Nintendo profitability

[Tortolia]

Here.

In this light, it’s odd how few game commentators seem to understand just how profitable Nintendo really is. With a net margin of over 20%, Nintendo is a financial rock star. Just by way of comparison, General Electric, that monster global conglomerate whose executives write the books about corporate leadership that other Fortune 500 execs read, clocks in with a net margin of 11% Nintendo’s business engine is so efficient that even though they sell far less than Sony, they make, bottom line, about as much as all of Sony, Yes, that’s right. Little Nintendo generates about as much cash as giant Sony—electronics, movies, the works.

[Don]

I'm guessing most of the profit comes from Pokemon. I don't know if you can call producing Pokemon games as an efficient business engine. It sure is profitable, though.

[Eric]

It's no secret that Nintendo makes a large profit on their stuff. All that in-house & 1st party stuff is gold.

[Zeus]

I'm guessing most of the profit comes from Pokemon. I don't know if you can call producing Pokemon games as an efficient business engine. It sure is profitable, though.

It's much more than that. They also are probably the best at keeping production costs down (maybe now you know why there's no speech in their games?) thanks to the experience, management, and initial outlay they've put down. Also, they make a profit on each piece of hardware sold on top of the software right from the inception of the hardware (GC, GBA, SP, DS). If I'm not mistaken, Sony's only been able to turn a profit for a year now. And their first-party games sell like mad. And they've got tons of cross-promotions which they benefit off of.

And they have Pokemon :-)

[Julius Seeker]

They have been consistently rated one of the top businesses in Japan for the last twenty years, often hitting #1. Yamauchi is one of the wealthiest people in the world due to his success with Nintendo.

I believe that the profits come from the fact that they release a ton of software and each one almost always sells a million worldwide.

Pokemon is only one piece of the pie. The series is about as successful as Dragon Warrior, but Square Enix is only about 1/15th the size of Nintendo. It's a 600M dollar company vs an 8 Billion dollar company. The difference is that Square Enix only has Dragon Warrior, and nothing else really since Final Fantasy titles only come out once every 5 years now it seems.

[Kupek]

In several respects, I view Nintendo as the Apple of the console world. They have strict standards control, more visually appealing hardware, and despite having a smaller market share, high profit.

[EsquE]

In several respects, I view Nintendo as the Apple of the console world. They have strict standards control, more visually appealing hardware, and despite having a smaller market share, high profit.

With Sega out of the picture, they're really the only pure gaming company left...I'll never be an early adopter for a Sony or Microsoft system, but I'm pretty sure I'll be there on day one for a Nintendo console because you're guranteed to get satisfaction. I used to have problems with their strict guidelines because I was a Sega fan and wanted to see more third party freedom, but looking at things now they may have had more foresight than I gave them credit for...

[Lox]

In several respects, I view Nintendo as the Apple of the console world. They have strict standards control, more visually appealing hardware, and despite having a smaller market share, high profit.

With Sega out of the picture, they're really the only pure gaming company left...I'll never be an early adopter for a Sony or Microsoft system, but I'm pretty sure I'll be there on day one for a Nintendo console because you're guranteed to get satisfaction. I used to have problems with their strict guidelines because I was a Sega fan and wanted to see more third party freedom, but looking at things now they may have had more foresight than I gave them credit for...

Yeah, that's how I usually feel when it comes to the new consoles. The only reason I got a PS2 first was because of GTA3. I have a feeling that I'll be picking up a Revolution before a PS3 this time.

[SineSwiper]

In several respects, I view Nintendo as the Apple of the console world. They have strict standards control, more visually appealing hardware, and despite having a smaller market share, high profit.

That's mainly from leeching lots of money from their high percentage of zealots. Ever since Sony took the console lead, Nintendo has been forced to rethink their price strategy. (Still the best comparison: Chrono Trigger @ $75 and FF7 @ $45) But, they have gotten away with a lot of stupid decisions that would have crumpled lesser companies.

The comparison with Apple is good, though instead of worry about prices, they just seem to find ways to reinvent themselves, while still charging a shitload for their products.

[Kupek]

That's mainly from leeching lots of money from their high percentage of zealots. Ever since Sony took the console lead, Nintendo has been forced to rethink their price strategy. (Still the best comparison: Chrono Trigger @ $75 and FF7 @ $45) But, they have gotten away with a lot of stupid decisions that would have crumpled lesser companies.

Come on, Sine. You know why CT was that much more expensive than FF7. CT was made with a cartridge, and at the time, it was the largest memory size (32 megabit/4 MB) used. FF7 was on CDs, which are far less expensive to make. CT was more expensive because of higher manufacturing costs - Nintendo and Square didn't get more profit off of it.

The comparison with Apple is good, though instead of worry about prices, they just seem to find ways to reinvent themselves, while still charging a shitload for their products.

I don't understand your point. GC games cost the same as PS2 and XBox games, and the GC itself is $50 cheaper than an XBox, and $80 cheaper than a PS2.

[SineSwiper]

Come on, Sine. You know why CT was that much more expensive than FF7. CT was made with a cartridge, and at the time, it was the largest memory size (32 megabit/4 MB) used. FF7 was on CDs, which are far less expensive to make. CT was more expensive because of higher manufacturing costs - Nintendo and Square didn't get more profit off of it.

Whatever. And that's why they charged $60 during the N64 days? Please. Cartridges held less data, much less, than CDs. With the plastic and chips, they should be, at the very least, the same price if not cheaper to make than CDs.

I don't understand your point. GC games cost the same as PS2 and XBox games, and the GC itself is $50 cheaper than an XBox, and $80 cheaper than a PS2.

Actually, I was talking about Apple. Nintendo has been forced down to reality because of their lack of a lead now, though they can still get away with a lot of other things, like surviving after the miserable failure known as N64. Apple is too stubborn, and their zealots are too misguided/brainwashed, to reduce their prices, much less pay any sort of attention with their competition. Nintendo still has parents with no devotion to them (and still hold the checkbook), so they need to keep them happy.

[Kupek]

Whatever. And that's why they charged $60 during the N64 days? Please. Cartridges held less data, much less, than CDs. With the plastic and chips, they should be, at the very least, the same price if not cheaper to make than CDs.

Seriously, Sine, think this through. Manufacturing costs aren't affected by how much data can be stored, but on the materials used and the complexity of making the device. A CD is a platter of platic with pits engraved with a laser. A cartridge is basically a stick of proprietary, read-only RAM encased in plastic. A cartrdige is a more complex device that requires more material. As for why N64 cartridges cost less than some late SNES cartridges, they probably got better at manufacturing them. Technology, as it is wont to do, advanced.

Actually, I was talking about Apple. Nintendo has been forced down to reality because of their lack of a lead now, though they can still get away with a lot of other things, like surviving after the miserable failure known as N64. Apple is too stubborn, and their zealots are too misguided/brainwashed, to reduce their prices, much less pay any sort of attention with their competition. Nintendo still has parents with no devotion to them (and still hold the checkbook), so they need to keep them happy.

Apple computers are not more expensive than PCs. I've priced Macs and their PC equivalent at Dell, and they cost just about the same. However, Dell (and other PC manufacturers) have finger grain options; that is, you can buy a stripped down computer for very cheap.

You really have an irrational dislike for Apple. We have 15 professors in our CS department here. We replace computers every three years. About ten of the professors here chose to get an Apple (either a Power Mac or a Power Book) instead of a Dell with Linux.

[Don]

Nintendo makes money off the cartirdge sales which is why it didn't go to CD. So yes, the cart costs could've been lower. It won't be as low as a CD, but it could have been lower than what they were charging for.

[SineSwiper]

Apple computers are not more expensive than PCs. I've priced Macs and their PC equivalent at Dell, and they cost just about the same. However, Dell (and other PC manufacturers) have finger grain options; that is, you can buy a stripped down computer for very cheap.

If that's actually true, then it's recent and out of extreme surrender from Jobs. The iPod still started off as a $400 product, with $200 batteries that break after six months. (Apple is getting a sweet deal out of that lawsuit, BTW.) I've seen Apple desktop machines as high as $3000. I can't even think of a PC for that price without getting into the quad-processor server-based boxes.

The Apple computer has always been a higher priced product for as long as I can remember. How else can they maintain a 10% or so market share and still be making a sizable profit?

You really have an irrational dislike for Apple. We have 15 professors in our CS department here. We replace computers every three years. About ten of the professors here chose to get an Apple (either a Power Mac or a Power Book) instead of a Dell with Linux.

Because every big thing they do is an act of hypocricy:

1. Apple bitches about the "Wintel empire", while continuing their close-ended hardware and close-sourced OS. (Only in the recent future did they change their OS, but it was mostly an act of survival and attention whoring.)

2. Apple bitches about Windows stealing their look-and-feel, when it was they who sold the rights for the look-and-feel to them in the first place, not to mention the fact that Apple stole the look-and-feel from Xerox. (I also find it fucking ironic that MS used the defense that they were copying off of Xerox on some of their features.)

3. Apple invents the iMac, a total gimmick in a box, complete with five different colors. WHEEEEEEE! Uneducated people buy them in droves because of the pretty colors.

4. Apple's advertising campaigns make me want to kick the shit out of Steve Jobs. All the while I'm saying "So why the hell don't you buy a PC and do the same thing?!"

5. The one-button mouse. Put all of the petty excuses behind, because I've heard all of them. It's still a stupid idea.

6. The iPod, which I've explained, and iTunes, their "solution" to people's gripes about the CD industry, in which they charge almost a CD's price for an entire album.

Mostly though, it's the image that they are sooooooo cool, while they market a computer for fucking retards. Build a device that even an idiot can use, and only an idiot will use it. The close-ended hardware is another big beef of mine.

[Zeus]

I'm responding to both of you at once here, so be patient....

Whatever. And that's why they charged $60 during the N64 days? Please. Cartridges held less data, much less, than CDs. With the plastic and chips, they should be, at the very least, the same price if not cheaper to make than CDs.

Not at all. CDs have no mechanical parts or anything in them. Just some silicon and a layer of data pressed into them. How do you think CD-Rs or DVD-Rs are so cheap? Carts have much more in them.

Seriously, Sine, think this through. Manufacturing costs aren't affected by how much data can be stored, but on the materials used and the complexity of making the device. A CD is a platter of platic with pits engraved with a laser. A cartridge is basically a stick of proprietary, read-only RAM encased in plastic. A cartrdige is a more complex device that requires more material. As for why N64 cartridges cost less than some late SNES cartridges, they probably got better at manufacturing them. Technology, as it is wont to do, advanced.

An excellent explanation

Actually, I was talking about Apple. Nintendo has been forced down to reality because of their lack of a lead now, though they can still get away with a lot of other things, like surviving after the miserable failure known as N64.

Miserable failure? Maybe in your reality. They only lost their extreme lead with the N64. They still had about 30% of the market here (you can thank Goldeneye, Mario 64, and Ocarina for that) and about 20% or so in Japan (the Saturn made a bigger dent over there, if I remember correctly). The GC is actually a much worse performing system as the Xbox has eaten into it rather than the PS2 (very odd).

Apple is too stubborn, and their zealots are too misguided/brainwashed, to reduce their prices, much less pay any sort of attention with their competition. Nintendo still has parents with no devotion to them (and still hold the checkbook), so they need to keep them happy.

Someone correct me if I'm wrong, but isn't Apple quite profitable and have taken for themselves quite a decent chunk of the pie? They have their product and they market it that way. They will never reach the mass market of PCs 'cause they don't have Winblows, plain and simple. But they've done quite well for themselves otherwise.

Nintendo is sort of the same thing except they can easily gain more market share since all they need is the games. It's not like you can't port the games over, it's just a matter of giving the their parties incentive (ie. market penetration with the right crowd).

Apple computers are not more expensive than PCs. I've priced Macs and their PC equivalent at Dell, and they cost just about the same. However, Dell (and other PC manufacturers) have finger grain options; that is, you can buy a stripped down computer for very cheap.

You really have an irrational dislike for Apple. We have 15 professors in our CS department here. We replace computers every three years. About ten of the professors here chose to get an Apple (either a Power Mac or a Power Book) instead of a Dell with Linux.

Yeah, they're quite popular with the education industry and the CG and computer art professionals. I mean, they don't crash and everything works exactly correctly with no "hardware issues" or "uknown problems", which is what they need. They have to buy the software anyways, so why not get the superior machine. The only reason I don't get an Apple is compatibility, otherwise I'd have one right now (I don't want to be running a Winblows script in the background)

[Kupek]

Yeah, they're quite popular with the education industry and the CG and computer art professionals. I mean, they don't crash and everything works exactly correctly with no "hardware issues" or "uknown problems", which is what they need. They have to buy the software anyways, so why not get the superior machine. The only reason I don't get an Apple is compatibility, otherwise I'd have one right now (I don't want to be running a Winblows script in the background)

I should point out that my example is <i>not</i> part of the "education industry." These aren't public school teachers, but Computer Science academics with substantial computing needs. We used to be an all Linux department, but now we're OSX and Linux.

[Kupek]

If that's actually true, then it's recent and out of extreme surrender from Jobs. The iPod still started off as a $400 product, with $200 batteries that break after six months. (Apple is getting a sweet deal out of that lawsuit, BTW.) I've seen Apple desktop machines as high as $3000. I can't even think of a PC for that price without getting into the quad-processor server-based boxes.

It's been the case for as long as I've paid attention to it.

You can't configure a $3,000 machine? Go to Dell's website, pick the top-of-the-line workstation, put two processors in it, at least a gig of RAM, the most expensive hard disk, and the highest end graphics card they have. That will easily hit the $3,000 mark, and that's the equivalent of the $3,000 Power Mac. If you can't configure a $3,000 PC, then you haven't tried.

Power Macs are not an introductory computer. They're <i>workstations</i>, which is actually a different class of computer from PC. It's only been the past five or so years that "PC" and "workstation" are used almost interchangebly.

The list:

1. When does Apple bitch about this? Apple fanboys, sure, but Apple themselves? Never heard it. This is your perception, not reality.

2. See 1.

3. What's wrong with making a computer explicity for people who aren't computer savvy? How are their color differences different than case mods?

4. Yeah, it's obnoxious. So is every other ad campaign from other large companies.

5. Macs can use a two button mouse just fine.

6. Don't care, don't pay attention.

Mostly though, it's the image that they are sooooooo cool, while they market a computer for fucking retards. Build a device that even an idiot can use, and only an idiot will use it. The close-ended hardware is another big beef of mine.

So I guess all of the professors in my department - who, I should explicity point out, have <i>Ph.D.s in Computer Science</i> - are idiot users?

You really don't know what you're talking about. You have this perception of what you think is the case but you've never bothered to verify it. And I should probably state that I've never bought a single thing from Apple. I don't own any Apple products. But I've used Windows and Linux extensively, and I've seen many people use OSX in both professional and personal settings, and I think it's the best desktop OS out there. It's the best interface Unix has ever had.

[Tortolia]

Bumping this so you fuckers can drop the "OMG NINTENDO CAN'T AFFORD NOT TO BE FIRST" line of bullshit.

[Don]

Whether Nintendo the company is profitable doesn't have much meaning to how well it does as a system.

Final Fantasy 7, largely hailed as the reason for success of PSX, sold about 3 million in Japan. If every person who bought FF7 bought a PSX for FF7, that's still only 3 million PSX attributed to FF7. Likewise Nintendo can't sell more systems than the number of people buying games, and I don't remember Nintendo at least vastly breaking the 3 million mark per game on the next gen systems, and even if there are 10 million unique Nintendo game buyers who bought the Nintendo systems solely due to Nintendo games, 10 million systems isn't much compare to the market leader.

So it is quite possible the company does well while the system is a failure.

[kali o.]

I'd like to play Nintendo games but I'm not selling out cash for a 'niche' system.

If they want to market themselves into that position, more power to 'em....too bad for me I guess, I like videogames, not just Nintendo games.

I don't recall giving a shit whether Nintendo made money having the console with the slimist pickings lately (not being a shareholder and all).

PS - Fads come and go. Can't milk Pokemon or the jap-exportation forever. And who knows where the handheld market will go.

[Don]

I think people are saying "I like Nintendo games so their system is going to be great" This would be an accurate predictor if this is actually the prevalent sentiment amongst gamers. However, let us consider a few things:

At best every person who has a GC bought it because Ninendo is great.

Every person who bought a PS2 did so for a reason that has nothing to do with Nintendo being great (because Nintendo don't develop for PS2)

Every person who bought a XBox did so for a reason that has nothing to do with Nintendo.

I don't know the market share offhand but I'm sure PS2 has well above the majority and XBox/GC is pretty neck to neck if you ignore Japan's xenophobic tendencies, so at best people who would buy a system for reason not related to Nintendo outnumbers people who would buy a system for Nintendo 3 to 1.

I wouldn't be surprised if this ratio is actually 10 to 1.

So the fact that Nintendo makes good games is meaningless to predict their success because it is obviously a minority opinion.

[Nev]

Hm, I'd forgotten that. Making good games really doesn't have anything to do with a company's success.

Wait, no, my bad. It has EVERYTHING to do with a company's success. That was what it was.

[Eric]

So Nintendo makes a profit off it's rehashes of it's own games.

3rd party developers get screwed

We don't get the same 3rd party games on the X-Box & PSX, because Nintendo doesn't care about them

And everyone is ok with this, as long as Nintendo is profitable?

Did I miss something?

[Nev]

I'm still looking for lots of evidence on the "3rd party developers get screwed by Nintendo" tip. Yes, the N64 cartridge decision might fall into that category. I'd be fairly surprised if even Yamauchi and Iwata didn't think that was a mistake by now. However, I don't know why everyone seems to ascribe it to the Cube and now the Revolution as well. To me, a lot of it depends on how good their development libraries for programming are, which I certainly don't know about.

I've heard from a friend in the industry who works in Japan that Sony's libraries may suck, though he does localization, not programming, so I'd very much want to check that out myself. I've used DirectX a bit (which is the library set for the XBox), and I feel like it's actually quite good and could save developers quite a lot of time, though like nearly everything else by Microsoft I think it's somewhat overengineered and more complex than it needs to be. Nintendo's, though, I have absolutely no idea about.

Does anyone know anything about this?

[Lox]

I think people are saying "I like Nintendo games so their system is going to be great" This would be an accurate predictor if this is actually the prevalent sentiment amongst gamers. However, let us consider a few things:

At best every person who has a GC bought it because Ninendo is great.

Every person who bought a PS2 did so for a reason that has nothing to do with Nintendo being great (because Nintendo don't develop for PS2)

Every person who bought a XBox did so for a reason that has nothing to do with Nintendo.

I don't know the market share offhand but I'm sure PS2 has well above the majority and XBox/GC is pretty neck to neck if you ignore Japan's xenophobic tendencies, so at best people who would buy a system for reason not related to Nintendo outnumbers people who would buy a system for Nintendo 3 to 1.

I wouldn't be surprised if this ratio is actually 10 to 1.

So the fact that Nintendo makes good games is meaningless to predict their success because it is obviously a minority opinion.

Well, to me, this is also a response to the comments that some made (specifically Kali) that went along the lines of "Bye bye, Nintendo". I think the proof that they are such a profitable company doing what they've been doing shows that this won't be the case.

[Zeus]

In a related story, I was writing the elevator up to my office floor this morning and the news update in the elevator was mentioned that Sony is planning on slashing a lot of it's plants and is cutting 10,000 jobs worldwide in an effort to shave $1.8billion in costs to revive it's electronics division.

That's what competition and removal of the veil of marketing does. People started to realize that Samsung and LG are actually BETTER than Sony in terms of digital consumer electronics and the profits in the traditional electronics have dwindled down to almost nothing. As well, you can get Toshiba or Panasonic devices, which are of near or equal quality to Sony, for 20% less.

They basically have been killed by their competition since they've always relied on their marketing to earn them higher profits.

And you know this is an old thread revived when EsquE responded to it :-)

[Don]

Nintendo doomed as a console? Probably if history is of any indication.

Nintendo doomed as a company? No. They can live on just Pokemon even if nothing else works and so far everything else still works anyway.

Mental maybe you only care about Nintendo and nothing else but just because Nintendo makes good games has absolutely nothing to do with whether Nintendo has a good system. A vast majority of the gamers would agree with this fact based on the fact that the number of XBox + PS2 combined is (every one of those was brought for a reason not related to Nintendo) >> number of GC sold (at best every one of those was brought because of Nintendo). And seeing most people buy only one system since PS2 claims something like 100 million shipped worldwide and no one else is even close, this means the vast majority of gamers own only one system (people who own multiple systems at best is equal to the number of XBox + GC owners assuming they all own a PS2 too) so no people can't just buy multiple systems to make sure they didn't miss out all the great games.

[Zeus]

The GC shipped what, 20 million units? Something like that. This is not a failure, not by any stretch, especially when you consider that they make money off of every system and a large chunk of what sells on the GC is Nintendo-made, so they're making extra profit off of those games. But it's being considered a failure. Why? Because it's far behind the NES, SNES, and N64 as well as its competitors. So? They're still much more profitable than their competitors, even in a distant third. The market is big enough for a third place console to generate excellent profits. Because of this and the fact that their consoles are vital to their business model (read that article I posted before by the developer), they will NEVER leave the console business to become a developer. Their development will always be tied to their games

It's not just Pokemon, although that is a highly profitable part of their business. They make craploads off the GBA, GC, and DS for their games as well, not to mention their licencing rights for all other games sold.

[Don]

Third place isn't good enough if you buy only 1 system, and most people buy only one system.

Now if you buy more than one system you might not care, but you're also the minority.

[Zeus]

Third place isn't good enough if you buy only 1 system, and most people buy only one system.

Now if you buy more than one system you might not care, but you're also the minority.

OK, I'll be a little more clear. Assume you have a total market of 150 million units. First place gets 100 million units, second place gets 30 million and third gets 20 million. Of that number of total units sold, assume that 30 million are to people with multiple systems; that's only 1/5th, so it's a reasonable estimate using your argument. Going by the 1/5th estimate, first place will have 80 million systems, second 24 million, and third 16 million to one-console buyers.

So, approx. 1 out of every 8 consoles sold are to the third place guy; in this case, Nintendo. Remember, hardcore gamers aren't the only ones buying systems, kids like games as well. What I'm trying to say is that even in third place with only one in eight people choosing your system over the others, you're still making craploads of money.

This is exactly where Nintendo finds itself, easily in third but making craploads of coin. What they're saying is "we think we can expand the market beyond where it is". If they can and get a lot of those new gamers, great. If not and they still end up in third, they're still making tons of money.

So yes, being third place is good enough when you're the most profitable games company in the world. They're still getting enough of the one-system buyers, not EVERYONE who owns a GC is a two-system buyer, just a decent number of them. So, without certain types of games like RPGs, FPSs, GTA-like games, they're definetely limiting their appeal and for people like you, they're not an option. But they're still making TONS of money.

[Nev]

Nintendo doomed as a console? Probably if history is of any indication.

Nintendo doomed as a company? No. They can live on just Pokemon even if nothing else works and so far everything else still works anyway.

Mental maybe you only care about Nintendo and nothing else but just because Nintendo makes good games has absolutely nothing to do with whether Nintendo has a good system. A vast majority of the gamers would agree with this fact based on the fact that the number of XBox + PS2 combined is (every one of those was brought for a reason not related to Nintendo) >> number of GC sold (at best every one of those was brought because of Nintendo). And seeing most people buy only one system since PS2 claims something like 100 million shipped worldwide and no one else is even close, this means the vast majority of gamers own only one system (people who own multiple systems at best is equal to the number of XBox + GC owners assuming they all own a PS2 too) so no people can't just buy multiple systems to make sure they didn't miss out all the great games.

I don't think you think very deeply into the issues you discuss, Don.

I own a PS2 and a GameCube. If I was richer, I'd probably own an XBox as well. I hate console fanboyism in most forms, and don't look up to, or down on, a game because of what console it's on. I'd hardly consider myself a Nintendo fanboy. So don't put words in my mouth. That's going to make me really very, very angry, very fast.

I have never once disputed the fact that the PS2 has far, far greater market penetration than its rival systems (XBox AND GameCube). But the argument that you seem to be making - "PS2 is the best system because it sells the most" - doesn't hold up. For one, I really think you need to clarify the point you're trying to make - what are you arguing? Are you simply saying that the PS2 is the "best" console out there? If so, what does that mean? Or are you arguing that the PS3 will outsell the Revolution and 360?

Aside from my usual feeling that a single metric of "what's the best" usually isn't useful for almost any discussion that is itself useful, if you do decide that's the argument you're going for, I would seriously disagree with the notion that sales figures are the only determinant of quality. Or have you decided you think The Phantom Menace should start hitting AFI Top 100 lists?

Now, we've just been talking about Nintendo's profitability, and I'm guessing you're not disputing Tort's source that states Nintendo clears as much profit these days as Sony despite being roughly one-tenth the size. So I'd like to ask something, Don. Who's the smarter company - the one that makes and sells more systems and achieves a greater market penetration, or the one that achieves a much higher profit margin on far lower sales? I personally don't think that question really has a "one-size-fits-all" answer; it depends on what each company is trying to do in the first place.

Something you might want to think about, however...from what I know of business, I believe most investors would invest in the company with the higher profit margins nine times out of ten. And I probably would as well.

[Don]

So all of you are buying a new Nintendo system because Nintendo is a great company to invest in? Does Revolution pay out dividends to owners?

How does Nintendo's profitability even has anything to do with how well there system is? I guess you need to be assured that since Nintendo is profitable they will actually continue to support a 3rd place system that has no possibility of winning? You care Nintendo makes profit so it can continue to make games to please you with more Nintendo games, even though you are a vast minority in the gaming industry?

I guess it might make you happy, but it sure isn't going to win it any market share. And there are a lot more people who cares for non Nintendo games than those who care for Nintendo games.

[Nev]

I guess it might make you happy, but it sure isn't going to win it any market share.

I'm going to take that as your "thesis statement", as it were - the point you're trying to prove.

What do I care if it wins market share? I mean, more market share, more developers, more games, etc., so yes, in that sense, I do, especially for something like the Revolution, where they're taking a risk on a new technology that I'm excited about with the controller. But if I understand your first statement right, it seems like part of your argument is that for any given person, the "best" system for him/her is the system that sells the best, as opposed to the one that gives him/her the most enjoyment? Please clarify, I wouldn't want to get this point in particular wrong.

And there are a lot more people who cares for non Nintendo games than those who care for Nintendo games.

Again, except for the effect on the number of developers, I don't really care too much. (I'll ignore the fact that you're not citing any evidence to back that up.)

I mean, yes, it's more fun to play with friends. I haven't really had problems rousing up a game of Smash Brothers Melee when I've wanted one, however, with the possible exception of a single one out of many friends who've tried it. Far be it from me to make him play a game he doesn't want to play.

In general, it seems like you're saying that if a lot of other people like something, I should think it's the best as well. I do not feel any particular pressure to think that is true, but please clarify for me whether that is or is not your point before we go on with this debate.

[Zeus]

I'll have to go with Mental on this one. What do I care where Nintendo is in the market? I'm buying the system for their games, which I can't get anywhere else. They consistently make great, fun games, so it's worth it for me.

My post was regarding how you keep saying "third place isn't good enough". It is, that's what I'm trying to prove. Besides, Nintendo NEEDS to have their own system, just read that other article I put. If they became a developer only, they wouldn't have nearly the success they do now.

[Nev]

I can't help but notice, Don, that you're continuing on with the other "console wars" thread, but that you haven't replied to me. What gives?