Nintendo in Crisis: 'There is no way we are going to win': Software-only Exit Plan Hint From Japan

A storm rages as Nintendo firefights disastrous Japanese reports.

Posted by Staff
Nintendo in Crisis: 'There is no way we are going to win': Software-only Exit Plan Hint From Japan
Nintendo has been rocked this morning by an analytical article in respected Japanese daily, The Nihon Keizai Shimbun, in which a senior Nintendo source is quoted as saying that the GameCube cannot compete in today's market. Compounding this statement, the anonymous source goes on to state that Nintendo may well move to a software-only business model.

To quote the Nihon Keizai Shimbun, "There is no way we are going to win competing in the same arena as electronics and computer makers," a senior Nintendo official said. "Our best option is to build on our software development abilities."

The article concludes, "So as the gaming market shrinks, Nintendo has declined to go face to face with Sony, which is taking its game machines into the realm of digital appliances, and will instead seek to survive by concentrating on the market for children". This is perhaps the most damning report on any of the three hardware manufacturers seen to date.

Nintendo was quick to respond this morning, releasing the following damage-limitation focused statement:

"Contrary to what has been reported in one Japanese publication, Nintendo is staying in the console hardware business and still plans to launch our next home console in the same timeframe as our competitors. In addition, we are working on a number of complementary technical advances that we believe may significantly enhance the gaming experience. We also continue to look for exciting ways to extend the value of the GCN, and will share those ideas with you in the coming months. Specific details about other accessories or systems and their functionalities haven't yet been made public. However, we will make further information about our next console available in the near future, and we look forward to further demonstrating our record of breakthrough innovation in video game play."

However, some analysts have perceived this statement to be as dangerous as the initial Japanese report. Nintendo seems to be building a peripheral-driven strategy in the gap between the next generation roll-out, likely to be in late 2005. As peripheral-reliant gaming is a relatively untested market, Nintendo would be essentially required to reinvent something as successful as the dance mat again and again, perhaps to the detriment of its core developmental focus.

We'll keep you updated as this amazing story unfolds.
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Comments

DoctorDee 10 Feb 2004 11:22
1/20
The thing is, the GameCube is an excellent piece of hardware... it's just been poorly marketed.

Nintendo continue to be dogged by the "kiddie" label, despite their machine been just as capable as the other consoles at playing "adult" games.

Sure the design on the GameCube doesn't help either, next to the PS2, it looks like a Fisher Price "My First Console" but then the Xbox looks like "My First Suitcase".

It is important that the console market does not become a two horse race. If it does it will mean a lack of choice for consumers, and ultimately, a lack of quality software.
dyne 10 Feb 2004 12:34
2/20
DoctorDee wrote:

>The thing is, the GameCube is an excellent piece
>of hardware... it's just been poorly marketed.
>
>Nintendo continue to be dogged by the "kiddie"
>label, despite their machine been just as capable
>as the other consoles at playing "adult" games.
>
>Sure the design on the GameCube doesn't help
>either, next to the PS2, it looks like a Fisher
>Price "My First Console" but then the Xbox looks
>like "My First Suitcase".
>
>It is important that the console market does not
>become a two horse race. If it does it will mean
>a lack of choice for consumers, and ultimately, a
>lack of quality software.

At this point in time, it does look as though Nintendo will take a similar route to Sega in the next few years.
Nintendo, however, wont be carrying large debts, and the company will continue to be backed by its handheld offering - at least until PSP debuts.

I think a two-horse race is likely. Sony is maintaining its stranglehold on the console market, and with the exception of Japan, Xbox has done reasonably well.

But I don't think that's a bad thing for consumers. Nintendo will continue to deliver great titles, with or without its own hardware, and I think the idea of cross-platform Mario and Zelda titles is appealing.
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sunnychandi 10 Feb 2004 12:56
3/20
but peripheral-reliant gaming has been done and 'tested' before, by sega with the dc. remember the seaman voice recognition mic and sega bass fishing contoller, samba de amigo controller etc etc.......and look what happened to them, they just dont have appeal to the general gamer

ninty is shooting itself in the foot wid comments about kiddie games, they made/ helped to make eternal darkness, was that for kids!?
The_gamer 10 Feb 2004 13:13
4/20
Why is this coming back. Nintendo do something and then every body says...nIN iS Do0m3d. You don't even know what they are releasing. So just wait 'till you see.

P.S. Say something about the xbox. Tell me how well it's doing in japan.
config 10 Feb 2004 14:00
5/20
The_gamer wrote:

>Why is this coming back. Nintendo do something
>and then every body says...nIN iS Do0m3d. You
>don't even know what they are releasing. So just
>wait 'till you see.

After the VirtualBoy, it's hardly unexpected that there's a level of scepticism surrounding this dual screen malarky.

>P.S. Say something about the xbox. Tell me how
>well it's doing in japan.

Why? Everyone knowns it's doing so poorly in Japan it's the laughing of the country's gaming populace.

omer48912 10 Feb 2004 14:21
6/20
Well I think that Nintendo need new marketing campaign which could maybe save them or give them some boost. If you look at their annual report you will see that they are not doing that bad as Sega so I don’t think that they will end in a same way as Sega did.

They need to go for a new image and to try and appeal to wider audience.

omer48912 10 Feb 2004 14:21
7/20
Well I think that Nintendo need new marketing campaign which could maybe save them or give them some boost. If you look at their annual report you will see that they are not doing that bad as Sega so I don’t think that they will end in a same way as Sega did.

They need to go for a new image and to try and appeal to wider audience.

xteboy 10 Feb 2004 19:28
8/20
omer48912 wrote:

>Well I think that Nintendo need new marketing
>campaign which could maybe save them or give them
>some boost. If you look at their annual report
>you will see that they are not doing that bad as
>Sega so I don’t think that they will end in a
>same way as Sega did.
>
>They need to go for a new image and to try and
>appeal to wider audience.
>

Nintendo is clearly bleeding and having a slow death, i wish the DS can save them now but what do you guys expect???? they should have focused themselves in making sure the next GC can compete with MS and SOny but instead they put their limited resources in introducing a NEW product which nobody is excited about anyway.....well, Nintendo's consoles have been fun, whatever they decide to do, as long as they keep making games, i'll still support them, if leaving the console business is the only way they will survive then by all means let them do it......
sunnychandi 11 Feb 2004 00:25
9/20
the reason this has all been brought up again, to the person who asked, is b'cos sum1 apparently at ninty has made these comments in the spong article. saying that ninty cant/ wont last as a hardware maker and will have to revert to a software only kind of route.

the silly thing is saying that ninty have to concentrate on kiddie games/ kids, i mean talk about shooting yourself in the foot
jamieladronka 11 Feb 2004 09:03
10/20
Nintendo will simply never change its image -- asking them to do that is like asking amtrak to start their own airline company. Or something like that.

Nintendo is clearly devoted to video games, and that is it. That's why the gamecube is as it is today -- Nintendo does not want a "multimedia" machine, when all it is aiming for is a gaming machine. They have always catered toward the niche market -- but now, that niche market is not what it used to be when the Nintendo and Super Nintendo were around. There was nothing there to challenge their foothold -- now there is.

Simply put, Nintendo will NEVER appeal to the mass market now because we desire too much from one thing -- multifunctionality is NOT a Nintendo strong suit sans periphials.

Although a complete "software only" plan seems rather...harsh to say, I do forsee Nintendo dropping it's plans for another console to focus solely on its handheld market -- thats where their revenue is to be made.

And as far as a cross-platform Metroid or Mario? Sure, that would happen um...if Nasa produces something that actually functions without breaking or needing immediate repair. They still have their handheld market, and that's where those titles will stay...
...after all, you can't really periphialize a handheld.
dyne 11 Feb 2004 11:20
11/20
jamieladronka wrote:
>
>And as far as a cross-platform Metroid or Mario?
>Sure, that would happen um...if Nasa produces
>something that actually functions without
>breaking or needing immediate repair. They still
>have their handheld market, and that's where
>those titles will stay...
>...after all, you can't really periphialize a
>handheld.

If Nintendo dropped consoles and only supported its own handheld, to think Mario, Metroid, Zelda etc. would only appear on GBA and its successors is a little naive.

If Nintendo doesn't have it's own TV-top hardware, Mario and Zelda WILL appear on other consoles. It doesn't make sense for Nintendo to restrain its own products to primitive hardware, handheld or not.

Nintendo has pride, yes, but it's not stupid.

Of course, all of this is speculation. :)
TigerUppercut 11 Feb 2004 14:42
12/20
The Dreamcast slimily is perfect. Though the Dreamcast did have a wealth of strong hardware, arguably stringer than that of the ‘Cube.

Seeing Nintendo state that they will extend the machine’s lifecycle reminds me of so many Sega press conferences. Keyboard, mouse, Rod, arcade stick, maracas, microphone, tambourine, train controller, camera, vibrator (true – in Japan with REZ) and it simply doesn’t work.

The problem is that while Sega was making all these mistakes, Nintendo was too busy counting dumptrucks full of Poke-cash to notice.
jamieladronka 12 Feb 2004 13:20
13/20
Having a franchise on a handheld is vain?

It's called marketing. Gamers know that Zelda, Metroid and Mario WILL sell units. In fact, that's what's kept the 64 going and the Gamecube too. Why would Nintendo lease out something that could have the chance of, effectively, becoming the next 'Crash' series, when the units will not only sell like candy on a handheld, but sell the handheld as well?

Naive, I think not. Marketing savvy, I think so.

Besides, without Mario - what is Nintendo? It's nothing. Sure, they'd sell alot more games, but Nintendo still has it's own platform - the handheld - to worry about. And that in its own, would justify a stance to keep the Zeldas, Metroids and Marios in handheld form
dyne 12 Feb 2004 13:33
14/20
OK, maybe it willl keep its franchise on a handheld format, but to gamers who've become accustomed to 3D offerings of Nintendo's greatest games will see it as a step backwards. I know I would, and I'm sure I'm not the only one who thinks so.

And I don't think Nintendo would stand to lose anything by releasing its games on other platforms. In fact, it did Sega a massive favour. It's not as if Mario and Zelda would belong to greedy companies like Sony and Microsoft. It's Nintendo's copyright and always will be.
jamieladronka 13 Feb 2004 00:46
15/20
Nintendo will be known more for its GAMEPLAY than it will be for its graphics. As far as I know, many games from Nintendo have never really PUSHED a dramatic artistic effort, sans Zelda and Viewtiful Joe (third-party) -- so its not like they're losing a whole giant effort in that department, anyways.
jamieladronka 13 Feb 2004 00:52
16/20
The only people who give Nintendo the "kiddie" label are the consumers. Adding "Mature" titles won't do anything for the system -- they added a franchise named Resident Evil to their line-up and that's done LITTLE to nothing for the GameCube.

Nintendo is KNOWN for its experimentation with its' games, and consumers should know that off the bat -- if gamers complain because a system is too "childish" simply because they cannot go around and run over pedestrians with cars, then they outrightly picked the wrong system and are fools for not researching it.

The GameCube's design is IDEAL for what it needs to be for -- portable multi-player gaming. Why hasn't it gone online like the Playstation and the Xbox? Because that's not what it is designed for. Nintendo has created its own world of "Home Consoles" -- like it or not, that's how they are going to stay.
DoctorDee 13 Feb 2004 10:45
17/20
jamieladronka wrote:

>The only people who give Nintendo the "kiddie"
>label are the consumers.

That's not true! Time after time serious financial analysts allude to the "kiddie" tag.

You know it's wrong, I know it's wrong... in fact, more the the point, it's irrelevant. But the company continues to be labelled this way. Parents read the analysts' reports in the serious papers, and it affects their decision when choosing a console for their kids... if they are pre-adolescent, the GameCube seems like a good choice, if they are adolescents, the PS2 seems a better choice.

Gamers who have been with the scene a long time know Nintendo stands for quality, but there are millions of "new" gamers, and they are influenced not by years of personal experience, but by what the read in the Sunday Times, which says tyhe Nintendo console and games are aimed at kids.

That Res Evil came out on GameCube is irrelevant too. It had already been out on other platforms. Plus, it takes more than one obviously "adult" title to change people's minds. Before "adult" gamers switch to GC, they would want to see a range of adult tiles. GC never had Driver/Driver2 (I know, I know, Driv3r IS gonna be on GC) or GTA2/3. Until NFS Underground, it didn't even have a decent racing game. It had Burnout, but long after the other platforms.

> The GameCube's design is IDEAL for what it needs
> to be for -- portable multi-player gaming.

Portable? The fact it has a handle (and a crappy little screen and a battery) doesn't make it portable!

> Nintendo has created its own world of "Home
> Consoles" -- like it or not, that's how they are
> going to stay.

We like Nintendo, we want them to stay around... but unless they get with the program - predominantly from a marketing point of view, but also in terms of console design, they aren't going to be.
dyne 13 Feb 2004 11:14
18/20
DoctorDee wrote:

>We like Nintendo, we want them to stay around...
>but unless they get with the program -
>predominantly from a marketing point of view, but
>also in terms of console design, they aren't
>going to be.

I completely agree.

And FYI, Driv3r has been cancelled for GameCube.

I love Nintendo, but a lack of "mainstream" games and third-party support doesn't bode well for the Jap giant.
jamieladronka 13 Feb 2004 23:11
19/20
DoctorDee wrote:


That Res Evil came out on
>GameCube is irrelevant too. It had already been
>out on other platforms. Plus, it takes more than
>one obviously "adult" title to change people's
>minds. Before "adult" gamers switch to GC, they
>would want to see a range of adult tiles. GC
>never had Driver/Driver2 (I know, I know, Driv3r
>IS gonna be on GC) or GTA2/3. Until NFS
>Underground, it didn't even have a decent racing
>game. It had Burnout, but long after the other
>platforms.

Why are you expecting racing games out of Nintendo all of a sudden? They never have had a history of good racing games, sans Mario Kart -- so I dont understand why it has to change now --- like I said, Nintendo has created its OWN market. People will buy Nintendo because they know what they are going to goet. That's all there is to it. If you're mad because some other system has a game that you want for a GameCube, then go buy the other system. Everyone should know what to expect when you buy a nintendo -- good platforming and rpgs, and maybe some other games. NOT racing games.



Portable? The fact it has
>a handle (and a crappy little screen and a
>battery) doesn't make it portable!

Super Smash Brothers? The Mario Party series? Super Monkey Ball? The GameCube was designed with portability in mind -- it's small, compact build and its very lightweight, and yes, in addition to the handle -- it is the perfect system to house-hop with and play games all night.



DoctorDee 14 Feb 2004 15:24
20/20
>Why are you expecting racing games out of
>Nintendo all of a sudden?

Is that what I said? No it's not!

What I said is that if Nintendo want to compete with the other manufacturers, they will have to create a console that attracts publishers to put a full range of games out for it. Otherwise they will become increasingly niche, and eventually will be forced out of the hardware market.

It doesn't matter who the racing game comes from but it has to be available for GC/GC2.

>so I dont understand why it has to change now ---

Because they are third in the three horse race, and if they don't improve their figures soon, it will become a two horse race.

>like I said, Nintendo has created its OWN market.

You said it, but I'm not sure what you mean by it. They didn't create any market, they moved into a market created by Atari, Coleco and Mattel, and made a name for themselves in that market.

Now they are in a market that they share with Microsoft and Sony... there's no "OWN market" about it.

>People will buy Nintendo because they know what
>they are going to goet.

And conversely, they will NOT buy Nintendo if they cannot get most of their favourite games on Nintendo hardware.

>If you're mad because some other system has a
>game that you want for a GameCube, then go buy
>the other system.

I have all systems, including GameCube... But if I was a more typical buyer, who only had one system, I'd do exactly what you recommend, and another system than GameCube... and that's why your arguement doesn't make sense... if enough people do that, Nintendo will not make enough money from hardware, and they will be forced to take the same route as Sega.

Everyone should know what to
>expect when you buy a nintendo -- good
>platforming and rpgs, and maybe some other
> games.NOT racing games.

And if they buy a PS2, they can expect good platforming (Ratchett and Clank, Prince of Persia), good PRG (Final Fantasy), good racing games (Gran Turismo, Need for Speed, Burnout) and good games of EVERY genre. if Nintendo doesn't compete with that.. they are gonna lose their audience... maybe not their "hardcore" Nintendo fanboy audience, but they will not get a share of the millions of "casual" gamers that form the majority of the market.

>Super Smash Brothers? The Mario Party series?
>Super Monkey Ball? The GameCube was designed
>with portability in mind

You seem to be confusing multi-player focus with portability.

-- it's small, compact build
>and its very lightweight, and yes, in addition to
>the handle -- it is the perfect system to
>house-hop with and play games all night.

The GameCube is no more portable (in real terms) than either the PS2 or the Xbox. All of them require you to get near a TV, and a power point.
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