Fils-Aime has a new philosophy, a console should be able to make money on release day. A very different concept compared to Sony and Microsoft's "bleed for three years" concept...
Microsoft predicts that the Xbox 360 will be profitable sometime in 2008 while most people gather that Sony's PlayStation 3, selling for USD $600.00, costs way more to produce then the USD $600.00 it is on the shelf for.
The fact that a stock Blu-Ray player is upward of USD $1,000 and the PS3 Blu-Ray drive itself may cost over $200.00 (almost the same cost as the total Wii package) it is assumed that Sony plans to take a hit in the wallet prior to making cash on the console hardware.
Nintendo, however, plans a different route: Making money on release day. It is now common knowledge that the Wii product will not be a technophiles dream box because the graphics are not state-of-the art HD verses Sony and Microsoft. People continue to murmur about how "Nintendo will lose the battle" in the console wars even though they've stated their not planning to be in the war.
How then, can a console possibily "lose" anything if it is profitable on day-one? Don't try to answer that question because it cannot be answered with honesty. A product that can make money in the market the day of release is always a winner, regardless to the billions served. If Nintendo only sells into 20% of the market and was profitable the entire time how can we laugh at them?
Reggie Fils-Aime told Reuters:
Nintendo is building their own space, the "interactive entertainment" market. This attempt to put yourself into another market space can either make a company highly successful or drive them into the ground. The market space must have consumers and people to drive the market space. Nintendo has proven, with the Nintendo DS, that such a market does exist. Now, it is time to see just how much cash can be found in that market.
Nintendo will create their one market space because they don't want to compete for powerhouse graphics. Is it because they cannot do so? Sure they can! If Nintendo wanted, they could go out and build a "god box" powerful enough to hold water with the "big boys" but really what is the point?
The goal of Nintendo is clear: make money and provide interactive entertainment. This has always been their goal but it has become clear, now, in the new next-generation market because the competitors are working so hard to build graphic powerhouses to bring in their hardcore gaming consumer. Both strategies are workable, each with its own risk, but Nintendo feels that their company is best suited to perform different tasks in entertainment. Can you fault them?
Nintendo expects to sell 6-million units by March of 2007 but industry analysts expect even better figures. Michael Pachter of Wedbush Morgan Securities told GameSpot, "I keep hearing that they will crush the 6 million unit number (by something like 2 to 3 million). That would be good for everyone."
Nintendo is proving that the interactive entertainment market is ready for its product line and analysts are aligned with that theory. Developers are on board with the idea of interactive gaming as well. Perhaps they are tired of the same old game architecture, or, as designers, they're intrigued by the idea of a new challenge?
THQ CEO Brian Farrell, who is supporting the Wii with four games by the end of March 2007 talks about the financial advantages of the Wii, "The Wii wasn't a whole new programming environment. So we had a lot of tools and tech that work in that environment. So those costs--and again, I hate these broad generalizations--but they could be as little as third of the high-end next-gen titles... Maybe the range is a quarter to a half."
While Sony struggles to put out positive news about their next-generation console Nintendo is able to sit back quietly and let analysts, developers, fans and bloggers talk about the advantages of the Wii. This next-generation "war" should be fun to watch...
Thanks to KingDrewsky for the information
Microsoft predicts that the Xbox 360 will be profitable sometime in 2008 while most people gather that Sony's PlayStation 3, selling for USD $600.00, costs way more to produce then the USD $600.00 it is on the shelf for.
The fact that a stock Blu-Ray player is upward of USD $1,000 and the PS3 Blu-Ray drive itself may cost over $200.00 (almost the same cost as the total Wii package) it is assumed that Sony plans to take a hit in the wallet prior to making cash on the console hardware.
Nintendo, however, plans a different route: Making money on release day. It is now common knowledge that the Wii product will not be a technophiles dream box because the graphics are not state-of-the art HD verses Sony and Microsoft. People continue to murmur about how "Nintendo will lose the battle" in the console wars even though they've stated their not planning to be in the war.
How then, can a console possibily "lose" anything if it is profitable on day-one? Don't try to answer that question because it cannot be answered with honesty. A product that can make money in the market the day of release is always a winner, regardless to the billions served. If Nintendo only sells into 20% of the market and was profitable the entire time how can we laugh at them?
Reggie Fils-Aime told Reuters:
"We will make a profit on the entire Wii proposition out of the box--hardware and software. That really is a very different philosophy versus our competitors. We are a company that competes only in the interactive entertainment space, so we have to make a profit on everything we do."
Nintendo is building their own space, the "interactive entertainment" market. This attempt to put yourself into another market space can either make a company highly successful or drive them into the ground. The market space must have consumers and people to drive the market space. Nintendo has proven, with the Nintendo DS, that such a market does exist. Now, it is time to see just how much cash can be found in that market.
Nintendo will create their one market space because they don't want to compete for powerhouse graphics. Is it because they cannot do so? Sure they can! If Nintendo wanted, they could go out and build a "god box" powerful enough to hold water with the "big boys" but really what is the point?
The goal of Nintendo is clear: make money and provide interactive entertainment. This has always been their goal but it has become clear, now, in the new next-generation market because the competitors are working so hard to build graphic powerhouses to bring in their hardcore gaming consumer. Both strategies are workable, each with its own risk, but Nintendo feels that their company is best suited to perform different tasks in entertainment. Can you fault them?
Nintendo expects to sell 6-million units by March of 2007 but industry analysts expect even better figures. Michael Pachter of Wedbush Morgan Securities told GameSpot, "I keep hearing that they will crush the 6 million unit number (by something like 2 to 3 million). That would be good for everyone."
Nintendo is proving that the interactive entertainment market is ready for its product line and analysts are aligned with that theory. Developers are on board with the idea of interactive gaming as well. Perhaps they are tired of the same old game architecture, or, as designers, they're intrigued by the idea of a new challenge?
THQ CEO Brian Farrell, who is supporting the Wii with four games by the end of March 2007 talks about the financial advantages of the Wii, "The Wii wasn't a whole new programming environment. So we had a lot of tools and tech that work in that environment. So those costs--and again, I hate these broad generalizations--but they could be as little as third of the high-end next-gen titles... Maybe the range is a quarter to a half."
While Sony struggles to put out positive news about their next-generation console Nintendo is able to sit back quietly and let analysts, developers, fans and bloggers talk about the advantages of the Wii. This next-generation "war" should be fun to watch...
Thanks to KingDrewsky for the information
