Wii profitable from day one
"No ulterior motive" - Nintendo
Nintendo of Canada exec Pierre-Paul Trépanier has told our sister site GamesIndustry.biz that the company is already raking in the cash following yesterday's launch of the Wii.
"We make a profit on the system itself," Trépanier said. "Unlike our competitors, we don’t have ulterior motives; we’re not in it to sell HD TVs, or to become the operating system in the living room or anything like that.
"We’re in the gaming business, and we have to make money from everything we sell - and we are making money from day one on the Wii."
According to Trépanier, Nintendo is still on track to meet shipment targets for the Wii - and he confirmed that North America will get the lion's share.
"We have 4 million units ready to go, which is something our competitors have struggled with... Historically a bit more than half of our worldwide shipment would go to North America, I think that’s probably a good estimate."
But despite the healthy stock supply, Trépanier conceded, the Wii is still likely to sell out this Christmas: "We do estimate there will be supply issues within the first few weeks."
However, he continued, "We’re receiving a constant supply. Every week there is a flow of product to the marketplace. The extremely complex and sophisticated supply system ensures that product will be delivered quickly to the stores that need it.
"We have a good supply management system that evaluates fairly well the demand and pull from each individual store depending on its size, class, location, seasonality and things like that," Trépanier explained.
"We’re not putting fixed numbers for stores; we really assign quantities based on historical pull."
Trépanier went on to defend Nintendo's decision to launch the Wii just two days after PlayStation 3, stating, "The timing is great as it’s pre-Thanksgiving, which is a very important commercial consideration in the United States, and it’s great for the holidays.
"And the great news is the feedback we’re getting from media and consumers and all of our research is that the Nintendo Wii really is the pretty girl at the party this year."
Trépanier's comments came at a Wii launch event held at the Ontario Place theme park. Members of the press, public and games industry were all invited to attend, and the response was positive despite long queues to play the most highly anticipated titles (with Ubisoft's Red Steel proving particularly popular).
Trépanier declined to put a figure on the number of Wii units shipped to Canada, but did say that the territory represents "about ten per cent" of the North American market. Analysts have estimated that as many as 200,000 consoles were available in Canada at launch.
"Canada is more important than its actual market size," Trépanier said.
"Not only is Canada 10 per cent of North America, which is significant, but the Canadian subsidiary of Nintendo is widely regarded as one of the best subsidiaries in the world on a whole bunch of measures including profit per employee and market share."
The Nintendo Wii will launch in Japan on December 2, six days ahead of the European release.
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Comments (78) Latest comment 5 years ago
Comments threads automatically close after 30 days, but please feel free to continue chatting on the forum!
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"We’re in the gaming business, and we have to make money from everything we sell - and we are making money from day one on the Wii."
Actually, he's right.
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And so on and so forth.........
Good on them for having a realistic product. Im glad MS didnt use this strategy or i could never have afforded a 360, but still, fair play to them.
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The sole aim for ALL these companies is to increase the value of their stock any way they can.
Get off your high horse Nintendo.
The counter arguament of course is "Well, if I just buy a 360, don't invest in any other technology that could lead to an alterior motive have I not basically got more for my money than a Wii? Because, as you say, you are making a profit on the Wii, and MS/Sony are making a loss on thier units. Therfore I summise that if I were to just buy the consoles and the games, better "value" would not be the Wii."
For a fucking start I can't watch a damn DVD on this Wii.
Oh, and there are tangiable reasons your hardware is deliverable on the scale you mention.
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But no they have to boast and say we cashing in, right NOW!! LOL!
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Look at the DS, it does nothing except play games, the PSP does everything, the DS has pissed on it regarding sales though.
Do one thing well not a lot badly...
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Shame on them for charging £40 a game when they're already making a profit on the consoles.
I'd love to pay more up front for the hardware in exchange for cheaper games, but Nintendo want us to pay more up front for the hardware AND have expensive games.
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/runs.
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But, again, if most of you customers wont use it and you can shave off $5 per unit, then why not?
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Shame on them for charging £40 a game when they're already making a profit on the consoles.
I'd love to pay more up front for the hardware in exchange for cheaper games, but Nintendo want us to pay more up front for the hardware AND have expensive games.
Oh, dont get me wrong, i probably wont buy a Wii for almost that exact reason, but you cant fault them for having a solid business plan. People will pay £40 a game and they know it. They are also charging as much for the console as they can get away with and thats not including 'optional' extras like controllers.
But, ultimately (and as i said during the clover closure) gaming is not charity work. They will charge as much as they can for as long as they can and laugh all the way to the bank while doing it.
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[link url=http://forums.somethingawful.com/showthread.p hp?s=&threadid=2183346
]http://fo rums.somethingawful.com/showthr...[/link]
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Bend over and take it, you love it
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I know it's business, but surely this isn't something they want to advertise to buyers, is it?
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/proving difficult
/perserveres
/succeeds
/but only just
/herbal bath...
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There's nothing especially solid about making a profit on the hardware, in many ways it's risky because it'll reduce sales. The PS2 did okay but it was sold at a loss (at least to begin with), and so do all the makers of "free" phones you get from phone networks.
In fact I think Nintendo has missed a huge chance with the Wii by making it so expensive and the games so expensive. People new to games (which Nintendo keep going on about) aren't going to suddenly be converted to gaming if the console costs £180 and the games cost £30 to £40, it's too expensive. Those prices are reasonable to existing gamers, but not to the average non-gamer.
"They will charge as much as they can for as long as they can and laugh all the way to the bank while doing it."
They can charge what they like, but that doesn't mean that charging more brings in more profits. Profits depend not just on margins (the profit per sale) but volumes too (the number of sales). If you put the margin up, the volumes go down, and the amount you lose because of reduced volumes can wipe out the amount you gain because of increased margins.
Videos have a smaller margin than games, yet the video industry is larger than the games industry because they sell in such huge volumes, and they sell in such huge volumes because they only cost about £15. Games need to get closer down to this level if they want to attract similar-sized audiences.
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I am just hoping Wii won't be like DS. Now, don't get me wrong, I like DS, but there's only a few really good games for it. Especially games that have longer lasting appeal. There are no good RPG games and even Zelda is taking forever..
Trepanier is saying Wii is the pretty girl in the party. Well, hopefully it's not as shallow as the pretty girls usually are.
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==========
Erm... isn't the game industry larger than the film industry and the TV industry combined (or so I heard)? Also, Wii games (on play.com at least) cost £12 less than PS3 games. Not trying to be a fanboy here (hell, I'm not even sure I'll buy a Wii), but I find it somewhat strange that people are surprised at Nintendo wanting profit.
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£40 will be RRP for the Wii titles - watch 'em come in under that in the real world....
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I think I'll stick to the Cube version of Zelda & my 360 thankyou very much !
PS. From a former Nintendo fan boy, now XBox & 360 fanboy.. Nintendo you let us down so badly with the Cube broadband adapter!!
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That's exactly what he said! Read the fucking article next time!
The "ulterior motive" (that they don't have) is clear in Sony's case: Push BluRay and HD movies to sell TVs, and also in Microsoft's case: Become the main provider of the "living room OS". Their consoles are like trojan horses for that case, and so they subsidize heavily. That's really all he said, and like SeesThroughAll put it "Actually, he is right"
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ROFL, this thread is going to be priceless...
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We've known for a long time that the Wii doesn't contain cutting edge components and thus would be cheap to make - and we've known for a long time that Nintendo have no intention of passing that saving onto consumers.
This isn't even the first time they've bragged about it.
Seems like an odd thing to be rubbing in gamers' faces, but OTOH it's nice to see that Sony don't have a monopoly on saying stupid things.
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Only potential sales. If you're going to make 5 million units of something, price it at a point where it will sell 5 million units, not at a price that might have sold 10 million units - you'll make a loss, disappoint 5 million users and create an eBayer's Paradise.
Yes, Sony, I am looking at you.
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Cheap, tiny and with nice gadgets!
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LOOOOOOOOOOOOOOOOOOOOOL!
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all i can say is: bastards!!
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im surprised nintendo admitted to this, it makes no business sense to tell people that your getting all the benefits of the transaction
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ie. 360 and PS3 are, pound for pound, better value.
Well done Mr Nintendo, the 360 looks an even better option for many after reading that I'm sure.
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But, again, if most of you customers wont use it and you can shave off $5 per unit, then why not?
I think it's actually a licensing issue more than anything. It's not the technology that would put the cost up, it's licensing. You have to pay X amount to somebody if your device plays DVDs
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a)doesn't like the wii at all (complained about the controls ALOT).
b)He would rather be masterbating over... sorry playing GeoW than playing Zelda (he complained about low res textures on Zelda...on the wii... WTF!?! ).
In comparison to IGN who was like a horney teenager locked in Playboy Mansion for the night.
I'm just curious on EG's stance on this supposed-to-be-better-than-OoT-Behemoth Epic game.
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/asseses situation
/pulls out minigun
/kills all frothing-at-the-mouth rabid MSony fanboys
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I'm don't think I read the comments that you were quoting, but for the multinational manufacturer of a gaming console to want to produce the most successful gaming console isn't exactly ulterior
@ everyone else regarding price. Nintendo have widely been reported (by Eurogamer / gamesindustry in addition to others) as having wanted to keep the retail price down. We're being milked here, because British consumers are always milked (by both companies and the government), but I suspect it's largely down to retailers for keeping the price inflated, rather than Nintendo itself.
And also, I was pretty pissed off when I saw games prices at £40 a piece. Nintendo had bleated on and on about keeping prices down, which seemed hypocritical, but most online stores are doing all games for no more than £32.99 with free delivery (e.g. play.com), so that pretty much assuaged my irritation (especially considering those are launch prices).
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http://en.wik ipedia.org/wiki/Trepanning - weird.
BTW - Got my Wii on Sunday morning here in the US... bought it primarily for Zelda, which is magnificent. The pack-in sports games are way more fun than I anticipated. The console UI is pretty neat, and I really want to try out some of the "social" aspects of it... not sure where to start though.
Red Steel is ok-ish, not amazing... here's hoping more decent content comes down the pipe pretty quickly.
Compared to my 360, the gfx are on the < side of "poor". But in the fun stakes - it's way up there. Love it!
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Ulterior motive - can't believe that any of you doubt this with Sony and MS. MS would just looovvve to own your living room and Sony really are desperate to push the HD thang after the relatively dysmal sell-through performance of HD TVs. I'm only surprised that the PS3 doesn't make tea and give you a handjob in the morning as they've plumbed so much other superfluous shit into it!
Nintendo making money - well, hard to criticise a company for attempting this. Don't get me wrong, I think the Wii is outrageously overpriced in the UK but so is everything in this shithole country ...
Better 'value' from the other consoles - maybe for some of you but for me, my year of 360 has been pretty shit. I don't have a HD TV (47" SD which I'll be replacing next year cos it's due - 5 years old - but would never do JUST for games given it's going to cost me £2.5k to do it!). Therefore, the HD ability is useless, the DVD player is the 3rd one in my house, the ability to playback music and movies on my TV is cool except that I can't hear anything cos the 360 is so bloody loud and I can't stream movies without giving M$ yet more cash to extend my PCs Media Centre (or something). So, its a games machine then and nothing else for me and I suspect lots of others too. As I've alluded to above, the PS3 is even worse in this respect. Blu-Ray? What for?! How much???!!!
Nope, give me a GAMES machine any day, I'm not interested (yet) in the other shit, especially at the uber-price it weighs in at.
Come 08/12/06, I'll be playing Zelda and around the end of the year, I may even have finished it and it'll be 10x better than anything I've experienced in 12 months of 'next-gen gaming' (pulleeezzz). When I'm done, I'll take a few days off then start it off from scratch again. Now that's value for £39.99 (£29.99 at Argos!)
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I feel more suspicious if the reviewer gives a game 100% (and Zelda TP has a few already) because no game is perfect, and not even Zelda can claim that, because if it has issues or slight problems, they can't be papered over just so the review gets 100%...by giving a game 100% your basically saying that this game is perfect there is nothing wrong with it at all...but we humans aren't perfect and we reflect this in the things we build (or program)....
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I doubt that the Wiimote and Nunchuck controllers are costing anywhere near as much to make as their price point suggests, either, and most US retailers apparently ran out of controllers before they ran out of Wiis, so it's safe to say most of the early adopters were buying 3 extra.
I don't see why they need to gloat to the media that they're taking their customers for a ride, though.
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if you dont care about "all the other shit" why are you complaining about your problems in trying to use "all the other shit"
if you dont have an hdtv, why did you get a 360 knowing it would only be put to full use with an hdtv
if you cant hear the movies and tv over your 360 you dont have a very good tv, even - they have speakers built in usually!
if you cant figure out you can put movie files on a memory stick, a hard drive, a cd, a dvd or stream through windows media player, oh well
and finally, why did you say the important thing is games and yet you failed to mention games when talking about your 360...
oh well.
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He gave it 8.8/10!!!!
>gee somebody didn't like Zelda
He did like it, he gave it 8.8/10!!!
Yes it has issues, story so far isn't great, graphics are obviously gamecube standards, the wii controlls dont ALWAYS work as well as you'd like (but 99% time do).. But it's STILL an ace game.
I'm a nintendo fanboy, so far i've put in 10 hours on zelda, and so far i'd say that review is spot on.
BUT it's STILL the best game i've played all year.
You guys really need to get over this "lower than 9.9/10 means the reviewer thinks its crap" attitude
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To be fair.. erm.. nope too easy, and itd wind people up too much
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Okay. First up, oh no! Nintendo in "We're making a profit" shocker! Seriously people, get your heads out of your arse for one minute and look at it from a financial and stockholders standpoint. If they're selling it for $250 and it costs $100 to make, then Nintendo are more or less winning. You might think it's pricey but if people are buying out all the systems - I think the argument suddenly starts to crumble. If they are willing to pay, then Nintendo can ride out the honeymoon period.
When that is over, yes, they'll need to drop the price a bit. The arguments here state that 360 and PS3 have further to drop financially. Which may be true, but they are taking losses on each system, so how far can Microsoft and Sony drop the cost of their machine before it becomes financially unviable to drop it further? Remember that there is a threshold on ALL systems as to far their pricepoint will drop. PS2 dropped much more in its later stages because the components and manufacturing process became that much cheaper and efficient - this isn't going to be true of the current wave of consoles for a year or two.
Yes, Nintendo is slapping people across the face on price-point a bit. Okay, a lot. But by the time they need to start taking a hit on the profits, they'll have plenty in reserve - unlike the PS3, and whichever way you slice that one it's going to be making losses for a while to come.
In short, yeah, not so good for consumers. But it's the bloody consoles launch and people are willing to part with that money. When it does settle to a sensible price point (and I assume it will within the next 6-12 months), they'll have burned through the early adopters (who will be the ones buying out the stocks) and THEN Nintendo can begin pushing it to it's new audience.
Not good for consumers, no. But everyone is trojaning in something. Face it, this next generation of gaming is going to be a bit hard to stomach for a while. Pop an alka-seltzer and DEAL WITH IT!
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As for ulterior motives, I don't think MS have bundled Windows into 360. In fact, you can run 360 in your house even if you own a Mac? What has that got to do with anything?
And for Sony, well I didn't have an idea that PS3 only worked with Bravias and not with 13,000 other brands of HDTV available! Thanks Mr Nintendo, you saved us all from a big rip off!
Lately Ninty bigwigs have become spectacular whiners and dare I say it, SOBs - somehow they seem jealous of MS and Sony's success in their respective fields. They better stick to actual games. GameCube launched with a similar warm glow, and look where it is today.
And by the way, I think a 360 or a PS3 is spectacular value for money, considering the hardware you get as well as the games lineup that will ultimately grace these consoles. So gloat all you want, Mr Reggie and Co - I will only get a Wii when it comes below 100 quid and that shouldn't take long.
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But, in saying that scores shouldn't be used at all.
@Talha, are just trolling or where you born dumb?
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For the record, I have no VENOM against Nintendo. If anything, my venom is against stupid remarks be it from Nintendo or Sony or MS, and that claim can be verified easily.
As for being a troll or being dumb, I don;t think saying anything against Nintendo constitutes both of those things. Anyone who thinks that must be so, so sad and dare I say it, both of those things.
Unlike you folks I won't call names here, but seriously, you guys think marketing to young kids as the focal point instead of 'greasy young men' like me is to be profitable? One word: Gamecube.
To quote Aerosmith: Dream On.
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But if they were to come around, unannounced, and start having a meeting while me and my wife are watching corrie... I should say "Oi, Microsoft.... NO!" etc.
And in relation to to the original article - so what. Nintendo can do what they like, and I'm sure it will work reasonably well for them. But just to counter the; "we're a games company" comment - why the hell do they want to be in the hardware market at all? It's folly; expensive, low margins, complex - and there's a lot to lose. If they're in the business of making the greatest games in the world, then why not make them for all systems and earn even more cash? Wanting to control the platform makes them as guilty as the next man.
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But I still pre-ordered one.
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Wiiiiiiiiiiiiiiiiiiiiiiiiiiiitarded.
Zelda maybe great, and i'll be sure to purchase it for my cube.
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By the way, how old are you? And what did you do with the grease in your time?
Edit: For heaven's sake get off those Zelda scores! 8.8 means a must-have game, and if you folks are so inclined, check out the score on Metacritic.
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Because a big chunk of their profits would then disappear in licensing fees etc. More money to be made when you own the hardware, especially when you're selling the hardware for a profit.
I thought Nintendo said they were getting out of the arms race and no longer competing with MS and Sony? If so why do they keep comparing their strategy to said companies strategies when by their own admission the products aren't comparable?
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I run Macs at home, I own a 360, MS will not get me with their "ulterior motive" as I could not imagine switching back to Windows. Therfore, have I not gotten better 'value' for the 360 than I would have for the Wii?
Personally I find comments like "we are making a profit on our units while everyone else is making a loss because we have no ulterior motive" insulting to me as a discerning customer.
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Anyway kudos to Nintendo for their near-simultaneous worldwide launch, something Sony couldn't achieve, and the fact that my pre-order for the Wii has now been confirmed. Roll on 8th Decemeber and Zelda Heaven!
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I think he's trying to emulate reggie or something...
Just that he's not as capable...
Anyway the zelda/gamespot ordeal then...
For now I reserve judgement...I will be back when I've actually played the game...
As everyone should right?
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Good point but I'd say that Wii Sports is more of a tech demo than a proper game so I doubt it would sell for £30 at retail, £20 or less maybe. It doesn't even come in its own case apparently. Still its a welcome addition as it means that everyone will at least have something to play if they only buy the Wii and nothing else.
But remember that the Wii comes with its own little stand and that's the kind of thing Sony or Microsoft would sell for a tenner!!! /wink
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They said the Wii and it's games would be cheap because of the crappy hardware, no DVD playback and low development costs. In reality they're simply so greedy that the Wii, essentially, costs nearly as much as a core 360. And it's games (at £40) cost as much as many 360 games (inc. Gears of War).
I think the success of the DS has really gone to their head. I hate to say it, but the Wii deserves to fail. Not because it's a bad console (it looks very interesting) but because of how Nintendo are selling it, and ripping off customers. You aren't going to woo non-gamers by taking them for a ride Ninty!
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[link url=http://arstechnica.com/news.ars/post/20061116-8239.html a>
]http://ar stechnica.com/news.ars/post/200...[/link]
Making a buck on the Xbox 360
It's a gloomy picture, but there is light at the end of the tunnel. When iSuppli tore down an Xbox 360 around this time last year, the firm estimated that Microsoft was losing $126 on each 360 sold. Microsoft is whistling a much happier tune now. Revised component costs for the Xbox 360 indicate that costs have dropped to the point where each $399 Xbox 360 sold costs $323.30 to make—leaving Microsoft $75.70 in the black on each system, before marketing and other costs are figured into the equation.
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@ Nige: Thanks for the Enfield reference.
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Company announces "we make profits".
Gamers flip out and whine about how company is telling them bend over and take it (conveniently forgetting the element of consumer choice).
Rinse and repeat.
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Granted - but I think the VAST increase in the size of their potential market could make up for that loss. I also think losing revenue from licensing is less of a bind for Nintendo than it would be for, say, Sony - who retain a lot of 3rd party publishers for donkey's years.
What Nintendo do well is make a few great titles, that sell millions of units. This model is the holy grail of publishing, and something that nobody else has really nailed as well as the Ninnies.
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I'm not that bothered about the price of the Wii. It's 20 quid more expensive than I hoped it would be but it's not a big deal.
The software prices would be better if they were £30 but they aren't too bad.
I think Xbox 360 software costs too much though I do believe it to be the best value console overall.
The PlayStation 3 is FOUR HUNDRED QUID whichever way you look at it!!!!!
The thing that gets me about the Wii is the costs of the controllers. Now Nintendo have always been bad for this. They've always had costly add ons, be it controllers or memory cards or whatever. Av cables, you name it. They've always costs far too much and I feel the Wii remote and nunchuck is a bit steep.
It costs more than a new game!
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- we innovate and our games are more fun (might be true?)
- we want to make more money (ehmmm....)
All that nonsense about ulterior motives is just clever playing into the sentiment that is going around against Sony right now, since that is their direct competitor at the moment (Xbox 360 having flopped in Japan).
In reality the Wii is expensive for what it offers in comparison to the PS3 and Xbox 360. This isn't as obvious with the PS3, but very obvious when you compare the price with an Xbox 360. That controller isn't $150 worth.
In the end, most people spend more money on the games than on the console, so it is interesting to see their business model on that.
Indeed Nintendo, if you make good money on the consoles, what about letting go of all those dev fees you placed in the past and having an open (offer and price) Wii games market Nintendo? I think the Wii lends itself very well for small pasttime games, how about opening that to any indie developer for only the price of the hosting on your online network?
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I think you mis-spelt ps3 there.
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no he got it right first time fanboy...
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So it's a personal thing. Personally I aint pay 600 dollars for something that i cant notice the graphical difference of when compared to my much cheaper 360
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I'm an old-school gamer at 40 years old so I'd be in denial if I said I didn't have a soft spot for Nintendo and Zelda games et al in the same way I guess a lot of you younger guys probably have for Halo/Res4/GTA/whatever.
That said, the point I was making about value is that it's subjective - there's no value for me in stuff that I can't use or doesn't add to my GAMING experience, i.e. HD graphics (which actually cause me problems on my SD TV I suspect, as big as it is - downscaled graphics introducing aliasing into the graphics that have just been AA'd in the box etc!), movie-streaming that you need extra s/w for, oh and it needs to be in WMV format too (how big's your WMV library then, huh?!) and so on. Of course, it's 10x worse with the PS3 and oh my life, what a cost!
So yes, slightly N-tinted glasses on me for sure though they've done plenty of gouging of punters in the past when they were on top.
You know the big thing about all this though? Check out the Wii sales, they're enormous already for something that has less processing power than my mobile phone and in pure h/w terms is diabolical value - maybe there's a lot of people who feel they're missing something (fun, per chance?) from their next-gen experience so far, so perhaps I'm not exactly alone in feeling repelled by this next gen hardware war ...
Bring on the software war ...
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if you dont care about "all the other shit" why are you complaining about your problems in trying to use "all the other shit"
if you dont have an hdtv, why did you get a 360 knowing it would only be put to full use with an hdtv
if you cant hear the movies and tv over your 360 you dont have a very good tv, even - they have speakers built in usually!
if you cant figure out you can put movie files on a memory stick, a hard drive, a cd, a dvd or stream through windows media player, oh well
and finally, why did you say the important thing is games and yet you failed to mention games when talking about your 360...
oh well. "
I got a 360 on release as I'd, quite independently, decided to get back into gaming after a very long lay-off. It just so happened that the 360 was being released around that time so I figured I'd just go for the newest thing around, simple as that! So, things like HD graphics were neither here nor there but I knew I'd still be looking at the best graphics available at that time and the next-newest console was pretty old so .........
Yes, I can hear over the 360 but it is VERY, VERY noisy - I bought on release so maybe some of you haven't heard/felt the uber-decibels that a release 360 knocks out lol
Burning movies to disk etc to watch? Sure, I have 2 DVD players already - like I said, I don't need a 3rd one drowning out the TV ...
Re games - I've spoke at some length about my disappointment at the quality/style/variety/imagination/whatever of the first-year 360 games elsewhere so maybe I thought I'd done enough on that for that post - anyway, bottom line is I don't seem to like the Western (no, let's be honest here, American) style of video games, i.e. kill, kill, kill, guns and more guns, one T/FPS after another. Yes, there are some exceptions but not many and yes, some contradictions to my overall feeling like COD2 being amazing for me but only probably because of the WWII setting (something I'm interested in, enough to drive me to doing the lot on Veteran! Eventually!). I haven't played another game that motivated me enough to finish it and a few top Live MP sessions aside, I've had very little real fun ...
That said, I am aware that there are many, many fascinating sounding games lining up on the 360 over the next few months so I certainly won't be ditching my 360. Rather, I think the Wii-360 combination is ideal for me and I'll pick and choose the best from both as and when they're released
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