Random Gaming Thoughts

[prfsnl_gmr]

I am not exposed to Nintendo ads on a regular basis, so I have no comment on this. If these are online ads then it makes sense to see them advertising online services. Whereas if you were in a brick'n'mortar retailer you might see physical advertising materials accordingly.

I have received e-mail advertising from Nintendo for many years. In the past, the advertising highlighted street dates, retailers, etc. Now, that advertising highlights eShop availability.

I'd counter that aspect again shows Nintendo always lags behind Sony and Microsoft when it comes to online integration. Further demonstrating the possibility of Nintendo going all digital before either Sony or Microsoft even less of a possibility.

The fact that Nintendo has traditionally lagged behind its competitors with regard to digital distribution is irrelevant to whether Nintendo will embrace a digital-only distribution model, and there is no reason that Nintendo - of all companies - should wait to see how something works out for its competitors before moving in a new direction. (Apple certainly didn't wait around for MicroSoft to release the Zune before moving forward with the iPod.)

I'd have to ask for a source citing Nintendo has been intentionally limiting its prints lately.

My sources are conversations with GameStop employees and high prices for certain physical Nintendo games in the secondarty market.

And while they are offering special DLC, Nintendo has also been offering special physical incentives with their retail releases.

Collector's editions, limited editions, day-1 editions, etc. are a type of selective pricing, and it is much easier to engage in selective pricing practices with a digital distribution model.

The mechanisms removed from those revised devices were ones that facilitated backwards compatibility with previous platforms. The primary media mechanisms incorporated into those devices for reading their proprietary physical media remained even after revisions.

True. What I meant was that Nintendo has undercut its competitors with each of its last two consoles and handhelds. Removing the mechanisms necessary to read physical media will help it accomplish this goal. I was not referring to the removal of mechanisms from revisions to earlier Nintendo hardware.

I 100% agree that internet access is far better in those countries, an advantage having to do with much smaller landmasses to wire up for broadband. However the USA being as large as it is, with scattered population centers as it has, does not have the same internet advantages. Hence broadband access in the USA is not comparable to UK and Japan at this time. Nor will it be in 2016 when the NX is revealed.

Here, I think you are conflating a population's size with its profitability. It may be that, in Nintendo's determination, the revenues received from serving the ever-shrinking population without a consistent relatively-high-speed internet connection do not justify the costs of doing so. It is unquestionably more expesive to produce and distribute physical content, and if, in Nintendo's determination, distributing physical content is not sufficiently profitable, it will certainly stop doing so. (In other words, Nintendo would certainly be better off making $3/customer on 10 million customers than $0.50/customer on 30 million customers.)

Those were profitable ventures yes indeed. But neither of those franchises were created by Nintendo, and as such fail to exhibit any relevance to Nintendo's own internal distribution methodology.

Whether Nintendo developed them is irrelevant. They demonstrate that very profitable children's video games do not require physical media or 10 GB installations, and I am certain that these franchises' success has not gone unnoticed by Nintendo.

That necessitates Nintendo pricing its digital version of a game at a lower price than the secondary market commands. Not an optimal outcome compared to say a reprint.

Repricing with a digital distribution model is incredibly easy, and the lack of physical media would eliminate the secondary market entirely. Accordingly, Nintendo would keep all of the revenues associated with its games, and it could maximize the profits on its games by simply lowering proces over time. In other words, those people who absolutely have to play a game on the release date would pay the most, and those of us, like me, who are content to wait a bit, would buy the game when it goes on sale. (Again, this is a type of selective pricing, and with physical media, the income from consumers like me often goes to third-party resellers like Gamestop.) Moreover, the cost associated with a physical reprint is increasingly unlikely to justify the revenue resulting from it. (IMO, this is why we now see fewer "greatest hits" titles, especially from Nintendo.)

.....

At the end of the day, I don't really care whether Nintendo abandons physical media. I just would not be surprised to see it do so.

[Exhuminator]

The fact that Nintendo has traditionally lagged behind its competitors with regard to digital distribution is irrelevant to whether Nintendo will embrace a digital-only distribution model

It is relevant because it establishes a pattern for Nintendo's behavior in regards to the company's online endeavors.

It may be that, in Nintendo's determination, the revenues received from serving the ever-shrinking population without a consistent relatively-high-speed internet connection do not justify the costs of doing so.

The only way to prove that this is a viable theory is to see Nintendo's overall profits concerning digital versus physical sales. Do you have any links to such material? If they exist and show a positive trend in revenues received than I will agree.

if, in Nintendo's determination, distributing physical content is not sufficiently profitable, it will certainly stop doing so

I have seen no evidence from Nintendo to indicate that physical content has not been sufficiently profitable for them. If you have a source on this please share it.

As far as Gamestop getting less Wii U game copies than might be expected, I'd wager that has more to do with sagging Wii U console sales and therefore a smaller sales potential in general. Nintendo is well aware of this and doesn't want to deal with soaking up returned overstock. They'd rather fill a reorder than accept RMAs.

I am certain that these franchises' success has not gone unnoticed by Nintendo.

And that's part of why Nintendo chose to develop games for mobile platforms in the future. But that does not automatically mean Nintendo will drop physical media on their own proprietary platforms going forward as a result.

lots of stuff about why digital is more profitable than physical

I know all of that. The point remains that there are lots of consumers out there who prefer physical media, or can only access physical media. If that was not true, Nintendo would not still be producing physical versions of their Wii U and 3DS games, despite the fact that they also offer those games on their corresponding eShops. That proves there's a demographic out there still buying physical Wii U/3DS releases even though their digital versions are available. That's not an insignificant fact.

I don't really care whether Nintendo abandons physical media. I just would not be surprised to see it do so.

I don't really care either, as evidenced by all the eShop games on my 3DS. I do think it's short sighted though to assume Nintendo is ready to lead the way in digital distribution versus their competitors. I say that for plenty of reasons I've already explained earlier.

Ultimately one of us is gonna get to say a really redemptive TOLD YOU SO come 2016.

[prfsnl_gmr]

The only way to prove that this is a viable theory is to see Nintendo's overall profits concerning digital versus physical sales. Do you have any links to such material? If they exist and show a positive trend in revenues received than I will agree.

Here you go:

http://www.nintendo.co.jp/ir/en/library ... 3.html#s25

Ultimately one of us is gonna get to say a really redemptive TOLD YOU SO come 2016.

Not really. I wouldn't be surprised to see Nintendo ditch physical media, but I wouldn't be surprised to see it keep physical media either.

[MrPopo]

Let's be honest here; individual physical disks are on their way out for consoles (handhelds are a more interesting case because they have tighter storage limits and are less likely to be always connected). It might not come in 2016 but it is inevitable.

[isiolia]

Broadband access and reliable-uncapped-broadband access are different things though. The latter is what is needed in large conformity in order to achieve the market penetration a digital only console would require.

While I don't disagree that better and higher/uncapped internet in the U.S. would be great, there is a middle ground that works. The more big companies that are relying on customers having that kind of connection, the more pressure ISPs might have to provide it as well.

Either way, there are a lot of people with decent or better internet connections out there to market to.

Yet despite how small some of those games are, they still got physical releases regardless. Which tells me Nintendo still finds value in the format.

Or they did when designing the Wii U several years ago, when they weren't partnering with mobile game companies, pushing DLC, and making bank on RFID equipped figurines.

The thing I look at there is how relatively feasible it makes digital for Nintendo, compared to MS and Sony. Even the standout large downloads like Smash or Xenoblade Chronicles X are maybe average-ish for a PS4 or Xbox One game.

On the flipside, it happens often that popular Sony and Microsoft platform games are released as GOTY editions with those patches and DLC included on disc. So that stuff is still accessible to offline gamers eventually.

Sure, but as I mentioned, you also have bundled vouchers and "free" digital games and the like that (far as I know) don't exactly have a coupon to send in for the disc, in the event you don't have good internet. They're products that are really designed around having a good connection, even if they don't strictly require it yet.

Until Microsoft and Sony drop their physical media integration in their consoles, I can't agree it's the mainstream option. If either of them put out a PS4 or Xbox One revision that did not include an optical media drive, then we would be seeing a true tonal shift.

I was saying that about downloaded/streaming content in general, not strictly about eschewing physical media entirely. As I said above, they may not cease to function without one, but they're reaaally designed around having a good internet connection.

Wouldn't surprise me at all to see revisions of those consoles that (at least) make the optical drive an add-on.

I don't think it would take Nintendo long to recoup that $17 drive per console. Especially if someone buys a new game that they developed, published, and distributed themselves.

It's still a decent amount of money per machine, and Nintendo has cut features that would have cost less to include before when revising machines.

I'm not saying digital only games aren't more profitable. I'm saying that cutting out physical game discs at this point in time is unprofitable.

I think that's very hard to say for sure, other than pointing to mobile and PC doing pretty well without especially needing them.

I agree that when that tipping point is reached, the shift will happen. But until then Nintendo seems to want to play things safe. I mean look at New Super Luigi U, Wii Sports Club, and NES Remix for example. They were all digital only titles that Nintendo decided later to release physically. They didn't make that choice on a whim.

Sure, but was that because significant numbers of interested customers were unable to download them? It could have been due to wanting to bolster retail presence/flesh out the release calendar. Could be that the few people buying Wii Us are more inclined to buy discs, for collections and such.
However, it's still an extension of a system designed years ago, not one being designed today, presumably in conjunction with a new unified account system. My inclination is that the NX is going to skew more towards iOS/Android in an attempt to capture more of that market, and the resulting software sales model may wind up being similar too.

[prfsnl_gmr]

My inclination is that the NX is going to skew more towards iOS/Android in an attempt to capture more of that market, and the resulting software sales model may wind up being similar too.

Most certainly.

We will deploy our game business on smart devices not because we think that the dedicated game system business will wane, but because doing so will encourage a greater number of people to associate with Nintendo IP, to become familiar with the charms of video games and, eventually, to explore more premium experiences on our dedicated game systems. To realize this, we need to create a bridge between the two platforms. When we announced our business alliance with DeNA, we announced an "integrated membership service," with the mission of establishing a bridge between smart devices and dedicated game systems. The membership service will encompass multiple devices such as our existing Nintendo 3DS, Wii U, the dedicated game system NX, which is currently under development, smart devices and PCs.

[isiolia]

Aye, at this point what I'm wondering is if the account system is being held up so that it can be announced/released with the NX, or if it'll be staggered. I was expecting to see details in the E3 presentation, as it had been a while since the original announcement, but nada.

[Sarge]

The digital future is all darkness and despair. Unless it's DRM-free. (Riiiiiiight.)

Once again, people pitched a fit when Microsoft proposed a similar system, and that was without killing physical media, but tying them to an account. I'm not sure Nintendo is going to be the company to take that risk... but their current market position may make them take more risks.

Seriously, I can see both sides of this, and can see compelling reasons why they may go all-digital or why they wouldn't. As it is, I think physical releases are still profitable, just not as profitable, and if it hits the point where the loss in potential customers is offset by the gains in folks willing to give up physical media, we'll have hit our tipping point, with all the incumbent ownership issues that entails.

This really has been an informative and entertaining discussion, y'all!

[MrPopo]

Yeah, people pitched a fit because Microsoft is TERRIBLE at messaging. They presented a system that was essentially "Like Steam on the PC except with sharing features". Steam is obviously a very successful model in the PC world, so if Microsoft had messaged better I think they could have gotten people on board with it.

[Sarge]

Well, the other portion is that the console market is a bit different from the PC market. The PC market had already been sliding digital for a while. That's a much dicier proposition in the console space.