Sony and Nintendo losing lots of money - whats the impact going to be?

[Sarkus]

Sony lost $2b last quarter. And Nintendo is expected to announce an annual loss for last year nearing $600m.

Anyone think this will impact next-gen planning and rollouts? I assume the Wii-U is coming either way, but nobody seems to be all that confident it will turn anything around and Nintendo's handheld bedrock seems to be eroding fast as phones and IOS devices take over. Meanwhile Sony is hemoraging money everywhere but PS3 and insurance, suggesting a big investment in new hardware may be delayed.

[Murbella]

3ds & psp 1.5 are both dead on arrival. Psp 1.5 is impressive hardware but not having any games makes it a hard buy. 3DS has no games as well and not likely to get any. About the only thing you see on either system is remakes of remakes of remakes.

I don't know if i would count on wii-u to save the day. By now a lot of people are tired of the wii and non in house developers seem to be fleeing the ship from game releases. Wii-u just seems like wii + 0.1. At least psp vita seems much improved over psp, but wii-u basically is a wii with a LITTLE better graphics and the most insanely stupid controller ever invented. Straight money grab.

[Angrycoder]

3ds & psp 1.5 are both dead on arrival. Psp 1.5 is impressive hardware but not having any games makes it a hard buy. 3DS has no games as well and not likely to get any. About the only thing you see on either system is remakes of remakes of remakes.

It is easy to take a quick look at the 3ds lineup and be dismissive, but it has more great games than the DS did at the same point in it's lifespan. Super Mario 3d land is the best mario game since mario 64, Mario Kart 7 is the best iteration since the n64 as well, and the new resident evil is getting a lot of positive reviews.

[Sarkus]

It is easy to take a quick look at the 3ds lineup and be dismissive, but it has more great games than the DS did at the same point in it's lifespan. Super Mario 3d land is the best mario game since mario 64, Mario Kart 7 is the best iteration since the n64 as well, and the new resident evil is getting a lot of positive reviews.

Thats fine, but that they've dropped the price to the equivalent of the DSiXL already means they most likely lost their traditional hardware profit on the thing. And the games don't seem to be coming at much of a pace either. Regardless, that Nintendo is losing money at this point after all the money they made just a few years ago with the Wii and DS handhelds suggests they are way off the rails at this point.

[rei]

Phoenix Wright trilogy and Ghost Trick are on or are coming to iOS. Nintendo DS/3DS and Sony PSP are no longer the dominant portable platforms and gaming-only portable devices are a disappearing breed.

[Angrycoder]

Phoenix Wright trilogy and Ghost Trick are on or are coming to iOS. Nintendo DS/3DS and Sony PSP are no longer the dominant portable platforms and gaming-only portable devices are a disappearing breed.

Most people have a toaster(or toaster oven), a microwave, and an oven their kitchen. All three of them do the same thing, heat shit up.

[Sarkus]

Most people have a toaster(or toaster oven), a microwave, and an oven their kitchen. All three of them do the same thing, heat shit up.

That's a pretty crappy analogy. Yes, they all heat things up but they also have different uses because you don't always heat things up the same way. The Iphone, on the other hand, has every bit the same capability as the DS does (outside the 3ds, which has not clearly established 3d as a necessity). If my microwave heated things up exactly the same way my oven does you can bet I'd be ditching the one that costs hundreds of dollars more. Just like I ditched that stupid home phone now that my cellphone is just as reliable.

[Relayer71]

The Iphone, on the other hand, has every bit the same capability as the DS does.

Show me the buttons!

[Murbella]

Say what you will, for people who don't like casual games, i don't personally believe the game library on iOS compares to PSP, much less NDS.

Gaming consoles are a bit different than the microwave/oven example because they tend to have exclusives. For example, i have a NDS and a psp because each had games i wanted that were exclusive. Obviously if the game library was exactly the same, i would buy the one with the best hardware and be done with it, but that is not and will not be the case probably ever.

[Relayer71]

Actually, show me the Zelda, Caslevania, and Atlus RPGs.

[rei]

They're in decline though.

[Catshade]

Aren't their losses more heavily attributed to the strong yen rather than bad performance per se?

[Sarkus]

Aren't their losses more heavily attributed to the strong yen rather than bad performance per se?

That plays a role, but at least in Sony's case they had significant actual sales declines in almost every category except the PS3 (which was basically flat) and their insurance business. Nintendo hasn't officially announced the details of their fiscal year yet, so we'll have to see what they say but we know that Wii sales have dropped off quite a bit and that the 3ds has struggled (hence the massive price drop already).

[rei]

just last decade, no one could imagine sega dropping out of hardware to be software-only.

[Woolen Horde]

That plays a role, but at least in Sony's case they had significant actual sales declines in almost every category except the PS3 (which was basically flat) and their insurance business. Nintendo hasn't officially announced the details of their fiscal year yet, so we'll have to see what they say but we know that Wii sales have dropped off quite a bit and that the 3ds has struggled (hence the massive price drop already).

While the PS3 didn't have a sales decline, revenue took a big hit from the price cut.

[Alex Pirani]

Maybe its because Sony and Nintendo don't charge you to play multiplayer ;P

[Spoit]

I thought the 3DS actually picked up pretty well during the holidays, saleswise, it was just that it dragged nintendo down in the beginning of the year and then they sold it at a lost for the rest of it, which didn't help their profits.

[Brakara]

Maybe its because Sony and Nintendo don't charge you to play multiplayer ;P

Joking aside, I can't help but think that Sony would've been in a much healthier position if they charged for PSN. If you look at the XBL numbers (which are similar to PSN), Sony are probably leaving around $1 billion in revenues at the table, every freaking year.

[Thongsy]

Are they? Or would a lot of Playstation owner defect to the Xbox? My friends that bought the PS3 did so because it didn't charge for online play. I probably would still have gotten a PS3 since the selling point for me at the time was MGS4 which I came to hate so I would've gotten one either way. But I doubt I would've been able to convince those that did get a PS3 to do so if not for the free online. Personally I don't play online games enough to justify paying $50/year for the right to play online and many others I know too.

[Brakara]

So you are saying that Playstation users, unlike Xbox users, would never pay for online usage? I highly doubt that.

If MS can make $1 billion a year on this, I'm pretty sure Sony could too.

[Armando Penblade]

So you are saying that Playstation users, unlike Xbox users, would never pay for online usage? I highly doubt that.

If MS can make $1 billion a year on this, I'm pretty sure Sony could too.

How many killer multiplayer games are PS-exclusive? That's an honest question; the last time I seriously looked at a PS-exclusive game is when I bought Rogue Galaxy for my PS2.

MS can get away with it, I think, due to having Halo and Gears of War. CODBLOPS/BF4EXGE (Extra Xtreme Gold Edition, of course) are cross-platform, so they're not exactly in the "Pay for Sony over Microsoft!" camp.

If both platforms were pay-to-play, wouldn't you assume that the one with better multiplayer exclusives and (if it's noticeably and consistently so) the stronger online offering in general would far and away beat out the other?

Then again, I'm probably a bad example. I own all of about 7 games for my 360 and have never used Live.

[Alstein]

Maybe its because Sony and Nintendo don't charge you to play multiplayer ;P

I expect Sony to start charging next-gen.

This will cause me to dump console gaming, I just won't pay to play online. I dumped the 360 because I figured out XBL over the life of the console would cost me well, about what a PS3 would these days.

The only thing I would miss is fighting games, and well, those are going to start declining again after 2012, and I expect that genre to move to the PC eventually anyways, at least on the 2D side.

[Armando Penblade]

It might be revived somewhat by MLG's decision to pick up 2-3 fighting titles for the 2012 season. . . at least the high-level competitive scene will be bolstered by that (in addition to the already excellent EVO tourney).

But regardless, if Capcom is leading a charge for PC versions of fighters, maybe more will follow suit!

[CLWheeljack]

I expect Sony to start charging next-gen.

This will cause me to dump console gaming, I just won't pay to play online. I dumped the 360 because I figured out XBL over the life of the console would cost me well, about what a PS3 would these days.

The only thing I would miss is fighting games, and well, those are going to start declining again after 2012, and I expect that genre to move to the PC eventually anyways, at least on the 2D side.

It would be nice if Sony figured out better value-adds for playstation plus to actually make it attractive (and thus profitable) while keeping multiplayer free. I'm not sure what you could put there that would work though. Maybe they could charge for the ability to have voice chat or party-rooms, or something like that, that I would never use.

As much as I can't believe that MS charges for multiplayer, I really can't believe that Netflix is a Gold service (assuming it still is).

[Slainte Mhath]

Just my personal opinion, but I think PSN stayed free because first of all it lured people who didn't want to pay to play online to the Sony camp, and secondly it helped offset the higher price you had to pay for the console up front. I know a few people who bought a PS3 based on the logic that if it was 3 or 4 years until the next generation of consoles and they paid $60 a year to play online with an Xbox then the total cost of Xbox ownership was going to be far more than the $100 up front difference they were spending on a PS3.

That said, I also believe that whatever Sony's next-gen console is, they will start charging for online play. As was mentioned upthread, it's working for Microsoft to the tune of $1B annually, and that kind of money can't be ignored.

Nintendo is just plain screwed. 3DS is an official flop at this point, and honestly the Wii U doesn't look like it has enough going for it to see the sort of sales that the original Wii saw in the year or so after it's release. With the Wii being so cheap, everyone who wanted one has one at this point, and selling Wii U consoles to those folks who already have a Wii is going to be a tough sell in most cases.

[CustodianV131]

Maybe they'll realize people don't want limited function devices anymore, with high priced games that more often then not don't life up to the price asked for them?

The market place is changing, they'll have to:
A. move with the times
B. succeed in pushing SOPA-like monstrosities
C. go the way of the dodo.

I hope they'll go for option A, since I would hate to see them go. Option B I'll not even consider.

[Murbella]

Somehow I don't think the world will turn to $3 casual games and abandon more deep higher prices ones just yet.

Nintendo's main problem as i see it is they do make a lot of those ultra casual $3 games but they don't sell them for ultra casual prices. For a while now they have focused not on getting good games for their systems but exclusively on gimmicks. Sometimes the gimmicks pay off, like with nds and wii and sometimes they don't, like with 3ds and wii-u. The problem with gimmicks is they get old so by the time people get bored that they can draw on their screen with a stylus, you need to have games in place to keep them there. Wii didn't do this, nds did.

[Telefrog]

That said, I also believe that whatever Sony's next-gen console is, they will start charging for online play. As was mentioned upthread, it's working for Microsoft to the tune of $1B annually, and that kind of money can't be ignored.

Yeah, unless people start jumping ship en masse over the Live fee, Sony would be extremely foolish to leave that money on the table. As much as I loathe to admit it, people have shown that they are entirely willing to cough up $30-$60 a year for access to multiplayer games and to watch the Netflix subscription they already pay for. That's easy money for Sony and Microsoft.

[ElGuapo]

Somehow I don't think the world will turn to $3 casual games and abandon more deep higher prices ones just yet.

Really? Why not? I'm always curious when someone says this, why they think it is so.

Do you think that someone would continue to pay $60 for a movie if they can get a different movie for $3? Even if the movie is 20 times better, the price point in between them makes it a very easy economic argument.

[CLWheeljack]

Really? Why not? I'm always curious when someone says this, why they think it is so.

Do you think that someone would continue to pay $60 for a movie if they can get a different movie for $3? Even if the movie is 20 times better, the price point in between them makes it a very easy economic argument.

While your point stands, I frequently suspect that the iOS market is doing more to expand the gaming market than directly cannibalize dedicated handheld sales. The people I see on the train playing Angry Birds weren't going to be playing a DS instead, they were going to read the paper, or check email, or listen to music, etc.

People seem very eager to call the 3DS and WiiU flops, even though one is early in it's life cycle and the other doesn't exist yet. (I'm not saying I think they are / going to be successful). People seem to forget that Nintendo has a ton of cash on hand, and that even the Gamecube was profitable for them overall. The price cut undoubtedly killed a lot of their 3DS profits, but it's still early to say how that will shake out financially.