The Death Of Nintendo Has Been Greatly Under-Exaggerated | Hacker News Reader

The Death Of Nintendo Has Been Greatly Under-Exaggerated

techcrunch.com

38 pointscoloneltcb51 comments

If I were an investor, and Nintendo's CEO came by and told me they wanted to make games for smartphones or, god forbid, sell to Apple, I'd sell so fast, and with so much energy, CERN physicists would confirm the Higgs boson from my clicking.

I think I already posted here about this, some eons ago. To recap: this strategy is bad. It's let's take Nintendo from a powerful stance as both platform maker and virtuoso first party developer, to Oversized Third Party Developer in a market notorious for:

(a) Low quality and extremely low fidelity demand, which prizes being cheap and having a gimmick over everything.

(b) Notoriously capricious primma donnas such as Apple and Samsung as platform makers, which take insane cuts from developers.

(c) Being an extremely fragmented market, with thousands of devices with very different characteristics and software which Nintendo would have to support.

Selling Nintendo to Apple is the business equivalent of folding a royal flush. Yeah, so the iPad sold 100 million units. The DS sold 154 million. For a single purpose device. The 3DS might be 20% behind its predecessor's curve -- a ridiculously successful curve, if I might say -- but that's still a cold 124 million units. The Wii was a fad, true... and it redefined the meaning of fad itself, selling 100 million units; a one model, single-purpose device. When factored into this that Nintendo profits from third party software -- unlike Rovio, which has to pay its dutiful tides to petulant lovers by excellance Apple and Samsung -- one starts clearly seeing how Nintendo is pulling ass like Brad Pitt at a wet t-shirt contest. Absolutely insane. Not even Steve Jobs could dream of selling a gadget so well as the 3DS does.

Not to mention that, again, in this business if you're a third party developer, either your name is Activision, or you're into masochism. Lose power, lose the platform, and you lose everything that makes you strong.

Edit: and I don't even like the Wii U.

I'm not a Japanese citizen or know the language but I'm under the impression that Nintendo is more like a Hasbro or Milton-Bradley; having been around since about 1905 or so.

These companies don't seem to go away. They have brands that continue to sell to the next generation of children.

Every now and then they become immensely popular and have some runaway freight train successes. But even in the bad times, they seem to stick with it.

There are some game companies that seem to do the startup gamble. The company that produced Teddy Ruxpin (Worlds of Wonder) and Atari seem to have been structured this way; put all the chips on black and see what happens.

But I'm under the assumption that as an American what I see are the electronics of Nintendo and that within the confines of Japan they have other product lines such as boardgames and toys for children (things like this: http://d3gqasl9vmjfd8.cloudfront.net/aba95bdd-6979-4b92-b7fe...) - as that is their history.

Am I wrong, or is this fundamentally what Nintendo is?

100% right

I'm not sure Milton Bradley is the right analogy. Milton Bradley, Tonka, Kenner, Parker Brothers, Playskool, Avalon Hill and Wizards of the Coast (among others) were all successful independent companies at one point. They are all owned today by Hasbro.

Nintendo used to produce card games etc., but today they only produce video game consoles and software.

That being said, I think the rest of your comment still holds.

They publish the Pokemon card game, yet another huge franchise.

For an article so sure of itself, it was incredibly light on actual facts, figures, and numbers. I got: the 3ds has sold 20% less than its predecessor at the same point in its lifetime.

Also got: Wii u is a dud (I think that's some kind of technical term); they have like, a blackberry amount of cash (whatever that means); and the author is "definitely" right.

Anyone have some actual details about why I should be concerned about Nintendo?

Completely agree

20% less than the Nintendo DS is a good sales figure considering the DS is #2 in terms of video game console sales, only selling 3 millions units less than the all time leader, the PS3. (http://www.vgchartz.com/analysis/platform_totals/)

The leader is the PS2.

oops typo :)

Nintendo's market cap is ~$15B. Their cash on hand is ~$11B. In my opinion, their IP is worth sooooo much more than the difference.

Rovio, in comparison, is estimated between the $2B-$9B range. If Angry Birds is worth that, what is Mario/Zelda/Metroid/etc. combined worth?

I do feel like they would be best served ceasing set top boxes and focusing on handhelds and making games for the PS4, XB1, and PC. Perhaps port a few of their games to iOS/Android.

To do this they would most likely have to get acquired though. I see Disney as a much more likely suitor for that than Apple.

> "Rovio, in comparison, is estimated between the $2B-$9B range. If Angry Birds is worth that, what is Mario/Zelda/Metroid/etc. combined worth?"

I don't know, what is nostalgia worth? A lot more kids know and crave Rovio IP these days. Sure, Mario/Zelda is recognizable and part of the zeitgeist but then so is Pacman.

It can't be nostalgia if these kids have never experienced what a real video game should be.

This is the problem with your thought process. Video games have changed. What you think they should be isn't what they are now. You don't continue, and grow as a company by targeting a shrinking demographic.

What is this 'shrinking demographic' exactly?

People nostalgic for Mario, Link, etc.

Well you don't have to be 'nostalgic' to like those games as Nintendo have made sure to release new iterations for every new hardware platform and also in different genre's than the original (Super Mario/Mario Kart).

Granted they are exclusive to Nintendo hardware which given their current diminishing hardware market share will mean less exposure, but it's not as if kids today don't know who Mario/Link/Samus are, only difference is that they know Mario/Link/Samus from the Wii/DS/3DS games instead of NES/SNES/N64 games.

I'd argue that the more-hardcore gaming market isn't shrinking.

It is, that's why the new consoles highlighted their non-gaming features. You can't just sell people game systems anymore, you have to provide an entire entertainment package.

I don't think those two facts are particularly related. I'm a hardcore gamer but I wouldn't buy a console if it didn't have interesting entertainment features (and great game line-up) or I'd just stick to PC. The growth of Steam and popularity of game emulation (which I'd wager is higher than ever) probably show that the hardcore market isn't going anywhere. You could probably compile Humble Bundle data too.

Again, I don't have hard data, but the situation doesn't seem as bad as some may think.

You're basing it off your experiences as a hardcore game interacting with hardcore gamers. The amount of people that wouldn't describe themselves as gamers that have emulated older games is a number at best in the quadruple digits. That isn't a big enough base to make money. If you want to make money you target the masses. The masses don't care about their parents video game characters.

Something is wrong with your thought process when you think the most dominant type of games are touch screen games. Video games haven't changed, there are just different types of games now. Some of which are limited by their lack of controls. Last time I checked gamers still exist, many of which don't play touch games.

Don't forget who had utilized a touch screen for games properly.

Yes, but as this article and many others have discussed; that number is shrinking. Gamers still exists, but you don't make billions of gamers. You make billions of consumers as a whole, and convincing people to buy yet another piece of hardware to do something is a hard sell. "I could just use this thing I carry with me everywhere," or, "I could buy a 2nd dedicated device that only does games (well)"

I'm aware the DS/3DS/etc do more than games, but anyone that uses the DS browser and thinks it's good is a liar.

I didn't reply to your first point. I'm not saying touch screen games are the dominant type, and neither is the article. The article is asserting that's the way things are going unless we get a monumental shift in gaming, which doesn't seem to be coming based off current announcements. Both of us are asserting: "Nintendo is ignoring the sea change in the world and coasting. This is a recipe for disaster."

These brands are still ridiculously recognizable worldwide. And Nintendo owns many of them.

I'd argue that Pokemon alone even today is worth more than Angry Birds.

A lot of this is not really structured it's just a bunch of thoughts I want to share with everyone.

This guy may say he loves Nintendo but I really don't think he's a gamer. He seems to be looking at it from the smartphone market point of view. The author compares Nintendo to Nokia and Blackberry; phone companies that barely even touch console or mobile gaming. Nokia and Blackberry lost a lot of market share but to say that Nintendo has fallen off as hard as they have is false. Relative to their markets of course.

Why can't console gaming still be a market and co-exist with touch screen games? Is there really only room for one? Just because the PC exists doesn't mean consoles will go to shit or that no one buys PC games.

Nintendo does pretty well in it's home country Japan, and I bet in other parts of the world also.

The author also neglects to talk about the differences in gaming markets. He seems to think all games and hardware are the same.

Handheld games are a market in itself and Nintendo is at the top of it. Just because people own more smart phones doesn't mean they'll buy a Nintendo game on it.

What does he care. It's not like he's going to buy "Super Super Mario World TOUCH for iOS" for $30. It doesn't sound like he's a gamer at all and it's sort of offensive when someone who thinks the latest tech will take over doesn't consider the facts or any other factors.

Think about, why would you give in to your "competition" and make games for their "console".

>why would you give in to your "competition" and make games for their "console"

Because these general purpose "consoles" have grown tremendously in power while decreasing in cost, they have the potential to take market share from Nintendo. Nintendo consoles used to be one of only a few avenues for kids to play games. today there are smartphones, tablets and PCs which all have comparable price to the gaming console.

"Why can't console gaming still be a market and co-exist with touch screen games?"

It can it'll just be a tiny market and any sensible company that wants to keep making big boy profits will have to be part of the larger market. There's still a few companies that make pagers, they just don't sell 50 million a year like they did in 1990.

"Handheld games are a market in itself and Nintendo is at the top of it"

They are now in 3rd place. Standalone handheld gaming devices are under the same pressure that point and shoot cameras and portable music players and all sorts of other devices are under.

"why would you give in to your "competition" and make games for their "console"."

Because your consoles flopped and you can make more money that way. Sega did it. Atari did it. NEC did it.

"Nintendo isn’t just failing because their hardware is sub-par. They’re failing because they continue to try to re-tool the Model T while the competition is building Ferraris."

This has been Nintendo since practically forever, they have always been railed on for their sub-par hardware milking it for as long as possible. Wii U might not be selling hotcakes but I don't think this is Nintendo's death. Their IP will keep the company going.

For anyone interested in the story of Nintendo (or just enjoys gaming history in general) this is a fun read: http://www.amazon.com/Super-Mario-Nintendo-Conquered-America... (or listen for commute/jogging)

The author may be correct that Nintendo is in trouble and will lose against Apple, Google, Samsung, Sony, Microsoft, etc. His mistake is in thinking this means that Nintendo needs to do something right now.

As a thought experiment, imagine a bad scenario for Nintendo in 5 years. They've been steadily losing market share and have eaten into their cash reserves. They've launched a new console and a new handheld that are largely seen as a flop. What are their options? Drop out of the hardware business and just be a game publisher/developer or sell themselves to another company. Basically the same options they have now. So they might as well stay the course and see if they can come up with another hit as it's not really costing them anything to do so.

I would say, almost certainly, console gaming in general is already dead; all we're seeing are its nails and hair continuing to grow. Hardcore gaming is on PCs, casual gaming is on mobile, multiplayer is online.

There's only one thing consoles are good for now, and it's exactly the market Nintendo already has cornered--local multiplayer gaming (your "Mario Party"-like titles.) The only valid competitor for Nintendo's dollar, this gen, is, extremely surprisingly, the Ouya. Nobody else is publishing semi-casual games you can play around a TV with your friends.

But that's still a small market. Nobody wants to play single-player games on a TV any more; they either want full online gaming experiences on a PC (for which Nintendo could give two shits), or personal games on a handheld. Which is why, no surprise, Nintendo has been shifting their major IP from console to mobile for years now. The "portable mode" of the Wii U is basically a compatibility hack for this new paradigm, letting devs make single-player games for the console, which can then be treated by the consumer as if they had been made for a portable, as they've now come to expect.

I'd bet that six-to-eight years from now, Nintendo will be putting out a box very similar to the Ouya, and also somewhat resembling the Apple TV. It will be sold as a DS accessory to enable local multiplayer DS gaming, on your TV. It'll be everything the Wii U is, but with four of those portables (notice how much the 2DS resembles one of them?) And that'll be that for Nintendo making consoles.

A very similar article could have been written before the original DS or Wii debut.

And many were.

And they would have been right. The Wii only delayed the inevitable. They had a huge hit but didn't capitalize on it.

Yet here we are, years later, talking about Nintendo's continued decline. Band-aids are great, but when you're bleeding internally; they don't do much.

Years of inaccurate predictions aside, does the company have bigger problems than new hit hardware can't solve?

Who knows, it's all pure speculation.

Can they hang on for years in a lul? Well that's pretty obvious.

While I don't see how Nintendo's 'death' is even on the table, I agree that Nintendo's hardware endevours seem to be failing.

I expected them to have to fold in the hardware department sooner or later and I'm actually surprised that they're still in it. I'm certain their handheld devices will eventually lose to the smartphone/tablet, and the game console market for 'casual' gamers where their hardware resides is losing to the aforementioned aswell.

So yes, I believe that just like Sega (which have nowhere near the same franchise power as Nintendo), Nintendo will become a developer for Android/Iphone and PS5/XTwo or whatever the current high-end gen console is when Nintendo finally get out of the hardware business (if the high-end console market still exists then).

On the other hand, it's games, not hardware, which is what Nintendo is best at.

They may be old hat, Mario, Zelda, Metroid, Pokemon etc, but it's those game franchies which have sold and is still selling Nintendo hardware and not the other way around. Zelda on Android, Mario on Iphone/IPad, i'm sure they will sell massively, printing money even.

I'd actually be incredibly surprised if they folded their hardware division. Sure it's not great now (except the 3DS is still doing good by every other metric other than compared to the DS ie: the best selling handheld in history). There are ups and there are downs.

Remember when Nintendo was the most valuable company in Japan surpassing Toyota, Honda, and even MUFG?

How the mighty have fallen.

That shift has been aided by the increasing dominance of Toyota & Honda.

I also remember when they were tyrannical, monopolistic assholes who got busted for price-fixing the NES and even sued to keep the Game Genie out of stores. They've been stubborn and out of touch for as long as I can remember.

This partially explains why the market discounts Apple's so heavily. Because if your business is manufacturing hits you are going to either have duds or miss waves depending on the POV. One dud you burn the profits from prior successes and can the CEO, two in a row and you're out of business.

I hope Nintendo makes it through the Wii U debacle but it's not looking great.

I wonder why many Apple faithful are obsessed with what Nintendo does or doesn't do, should do or shouldn't do. Maybe they're secretly angry that the current CEO of Nintendo started programming on a Commodore PET, and not on an Apple device.

I see a lot of similarities between the two companies. A willingness to think different in pursuit of their own hardware standards and form factors (remember how the Gamecube used mini-discs and had a handle for carrying?), huge success from pursuing the Blue Ocean Strategy, the capability to inspire consumer cults (possibly because they are seen as somewhat "purer" than their competitors), and even similar aesthetics (clean off-white plastic-porcelain hardware, the lower-case letter 'i').

This is an incredibly dumb assertion and you should be ashamed of yourself for making it.

People make the comparison between the two because both companies have generally marched to their own tune. While their competitors obsessed over expanding the feature checklist of their devices, they worked on producing quality content on quality hardware. They were never the most advanced, but they were the simplest and most exciting.

All Nintendo needs is to be compatible with the Occulus Rift.

Why are the Apple zeitgeist all having such a fit about Nintendo right now? First it was Gruber, then Arment, then the various hanger-ons and followers, and now Siegler.

I just don't understand why that company has suddenly become so interesting to them? Might they offer some guidance on the great PS4 versus Xbox One decision?

They're far from gamers...

See my comment here: https://news.ycombinator.com/item?id=6331529

There are some compelling similarities between the two.

The most famous apple fans are also big Nintendo fans. Or at least they claim to be. John Siracusa is the only one of them that I remember talking about actually playing Nintendo games (even though he always says Mary-o).

Part of it is that for a long time people have compared Nintendo and Apple (both make hardware and software, both have had iconoclastic leaders, both have tended to go their own way contrary to popular trends).

But I think a big part of it is combination of the fact that the Nintendo 2ds was announced and that all these apple people are friendly and follow each other. So when one of them mentions something then the odds are that others will mention it too.

Siracusa's essay is the only one worth reading: http://hypercritical.co/2013/09/02/nintendo-in-crisis

The rest of those clowns don't have much to add to the conversation.

Because journalism/blogging follows fads just like anything else- if Gruber starts talking about a topic and gets a decent response, you can bet that everyone else will feel the need to respond and hop on the bandwagon.

Reply on news.ycombinator.com