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Centipede2600

Is Nintendo following Atari's footsteps?

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Losing some old school fans,controllers that have drove them away to other brands, constantly showing Mario and Zelda or bringing up the past, and its slow turn to irrelevancy to the modern times. I don't know about you but I see a pattern here.

 

First off, I don't hate Nintendo nor am I a fan boy of any brand because I just l like to play video games. My title is not click bait and please let me explain.

 

Nintendo used to be the king of the video game industry from the mid 80s to early 90s. Atari was the king from the late 70s to early or mid 80s before the NES. Atari 5200, 7800, and Jaguar failed to recapture it's fan base because of bad to mediocre controllers, too much emphasis on old titles, unimpressive tech, etc (these consoles have it's fans but the fact is that those that love 2600 did not like the successors as much and the sales reflect that). Nintendo 64, GameCube, Wiiu have failed to bring it's fan base. Wii may have but it was a fad. As much as I love the N64 because it is my favorite console of all time, that console began Nintendo's decline because there was competition. Also, here is another comparison. Sega, is like the Intellivision and Colecovision, an old rival that eventually were forgotten to the majority of gamers and the only fans remain are the hard core fans. Atari's downfall began with Nintendo Entertainment System. Nintendo'downfall began with the Playstation. Nintendo was was described as the new Atari and the Playstation was described as the new Nintendo.

 

When I say downfall, I don't mean that it started to become bad but rather it's dominance in the industry has declined. This post may have sounded stupid and I apologized. I just see a bit of a similarity and how Nintendo is on Atari's footsteps but the only difference is that Nintendo's systems actually sold decently after the Snes.

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I love a good Nintendo gloom n' doom report, I'm not a fan of them currently, but I don't think they're the next Atari. Atari's failure was pretty much their own. The beginning of the end started when they stupidly shelved the complete and ready for market 7800 in favor of computers. That was the moment when they gave up on gaming and it's a moment Nintendo doesn't have in its history.

 

Another big difference between Nintendo and Atari are the IPs. Atari has some iconic IPs but they never maintained and built upon them, unlike Nintendo. Imagine if Yars' Revenge or Centipede had been built into modern franchises rather than rehashed into one port after another. Nintendo always built on their IPs. Super Mario Bros. is built on Mario Bros., the franchise evolves and Atari never understood that.

 

So yeah, those are the two differences I see that dismiss the Nintendo=Atari argument. It was only 10 years ago or so that I found out the Atari Lynx and Jaguar even existed and I still am surprised to find out that a certain game I've been playing for years was an Atari property. I never have that problem with Nintendo, I know every system they've made and when I'm playing a Nintendo game it's clear that I'm playing a game by Nintendo. That's where you see the difference in maintaining relevance in the marketplace and building on your IPs.

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I'd agree but since the post-Gamecube era they've always done off-spec systems. The Wii worked out well enough for them profit wise, but the WiiU was too badly setup on the development side it was doomed before it was out of the gate. Atari though they had their own different screw-ups that dragged them into the toilet. I don't agree Wii was a fad, fads don't last that long, but they didn't further capitalize on what they did there with WiiU and went with an overpriced tablet controller that backfired as the parts were so expensive they really had to gimp the main system to keep it within their lame budget with a weak CPU, a backwards GPU, and coding language making Saturn look simple. N64's failure was the storage medium as was the Gamecube to a point given the 1.5GB cap on the mini-dvds there, but the hardware wasn't garbage otherwise. They slipped going to a not great medium storage size at first which gimped front runner status, but then the Wii went SD vs HD and it worked out fine even if it lacked a lot of solid third party games it got some.

 

WiiU broke their back that's where the true slide hit damn near rock bottom. At this rate killing off two development houses internally to one and devising a portable console they have a decent chance to redeem themselves, but first place isn't happening. It doesn't mean they're going the way of Atari as they're just not as mishandled and that ignorant. They still dominate the dedicated handheld arena and the Switch may very well carry on that banner but only time will tell as they're fighting the mobile/microconsole market with one of their own that has the benefit of their more loyal handheld game makers and their IPs as well. The re-focus should help them but as to how much who knows.

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There are far more differences than similarities between Atari's demise and what has been happening with Nintendo. So I would say, no, Nintendo is not following in Atari's footsteps.

 

Nintendo has been screwing up a lot recently, but there is still plenty of opportunity for them to pull their heads out of their butts and recover the lost consumer confidence. They simply need to offer (1) products that consumers want to buy and (2) in enough quantity for consumers to easily buy those products. With the WiiU they failed at (1) and the NES Classic they failed at (2). They still can fix the NES Classic situation if they choose, and the Switch can be a success if they get their act together.

 

Atari burned too many opportunities by the mid-80s to recover to their former glory. Nintendo isn't in that situation... yet.

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Im thinking apple is a more appropriate vs match

 

Apple was king in the 80's but due to confusing and lackluster products they were on "deaths door" by the late 90's

 

Now what happens next is to be seen. Is Nintendoh's switch going to be their Ipod or their Newton?

Edited by Osgeld
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I think that it's very difficult to stay relevant for more than 20 years or so in any technology medium. And like it or not, video gaming is a technology medium. We had board games and other types of games long before we had video games; the only reason video games exist is because it was impressive new technology that allowed us to experience a different kind of gaming.

 

I think Nintendo actually knows that on some level, which is why they keep trying to give us gimmicky controllers and hybrid systems, but essentially what they're trying to do is alter the terms of this unwritten contract. They're trying to give us new experiences not with new or better technology, but with physically different play styles. And other than the Wii, which was a fad for a few years before dying out, I just don't see a lot of evidence that this is what the gaming public wants. There's a lot more evidence that they just want to be wowed with more realistic graphics, at least until the tech we have really enables new and different experiences just like game consoles themselves did early on.

 

I really don't see that coming from anything other than VR, though it's going to be a slow process for that to happen. In the meantime, I think Nintendo would be better served by trying to compete more directly with Sony and MS, and working towards that VR future just like Sony and MS are. Nintendo no longer defines what gaming is the way they may have done in the 80's. The industry has gone in a different direction, and they just don't have the influence anymore to pull it back towards them.

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Osgeld has a solid point. Nintendo has been the Apple of the gaming industry in a good many ways. The highs and lows being the big one he said. Apple also wouldn't allow others to experience their stuff forever and still mostly wont, like NIntendo. Nintendo like Apple has a decent price tag to profit and not lose off hardware. They both are really anal about protecting their hardware and software, security and the rest of it, both huge control freaks. They both think they know their market well and in part they do, and in a good way they don't but they have tens of millions of product loyal types who will still line up to grab their stuff day one or eventually. Like Apple they get the hit and the miss with devices. Sometimes they keep well up to spec(more in the past) and they roll with it well, sometimes they don't and still find a happy niche chomping for goods (their weaker ipod shuffle and touch devices,) and yet other times they f it up like the Newton with the WiiU. They both jump to their own personally selfish needs first and run to their own beat they choose to follow and you can get on board or suck it.

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Atari was more of a business issue than simply product. Nintendo's market position has been eaten alive by MS and Sony, there's just not much room for them now. Plus their products cost too much.

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Osgeld has a solid point. Nintendo has been the Apple of the gaming industry in a good many ways.

 

The big difference is that Apple has always made money with very limited market share, and you can do that in computers because the overall market is so vast, and until very recently was constantly growing.

 

But game consoles are much more limited in terms of dollars; there's just less there to split up. There aren't businesses buying giant server farms of Nintendo Wii U's, for example. It's entirely a consumer product and it's limited by the number of households there are in a given country. You can't really have 5% or 10% market share in game consoles and turn a profit.

 

So I don't think the comparison totally works, because the only way to really survive in video gaming is to have close to 50% market share. Apple's never been about market share; they don't care, and they don't need to. None of their products ever has more than about 20% market share (the iPod did in its heyday, but it's an exception). Even the iPhone is dwarfed by Android, but they still make a ton of money off of it. That doesn't work in game consoles.

 

Not focusing on market share lets Apple do things their way, and the way their fans like. Nintendo may be trying to do the same thing, but if they are, then they're just not very smart. Game consoles are a zero sum game, and to make any profit at all you probably need to be above around 40% of the market. If your two competitors have 50% and 40% of the market, that leaves 10% for you and that's a recipe for giant losses. So Nintendo absolutely needs to try to win market share in a way that Apple doesn't. And that means designing their systems for more than just their most hardcore fans.

 

Nintendo's been propped up by the 3DS, which has been a success. That's not going to last forever, though, so they'd better at least be *planning* to try to steal market share with the Switch. Otherwise they could get into a situation where they have 10% of the home console market and dwindling sales in pure handhelds, and then they're going to be in a world of hurt.

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Nintendo's home console market share has pretty much taken a dump since the Wii.
They gambled on a cheaper console that wasn't HD. It was hugely popular due to the gimmicky controllers, but with the intro of cheaper HDTVs and motion control options from competitors it ended up bowing out early. The Wii U didn't help reverse the situation either.
Now the switch looks like a niche product that doesn't fully compete with faster home consoles or cheaper handhelds (IMHO).
I think Nintendo's market share in the home console market has nowhere to go but down for the time being.

However, Nintendo isn't bleeding money like Atari was. Their financial position isn't great but as long as they make selected releases in the mobile app market and continue to offer an alternative to the blood n guts oriented consoles, I think they will remain financially sound.
I don't see then being sold off like Atari.

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Nintendo's home console market share has pretty much taken a dump since the Wii.

They gambled on a cheaper console that wasn't HD. It was hugely popular due to the gimmicky controllers, but with the intro of cheaper HDTVs and motion control options from competitors it ended up bowing out early.

 

I dont even think it was a non HD issue, I have never been bothered with it, but I have a 40 inch tv and a somewhat long living room

 

what killed its AAA gotta have it chances were the default special controllers and the last gen horsepower

 

edit:

 

I got my Wii in 2012, mainly at the time I wanted a streaming media box, didnt have an HDTV yet (that came in 2014) and to this day sitting on the couch it looks fine at 480p watching amazon or whatever, but for the price of the non gc compatible wii, I thought hell I could get a roku, or a wii and play some games

 

What disappointed me the most was trying to filter the shovelware, and lack of big titles, even scaled back versions ... felt like I bought a psp again =/

Edited by Osgeld

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The big difference is that Apple has always made money with very limited market share, and you can do that in computers because the overall market is so vast, and until very recently was constantly growing.

 

But game consoles are much more limited in terms of dollars; there's just less there to split up. There aren't businesses buying giant server farms of Nintendo Wii U's, for example. It's entirely a consumer product and it's limited by the number of households there are in a given country. You can't really have 5% or 10% market share in game consoles and turn a profit.

 

So I don't think the comparison totally works, because the only way to really survive in video gaming is to have close to 50% market share. Apple's never been about market share; they don't care, and they don't need to. None of their products ever has more than about 20% market share (the iPod did in its heyday, but it's an exception). Even the iPhone is dwarfed by Android, but they still make a ton of money off of it. That doesn't work in game consoles.

 

Not focusing on market share lets Apple do things their way, and the way their fans like. Nintendo may be trying to do the same thing, but if they are, then they're just not very smart. Game consoles are a zero sum game, and to make any profit at all you probably need to be above around 40% of the market. If your two competitors have 50% and 40% of the market, that leaves 10% for you and that's a recipe for giant losses. So Nintendo absolutely needs to try to win market share in a way that Apple doesn't. And that means designing their systems for more than just their most hardcore fans.

 

Nintendo's been propped up by the 3DS, which has been a success. That's not going to last forever, though, so they'd better at least be *planning* to try to steal market share with the Switch. Otherwise they could get into a situation where they have 10% of the home console market and dwindling sales in pure handhelds, and then they're going to be in a world of hurt.

Well I wouldn't call it a difference, as even as horribly bad the WiiU went in the end even after some partial/near full years of losses they did make money on the rotten thing. And they've had a limited market share since the N64 too so again why I felt there was a comparison there. I know consoles are a more limited share, they're locked into their own little world. If anything has been proven fairly well over time is that two is company, three's a crowd, and in a group of 3's Nintendo basically gets crowded out, even with the WIi as much as it moved the hardware attach rate was nauseatingly rotten. They did the right thing killing off their console division and smashing it all into one group as they do best with portable devices and always have since the post-3D days. Nintendo like Apple hasn't cared about share either, they care about profit even if they do it in really warped logic ways. Again since the N64 era they've not held better than what a 1/3 of the market if that other than brute hardware sales on the Wii (to Apple's iPod's best days.) Nintendo does what Nintendo does, just like Apple and their fans (Nintendo and Apple) despite alienating others makes them happy to a fault. You say they don't want a 10% of the market situation, but I doubt they even have that now with the WiiU as it's just jacked every way possible you can imagine.

 

I hate to say it but you're kind of more so lining up to my point how Apple like they are in various ways. :)

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Nintendo does what Nintendo does, just like Apple and their fans (Nintendo and Apple) despite alienating others makes them happy to a fault. You say they don't want a 10% of the market situation,

 

 

snipped for convenience lol

 

but exactly, like apple they dont HAVE to have a large marketshare, some yahoo's will keep buying a 300$ console every time they fart one out JUST to play mario whatever and Zelda who gives a shit, and if your lucky you might, just MIGHT get a metroid game

 

BUT that pile of "OMG NINTENDO DID SOMETHING" crowd is getting smaller and smaller, people were still buying apple in 1998, but not nearly as many as were in 1988...

Edited by Osgeld

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I do believe the age of the video game console is nearing its end. Microsoft and Sony still have gobs of money they can sink into their consoles, while Nintendo does not. Once Nintendo is out, it'll be a race between Microsoft and Sony to see who can stand to lose the most amount of money and still stay in business. On the flip side, I think more and more people today would rather relive the experience of playing old games they loved when they were kids, which is why the "flashback" consoles sell out so quickly whenever they are released.

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The beginning of the end started when they stupidly shelved the complete and ready for market 7800 in favor of computers. That was the moment when they gave up on gaming and it's a moment Nintendo doesn't have in its history.

 

While I doubt pulling the 7800 after the test market did them any favors, they had to due to the transition from Atari Inc to Atari Corp (Atari Inc being the Warner owned company, Atari Corp being the Jack Tramiel owned company).

 

Some wiki cut-and-paste:

 

"The reality was that a contractual issue arose in that GCC had not been paid for their development of the 7800. Warner and Tramiel battled back and forth over who was accountable, with Tramiel believing that the 7800 should have been covered as part of his acquisition deal. In May 1985, Jack relented and paid GCC the overdue payment. This led to additional negotiations regarding the initial launch titles that GCC had developed and then an effort to find someone to lead their new video game division, which was completed in November 1985."

 

Not exactly as cut and dry as "they stupidly shelved". Atari's history is a complex (and interesting) one.

 

On a more related note, I personally do not see a common thread between Nintendo's history and Atari's.

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On a more related note, I personally do not see a common thread between Nintendo's history and Atari's.

 

Except a) video game industry is changing and b) losing money.

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Except a) video game industry is changing and b) losing money.

 

If $60+ billion in the bank is "losing money", then I don't really know what to tell you.

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I just don't see Nintendo folding. They have themselves spread far and wide. A drastic conversion, definitely, but going out of games, not a chance. I'd imagine MS and Sony would fold up game operations before Nintendo did, especially Sony. Microsoft and its game studios can fall back on well WIndows and the rest. What does Sony have to fall back on game wise? Nothing, they don't develop really, they're almost all second party and third party operations. They're all in a position to lose money, but in the end Sony would be the one to hurt by far the most. Sure people can look at the PS2/PS3 era and name a few games they keep around or newer last gen franchises people liked, but do they really stand out enough in the end something similar enough hasn't already been done on the PC or even in Android? Nope.

 

Nintendo has their IPS, and even if you tossed Mario and Zelda to the side their former main line profit madness driving games, what you are left with is a multi-billion dollar gaming, merchandise, food, movie, 30min cartoon, and even amusement park blowout known as Pokemon now going into its 21st year (last year was the 20th anniversary.) Look how hard core Pokemon Go moves even now still on mobile platforms, and look at the records Super Mario Run cracked in its sales as well. They don't have to do as the trolls wish and bend over for MS or Sony. They're best at mobile, and they may end up being saved by it in the end, not on their own devices but perhaps Android, Apple, and whatever PC may run in 10-20 years. They answer to no one and have made it clear even with their newest people running the show, they'd close up shop and bury their IPs so they're not diluted into garbage before being put on the competitions devices and I'd believe it.

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If $60+ billion in the bank is "losing money", then I don't really know what to tell you.

 

its a numbers game that I suck at, but from 2015 end of year to 2016 end of year they went from a 3.7% return to a 1.4% return, that's not the end of the universe but it is not healthy, especially considering in 09 they were 22% return and in 2010 17%

 

can you sustain loosing 3/4 and a bit more of your profit within 6 years and not start to get a bit itchy?

Edited by Osgeld
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can you sustain loosing 3/4 and a bit more of your profit within 6 years and not start to get a bit itchy?

 

I personally sustain making zero profit. Then again, I only have me to worry about. ;)

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I do believe the age of the video game console is nearing its end. Microsoft and Sony still have gobs of money they can sink into their consoles, while Nintendo does not. Once Nintendo is out, it'll be a race between Microsoft and Sony to see who can stand to lose the most amount of money and still stay in business. On the flip side, I think more and more people today would rather relive the experience of playing old games they loved when they were kids, which is why the "flashback" consoles sell out so quickly whenever they are released.

Microsoft sure. Sony on the other hand would have been in deep shit if the PS4 was a failure.

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Also, here is another comparison. Sega, is like the Intellivision and Colecovision, an old rival that eventually were forgotten to the majority of gamers and the only fans remain are the hard core fans. Atari's downfall began with Nintendo Entertainment System. Nintendo'downfall began with the Playstation. Nintendo was was described as the new Atari and the Playstation was described as the new Nintendo.

 

Sorry, but this bit is not historically accurate. Nintendo were nowhere near the scene when Atari fell off its throne in 1983, and the causes of that dethronement are manifold, but in part due to shoddy quality games and a bit of an industry bubble about how many units could be shifted (heavily simplified). Atari, the original Atari that ran the 2600 and the original 8-bit machines and the XLs, were destroyed in that bubble, the wreckage bought up by Jack Tramiel and revived as Atari Corporation, which is known for the XE and ST computers. Same name, and a continuation of some assets and staff, but really, their heritage is kind of spotty.

 

Atari Corporation did okay in the remainder of the 80s thanks to exploiting the thirst in Eastern Europe for cheap XEs, and the ST happily meeting a market niche in Western Europe for an affordable 16-bit GUI computer. By the early 90s PCs ate into this niche, and a relatively strapped-for-cash Atari went for broke on the Jaguar. We know the rest.

 

I know it's not really the purpose of this thread but just wanted to point out Atari's history and Nintendo's are really quite different. Nintendo hasn't imploded and the scraps revived into a different-but-similar entity. Sony 'beat' Nintendo in the 4th Generation, in a way Nintendo never really did to Atari, unless you count the 7800's Johnny-come-lately and undersold presence as some kind of echo - I don't. Nintendo remain a financially healthy company through their plethora of IPs with powerful presence - the Disney of video games, in many ways - and their reputation for caution.

 

Arguably SEGA's recklessness in the 90s is probably a more accurate echo of Atari's history, but Nintendo's? Nah.

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If $60+ billion in the bank is "losing money", then I don't really know what to tell you.

Actually it's $10.5 billion. I guess they lost that other $45.5 billion already.

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I personally sustain making zero profit. Then again, I only have me to worry about. ;)

 

 

Actually it's $10.5 billion. I guess they lost that other $45.5 billion already.

 

I see $5.73B http://amigobulls.com/stocks/NTDOY/balance-sheet/quarterly?t=ibc

 

Here's a 2012 story about their financial status

 

Buried in reams of financial data is the revelation that Nintendo have 812.8 billion Yen (£6.7/$10.5 billion) in the bank - enough for it to take a 20 billion Yen loss (£163/$257 million) every year until 2052. Then there's almost 469 billion Yen (£3.8/$6.0 billion) held in premises, equipment and investments. When that runs out - we're in the year 2075 by this point - they've got some of the most valuable intellectual property in gaming to sell off before the company goes out of business.

Apple notwithstanding, hoarding cash isn't the best use of corporate resources, not when it can be invested into research and development.

 

Two observations:

- Nintendo's cash hoard is often expressed in yen, which often mistranslates into dollars or euros

- Few if any of us are competent financial analysts, I know I'm not ... but I know enough to know I don't understand the whole picture.

 

I just want to play some Zelda on the new tablet dingus. After that, I'd like for them to be financially healthy enough to make more good games, at a pace where I can keep up with the stuff that interests me. I'm fine if they stay a bit hungry -- competition is good for their creativity.

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I'm curious where the 60bn total came from. All tangible and liquid assets? I could see 10.5bn in the bank to float around as a safety net for a company as large and spread out as they are.

 

 

I also agree if you really want to draw comparisons tie the 80s Atari to the 90s Sega. Their implosions have some interesting overlap going on right into becoming fairly irrelevant software houses that don't well capitalize much on their IPs as they should.

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