Save your Scorn

Do those predicting or celebrating the Wii's decline have a point?

Published as part of our sister-site GamesIndustry.biz' widely-read weekly newsletter, the GamesIndustry.biz Editorial is a weekly dissection of one of the issues weighing on the minds of the people at the top of the games business. It appears on Eurogamer after it goes out to GI.biz newsletter subscribers.

Only a few years ago, Microsoft was the company that couldn't do anything right in the games market. The original Xbox was widely ridiculed - it was the size of a house, its controllers were designed for gorillas rather than humans - and the company's quarterly reports, each revealing the scale of the gaping money pit in the Home & Entertainment division, were a steady dripfeed of further fodder for the fire.

Soon, though, it was Sony's turn to occupy the stocks in the middle of the village. Around the launch of the PS3, the formerly dominant hardware firm couldn't do anything right - and the slightest misstep was construed as a company-killing disaster.

The game of musical chairs moves on. This year, there's no doubt who's been left standing up when the music stopped. It's Nintendo, the one-time underdog made good, whose powerful position in the market and relentless courting of new demographics has made it into the bete noir of gamers - while its own failure to sell decent volumes of software on the Wii platform encourages many industry types who should really know better to snipe from the sidelines as well.

Giant corporations don't really go in for introspection, so of course, neither Sony nor Microsoft will have pangs of empathy for Nintendo's newfound whipping-boy position - and even if they did, a quick glance at the Scrooge McDuck-style money vaults beneath the company's understated Kyoto headquarters would quickly assuage any guilty feelings. Frankly, rival executives and spokespeople are simply going to be glad that the heat is off them, and keen to stick the boot in where possible.

However, as any platform holder exec will admit (after a few drinks, at least), the wrath of consumers and industry alike does not, as a rule, select its target based on cold, rational logic. The original Xbox, in hindsight, was a pretty good console - whatever you thought of its industrial design, it boasted features and power well ahead of its rivals, and had software like Halo available from the outset. Sentiments run higher over the PS3 at the moment, but the reality is that Sony's missteps with the console have never been remotely as awful as skim-reading websites and forums would suggest.

So, too, is the situation with Nintendo - a situation thrown into sharp relief by the firm's recent announcement of financial and unit sales forecasts, which have rather unfairly provoked a loud chorus of "ding, dong, the witch is dead" from the firm's detractors.

The figures aren't great, but they aren't great by Nintendo's standards, which is a bit like a top restaurant dropping from three Michelin stars to two, rather than having the whole establishment bulldozed and replaced with a McDonald's. A six-month profit figure of three quarters of a billion dollars is still eye-watering and something that most executives in the industry would sell their grandmothers to achieve - even if it is 52 per cent lower than the even more insane profits the firm generated a year previously.

The real concern, however, isn't Nintendo's profitability. Bear in mind, after all, that the Yen is extremely strong at the moment, so every Pound, Euro or Dollar of profit the company generates overseas is contributing less to its bottom line this year than it was last year - not to mention the impact currency changes have on the firm's vast foreign investments. A significant chunk of the profit decline can be explained away in those terms.

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