That's the rub, isn't it - nobody's been as consistently profitable as Nintendo, even though Nintendo doesn't follow standard industry practice (like pushing a Platinum range, or loss-leading consoles at the beginning of their lifespan to obtain market share and recoup on licensing fees).
Nintendo's doing things differently to conventional wisdom, and Nintendo's making more money. Hrmm. Is there a lesson here, perhaps?
This is such a spurious argument I don't have time to take it apart atom by atom, but I'll make a couple of quick points.
1. Just because Nintendo made a lot of money doesn't prove they couldn't have made even more money by doing things differently, duh.
2. The videogames industry, as I said, is run as a lottery. Nintendo won that lottery this generation. By ASTONISHING COINCIDENCE, their most successful products - the Wii and DS - were far, far cheaper than any of the competition in their respective fields. The Wii launched at well under half the price of the PS3, the DS at not much more than half the price of the PSP.
3. Your evidence is somewhat selective. Remind me of Nintendo's huge profits in the Gamecube era, say.
4. Old history, you say? Despite massive hit properties like Pokemon and Super Mario Galaxy, and despite selling six million consoles and over 50 million units of software in six months, Nintendo's most recent financial results saw a sizeable loss: http://www.gamesindustry.biz/articles/nintendo-records-q1-loss-of-25bn
"Consistently profitable" is the last thing Nintendo has been. They've had a good recent few years, for sure - by selling the cheapest hardware and the cheapest software.
I also think there's a fundamental misunderstanding of margins, here. Game companies can't simply tell the manufacturer that they want their game burned and packaged for cheaper, tell the shipping company they want it shipped for cheaper, tell the platform holder they're not going to pay as much royalty, tell retailers their margins are cut in half, and give up a big chunk of their own cut. They wouldn't be able to give up on cost of returns or marketing or game development.
Essentially, retail games are already being sold with only $5-10 profit. They can't cut the price in the way Dingle's been suggesting.
I note that all my posts have suddenly started being pre-moderated (EDIT: and that the last two have been blocked), even though I've said absolutely nothing abusive or insulting. Looks like someone's got themselves a chum on the moderating team, eh?
That's the rub, isn't it - nobody's been as consistently profitable as Nintendo, even though Nintendo doesn't follow standard industry practice (like pushing a Platinum range, or loss-leading consoles at the beginning of their lifespan to obtain market share and recoup on licensing fees).
Nintendo's doing things differently to conventional wisdom, and Nintendo's making more money. Hrmm. Is there a lesson here, perhaps?
This is such a spurious argument I don't have time to take it apart atom by atom, but I'll make a couple of quick points.
1. Just because Nintendo made a lot of money over a certain period doesn't prove they couldn't have made even more money by doing things differently, duh.
2. The videogames industry, as I said, is run as a lottery. Nintendo won that lottery this generation. By ASTONISHING COINCIDENCE, their most successful products - the Wii and DS - were far, far cheaper than any of the competition in their respective fields. The Wii launched at well under half the price of the PS3, the DS at not much more than half the price of the PSP, and both also have cheaper software than their competitors.
3. Your evidence is somewhat selective. Remind me of Nintendo's huge profits in the Gamecube era, say.
4. And as noted above, even despite massive hit properties like Pokemon and Super Mario Galaxy, and despite selling six million consoles and over 50 million units of software in six months, Nintendo's most recent financial results saw a sizeable loss.
"Consistently profitable" is the last thing Nintendo has been. They've had a good recent few years, for sure - by selling the cheapest hardware and the cheapest software.
Yeah, if there was conclusive evidence that retail games made more money with the big price cuts, I think we'd see that more frequently. You see it a lot more in the digital space because there's a lot less overhead cost and a lot more fanfare around price drops on the online space (see Steam sales). And don't forget the almost real-time stat tracking on sales having an impact, which you don't have at all for retail sales.
Edit: You do realize that the loss in the first link you posted was, IIRC, due primarily to the strengthening of the yen in comparison to the dollar and the euro, right? And that Nintendo was, in a sense, instituting a price cut by not raising prices to make up for it? And your evidence is extremely selective. Their fiscal year that ended March 31 2010 ended with a profit of $2.45 billion. The previous year? $2.95 billion.
Yes, let's cherry pick the worst possible quarter in years, just like we cherry picked EA earlier. Please. And not only that, it's a false conclusion, as pslong pointed out above.
Nobody's arguing that cheaper games in general is a bad thing. Development costs are out of control and need to come down ASAP. The problem comes in when you say, hey, this game cut its price 90% and the sales increased more than 1000%! Every game should do the same! Because that's ludicrous. Even cutting current prices by 50% would be ludicrous, and thankfully publishers have the knowledge to see that rather than take your advice.
It's not as simple as just slashing the price right now. Development costs have to come down first so the industry will be able to go back to $40-50 games without killing itself.
Yeah, if there was conclusive evidence that retail games made more money with the big price cuts, I think we'd see that more frequently.
Two issues are being confused here - whether things make more money when sold significantly cheaper, and the mechanical practicalities of adjusting pricing.
The former is true and proven beyond all rational dispute. The latter is particularly complicated in videogames retailing due (primarily) to licensing issues - chiefly the large fixed fees charged by hardware manufacturers for the privilege of making games for their systems, which interfere severely with the ability of both retailers and publishers to reduce prices. Perhaps we ought to establish which of these issues is actually under debate here.
Yes, let's cherry pick the worst possible quarter in years, just like we cherry picked EA earlier. Please.
I didn't "cherry-pick", I merely chose the most recent figures for (a) the leading hardware manufacturer and first-party software publisher, and (b) the biggest independent publisher. Had I been cherry-picking I'd probably have gone for some of Sony's absolutely gargantuan losses in recent years, or perhaps Microsoft's figures:
IIRC, those financial results showed solid earnings in all regions, with the losses being purely down to currency fluctuations. Plus that was just one quarter, the traditionally quietest of the four.
My point was intended to be somewhat spurious. The videogame industry is a ridiculously complex multi-dimensional problem to solve, and there are a number of reasons why any given platform or company is successful at a given time. Putting Nintendo's success down to simply having the cheapest hardware and software is showing very little understanding of a bigger picture that, to be frank, I don't think anyone fully understands. But Nintendo do do things differently to most of the rest of the industry, and they've had an astonishing amount of success recently.
"Retaining value" has been one of their recent mantras, too: it came up as a mission at the CES, and whilst their consoles have started out the cheapest, they've been very slow to drop in price. I think they've got longer-term objectives than just making maximum profits on a given game in a given quarter, and want to, as best they can, shape consumer expectations in terms of pricing to help maintain value in the long run. But that's just the impression I've been getting from listening to their presentations at trade shows.
Putting Nintendo's success down to simply having the cheapest hardware and software is showing very little understanding of a bigger picture that, to be frank, I don't think anyone fully understands.
Speak for yourself. Cheap systems + popular brands + quality games = profit.
We'll see how things go with the 3DS compared to the DS. My money's on lifetime unit sales dropping by at least 40%.
whilst their consoles have started out the cheapest, they've been very slow to drop in price.
True. But when you're already the cheapest and you're already selling just about as many as you can physically produce, cutting the price makes no sense, particularly when there are fixed physical costs. Manufacturing games on discs, on the other hand, costs close to nothing.
Yeah, if there was conclusive evidence that retail games made more money with the big price cuts, I think we'd see that more frequently.
Two issues are being confused here - whether things make more money when sold significantly cheaper, and the mechanical practicalities of adjusting pricing.
The former is true and proven beyond all rational dispute.
Um. No, it isn't. It's been demonstrated in a few instances in a DD context. That's very different to the sweeping statement you're making.
Otherwise, everything would always be in a perpetual spiral of reducing prices.
Probably because you just created the account today and have posted a few messages more than other new users? That's my guess.
Four (at that point) is a lot now?
I take that back...
It's probably because you are a new account, and have links and use the $ symbol in your posts. I think it's triggering some sort of spam filter the forums have.
I remember this being the case in the GC/PS2/Xbox generation as well; the Nintendo games seem to stay full price forever. I just looked up New Super Mario Brothers; still full price 2 years on.
Okay. So Nintendo had a bad first six months last year.
Why? What was different between those six months and the same period the previous year?
Putting Nintendo's success down to simply having the cheapest hardware and software is showing very little understanding of a bigger picture that, to be frank, I don't think anyone fully understands.
Speak for yourself. Cheap systems + popular brands + quality games = profit.
Well, at least I know what level you're thinking at. If only everyone in the industry had your insight.
We'll see how things go with the 3DS compared to the DS. My money's on lifetime unit sales dropping by at least 40%.
If anything does even 60% as well as the DS, it's a phenomenal success. Plus, if the prices are 40% higher over its lifetime (they are now on launch price comparisons), and profit margins are similar, that's the same profit.
whilst their consoles have started out the cheapest, they've been very slow to drop in price.
True. But when you're already the cheapest and you're already selling just about as many as you can physically produce, cutting the price makes no sense, particularly when there are fixed physical costs. Manufacturing games on discs, on the other hand, costs close to nothing.
The fixed physical costs aren't fixed: do you seriously think the Wii costs as much to make now as it did in 2006?
Do you want to talk about why Nintendo's taking an approach of apparently deliberately bucking the trend of dropping the price on software when its sales drop, possible motivations for that, and if it's possible they have insightful reasons for that strategy?
Or do you want to demonstrate that you understand how to run Nintendo's business better than they do?
Um. No, it isn't. It's been demonstrated in a few instances in a DD context. That's very different to the sweeping statement you're making.
It's been demonstrated a thousand times in almost every field of mass-market retailing for the last 20 years. If you're seriously going to try to argue with that then we're wasting our time.
Otherwise, everything would always be in a perpetual spiral of reducing prices.
Actually, in real terms most consumer goods are, even physically manufactured items. Fuel and energy are just about the only things that don't now cost a much smaller proportion of income than they did 10 or 20 or 30 years ago.
Why? What was different between those six months and the same period the previous year?
Perhaps the fact that the price differential between them and their competitors got much smaller, as you yourself have pointed out. (The PS3 has got much cheaper since launch, whereas the Wii's price has barely moved.) Perhaps the growing effect on the handheld market of being undercut by a competing format whose software costs well under a tenth as much as DS games and has accounted for billions of dollars of consumer spending that might otherwise have come Nintendo's way. There's two possibilities just off the top of my head.
The currency fluctuations are certainly also a contributory issue, but they don't come close to accounting for anything like the whole difference, as you'd see for yourself if you examined the figures for even two minutes. Do you think every single Japan-based company has suffered similarly large turnarounds?
If anything does even 60% as well as the DS, it's a phenomenal success.
Sure. Nobody said otherwise. Although, the PSP did about 60% as well as the DS and "phenomenal success" aren't words you often hear anyone using to describe it. It's most commonly regarded as a bit of a flop.
I mean... what are you trying to say here?
I just came in to point out that someone was talking complete cobblers about iOS sales statistics, and got distracted by the laughable claim that every company in the videogames industry was run by a business genius. The slightest glance at the trade press for the last decade blows that argument to shreds better than anything I could ever say.
The number of game publishers and developers who've crashed and burned in that time makes the Wall Street Crash look like someone losing a nickel down the back of a chair. The amount of money lost by games companies in those ten years adds up to tens of billions. The vast majority of games publishers lose money - fact, not opinion - and the reason is the lottery model of business they still operate by. Get the big No.1 hit and you'll make more money than God. Peak at No. 16, never mind No.100, and it's only a matter of time before they repossess the company watercooler. Even Activision can't afford to keep making anything other than a tiny handful of banker franchises.
I mean, written as broadly as you've put it, you'd think houses would make more money sold at a dollar than a hundred grand.
Sorry, I can't deal with arguments this stupid. Exactly what did you imagine that comment would bring to the debate?
Hopefully, it'd get you to clarify your position from "things make more money when sold significantly cheaper," which is ridiculously broad and obviously incorrect on the most basic level. If you disagree with my statement, then draw the line. If a hundred grand is sub-optimal pricing for a house, how much should that house sell for in order to make more money?
Cite your statement. You haven't once backed up a claim with real, applicable data. You just say it's so true that you'd have to be stupid to think otherwise, which is not a rational argument. As the person asserting that more money is always made when you sell something for less money, the burden of proof is upon you.
It's been demonstrated a thousand times in almost every field of mass-market retailing for the last 20 years. If you're seriously going to try to argue with that then we're wasting our time.
I mean, written as broadly as you've put it, you'd think houses would make more money sold at a dollar than a hundred grand.
Sorry, I can't deal with arguments this stupid. Exactly what did you imagine that comment would bring to the debate?
Hopefully, it'd get you to clarify your position from "things make more money when sold significantly cheaper," which is ridiculously broad and obviously incorrect on the most basic level. If you disagree with my statement, then draw the line.
Okay, but answer me a quick question first:
1. You genuinely can't see the difference between a huge physical construction that takes months to make, costs tens of thousands of dollars in basic materials alone for every individual unit and is chiefly sold from user to user for a unique individually-negotiated price, and an item of intellectual property that can be duplicated infinitely for pennies per unit and is mass-produced and sold at retail via middlemen.
2. You CAN see the difference between those two things, and are deliberately pretending you can't in order to muddy the argument and distract attention away from the increasingly-obvious fact that you have no idea what you're talking about and no desire to find out, given that you obviously haven't read any of the links I've helpfully provided.
I don't see any reason to continue, as long as you fail to present any evidence to support your position.
You didn't apply any provisos to your statement. Presumably it applies to the housing market, the corn market, the microchip market. Whatever price your product is currently at, sell it for cheaper, and you'll make more money. I want to know what fantasy world you're drawing this from.
Putting Nintendo's success down to simply having the cheapest hardware and software is showing very little understanding of a bigger picture that, to be frank, I don't think anyone fully understands. But Nintendo do do things differently to most of the rest of the industry, and they've had an astonishing amount of success recently.
I'd just like to point something out about this - using largely the same strategy, the last two console generations were perhaps anything BUT a success for Nintendo. N64 and GameCube were both the cheapest console on the market. They floundered against PSX/PS2/Xbox. What perhaps *was* successful for Nintendo was that due to low manufacturing costs and the like, they still turned a profit during these years despite poor sales.
Anyways, ultimately I think Nintendo's success this generation and with their handhelds in particular has been 100% about finding new markets and presenting interesting enough ideas to attract consumers. Wii was successful because they found a way to get Mom and Grandma to buy one. Same thing for DS. Gameboy stayed successful for the longest time because they came up with Pokemon which somehow became an insane phenomenon.
Price doesn't really have much to do with that. It has *something* to do with it, as if the hardware/software was deemed "too expensive" by the public it would not sell regardless of said value. But you're talking really overpriced here - like if Nintendo randomly decided Wii games should all sell for $80 each or something (see: why no one bought a NeoGeo). But standard retail price is fine - consumers expect that. If a game is still selling, and trust me, games like Mario Galaxy or New Super Mario Bros Wii are still selling, there is no reason to drop the price.
Edit: I'll also add regarding Nintendo's unique policies, they are kind of in a special position here. As both console manufacturer and software developer, they have a lot more leyway. Furthermore, they have name recognition. They have been the face of video games for 25+ years. That affords them a little room to take risks with things whereas others may not have the luxury.
The currency fluctuations are certainly also a contributory issue, but they don't come close to accounting for anything like the whole difference, as you'd see for yourself if you examined the figures for even two minutes. Do you think every single Japan-based company has suffered similarly large turnarounds?
Actually, yes, they accounted for the whole difference. If you looked at their accounting sheet, they incurred a 70 billion yen loss on foreign exchange losses. Their losses for that quarter overall was 25 billion yen. So remove the foreign exchange loss, and they make a profit of 45 billion yen.
I don't see any reason to continue, as long as you fail to present any evidence to support your position.
You didn't apply any provisos to your statement. Presumably it applies to the housing market, the corn market, the microchip market. Whatever price your product is currently at, sell it for cheaper, and you'll make more money. I want to know what fantasy world you're drawing this from.
Actually, yes, they accounted for the whole difference. If you looked at their accounting sheet, they incurred a 70 billion yen loss on foreign exchange losses. Their losses for that quarter overall was 25 billion yen. So remove the foreign exchange loss, and they make a profit of 45 billion yen.
Nintendo's strategy of keeping their games at the same price for as long as the console is around is working for them now. The real question is will it continue to work for them in the future? Digital distribution and the rising popularity of smartphone gaming is rapidly changing customer's expectations on pricing.
I think you've mistaken the fact that lower price = a greater quantity of sales for the incorrect assumption that lower price = more profit.
And since I very expressly said that I didn't mean that, I think you must not be bothering to actually read my posts, which I pretty much already knew.
Nintendo's strategy of keeping their games at the same price for as long as the console is around is working for them now. The real question is will it continue to work for them in the future? Digital distribution and the rising popularity of smartphone gaming is rapidly changing customer's expectations on pricing.
Is it possible for Nintendo to combat this, though? Or is it like Cnut trying to turn back the tide?
I think you've mistaken the fact that lower price = a greater quantity of sales for the incorrect assumption that lower price = more profit.
And since I very expressly said that I didn't mean that, I think you must not be bothering to actually read my posts, which I pretty much already knew.
Would you care to quote that for me? Here's where I got the idea from in the first place:
Two issues are being confused here - whether things make more money when sold significantly cheaper, and the mechanical practicalities of adjusting pricing.
The former is true and proven beyond all rational dispute.
If you can't express yourself clearly then of course there're going to be misunderstandings.
Cutting prices almost always delivers more revenue (not just more sales)
If you can't express yourself clearly then of course there're going to be misunderstandings.
Except that clearly I can, as indicated above, and you're too lazy to read it. I'm not wasting any more of my time with your petty, absurd hairsplitting. You know perfectly well what I mean, and the fact that you choose to pretend that you don't, and make self-evidently idiotic extrapolations, proves fairly comprehensively that you're trying to score juvenile points rather than debate the issue. I wash my hands of you. Anyone with any interest in discussing the issue like a grown-up is still welcome.
Actually, yes, they accounted for the whole difference. If you looked at their accounting sheet, they incurred a 70 billion yen loss on foreign exchange losses. Their losses for that quarter overall was 25 billion yen. So remove the foreign exchange loss, and they make a profit of 45 billion yen.
Nintendo's strategy of keeping their games at the same price for as long as the console is around is working for them now. The real question is will it continue to work for them in the future? Digital distribution and the rising popularity of smartphone gaming is rapidly changing customer's expectations on pricing.
Is it possible for Nintendo to combat this, though? Or is it like Cnut trying to turn back the tide?
I think it's a symptom of an overall trend and as such not really combatable. Adapting is the key, but it doesn't look like Nintendo wants to do this (as evidenced by their negative comments about low prices for games at GDC). Heck, they're going the opposite direction - the 3DS is drastically more expensive than the DS was at launch and the standard game prices are $10 higher as well.
If Nintendo wanted to adapt the current market trends, they could do so and still make a lot of money. Games like Pokemon & Animal Crossing could easily be turned into free-to-play games that make their money through in-game purchases.
Posts
This is such a spurious argument I don't have time to take it apart atom by atom, but I'll make a couple of quick points.
1. Just because Nintendo made a lot of money doesn't prove they couldn't have made even more money by doing things differently, duh.
2. The videogames industry, as I said, is run as a lottery. Nintendo won that lottery this generation. By ASTONISHING COINCIDENCE, their most successful products - the Wii and DS - were far, far cheaper than any of the competition in their respective fields. The Wii launched at well under half the price of the PS3, the DS at not much more than half the price of the PSP.
3. Your evidence is somewhat selective. Remind me of Nintendo's huge profits in the Gamecube era, say.
4. Old history, you say? Despite massive hit properties like Pokemon and Super Mario Galaxy, and despite selling six million consoles and over 50 million units of software in six months, Nintendo's most recent financial results saw a sizeable loss: http://www.gamesindustry.biz/articles/nintendo-records-q1-loss-of-25bn
"Consistently profitable" is the last thing Nintendo has been. They've had a good recent few years, for sure - by selling the cheapest hardware and the cheapest software.
Essentially, retail games are already being sold with only $5-10 profit. They can't cut the price in the way Dingle's been suggesting.
About $288 million more.
http://www.gamesindustry.biz/articles/nintendo-records-q1-loss-of-25bn
Around $288 million more:
http://www.gamesindustry.biz/articles/nintendo-records-q1-loss-of-25bn
This is such a spurious argument I don't have time to take it apart atom by atom, but I'll make a couple of quick points.
1. Just because Nintendo made a lot of money over a certain period doesn't prove they couldn't have made even more money by doing things differently, duh.
2. The videogames industry, as I said, is run as a lottery. Nintendo won that lottery this generation. By ASTONISHING COINCIDENCE, their most successful products - the Wii and DS - were far, far cheaper than any of the competition in their respective fields. The Wii launched at well under half the price of the PS3, the DS at not much more than half the price of the PSP, and both also have cheaper software than their competitors.
3. Your evidence is somewhat selective. Remind me of Nintendo's huge profits in the Gamecube era, say.
http://news.bbc.co.uk/1/hi/business/3166940.stm
4. And as noted above, even despite massive hit properties like Pokemon and Super Mario Galaxy, and despite selling six million consoles and over 50 million units of software in six months, Nintendo's most recent financial results saw a sizeable loss.
"Consistently profitable" is the last thing Nintendo has been. They've had a good recent few years, for sure - by selling the cheapest hardware and the cheapest software.
Edit: You do realize that the loss in the first link you posted was, IIRC, due primarily to the strengthening of the yen in comparison to the dollar and the euro, right? And that Nintendo was, in a sense, instituting a price cut by not raising prices to make up for it? And your evidence is extremely selective. Their fiscal year that ended March 31 2010 ended with a profit of $2.45 billion. The previous year? $2.95 billion.
3DS FC: 0817-3759-2788
Four (at that point) is a lot now?
Yes, let's cherry pick the worst possible quarter in years, just like we cherry picked EA earlier. Please. And not only that, it's a false conclusion, as pslong pointed out above.
Nobody's arguing that cheaper games in general is a bad thing. Development costs are out of control and need to come down ASAP. The problem comes in when you say, hey, this game cut its price 90% and the sales increased more than 1000%! Every game should do the same! Because that's ludicrous. Even cutting current prices by 50% would be ludicrous, and thankfully publishers have the knowledge to see that rather than take your advice.
It's not as simple as just slashing the price right now. Development costs have to come down first so the industry will be able to go back to $40-50 games without killing itself.
Two issues are being confused here - whether things make more money when sold significantly cheaper, and the mechanical practicalities of adjusting pricing.
The former is true and proven beyond all rational dispute. The latter is particularly complicated in videogames retailing due (primarily) to licensing issues - chiefly the large fixed fees charged by hardware manufacturers for the privilege of making games for their systems, which interfere severely with the ability of both retailers and publishers to reduce prices. Perhaps we ought to establish which of these issues is actually under debate here.
I didn't "cherry-pick", I merely chose the most recent figures for (a) the leading hardware manufacturer and first-party software publisher, and (b) the biggest independent publisher. Had I been cherry-picking I'd probably have gone for some of Sony's absolutely gargantuan losses in recent years, or perhaps Microsoft's figures:
http://www.next-gen.biz/news/playstation-division-records-%C2%A3600m-full-year-operating-loss
http://venturebeat.com/2010/07/22/microsofts-xbox-division-posts-172m-loss-even-as-slim-models-start-selling/
My point was intended to be somewhat spurious. The videogame industry is a ridiculously complex multi-dimensional problem to solve, and there are a number of reasons why any given platform or company is successful at a given time. Putting Nintendo's success down to simply having the cheapest hardware and software is showing very little understanding of a bigger picture that, to be frank, I don't think anyone fully understands. But Nintendo do do things differently to most of the rest of the industry, and they've had an astonishing amount of success recently.
"Retaining value" has been one of their recent mantras, too: it came up as a mission at the CES, and whilst their consoles have started out the cheapest, they've been very slow to drop in price. I think they've got longer-term objectives than just making maximum profits on a given game in a given quarter, and want to, as best they can, shape consumer expectations in terms of pricing to help maintain value in the long run. But that's just the impression I've been getting from listening to their presentations at trade shows.
Earning $5000 trillion is useless if you spend $6000 trillion to do it.
They made a six-month loss too, down almost $900 million on the same period the previous year:
http://www.gamesindustry.biz/articles/2010-10-28-nintendo-hits-2bn-loss-for-first-six-months
Speak for yourself. Cheap systems + popular brands + quality games = profit.
We'll see how things go with the 3DS compared to the DS. My money's on lifetime unit sales dropping by at least 40%.
True. But when you're already the cheapest and you're already selling just about as many as you can physically produce, cutting the price makes no sense, particularly when there are fixed physical costs. Manufacturing games on discs, on the other hand, costs close to nothing.
Otherwise, everything would always be in a perpetual spiral of reducing prices.
I take that back...
It's probably because you are a new account, and have links and use the $ symbol in your posts. I think it's triggering some sort of spam filter the forums have.
It's not even 100% true in the digital market, much less retail. You've failed to cite anything to support this point.
I mean, written as broadly as you've put it, you'd think houses would make more money sold at a dollar than a hundred grand.
This was definitely *not* true for the Gamecube - see:
http://en.wikipedia.org/wiki/Player%27s_Choice
As an example, Super Mario Sunshine was released in 2002, but re-released as a much cheaper Player's Choice title in 2003.
This plan fails spectacularly on the smaller, niche titles. Good fucking luck finding a new copy of Radiant Dawn these days.
They should have a player's choice line of their lesser titles, but that could be seen as a drag on those titles that aren't PC.
Okay. So Nintendo had a bad first six months last year.
Why? What was different between those six months and the same period the previous year?
Well, at least I know what level you're thinking at. If only everyone in the industry had your insight.
If anything does even 60% as well as the DS, it's a phenomenal success. Plus, if the prices are 40% higher over its lifetime (they are now on launch price comparisons), and profit margins are similar, that's the same profit.
The fixed physical costs aren't fixed: do you seriously think the Wii costs as much to make now as it did in 2006?
Do you want to talk about why Nintendo's taking an approach of apparently deliberately bucking the trend of dropping the price on software when its sales drop, possible motivations for that, and if it's possible they have insightful reasons for that strategy?
Or do you want to demonstrate that you understand how to run Nintendo's business better than they do?
It's been demonstrated a thousand times in almost every field of mass-market retailing for the last 20 years. If you're seriously going to try to argue with that then we're wasting our time.
Actually, in real terms most consumer goods are, even physically manufactured items. Fuel and energy are just about the only things that don't now cost a much smaller proportion of income than they did 10 or 20 or 30 years ago.
Perhaps the fact that the price differential between them and their competitors got much smaller, as you yourself have pointed out. (The PS3 has got much cheaper since launch, whereas the Wii's price has barely moved.) Perhaps the growing effect on the handheld market of being undercut by a competing format whose software costs well under a tenth as much as DS games and has accounted for billions of dollars of consumer spending that might otherwise have come Nintendo's way. There's two possibilities just off the top of my head.
The currency fluctuations are certainly also a contributory issue, but they don't come close to accounting for anything like the whole difference, as you'd see for yourself if you examined the figures for even two minutes. Do you think every single Japan-based company has suffered similarly large turnarounds?
Sure. Nobody said otherwise. Although, the PSP did about 60% as well as the DS and "phenomenal success" aren't words you often hear anyone using to describe it. It's most commonly regarded as a bit of a flop.
I just came in to point out that someone was talking complete cobblers about iOS sales statistics, and got distracted by the laughable claim that every company in the videogames industry was run by a business genius. The slightest glance at the trade press for the last decade blows that argument to shreds better than anything I could ever say.
The number of game publishers and developers who've crashed and burned in that time makes the Wall Street Crash look like someone losing a nickel down the back of a chair. The amount of money lost by games companies in those ten years adds up to tens of billions. The vast majority of games publishers lose money - fact, not opinion - and the reason is the lottery model of business they still operate by. Get the big No.1 hit and you'll make more money than God. Peak at No. 16, never mind No.100, and it's only a matter of time before they repossess the company watercooler. Even Activision can't afford to keep making anything other than a tiny handful of banker franchises.
Sorry, I can't deal with arguments this stupid. Exactly what did you imagine that comment would bring to the debate?
Hopefully, it'd get you to clarify your position from "things make more money when sold significantly cheaper," which is ridiculously broad and obviously incorrect on the most basic level. If you disagree with my statement, then draw the line. If a hundred grand is sub-optimal pricing for a house, how much should that house sell for in order to make more money?
Cite your statement. You haven't once backed up a claim with real, applicable data. You just say it's so true that you'd have to be stupid to think otherwise, which is not a rational argument. As the person asserting that more money is always made when you sell something for less money, the burden of proof is upon you.
Cite this. Demonstrated where, by whom?
Okay, but answer me a quick question first:
1. You genuinely can't see the difference between a huge physical construction that takes months to make, costs tens of thousands of dollars in basic materials alone for every individual unit and is chiefly sold from user to user for a unique individually-negotiated price, and an item of intellectual property that can be duplicated infinitely for pennies per unit and is mass-produced and sold at retail via middlemen.
2. You CAN see the difference between those two things, and are deliberately pretending you can't in order to muddy the argument and distract attention away from the increasingly-obvious fact that you have no idea what you're talking about and no desire to find out, given that you obviously haven't read any of the links I've helpfully provided.
Which is it?
You didn't apply any provisos to your statement. Presumably it applies to the housing market, the corn market, the microchip market. Whatever price your product is currently at, sell it for cheaper, and you'll make more money. I want to know what fantasy world you're drawing this from.
I'd just like to point something out about this - using largely the same strategy, the last two console generations were perhaps anything BUT a success for Nintendo. N64 and GameCube were both the cheapest console on the market. They floundered against PSX/PS2/Xbox. What perhaps *was* successful for Nintendo was that due to low manufacturing costs and the like, they still turned a profit during these years despite poor sales.
Anyways, ultimately I think Nintendo's success this generation and with their handhelds in particular has been 100% about finding new markets and presenting interesting enough ideas to attract consumers. Wii was successful because they found a way to get Mom and Grandma to buy one. Same thing for DS. Gameboy stayed successful for the longest time because they came up with Pokemon which somehow became an insane phenomenon.
Price doesn't really have much to do with that. It has *something* to do with it, as if the hardware/software was deemed "too expensive" by the public it would not sell regardless of said value. But you're talking really overpriced here - like if Nintendo randomly decided Wii games should all sell for $80 each or something (see: why no one bought a NeoGeo). But standard retail price is fine - consumers expect that. If a game is still selling, and trust me, games like Mario Galaxy or New Super Mario Bros Wii are still selling, there is no reason to drop the price.
Edit: I'll also add regarding Nintendo's unique policies, they are kind of in a special position here. As both console manufacturer and software developer, they have a lot more leyway. Furthermore, they have name recognition. They have been the face of video games for 25+ years. That affords them a little room to take risks with things whereas others may not have the luxury.
Actually, yes, they accounted for the whole difference. If you looked at their accounting sheet, they incurred a 70 billion yen loss on foreign exchange losses. Their losses for that quarter overall was 25 billion yen. So remove the foreign exchange loss, and they make a profit of 45 billion yen.
http://www.nintendo.co.jp/ir/pdf/2010/100729e.pdf
Maybe you need to be the one examining the figures a little closer.
3DS FC: 0817-3759-2788
So (2), then.
Steam ID : rwb36, Twitter : Werezompire,
I think you've mistaken the fact that lower price = a greater quantity of sales for the incorrect assumption that lower price = more profit.
And since I very expressly said that I didn't mean that, I think you must not be bothering to actually read my posts, which I pretty much already knew.
Would you care to quote that for me? Here's where I got the idea from in the first place:
If you can't express yourself clearly then of course there're going to be misunderstandings.
http://forums.penny-arcade.com/showpost.php?p=18967510&postcount=32
Except that clearly I can, as indicated above, and you're too lazy to read it. I'm not wasting any more of my time with your petty, absurd hairsplitting. You know perfectly well what I mean, and the fact that you choose to pretend that you don't, and make self-evidently idiotic extrapolations, proves fairly comprehensively that you're trying to score juvenile points rather than debate the issue. I wash my hands of you. Anyone with any interest in discussing the issue like a grown-up is still welcome.
Well, presumably they thought DS sales were going to be higher. If you don't meet expectations, that's where part of the blame will go.
And please, teach me. What am I reading incorrectly?
3DS FC: 0817-3759-2788
I think it's a symptom of an overall trend and as such not really combatable. Adapting is the key, but it doesn't look like Nintendo wants to do this (as evidenced by their negative comments about low prices for games at GDC). Heck, they're going the opposite direction - the 3DS is drastically more expensive than the DS was at launch and the standard game prices are $10 higher as well.
If Nintendo wanted to adapt the current market trends, they could do so and still make a lot of money. Games like Pokemon & Animal Crossing could easily be turned into free-to-play games that make their money through in-game purchases.
Steam ID : rwb36, Twitter : Werezompire,
Animal Crossing could, but not pokemon.