Wednesday, January 18, 2006

The Real Nintendo

I am so sick and tired of the politics surrounding the videogame industry. It makes me just sick. The reason why is obvious, gamers are competitive by nature. A competitive person will not admit defeat, even at the bitter end there is usually an excuse for your shortcomings ("I have been up for 35 hours", "My contact ripped in half", etc.)Because gamers are so competitive there is usually a huge divide between gamers with different systems. To make matters worse it is great marketing for system developers to play into the competition to try and hook a gamer for life. The gloves always come off (if they even started on) and low blows are commonplace.This may not be the best subject to start my blog with but it has been the one rattling around in my head of late. It is 'why is Nintendo always seen as second-rate?' This is a question that has had me up in arms more times than I could count. The story that has been perpetuated by the media, competeting corporations, and gamers alike is that Nintendo is for children,and they have inferior hardware. If this weren't he opposite of the truth I would'nt be sitting here typing.The facts are much different than the askew reality that you no doubt have at least heard if not believed yourself. The fact is that Nintendo is among the most mature videogame companies on the planet. With over 20 years of experience in putting together great products and software, they have proven their ability to compete with everyone and anyone that comes their way.Looking on this currently ending console generation for example, Nintendo reports a profit, both on consoles and software. In contrast Sony had a slight loss on hardware and a profit on software. Microsoft had a huge loss on hardware and could'nt possibly have made it up in software. With Nintendo selling the cheapest console you might wonder how they are making a profit. I will try and answer this question.The next console generation looms before us. 360 has just been released. PS3 and Revolution are poised for a launch probably next holiday season. The 360 was $400. The PS3 is estimated to ship for at least that amount. The estimates for the Revolution however are around $150, some even say a $99 pricepoint could be possible. Personally I think a $199 launch feels right. It undercuts the competition, recoups some development costs and leaves plenty of room for price cuts later. The same question can be asked, how is Nintendo making a profit? The answer that is blown out of proportion again and again is that they are filling that sleek, sexy box with inferior junk. This is of course, subjective to your view, but factually false.The hardware comprising the Revolution will be just as next-gen as the 360 and the PS3, meaning that brand new chips, boards, and technology has gone into its development. On top of that, the Revolution is the only platform with the ability to deliver next-gen games as well as next-gen graphics. The new controller has the ability to be the next morph in video game control, and it will make waves breathing new life into the FPS genre which has become increasingly stale, and RTS games which never made a real showing on consoles due to the lack of intuitive, responsive control.Back to our question of price and profit. Here is some homework. Open a new browser and google video cards. You will easily be able to find the best video card on the market. No matter when you read this the price will be somewhere around $450-500. Now, find the video card that the best one replaced and you will save yourself at least $300, yet it was cutting edge 6 months ago. This is how Nintendo is cutting costs, by doing what you and I would do when shopping for a graphics card, getting what we can afford. Of course, Microsoft and Sony are more than happy to pass these costs on to you, but they are also realising a loss per sale which is really hammering them, especially for the first couple years after launch. Nintendo has chosen what I see as a much wiser path, delivering graphics that are *nearly* on par with the competition for a price that they can't ever hope to match, while still turning a profit.The obvious question now is if the PS3 and Revolution are coming out a year later why can't they have comparable technology to the 360 while still undercutting the price? The answer is simple. Unlike graphics cards which can be replaced and upgraded apart from the rest of your computer a console system is completely proprietary, with every part tweaked to mesh perfectly with every other part instead of having a resource wasting software bridge connecting everything like in your PC. So Nintendo had already made most of their decisions about what they wanted the Revolution the be like long before we even were hearing rumors about it. Likewise with Microsoft and Sony. The graphics board will go down in price quickly, and new iterations will force older models out of production and onto clearance racks. In contrast a console will not supplant itself for another 5 years meaning no new products can force the price down. Not because they are gouging you with the console, but rather because the new graphics boards are gouging you with a price well above the value. They suck extra money at the top because they can't make money on any particular model for long. Consoles need to stay profitable, and hopefully desirable for a much longer lifespan.So that is in answer to the inferior hardware part of the question. I remember when the N64 came out and the graphics creamed the PS1, but the cry then was that graphics didn't matter so much and that Nintendo sucked because they had the much more expensive cartriges instead of the cheaper, and cheaper to program for CDs. Now the position is reversed and Nintendo sucks because they aren't supporting HD (which will result in more expensive games) and less powerful hardware. Why can't they make up their minds? And why does Nintendo suck when they are the only one pulling a profit?Next blog is why Nintendo games are much more mature than you may think. Until then.Rivulet


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