Nintendo's Competitive Advantage

When I was working at Codemasters in the mid eighties Richard Darling was considered to be a gaming god with a string of number one titles at Mastertronic and then Codemasters to his name. So it was really interesting that the game machine he had at home was a dated Atari VCS 2600 console when he could easily have used a far more powerful and modern machine like a Commodore Amiga or Atari ST instead. The reason he gave was that gameplay was the most important thing, not graphics. And that the VCS 2600 had finely crafted and polished games in which the gameplay was paramount.

This is a debate that has cropped up again and again over the years. Always the platform makers give us ever higher graphics capabilities. And nearly always game developers throw ever increasing resources at utilizing those graphics capabilities to the maximum. What a game looks like has become the most important thing.

Yet talk to serious gamers about their favorite games. Often you hear the names of titles like Elite, Goldeneye and Super Mario 64. Games with quite miserable graphics compared with more modern offerings.

And this seems to be something that Nintendo (NTDOY.PK) understand better than Sony (SNE) and Microsoft (MSFT), which has given them a massive competitive advantage. Basically Nintendo did not go HDTV with the Wii whilst their competitors did with their latest consoles. This looks relatively sensible as the vast majority of homes do not have HDTV and the adoption rate will be relatively slow because non HD TVs do a perfectly good job.

The advantages to Nintendo are firstly that it makes their console cheaper to manufacture. This means that they can sell the base console at a profit whilst their competitors have to subsidise the retail price. It also gives Nintendo far more room to manoevre when it comes to using the price mechanism to take on that competition.

The second advantage is that games are a lot easier, quicker and cheaper to develop. In fact they are more comparable with PS2 games in this area. This, obviously, has a massive effect on what appears on the game shop shelf and when it appears. Quite simply, it should be far easier for a publisher to make a profit on Wii, which explains why so much development resource has been directed at it.

Comments

[User 136665:]

I think that the difficulty for 3rd partied developing for Wii is that fact that Nintendo is you competition. Take a look at the NPD numbers, Nintendo absolutely dominates that top of the list. I am sure that part of this falls on the shoulders of the devs who, IMHO, tend to throw insufficient time and resources at their Wii projects, but it there is still something to be gleamed from the fact that Nintendo dominates in this area.

I think a second that there is more then meets the eye to Nintendo development has to do with Sony's acquisition of SN systems. The IDE that many game devs prefer is MS Visual Studios, but with Nintendo development you are forced into a CodeWarrior world. This may not be a huge problem if you are a pure Wii shop, but if you are doing xBox and PS development, many of your tools and automated processes will need to be re-worked.

2008 Jan 06 12:17 PM

[WJUK:]

I agree with what is said in the article, but I also agree with the previous comment about first-party compared to third-party sales.

You can say that the main reason is actually the company/dev themselves and this is largely true. Most of the time, the third-party games are nothing compared to the monolith that is Nintendo's own titles. But when they are good some still don't get the attention they deserve (Zack and Wiki) but that may also be attributed to lack of advertising.

There are some games that break the mold (GH3, for example) and I think the Wii's library will open up a lot more in 2008 and eventually become more like the DS game library (in other words: gigantic).

2008 Jan 06 02:36 PM

[User 136717:]

The above 2 comments are wrong, 3rd parties have had success on the wii.Resident evil 4 is about to cross a million which is impressive considering it has been on 3 other platforms. Ubisoft has said they sold a million of red steel and did similarly well with the first rayman. The Umbrella Chronicles has also done well, and so has carnival games and of course gh3. Of all the games that have done well on the wii all but 1 or T or higher rated. 3rd parties need to put as much effort into their wii games as Nintendo and they need to not be g rated as Nintendo has that niche filled very well.There was also no way in hell that the poor HIV infected man's version of a pc adventure games Zack and wicki was going to do well. Adventure games don't do well in general and ZandW was a joke compared to The longest Journey and Grim Fadango hell it was garbage compared to dubious old Myst. ZandW was pushed and praised only because the videogame "journalists" and forum fanboys don't want the wii to become the new ps2 and are trying to push it into a niche. I am an adventure gamer and I can guarantee that ZandW was garbage with shit asthetics.

2008 Jan 06 04:06 PM

[employee:]

I've been employed within the industry (non-retail) for a number of years. I've seen companies come and go. Nintendo has always attempted to push the expansion of the gaming industry, while the other console makers (even before MS and Sony) have generally played it safe.

An example of a "learning" failure within the gaming industry (created by Nintendo), was the Virtual Boy... =)

If you look back, everyone was talking "Virtual Reality" (TV shows/Movies/etc.)--ev... tech company wanted to be the first one on the market with a "VR" product (one almost did)....... Then "Virtual Boy"..... then silence..... the whole industry cancelled that plan and darted into different directions (like a school of fish). It is funny (to me) where this concept ended up--learning from what Nintendo did or couldn't do--"If Nintendo couldn't do it, we won't even try."

Nintendo plows the field: The company has made its mistakes, but I applaud them for brainstorming the new (or older) technologies and how to make the industry a better (more fun) place. Its success is not just based on a "bigger is better" attitude of improving existing graphics/sound to a level that MOST eyes and ears can't distinguish--just to make it first to market with the technology. (Obviously, that doesn't always work!)

Why: Generally speaking, how much money would the average family spend on a device for a 5-12 year old to use in their average home (the exception being the family computer)?

With all the latest "new tech", it's interesting how reliable some of that simple "old tech" ends up being in the end.
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2008 Jan 06 05:56 PM

[messels:]

hi, could you please conjugate your verbs correctly?
microsoft is a third person singular entity requiring such verb conjugation. note in the previous sentence i used "is" and not "are". it's extremely distracting and detracts from your analysis.
en.wikipedia.org/wiki/...

2008 Jan 07 05:00 PM

[employee:]

Messels: 1) Who the ???? are ya talking to? 2) I personally thought (given the audience) everything is of the proper quality. 3) You get what you pay for. 4) You have caused a bigger distraction than anything else. I suggest trying that same speach down at the local pub and see how far it gets ya!

2008 Jan 07 08:42 PM