Thanks to the massive success of the Wii and DS game consoles, Nintendo was able to turn the tide and once again become the number one game company in the world. As with any honeymoon, however, it must come to an end at some point. Nintendo reported its financial results for the first half of 2009 yesterday, and it didn’t look good.
The Wii was a massive gamble. Sony and Microsoft were busy trying to one-up themselves by producing ever more powerful hardware, without really trying to do something truly innovative in the game console space. Nintendo, on the other hand, tried something completely new, and designed its Wii console entirely around motion control.
This paid off big time for the Japanese company. The Wii was able to tap into a resource neither Sony nor Microsoft could tap into: the casual gamer. The Wii became a massive hit among the casual gamer crowd, who ate the thing up like cake with strawberries andwhipped cream.
It also had a darker side effect, an effect which did not reflect itself in Nintendo’s stellar sales figures and financial results: Nintendo started to snub its hardcore fans. As soon as Nintendo realised it could earn a lot more money by focussing its efforts on the casual crowd, its hardcore fans were in trouble.
I used to be a hardcore Nintendo fan, just like one of my best friends. We were both very excited when the Wii was first announced, but I was already a bit sceptical when I heard all the specifications. Standing up all the time? Flailing your arms around like a lunatic? Is this something I want to do when I play games – an activity which I perform to unwind?
We were both disappointed by the Wii, and as hardcore Nintendo fans, this was a weird sensation. On the ‘net, I heard more and more hardcore Nintendo fans airing similar concerns. While the Wii is a very nice piece of hardware, it just doesn’t appeal to a lot of hardcore Nintendo fans. This feeling was only made worse by the fact that the motion control system just doesn’t work very well. It’s inaccurate, it doesn’t register your motions very well.
As Ben “Yahtzee” Croshaw said many times, the Wii appeals to casual gamers and the gimmick crowd. However, they are like magpies – they will stick with the Wii until the next shiny object comes along. It’s a dangerous affair to rely on those types of gamers, instead of the hardcore ones, which will buy whatever you put out as long as it doesn’t kill bunnies. Yahtzee already wondered – what will happen when the novelty wears off? When people realise they play games to unwind, not to act like an “air traffic controller covered in beetles”?
Well, we now know what happens when the novelty wears off: Nintendo’s profits and sales plummet. The company’s profits in the first six months of 2009 dropped 52% compared to the same period in 2008 – from USD 1.59 billion to USD 709.3 million. In the US, the PlayStation 3 outsold the Wii for the first time last month, and the DS, too, is starting to see slower sales (it’s still the best selling console in the US, but only by 32400 units).
Nintendo sold 5.75 million Wii units worldwide during the first six months of 2009, compared to more than 10 million units in the same period in 2008. That is a massive worldwide drop in sales, which certainly cannot be attributed solely to Sony’s price cuts.
There are a few possible bright spots in Nintendo’s future, though; the Wii has seen a price cut too recently, and is now stuck at the magical price point of 200 USD. This could increase sales, but history does not suggest a price cut will always lead to sales increase, nor does it say anything about the sustainability of such a possible sales increase. Another bright spot is the upcoming release of New Super Mario Bros. Wii – analysts suspect it will be the best selling game of the holiday season.
Then again, Sony and Microsoft have some decent games coming in or already released too – Left 4 Dead 2, Mass Effect 2, Uncharted 2: Among Thieves, Bioshock 2, Dragon Age: Origins, and so on.
Still, Nintendo won’t reach the highs of the past few years any more. Let’s not forget that despite these financial results, the company is still doing very, very well – just not amazingly out-of-this-world stellar any more.
Just looking at the growth over the past 12 months it’s clear the PS3 is finally taking charge.
I wouldn’t necessarily go that far. The PS3’s future has a lot to do with the answers to these questions…
1. How much of the growth was/is motivated by a desire to buy a game console — or a [now] competitively priced Blu-Ray player? Or, put another way, will people buy games?
2. How many hit exclusive titles will there be for the PS3 over the next year?
3. What impact will further price cuts for competing game consoles have on the market (as they’re certainly sure to do)?
I might buy Final Fantasy for my PS3 bluray player – that’s about it though. To me all the hype over games like Uncharted 2 can’t hid the fact that it’s like every other shooter on the system (based on the demo). I don’t think I’ll be playing too many games like that.
Plus I tend to do all my real gaming on the PC anyway. ;-P
I don’t know man, I just finished Uncharted 2 and I’d say it was one of the best games I’ve ever played. I wouldn’t exactly call it a shooter though, I’d say it’s more of an adventure game that involves shooting for some of it. For me, this game made up for the new Indiana Jones movie being horrible.
you should ask yourself: was it better for Nintendo to branch out and cater to a wider audience or try to keep up with Sony and Microsoft and most likely end up like Sega and be only a game publisher/developer? I am of the opinion that the first is probably the better choice, even if they have to focus a good portion of their time on casual games, which can be fun some of the time.
The problem is market saturation. Casual Gamers are the B Customers. Nintendo original successes was do the the fact that their B Customers were a hungry group. So they focused on getting them and making them their A customers. However the Casual Gamer isn’t their best long term customers. They get the console and perhaps 1 or 2 games. Thats about it. The A Customers or hard core gammers will keep buying games and add ones for the life of the product thus making a more sustainable business.
Nintendo should have put more effort in competing against the PS3 and XBox as well. The Graphics for the WII is a decade old, and a lot of games made for the wii were designed as an after taught and creating horrible game play.
the gfx were very old and I’m all for casual but that doesn’t mean that every game has to look like mario brothers.
I think you completely nailed it. A lot of the fuss over the Wii was due to the breadth of the market. Old people who never played a videogame were buying the Wii, exercising by playing Wii Sports, etc. BUT … those same people aren’t going to keep buying games. They’re going to stick with what they’ve already got, it may not even occur to them that they would want/need additional games and, eventually, the machine is going to gather dust and rot. Now, compare that with the hardcore gamer market: the kind of people who cruise the web looking for information on every cool game that comes out; preoccupation with the underlying graphics technology, how many triangles/sec can it render, blah, blah, blah. Which customer would you rather have? This is Nintendo’s big weakness and, while a hit Mario title will help, it’s not the longterm solution to Nintendo’s problem.
No, i think you both are missing the point. The main reason why nintendo is seeing profit losses is mainly because they didn’t roll as many blockbuster games as last year, for both their platforms. Keep in mind that nintendo may have been behind sony in the past, but overall, the DS _is_ the most succesful platform this generation, the one everyone has and the one that solds the most games (nintendogs, new super mario bros, mario kart DS, etc still sell several orders more than the best selling 360 or PS3 titles), same with dragon quest series in Japan, though for some reason most analysts completely ignore it. In any case, i personally find strange that after the large amount of first party titles nintendo released until mid-2008, they’ve been pretty quiet since.. and are only announcing sequels (to zelda DS, new super mario bros, on wii, another zelda on wii, another galaxy, etc), so my guess is that they are already developing for next-gen.
Exactly. This report has zippo to do with their hardware (or at least not the way you think), and everything to do with the quality of their games this year – no Mario (except later), no Metroid, no Zelda (well, actually I they have one of those too – later in the year) – I didn’t even hear much buzz about pokemon, etc. They did have a bunch of hardware will no killer games – They have simply not had much in the way of games this period. It’s the software. Nintendo has demonstrated that it’s the software that matters time and time again. Why do so many forget that so quickly.
You’re kidding yourself. The Wii was a fad. Nintendo oversaturated the market. There’s no one left to sell to. And, I will predict that next year will offer similar financial results for Nintendo. They may be able to grow income from new titles, but not sales of Wii hardware. That horse has already left the barn.
“Standing up all the time? Flailing your arms around like a lunatic? ”
Stopped reading here. So how button smashing is better then swinging your arms?
Another thing these “hardcore gamers” criticize and I don’t understand is how can analog stick can be better then pointing to shoot people on the face. How do people shoot with real guns, using analog sticks or pointing and shooting?
It’s not entirely Nintendo’s fault if no developer yet learned how to use motion control to bring a decent experience like some Nintendo titles on Wii brought…
I despise console controllers. I either play pc games witha mouse or I use the wiimote.
_and_, every now and again, you get something that wouldn’t work as well on a traditional controller like LostWinds.
Sometimes it’s nice to sit down after a long days work, and not have to hold your arms out in front of you for 45 minutes.
That’s what Team Fortress 2 is for…
that’s what my 360 is for. The Wii only gets used at parties, and usually interest wanes pretty quick
Maybe because their controller sucks? Otherwise, why would they have launched the Wii MotionPlus add-on?
The Wiimote lacks precision. It’s okay for having giggles with friends, but unacceptable for competition. Unless the game requires the Wiimote, I always end up using a normal controller, like the VC one.
It’s good news this drop, now they will stop being lazy and release more good games and more innovation..
And it’s about time for Wii HD
My actual dreaming game would be a HD version of Legend of Zelda with heavy usage of motion plus
Another Zelda game in HD, now THAT’S innovation, lol! I always see hardcore gamers crying for more Mario, more Zelda, more Metroid, etc. Basically, “just give us the same shit we played last year, but make it look better!” That’s innovation to the hardcore crowd, and the reason why they will happily plunk down $60 for the latest space marine shooter/fps flavor of the month. Maybe one day, these people will get tired of bleeding from the asshole and stop paying for the same games over and over again, start demanding real innovation, and not just another sequel with a higher polygon count.
PS: Before anybody accuses me of being a Wii fanboy, you should know that I don’t own one.
Edited 2009-10-31 03:04 UTC
I gotta disagree with you here, Thom.
“Hardcore” gamers don’t play games to unwind; they seek stimulation. That’s why during game play their heart palpitate irregularly; pupils dilate; adrenal glands release greater amounts of epinephrine and norepinephrine; blood pressure heightens; and respiration increases. The original Legend of Zelda did this to me as a 6 year-old, and Zelda Twilight Princess did this to me as a 26 year-old. Most of those ‘hardcore’ games make your body react as though it were in “real danger,” so it seems inconsequential whether you achieve that by gyrating with a motion-sensor or a statically-clutched traditional game controller.
As for what makes a “hardcore Nintendo fan,” I think we also have different definitions. Hardcore Nintendo fans come for the classics: Mario, Zelda/Link, Samus/Metroid, and Nintendo’s franchise as a whole. While Nintendo may have innovated a number of new games with Wii, the classics are there and many others are on their way. Simply hearing the theme music from Wii’s Punch-out triggers a warm nostalgia from the mid-latter 80s, as I would flip-out over how outrageous one punch from Mike Tyson could knock down Lil’ Mac. (But I still came back, over and over, until I beat that sucker!)
Nintendo delivered with the Wii. And while motion-based gaming may not be your thing, the Wii is certainly not limited to this sort of game play; traditional controller options and corresponding games do exist for the Wii. Hell, the new Super Mario Bros. will be an old school, 2-D, side-scroller!
One thing is clear: Innovation always has its critics…
————-
You might be a hardcore nintendo gamer if “007-373-5963” or “up-up-down-down-left-right-left-right-b-a-select-start” make you smile. =)
A bottle of poppers and a porno flick will do that a hell of a lot more cheaply. And without the brain atrophy.
I disagree with the brain atrophy part of that comment.
Specify.
People addicted to porn look to more and more hardcore kinky stuff to satisfy their lusts. Over time they get more callous and feel the need to act on their sexual whims in more and more perverse fashions. That is no less brain atrophy than a hardcore gamer.
Are you joking? Or do you really mean that?
Edited 2009-10-31 03:29 UTC
It’s true! It’s been proven that porn is more addictive than gaming because sex is a natural part of humanity.
Gaming feeds on some need for justice or truth or some violent tendency to shun evil or some other outward principle that a plotline is based on. Porn is based on a core instinct.
The hardware is generally less expensive, too. At least the entry level stuff. And even mid-level, really. You can buy a couple of slings, a rack, and a couple of pair of (admittedly not top quality) hand-cuffs for the price of an entry-level gamer system these days. Not that I pay close attention, anymore. I just have friends…
But I believe that the original terminology was “hardcore gamer”. We’re probably skewing things by introducing the concept of addiction, don’t you think?
Edited 2009-10-31 03:43 UTC
Hardcore porn is generally only for the addicted anyway, I say. But this is indeed getting way off topic.
100% agree. I’m a true ninty hardcore (since 1989) and I love Wii, for me It’s like a NES 2.
Yeah… 3rd parties’ games suck that’s true… but We can’t blame Nintendo for that!!
Nintendo games are really amazing: SM Galaxy, Metroid Prime 3, ZeldaTP, Wii Sports, Animal Crossing, Wario Ware, Punch Out, Super Paper Mario, hey there’s a lot!
Nintendo dropped the ball on their OWN franchises the worst! There was none of the main “fanboy” franchises for the first YEAR and even then the main titles were warmed over gamecube titles.
No Super Mario, No Metroid, No Pokemon, No Pikmin, No Animal Crossing… for the first year or longer. No online interactions (that mattered). NO use of the wireless. No meaningful interactions with DS games (and DS has moved to DSi now!) The titles they did have were warmed over GC games with LESS content than the GC version.. Mario Galaxy, Twilight Princess (a GC game that took so long it had to be “ported”), Metroid echos… and the list goes on.
Nintendo hasn’t published a Franchise game for Wii worth buying yet. Even the Motion Plus was release without a game to use it! They’ve had a clear lead and produced absolutely no compelling gaming products in 3 years.
hmm I love sword fighting in sports resort
🙂
SFII
Hopefully this will wake up Nintendo!
lots of adults bought the wii. then they diddn’t deliver the games.
they need to divide the games by section AT the store. adults games? games with content and story? and then party/kids games.
as it is when i go to look at nintendo games the ONLY type of game i see plastered all over the walls are puppy palz. or any other variety of children games.
all they need is a couple of really good, and original games. stop making old fashioned mario platform games. come up with something original, because all your third party companies are just putting kiddy games on the system.
My copies of Trauma Center, Metroid Prime, Dead Rising, and Resident Evil would like a word with you.
I suppose if I bothered with “only” getting “adult” games, I’d also have to mention Silent Hill, Call of Duty, Red Steel, and other such games, but I’m having too much fun with the “kid” games like Rock Band, the various Sonic games, Punch-Out, Okami, and Mega Man 9. I also have to find a copy of Guilty Gear XX eventually…
Wii Sports: 47 million sales (best-selling video game of all time)
Wii Play: 22 million sales.
Wii Fit: 21 million sales.
Mario Kart Wii: 17 million sales.
Smash Brothers Brawl: 8.4 million sales.
Best-selling 360 game: Halo 3, 8.1 million sales.
Best-selling PS3 game: MGS4, 4.5 million sales.
(Citation: http://en.wikipedia.org/wiki/List_of_best-selling_video_games)
Since when is popularity an indicator of quality?
You mean they managed to sell a game which is basically crap? 47 million pices of it?
I don’t have a Wii or any other console but just from the numbers it’s obvious they could find a pretty big market for themselves.
Plus those numbers show something else namely that there are many people who don’t mind moving while they are playing. Maybe it’s not appealing to the so called “hardcore gamer” but from the numbers it looks like they are the minority.
Well, that game is sold with the console, so people are getting it whether they like it or not.
Personally, I find it unacceptably boring and ugly, but it does seem to have a certain appeal to non-gamers, like my girlfriend’s parents.
That’s exactly the self-naval-gazing that’s killing Nintendo NOW. Wii Sports is the pack-in game they “make” you buy. As were Wii Play and Wii Fit both packed with hardware. Now we’re down to Mario Kart and Smash Brothers as the true winners, much closer to reality of the install base verses the other systems. Note that the Franchise games… Mario Galaxy, Zelda, Metroid Prime, Pokemon… nowhere to be found on the list and THAT is why Wii is burning out quickly. The “standard” Nintendo franchises are poorly represented in sales, and frankly the hard-core fans of these franchises hated the GC AND Wii installments of the games. Game MAKING is fundamental and Nintendo has spent their whole load on games custom made for Wii and not GOOD NORMAL games the fans loved.
I just excluded them because they were lower than the best-selling games of the other consoles (Mario Galaxy was only 8.02 million sales, f’rex). The full list (http://en.wikipedia.org/wiki/List_of_best-selling_Wii_video_games) has all of the franchises you mentioned (as well as others, like Animal Crossing) above the million sales mark.
Maybe it’s just me, but when I read this, I can’t help but to think a few things.
First, how long was the Wii the top selling console? They were so hard to get a hold of for so long because they were constantly sold out. When something sells and sells and sells for that long, it has to reach a saturation point. The more you sell, the less demand there will be.
Second, and I’m sure this is not news to anyone, but for the first half of 2009 the global economy was in the toilet, and it’s still going on. Not only that, but there’s barely a mention of how the competitors did during the same period. Any chance that their sales dropped during the first half of the year, too?
I would think that both of these things would have a huge impact on Wii sales, but instead it’s all just touted as, “Awww, poor Nintendo didn’t cater to the right gaming crowd.” To me, it just sounds like someone’s feeling a little sour because they fancy themselves “too hardcore” for a Wii. Not all gaming needs to be about body count and how many brazillions (sic) of polygons can fit on the screen at one time. If those are the two things that make someone a “hardcore” gamer, I’m glad I’m not part of that crowd. I like to actually have fun with my games once in a while.
economy is dropping and the people that would be most eager to buy nintendo ds or wii already have it. Those that would be on the edge of buying it would avoid it if the economy is bad.
The fact that many games are $20 a pop and the ones with custom controllers are more than that makes me wonder if a homebrew-enabled system would do better. You have to mod the Wii to access the homebrew channel while a PC or netbook can access the whole internet.
Some casual games run fine on Linux. Some don’t even cost anything. Many of those will run fine on a netbook. Why waste money on a Nintendo DS when you can get more freebies for a Netbook?
The cost effectiveness of a console also pales in comparison to the Windows PC. Most Intel and AMD powered systems run Windows and there are loads of developer incentives for developing software for Windows, not the least of which being the Visual Studio and the freebie versions of the software development tools.
I think if Nintendo is going to gain a foothold into the market, it will have to either come out with something novel and able to compete with the freebie giveaways on other platforms. Maybe a new web browser so the Wii will function better as a net-top box with Adobe Flash capabilities.
I disagree with the idea that hardcore gamers are the core of the industry. I think that hardcore programmers and designers are the core of the industry. The reason casual gamers are so fickle is because it doesn’t take much to meet their demands and so are more likely to look at something other than a console to satisfy their needs.
Considering that the Wii caters mostly to old people ( which I am totally sure they are adults in the whole sense of the word, granpa sure hell is), I wonder what’s up with todays youth.
They need gore, nudity and such to call something adult oriented? Who gives a crap about that stuff. All in all, the ages of people playing the wii is a hell of a lot higher than those teens playing PS3 and Xbox 360)
This leads me to the conclusion that there’s something wrong, they need reassurance that they’re adults or something.
And by the way console sales (as taken from Wikipedia)
Xbox 360 Worldwide: 31 million (as of August 27, 2009)
Wii Worldwide: 56.14 million (as of September 30, 2009)
Ps3 27 million (as of September 30, 2009)
Considering that Nintendo has about as much units out there as their competitors combined, I lean towards the “Everyone and their Grandma has one” side of the argument for sales decline.
Note: Sales figures don’t include the new 120GB and 250GB 4th Generation PS3s.
The next year is when that “lead” of console sales sees the gap shrink considerably.
If people hadn’t realised:
1) Every console sold makes money – they aren’t losing money hand over fist as with the case of Microsoft’s XBOX and Sony’s PS3. Every console that leaves the store, Nintendo is turning a profit of it – they aren’t playing the game of ‘make a loss on the hardware, make it up on the software and accessories’ gamble.
2) If people here hadn’t realised, there is a recession and people have been hit hard – and in some cases, really hard, especially in the US where the social safety net isn’t as wide and inclusive as Europe, Australia and New Zealand.
3) The profits dropped by 52% but they still made a profit – compare that to Sony and Microsoft whose games divisions still haven’t turned a profit.
4) When the economy picks up again, the key will be marketing to customers that their console provides the best value for money when it comes to entertainment. Value for money is going to be the key driver – where consoles are put up against television, youtube etc. for the attention of the consumer. The consumer is going to be asking him or herself which gives the best bang for the buck.
Uhm, Micrisoft’s XBox division is making a profit, as far as I know.
Microsoft subsidized XBox to the tune of > $1 Billion in losses before it made a penny.
Just find and read the 10-Q statements from the XBox’s first release until it finally turned a profit.
Edited 2009-10-31 20:37 UTC
Lets also be honest for a second and recognise the fact that the division is made up of a large number of completely unrelated components. Microsoft has many divisions and outside of Office and Windows, are all unfocused.
Would be nice to see good games come to nintendo…… instead all is see is shity games that are priced at 50 bucks. The only thing I am excited about coming from Nintendo is the new Mario game this fall. Even from that I am not jumping up or down.
I’m not sure when a billion dollars in profit started to mean things were going badly for a company… and besides… wasn’t there some sort of recession recently?