 around the corner the majority of the early adopters that might buy the system are waiting. Largely libraries are what sell consoles and right now the Wii U library isn't strong.

      #2 - the economy. It's still weak worldwide. That makes a newer, more expensive console harder to sell. Since Nintendo tends to appeal more to the casual, family, etc. gamer than the core it is more likely to be hurt by this as those gamers decide to wait another year to buy, or buy a PS3/X360. If the economy picks up it should help. If it doesn't then this entire generation could be in trouble. It seems unlikely to pick up enough in the next year but a consoles life is long enough that it could impact it significantly

      #3 - improved advertising and reviews. Nintendo did a horrible job at launch. The commercials were terrible especially at convincing an early adopter to get the console. The point-of-sales kiosks I saw do nothing to push the system either as they weren't even playable. In addition in rushing to get to market for the holidays it launched part done and suffered for it with most reviews harping on slow load times, day one download etc. This likely gave a lot of people pause and they opted to wait for games and bugs to be ironed out. PS3 had a horrible launch too with it's price. X360 survived 25%+ failure rates from the RROD. So all is not lost if Nintendo can correct its course quickly. Most people I've seen that have the system really like it but for the minor early issues and lack of games. It's not revolutionary and obvious the way Wii was. But as people use it they find that asymmetric gaming (Mario Chase, Luigi game), off screen play, and unique usage of the tablet (Zombi U) are really fun and unique (and many comment less gimmicky than motion controls were). Miiverse is generally loved, Nintendo finally did online decently, and the digital section is far better than Wii. As word spreads the system has a good chance of catching on in my opinion. The system has the benefit of appealing to the casual and/or non-traditional gamer who likes motion controls and new ways of playing, but can also be played like an old-school traditional console. That could help it if they can show each segment that it does everything they want - but so far they haven't shown that effectively. No guarantee they can, but if they do they could have a hit.

      #4 - third party support. It's been a weak point for Nintendo for a long time. I think it's got a shot of changing this time. The indie developers have raved about how easy it is to work with Nintendo this time (100% change from the past). Several have commented that the Wii U is an easy platform to develop for. In addition support from big houses has actually been pretty good. In my opinion it's normal that big 3rd party developers played it safe with ports of other games. It allows them to test the waters with low risk. New consoles launch titles are rarely big hits (X360 only had 3 launch window titles break 1M copies and none break 2M). In times like these where developers are folding left and right there is no way 3rd party were going to go too far out on a limb. Ubisoft is the only one with ZombiU (which was new but still budget constrained) but they have strong relationships with Nintendo already through Dance Party and other Wii titles. So assuming it's true that Nintendo is easier to work with now it makes sense for 3rd party to support them. They may get 3rd pickings but with costs like they are now it would seem 3rd party would want to do anything they can to get additional sales. If it is true that Wii U is easy to develop and the fact that it can use standard (not motion) controls should make it quite easy to create ports for. Add in gamepad maps/inventory and offscreen play and it may even become the preferred system for buyers unless PS4 or X720 versions perform that much better. As we've seen this generation just having more power (PS3) didn't necessarily mean it got the better version of games.

      #5 - time and price. The casuals may have shrunk but they aren't gone. Kids will still want a system to play with their friends. This is a slow adopting and price sensitive segment that will buy in year 2-3 of a console life, not in year one. Kinect has made inroads but isn't winning (Just Dance titles sell 5:1 on Wii over Kinect despite Kinect being the better fit for that game). As Wiis die, new families buy consoles etc. Nintendo is well positioned. In addition the generation that grew up on Mario are now parents and nostalgia and sharing experiences with the kids will help sell Wii Us

      I do think things will get worse before they (hopefully) get better. This will be a lost quarter as there just aren't enough games coming out before April to really push sales which are pathetic right now. That will likely keep the stock low or it may even go a bit lower. However I'm still bullish on Nintendo as a long term play. There is just too much value in the IP of Nintendo to go much lower and stay low. MS or Sony would love to own Nintendo as it would all but guarantee victory in the next gen. If Nintendo did elect to go software alone it would do so with the strongest library in all of gaming. The book value of Nintendo after cash and cash equivalents is only about $1Billion. I think the IP and future value of 3DS is worth that much with Wii U having the potential to push the stock very high if it picks up. Wii U won't touch the Wii for sales but I don't think anything will. I do think it will do better than the 20million that GameCube did. Once Nintendo gets cost out I envision them making a profit on every console sold.

      I see the stock stagnant or sinking a bit more over the next 3 months with perhaps moderate appreciation this year. So short term I'd say it's probably a hold. But longer term 1+ years I still think it's a buy. I'm a bit less bullish than when I bought it as I thought the Wii U would catch on a bit faster.

      Sentiment: Buy

      • 3 Replies to narumtr
      • Well said.

      • Fantastic Post. Truly informative and not just some puff piece or some doom and gloom vision as we have been seeing recently on the board. I also agree with the short term = grim and long term = optimistic outlook. I think the life cycles for video game systems in general have changed considerably from the days of the first Wii Launch. Right now we are nearly 2 years since the original launch of the 3DS, and only now has Nintendo begun its push out some Major system movers coming up later this year (Pokemon X and Y is a near-guaranteed sell out). So it really should be no surprise if the Wii U experiences a similar life cycle where it won't baring fruit until years down the road. Patience is the key.

        Sentiment: Hold

      • slickdis1 Feb 5, 2013 2:43 PM Flag

        I made a rather lengthy post like yours yesterday but for some reason it was deleted. I'm glad you wrote many of the things I touched upon.

        I want to reiterate a couple things though: To the people saying Nintendo should go third party because they'd make more money... that's straight ignorance. Why would Nintendo pull out of their VERY lucrative hardware business to only produce software? They already produce software AND hardware, so they're purposefully shrinking their business to make more money? How does that make any sense to someone with a brain?

        Speaking of money, here's a fun fact. You know the GCN that sold 21 million over its lifespan? During Sony's 'golden age' of the PS2 that sold 120 million? Yeah, Nintendo made more money than Sony YoY for 4 of 5 years. In a matter of fact, since 1998 Nintendo has made more money than Sony (as a whole) for every year except 2002. Nintendo knows how to manage their assets and not panic - more than I can say about some of the people in this forum.

        Wii U has been out a grand total of 3 months now and people are saying "it's over". When aren't people saying it's over for Nintendo? Here's another fun fact: Wii U launch was 2nd most successful console launch ever, only to be bested by the original Wii itself. If you think the Wii U start is bad then I'd certainly like to know what the PS3 and X360 launches were considered - and now look at how the consoles performed.

        The slower Wii U sales we are witnessing is to do with there not being much [interesting] software. There's plenty of games to buy both in stores and on the eShop, but none of them really hit it out of the park yet (except Nintendo's usual suspects). Starting at the end of March onward is when we'll see higher quality releases and that's when things will pick up.

        The stock may lower a bit more but it's going to go back up eventually.

    • Nintendo would make way more money going 3rd party but it wont happen for a long time. Iwata did say he might step down if they have another bad qtr (and they will) so maybe once he is gone someone might think of going 3rd party then. With the U being so new they wont give up on it this year. Just think of the piles of cash they could have if they did not have to fight it out on the hardware side and just sold games.

      • 1 Reply to hahastocks
      • Thanks for expanding my idea.

        Nintendo as a third-party will succeed and be a more profitable proposition than they are now. Many people cite SEGA's transition as an example of what would happen to Nintendo, but that is very misleading. When SEGA went third-party it lost many key long term big name developers as well as had the unfortunate development of being purchased by Pachinko game developer Sammy which had less concern for home console software development.

        Nintendo should not only go software only but look to expand itself through mergers. Imagine if Nintendo merged/acquired Tecmo, Sega, Level 5, Atlas, etc and formed a Japanese software development conglomerate powerhouse.

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