Nintendo bows out of next-gen console stuff

[Tom Ohle]

http://www.gamespot.com/all/news/news_6089101.html

I just don't know.

[-Lord Ebonstone-]

And thus, the end of Nintendo as a console hardware producer.

[DaveC]

Whoa, that came out of left field. Of course there will be many that will back track and try to say they expected this to happen and it's a "good thing".

[JD]

"good thing"

I don't see how having a new system ready by 2005/2006 to once again directly compete with at least one system launch of another company (probably two this time) would have been a clever idea. Especially since one of them is going to be the PS3.

[Dave Long]

Hmmm... that's a surprise but maybe not such a bad thing. Sony's next console isn't even definite for 2006 at this point. Maybe Nintendo knows something we don't about their strategy? If say, PSP doesn't make a 2004 release worldwide but rather only in Japan, Sony isn't likely to want to have PSP in 2005 in the US and the PS3 in 2006. That's a lot of money to lose.

Nintendo have proven many times that they can support a system by themselves if necessary. They can easily sell their games for their system til 2007 if that's the case. Maybe developers are also saying they'd like to see the pace of console progression get back to where it was before the end of last gen. Playstation went five years before PS2 hit the market here in the US. SNES and Genesis had six or more year lives as well.

They're probably thinking that there won't be a huge increase in graphics quality if Microsoft releases in 2005. Even 2006 isn't going to offer huge changes. This will also put them in a different time table from Microsoft and with similar hardware suppliers, that will mean a different product altogether if it does work out.

With the economy the way it is, people may be glad to buy $49.99 Gamecubes in 2005 while MS launches Xbox.

Pretty much guarantees a Zelda update and a second Mario game on this gen. I'm ok with that.

--Dave

[Dirt]

It makes sense. Always remember your bread and butter (Gameboy).

[Jim Preston]

I won't necessarily backtrack, but this isn't particularly surprising. All the discussions around here have been about one thing: who'll be out first, MS or Sony? Nintendo wasn't even a part of the conversation. With Xbox2 kits rolling out soon, and Sony making what looks to be a killer handheld, Nintendo's impressive holiday sales figures can't conceal the misguided "connectivity" strategy, the lack of an online vision, and the relatively flat third-party sales. Of course, if they want to make more royalty concessions and continue to pay some publishers to support the Gamecube, then sure, there will be games coming out for NGC for a while. But in the current ramp-up for next-gen engine, tools, procedures, and network handling, the debate we've been having around our campfire is whether the future will belong to Sony or Microsoft.

Hopefully Nintendo will bounce back; a healthy console price war makes third party stock prices go up.

[Kitsune]

This can only mean one thing:

I don't care what news comes out of there first soon, there's no way I'm visiting the Gaming Age Forums for AT LEAST three weeks. :wink:

-Kitsune

[Rimbo]

Well, Nintendo's said publicly that they don't think flashy graphics and sound is what makes a game worth playing, and now they're putting their money where their mouth is.

Sony got the PS2 into homes first and foremost -- once that was established, only then did the game developers follow, and only later did it become a success. They got them into homes with two things: Backwards compatibility, and a DVD player. At the time, particularly in Japan, DVD players were more expensive than PS2's. Here a PS2 cost the same as a DVD player, and had the added benefit of playing both the entire PS1 library of games plus the newfangled PS2 games. Even though there were precious few of the latter, it was the best bargain for most. I remember reading reports during the first year or so of PS2 development that because of all of the people who bought them as cheap DVD players, their game sales were initially abysmal, and not good enough to cover the costs of PS2 development. At the beginning, the Sony PS2 was having trouble! People forget that.

Market conditions have changed. Now, everyone has a DVD player just about. Sony and Microsoft BOTH stand to lose the upcoming "console war" if they don't correctly guess what's going to get them into people's homes.

But most importantly, no console manufacturer ever went out of business by failing to release a console. Case in point: Infinium's still around, aren't they? ;)

[Lunch of Kong]

Nintendo has officially denied this report, and now so can I. :-)

[Draikin]

same newspaper, 3 years ago :o


Japan's Nihon Keizai Shimbun reported Tuesday that Sega will stop production of the Dreamcast game console by the end of March to focus on developing and marketing game software for other companies' devices.

A Sega representative in San Francisco denied the report, saying plans for the device are "huge and long term."

[Luke M]

And thus, the end of Nintendo as a console hardware producer.

Is this your new calling card?

You need to go copy paste it on some more forums :)

[Ben]

DaveC- Well, you definitely win the most eeriely accurate prediction of responses. There's nothing more pathetic than a fanboy being reduced to "maybe there's something they know we don't".

Somehow I suspect you guys wouldn't be talking about a Microsoft announcement along the same lines. And the XBox would stand a much better chance of lasting, thanks to it's online functionality+HD+more power.


Anyway, no way Nintendo tries to carry the Gamecube as a real contender through to 2007, diminishing returns of technology aren't remotely that good. They'll have to release titles for other systems(a la Sega), or completely give up on the mainstream. I think it'll be the latter, and I think it's pretty cagey of them, they can sell it as a budget/kid's console pretty easily. That's certainly the direction they've been going since the late 90s. Let Microsoft and Sony fight over the adult market. It's not buying a $50 GC instead of a $300 PS3/Xbox2, it's buying a $50 GC for your kids so they don't hog your system. With the PSP ending a decade of no serious competition for the Game Boy, finding a a new market to dominate is smart. Nintendo, quite simply, has trouble in a competitive market. Their skill(and this is not meant to be insulting, it's a really useful skill) is exploiting markets other people don't try to sell to.


That's all assuming this is true, but it does make sense. We have heard much less about "N5" than PS3/XBox2.

[Linoleum]

With the PSP ending a decade of no serious competition for the Game Boy, finding a a new market to dominate is smart. Nintendo, quite simply, has trouble in a competitive market.

The PSP is not serious competition for the GBA. You aren't going to give a PSP to an eight year old.

[runesword forger]

Hmm. If Ninty isn't doing a home console next gen, why wouldn't they simply team up with MS and let MS do the hardware? Maybe badge engineer the Japanese version with the Nintendo name, or the MS/Ninty name, or whatever. Hell, it seems like MS would pay them not to play....

Or maybe this has happened, and the announcement just isn't coming yet.

[Rimbo]

It soulds like a lot of folks are mis-reading the news here.

Nintendo isn't saying that they're not releasing another home console. They're also not saying that they won't be releasing a next-generation console. They also did not say that they have stopped working on a new console; they are still working on one.

What they're saying is that they're not going to slug it out with MS and Sony in the next two years when those two folks release their next-gen stuff. Instead, they're going to let those two slug it out, enjoy the carnage, and probably come out with their new one in '07, when MS/Sony are probably in the middle of their next-gen hardware's lifetimes.

Whether this is Yet Another Death Knell for Nintendo, or Yet Another Brilliant Move by Nintendo, time will tell. So apologists will apologize and haters will hate, but reality doesn't answer to either side -- reality doesn't even answer to itself.

[Dirt]

And thus, the end of Nintendo as a console hardware producer.

What? Nintendo didn't build the Gameboy Advance?

[-Lord Ebonstone-]

And thus, the end of Nintendo as a console hardware producer.

What? Nintendo didn't build the Gameboy Advance?
Oops, terminology screw-up. IMHO, GBA = "Handheld," while GCN, PS2, XBOX = "Consoles."

[Dave Long]

Nintendo has officially denied this report, and now so can I. :-)

You're a cagey fellow Mr. Wong. Methinks you know something we all don't. :)

--Dave

[Trixie]

I really don't think she would have gone on record saying that they were officially still in the console race, unless they really were. So while the Japanese Economics Newspaper (yay japanese class) can say whatever they want, I'm not entirely convinced.

How awesome would it be if all the console companies formed blazing sword together and used their best features... think of a PS2 gaming library with Xbox Live and Nintendo peripherals... shiver me timbers!

[DennyA]

If Nintendo can make its games for PS3 and XBox2, then it can sell blades without having to give away razors. Seems logical to me.

[Mike Cathcart]

Nintendo's impressive holiday sales figures can't conceal the misguided "connectivity" strategy, the lack of an online vision, and the relatively flat third-party sales.

Connectivity can be pretty awesome when done right. Pac-Man Vs. is one of the best party games this gen. As for online vision, it doesn't seem to be hurting them that much, does it? Clearly Microsoft has the best online plan for gamers, with cross game buddy lists/invites and voice support in every game. But if Microsoft is infinitely better at online than Nintendo why is the "race" for second so close? Because online really isn't that important? Could Nintendo almost be right on this one? Maybe.

I'll give you third party sales, though. Never been a strong suit. Except Soul Calibur 2 :)

Anyway, I can't see a 1-2 year delay as a good thing for Nintendo. It killed them this gen and they said they wouldn't do that again. Even if Sony/MS ship in 2005 and Nintendo in 2006 you'll inevitably have the shortage problem in year one so they can't get going until 2007 when Sony/MS have a growing two-year-old library. Oh well, maybe we'll get the Super Gameboy Advance and it'll all be good. Or I'll just keep playing Gunbound.

[Jakub]

If Nintendo can make its games for PS3 and XBox2, then it can sell blades without having to give away razors. Seems logical to me.
Of course, then they have to pay hefty licensing fees.

[Dave Long]

If Nintendo can make its games for PS3 and XBox2, then it can sell blades without having to give away razors. Seems logical to me.
Of course, then they have to pay hefty licensing fees.

...and lose all licensing fees they now collect along with all the revenue from memory cards, peripherals, etc.

If Sega could have continued selling hardware, they would have. It is not more profitable to be "just a games maker". Selling the hardware that everyone else makes games for makes you a LOT more money when you do it right.

--Dave

[awdougherty]

Possibly, but don't you think Microsoft would pay HUGE money for the next Zelda or Mario games?

[Dave Long]

Not nearly as much as Nintendo makes now. Those exclusivity deals aren't as lucrative as you think. Would you rather have the costs for developing one or two games covered or 500 million in profits? That's how much profit Nintendo will have at the end of their fiscal year.

--Dave

[Dave Long]

So basically, the article was wrong...

http://cube.ign.com/articles/491/491054p1.html

--Dave

[Theodore Rex DX]

Mmmmmaybe. Videogame people tell such ridiculous fibs. I think Gamespot must have updated their article too, because the comments I'm seeing from people here seem to be going against what's written now.

[mouselock]

If Nintendo can make its games for PS3 and XBox2, then it can sell blades without having to give away razors. Seems logical to me.
Of course, then they have to pay hefty licensing fees.

...and lose all licensing fees they now collect along with all the revenue from memory cards, peripherals, etc.

If Sega could have continued selling hardware, they would have. It is not more profitable to be "just a games maker". Selling the hardware that everyone else makes games for makes you a LOT more money when you do it right.

--Dave

Even as the costs for R&D on hardware, in addition to production, skyrockets? I'm not sure how much of that I believe.

Licensing royalties on peripherals? I'm sure there's a trickle of cash from madcatz controllers and memory cards, but most of it seems to come about from royalties on their own hardware. The last 3 generations of Nintendo consoles have had significantly less 3rd party type crap than others. I've always assumed this was beceuase N had a bit more of an eye for the "Quality" portion of Q&A when it came to certified peripherals.

It's not exactly as if game consoles are nearly as divergent as they were in generations past. When Nintendo made the original NES.. well, it was pretty much all them (and the SMS). Newly resurrected idea and all that. SNES? Let's introduce 16 bit graphics + these nifty basic hardware tricks, up the color palette. N64? We're sticking with cartridges! But GC? Yeah, it's an optical disc system with huge polygon pushing and texturing power. It's different from the other optical disc systems in that we have a funky form factor for our discs, and have mucked about with our controller layout yet again.

If anyone has the luxury of saying "Y'know, this whole hardware and game idea is silly. Let's let someone else eat the R&D costs for the hardware, and we'll just concentrate on putting out good quality games", Nintendo does.

I'm not a console fanboi any longer. I'm old enough and well off enough that eventually I'll own them all every generation anyway. So given that, I can't figure out any difference in visibly perceptual capabilities between the XBox and the GC. Assumably any game can look as good on the XBox as on the GC, if not slightly better. I'd imagine MP3 streams aren't any harder to plug into the hardware either. So it all comes down to the quality of games, and given teams who can get access to the innards of the hardware to really grok what's going on in there, I see no reason why a solid game writer wouldn't be able to write solid games on any system. And IMO, the whole selling point for Nintendo for at least the last two generations has been in solid game production, not superior hardware specs.

[DennyA]

Wait, if they can make $500 million profit on being #3, then why the hell not just be happy being #3?

[Theodore Rex DX]

Most of that's coming from GBA, though. They might make more if it wasn't for GC - though I do think they're running a profit on their GC operation.
Also, I'm pretty sure they're number two and have been for some time.

[Theodore Rex DX]

http://www.reuters.com/newsArticle.jhtml?type=technologyNews&storyID=4320118

Stuff from Reuters.


"Other companies aren't expected to come out with next-generation consoles until late 2005 or 2006," said Nintendo spokesman Yasuhiro Minagawa. "Our machine will be ready at the same time as the other new consoles."

Saying pretty much the exact same thing as Nintendo's American branch but from a different, Japenese person. Possibly in response to this news:


On the news of a possible delay in development, Nintendo shares fell 2.67 percent to 9,850 yen in early afternoon trade against a 0.62 percent fall in the Nikkei average.

Ouchie.

[Warlord of Mars]

Well, Nintendo's said publicly that they don't think flashy graphics and sound is what makes a game worth playing, and now they're putting their money where their mouth is.

That's a compelling point to become a software publisher if I ever saw one.

[Jason Becker]

Maybe they feel its just not worth it to slug it out with MS/Sony at the same time. If those two release around the same time it will be like two giant Battleships duking it out, and it could be better to wait maybe one year. People can say well if they wait it will be like last gen, but can it be any better it if all three are released within a few months with hundreds of millions in ads being shoved in everyones face?

[Rimbo]

Well, Nintendo's said publicly that they don't think flashy graphics and sound is what makes a game worth playing, and now they're putting their money where their mouth is.

That's a compelling point to become a software publisher if I ever saw one.

Is it? How many games suck but were heavily hyped because of the quality of their flashy graphics and sound? How many cookie-cutter copies of the FPS and RTS genres do we really need?

Nintendo keeping their hardware means they can try things other guys aren't, like (random example) Pac-Man Vs.

[Moore]

Now they say the N nextgen offering will be shown at e3 05.

[Gunmetal]

Geez, you say the Xbox Next won't have a harddrive and it's like you said the sky is purple. If you say that Nintendo's dropping out of the hardware race based on a quote taken out of context from an answer to a different question and it's like "yes, I definitely believe this."

[Mike Cathcart]

Exactly. And what's with the topic title? It's not like the article was a report on an official announcment. Even before the update it should have been clear that A) this info is questionable at best and B) it wasn't even a complete "bowing out", just a delay. Maybe when the Reuters article hit this morning someone should have started a new topic called "Nintendo pre-emptively wins next generation console wars."