Flying_Phoenix said:
^^^Except this isn't a philosophy this is business, and in business if you want to expand you do so by almost any means necessary.
Except Sony wanted to expand, and yet it has unsuccessfully sunk billions of dollars trying to do so.
First off the PS3's losses were not in any way, shape, or form were to gain marketshare in the gaming industry but more so the home video (which is far bigger than gaming).
It doesn't matter what industry this is - the principle remains the same.
Sony's recent business shows that sacrificing profit for marketshare is not the best thing to do intrinsically.
Second off sacrificing profits for market share has been SONY's and Microsoft's (especially) bread and butter in business for years (Windows didn't report profit for the longest time for example). Is it the ONLY way to go? Certainly not, but it IS an alternative.
That saying please don't get my words twisted I'm not saying that Nintendo should bleed billions in order to focus on a long term goal, but what I am saying is that they should at least flock over a fair share amount of cash to get things rolling.
This is how the 360 came to be the traditional gamer haven as Microsoft cut deals with companies such as Capcom to get things rolling. Did they take it too far? Most definitely. However did it work? Yes. Are there more cost efficient concentrated ways of doing what they did? Yes.
It seems to me that your argument relies on building third-party relationships being an intrinsically, undoubtedly good thing.
To stop beating around the bush comparing the 360 and the Wii will likely get us running around in circles. Nintendo is far too conservative with third parties as they often are too little too late (late especially) with their offerings. It doesn't matter if your system has an exclusive Grand Theft Auto or Resident Evil, it's 3 years since its launch and those who were interested in those games in the first place have purchased competing platforms that offer games such as those on a regular basis. With the 360 Microsoft does succeed but ends up wasting millions on making deals for games they don't really need. I could give examples but I think most know what games I'm talking about.
Except you're looking at this through the perspective that building third-party relationships is good
intrinsically. To say that Nintendo is conservative because it does not do so is to criticise them for doing something that you feel they have a duty, almost, to fulfill - that they are not doing something which you think they
should.
What I am saying is that view only works on the condition that you think that one should prioritise and prefer marketshare over profits. I am challenging you to consider this action through another perspective, whereby you prioritise profits over marketshare. From this perspective it is entirely reasonable that it is not intrinsically good that one builds third-party relationships, and therefore one cannot criticise Nintendo for not pursuing them (unless this, in fact, turns out to impede their profit-making abilities).
I am not saying that it is right to prioritise profits over marketshare (although inevitably, one will have to choose one over the other). Rather, I am arguing that one cannot criticise Nintendo's goals unless one proves that, without a doubt, marketshare is more preferable than profit.
What I think Nintendo should do is try to find a way to get games with significants on their platform within a 18 months of the platforms launch. If Wii 2 launches two years from now and during it's first year and a half comes many games as relevant as Lost Planet and Dead Rising were for the 360 as well as working on getting as many people on board with multiplats I think it's safe to say that the platform won't have any trouble in garnering traditional third party support.
Everyone is looking at this through the best case scenario, where Nintendo gets these games on the Wii, and suddenly a healthy 18-35 male market grows and is sustained by external developers and publishers, who are making lots of money. But what if this didn't work? What if Nintendo sunk millions and billions of dollars into games, that, actually,
didn't convince consumers to choose a Wii over a 360? Would Nintendo have been right to pursue this action then?
I would argue that, if we view this through the perspective of "profit is best" (as Nintendo seemingly does), this would not have been the best route of action. Why? Because one would have risked millions of dollars needlessly. Why spend money assuring something that is going to happen anyway? Why spend money getting consumers to value motion controls now when they eventually will in the future?
Please note that I'm not saying that Nintendo was right completely to refuse the olive branch to third parties. Perhaps it would have turned out that they would have gained lots of money, so by not pursuing this option they in fact
are impeding their profit-making capabilities. All in all, I don't know, and probably never will. Ultimately, all I want to suggest is that to Nintendo, at least, what they did
made sense. And to suggest that it didn't requires one to argue that one should prefer X over Y, which I would argue is nigh-on impossible.
As for is profit worth sacrificing for market share? Of course it is. That's business 101.
This is rapid growing industry and all the companies want as much of that as possible. And the safest way of going toward that goal is achieving marketshare since when someone has their finger wrapped around a demographic its tough for someone else to overcome it.
So you're essentially saying that Nintendo's business is, what,
bad business?
Now people often point to SONY as a posterchild of why this isn't worth it. The PS3 alone has put the entire Playstation project in the red. Yet this is irrelevant. The PS3's misfortunes were guided by SONY's arrogance and that alone.
Except to me, this begs the question. Why was Sony arrogant? Because they believed that consumers valued technology. As a result, they designed a console that would contain lots of technology but be very expensive and would lose them money. Why were they willing to do such a thing? Because they believed that sacrificing profits to marketshare was undeniably a good thing.
Unlike Nintendo, it is easier to say that Sony did the wrong thing because we can see more easily how their actions have affected their intended goals. However, like Nintendo, I would argue that to them their actions
made sense.
So let's change the subject of a company that didn't get blinded by arrogance when using this philosophy. Microsoft spend billions on trying to get everyone on board with Windows while Apple solely focused on profit. Now that the computer industry is so developed who seems to have had the last laugh as they now own a near monopoly on the OS industry?
You
don't think that Microsoft wants to be making as much money as Apple?
(In all honesty, I know very little about the computing industry, so I can't debate much about it.)
I'm not saying that Nintendo should throw money around like crazy, but I am saying is that they should throw enough around to main growth and capture as many markets as possible to secure themselves as #1.
What you're saying is that Nintendo should evaluate risk and make rational business decisions. I agree.
However,
how you evaluate something and
how you rationalise a business decision relates entirely to what your priorities are. You're essentially arguing that Nintendo should not prioritise profits over marketshare, and I'm asking, "why?" Why is prioritising marketshare over profits intrinsically, indubitably, good?