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Monday, May 29, 2006

Can Nintendo Win? Wii say Yes

We've seen something disastrous happen before. Something that's created a massive shift the in market, something that has thrown a giant out of the loop, and smashed them down into last place. This is Nintendo we're talking about. Nintendo, who was once the definition of gaming, now sits at the end of this, the 6th generation of gaming consoles in a meager last place.

Yamauchi; the great president of Nintendo. It was he who would bring about the end of the crash of games in the early eighties. He was a business man at heart, and made a bold move to offset the precedent of relinquishing quality titles and sales. It was then, that Nintendo, fueled by the success of arcade games such as Donkey Kong, to launch what could be argued as the largest attack on the industry ever.

Yamauchi took his company, and launched the Famicom. Using superior quality games, the system slowly gained momentum over its competition. Once Japan had their treat, Nintendo struck a deal with Matel to port the Famicom over to the Americas, where it became known only as the Nintendo Entertainment System. Seemingly overnight, the industry was reborn; transformed from a fading dream and into a viable source of revenue, at least, how Yamauchi saw things.

To ensure pure dominance, and quality of games, Yamauchi demanded copyrights to every game published on his Family Computer system. As well, the quantity of games reduced to a bear bones minimum. As a final tactic, to artificially increase demand, the number of systems produced and made available was staggered, and limited. Nintendo was king.

Having nowhere else to turn to, many of these developers making games had but no choice to subside to Yamauchi's demands. His company was ruled by an iron fist. Yamauchi knew how to be a business man, but he did not know how to be a gamer.

A few years passed, and competition with rival Sega increased to an all out brawl. The SNES and Genesis remained practically equal, and Yamauchi was looking for and edge over his growing competition. It was then that what could now be considered an unholy alliance was formed. In 1994, Nintendo went looking for a new medium, besides cartriges, to place games on. Again, to enhance quality, lower production costs and allow for many more copies to be made available. The medium at the time that was just beginning to really steam ahead? The Compact Disk.

Forging out, Nintendo sought out Sony. It was there that the Playstation was born. Intended to be an add on accessory to the SNES, this unit would allow games to have far greater spanning content thanks to the 650 Megabytes offered thanks to CDs over the mere 8 meg cartridge. Sony's request for developing and manufacturing the technology? 25% of all game sales. Yamauchi was furious, and he shoved the offer in Sony's collective faces; Yamauchi's businessman style had really begun to show as he made a sound business move at the time. But as you know, that would not be the last of the Playstation.

After such talks, Sony had decided to continue on the Playstation venture, and decided to beat Nintendo at their own game. Seeking Phillips now for the new format - a deal that again quickly fell through. Phillips followed suite with Sony and decided to launch the CD-I system. Thanks to various contract errors, this gave Phillips the rights to several Nintendo franchises. However, those that were spawned never came close to the quality of Nintendo games.

After learning they would now be facing three contenders, and being on equal footing to Sega already, Nintendo quicky began to work towards the Nintendo 64. They thus had to abandon the CD format and go back to cartridges.

Relying on their tried and true methods, Yamauchi guided Nintendo into the next generation of gaming. Sony had a plan, a plan so simple, it would take from Nintendos already limited number of games. They offered more affordable development tools, and placing few restrictions on what the developers could do. This enticed many developers working with Nintendo to switch sides and move to Sony. The raw number of games the Playstation received was massive, while the N64 by comparison had a definite lack of games. Despite the continued Nintendo quality, a technically superior system, they began to lose ground.

(If any of this sounds familiar, you may begin to see what is happening to Nintendo.)

Because of the vast Playstation library, many of the casual gamers were more likely to embrace the Playstation as their console of choice. It was then that Nintendo's two generation dominance ended. The trend continued into the next generation. However, Nintendo began to understand what was happening, Yamauchi could no longer run the company as a business, it needed to be run as a testament to gaming. Yamuchi, not being much of a gamer, decided to step down.

Seeing the near death and colapse of Sega, Iwata, a gamer at heart, took the wheel, and began to move Nintendo in a new direction. Working almost in secret, Iwata's Nintendo decided to rough it through the GameCube generation, in favor of a massive sneak attack on the industry until this point. Nintendo has shifted gears, putting its focus on the lower costs for development, and titles for everyone.

Nintendo has left the doors open, for anyone to make a game for their new system, Wii. With the development costs being fractional to those of the Xbox, both original and 360, and the Playstation (yes, all of them), the company is attracting developers like moths to a porch light. Nintendo is in effect, copying the model for the Playstation.

Sony is copying the early Nintendo model, by rapidly inflating development costs, working with an exclusive and expensive format that may not even become the standard. If Betamax and UMD are any indication to the suvivability of Blu-Ray, its doomed.

Playstation 2 did so well, many believe, because it included a DVD player. DVD at the time was the next big thing, and already the standardized format for the next generation of movies. Now, we are in a battle, Blu-Ray vs HD-Dvd. Blu-Ray has already begun to slip. For people to take advantage of the PS3 Blu-Ray, they must be willing to dish out the $600 to get the HDMI output, so that they can use it to its full effect (not to mention having a HD TV to support the improved resolution being outfitted). This new type of connection is even absent on early HD TV's, while just about every television that's still working had a RCA connection for a DVD player back when the PS2 launched.

To make matters worse, Sony is keeping tight lips to their developers, leaving them in the dark about changes, such as the gyroscopes in the PS3 controler, which was only added 1 week before E3. Many comments are coming in from developers working with the PS3, touting it as a nightmare to develop for, and many more still are wanting to start games on the Wii. PS3 exclusives are quickly moving to the 360 and Wii (albeit toned down in graphics).

Its no question to ask if the PS3 will sell. It will. Many of the Sony fans will gobble it up, dispite its high price point. Its the casual market Sony had during the PS1 and PS2 years that it will be losing. Sony, has in effect, pulled a Nintendo. Nintendo has taken all the casual gamers that Sony had, and have added them to their consumer potential. Now, Nintendo has intense momentum, and Sony has become the pure model of the old Nintendo, a model that led to the current ranking of last place in terms of unit sales. Nintendo lost their 12 year reign to Sony. Sony, now in the same boat as Nintendo, facing multiple competitors, just may lose their 12 year reign to Nintendo.


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