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Analysts debate Nintendo's digital approach, whether they should go third party
"In a negative scenario, Nintendo will be forced to prematurely lower the Wii U price, and over the course of this cycle, we expect consideration will be given to extending first party franchises to other platforms. I think the pressure is on Nintendo to deliver better momentum with consumers in the next 9 months; some view into the next holiday title lineup would help." - RW Baird analyst Colin Sebastian
"Going the way of Sega and only doing software is simply not the best route. But if they are going to do hardware they need to do some marketing for that hardware. Nintendo's performance the last year was a disaster. It was almost like they rolled over and played dead with less than zero marketing for both the Wii U and the 3DSXL. This is something that can be changed. I don't understand what their thinking was, but in an age when consumers are clamoring for portable/tablet hardware it would seem to be a huge opportunity for Nintendo. Nintendo used to be great at marketing hardware and if they could bring that back I think there is opportunity." - DFC Intelligence's David Cole
"So long as [Satoru] Iwata is CEO, I don't think there is a prayer that they allow their software to show up on third-party platforms. If they are considering it, we'll see GBA software on mobile phones first... If Nintendo decides to go the way of Sega, it will be because a new CEO takes them in that direction. I don't see Iwata making a decision like that, it is not his nature." - Michael Pachter of Wedbush Securities
"Nintendo's market dominance has always come on the back of its hardware. Their hardware has been a key factor in driving the growth of their brands and products. While I do agree that Nintendo should explore releasing products on other platforms, there holds a significant risk that it could marginalize the benefits of owning a piece of Nintendo hardware and could create a cascading impact on the health of their hardware division. If the Wii U turns into a market failure, I'd suspect that a software only approach becomes a serious consideration; however, it would likely cut the company's valuation in half. The transition alone would spiritually kill the company for many years." - EEDAR's Jesse Divnich
"I believe the console business has changed fundamentally, and there will be slow uptake and increased downward price pressure not only for the Wii U but also for the next generation from Microsoft and Sony. Hardware expectations will be overly high for all three vendors, but I don't expect the numbers to match this generation. Nintendo can realize strong profits with a smaller base if Wii U (and 3DS) gamers buy more software, particularly paid digital downloads.
I think Sony and Microsoft will also need to sell more digital downloads to increase the software spend to base ratio. Microsoft will have an advantage here because of the lead Xbox LIVE has in PC, tablet and smartphone integration. Nintendo and Sony should both reconsider competition and potential co-operation with Android and iOS devices." - Inside Network's Billy Pidgeon
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"Going the way of Sega and only doing software is simply not the best route. But if they are going to do hardware they need to do some marketing for that hardware. Nintendo's performance the last year was a disaster. It was almost like they rolled over and played dead with less than zero marketing for both the Wii U and the 3DSXL. This is something that can be changed. I don't understand what their thinking was, but in an age when consumers are clamoring for portable/tablet hardware it would seem to be a huge opportunity for Nintendo. Nintendo used to be great at marketing hardware and if they could bring that back I think there is opportunity." - DFC Intelligence's David Cole
"So long as [Satoru] Iwata is CEO, I don't think there is a prayer that they allow their software to show up on third-party platforms. If they are considering it, we'll see GBA software on mobile phones first... If Nintendo decides to go the way of Sega, it will be because a new CEO takes them in that direction. I don't see Iwata making a decision like that, it is not his nature." - Michael Pachter of Wedbush Securities
"Nintendo's market dominance has always come on the back of its hardware. Their hardware has been a key factor in driving the growth of their brands and products. While I do agree that Nintendo should explore releasing products on other platforms, there holds a significant risk that it could marginalize the benefits of owning a piece of Nintendo hardware and could create a cascading impact on the health of their hardware division. If the Wii U turns into a market failure, I'd suspect that a software only approach becomes a serious consideration; however, it would likely cut the company's valuation in half. The transition alone would spiritually kill the company for many years." - EEDAR's Jesse Divnich
"I believe the console business has changed fundamentally, and there will be slow uptake and increased downward price pressure not only for the Wii U but also for the next generation from Microsoft and Sony. Hardware expectations will be overly high for all three vendors, but I don't expect the numbers to match this generation. Nintendo can realize strong profits with a smaller base if Wii U (and 3DS) gamers buy more software, particularly paid digital downloads.
I think Sony and Microsoft will also need to sell more digital downloads to increase the software spend to base ratio. Microsoft will have an advantage here because of the lead Xbox LIVE has in PC, tablet and smartphone integration. Nintendo and Sony should both reconsider competition and potential co-operation with Android and iOS devices." - Inside Network's Billy Pidgeon
Link