Erm, I suppose Nintendo started on the DS quite some time back before the iPhone/iPod Touch?
So? It's still selling 1:1 in hardware and 1:20 or more in software. Apple is showing no signs of catching up. If they were catching up, fine! But they're not. Seriously, don't be like the Android fanbois now.
The software is very important in getting customers for the products. Apple make almost all of its profits from the hardware. Nintendo makes a large percentage of profits from the software. Maybe most of it.
Where did you get that from? Just guessing? Nintendo has always sold their hardware on profit from day one (unlike other manufacturers), and they maintain their prices for a long period of time, therefore achieving higher and higher margins. Overall, they have a operating proift margin of 20-30%, which is exactly what Apple makes.
Apple, by the way, had a very aggressive price drop for the iPod Touch last year (from $300 to $230), and in their conference call they admitted that the margin would therefore be lower. I wouldn't be surprised if the iPod Touch 8G currently had a lower gross margin than the Nintendo DS. I certainly wouldn't claim the opposite without any base for that claim.
So? It's still selling 1:1 in hardware and 1:20 or more in software. Apple is showing no signs of catching up. If they were catching up, fine! But they're not. Seriously, don't be like the Android fanbois now.
I'm not a fanboy. They are in completely different departments, Nintendo is strictly for gaming while Apple is SUCCESSFULLY making the iPhone a viable gaming platform. It took a very short while for Apple to catch up so fast. Get my point? Prove to me that Apple is not catching up. Any? Then I guess Nintendo must be lying.
I'd like to ask about your company's online strategy as a whole. During the last Game Developers Conference, so many third parties were showing iPhone applications that I expected a surge in their download sales. How does President Iwata evaluate iPhone? How do you feel about the current situation of Nintendo's WiiWare and DSiWare? What is your future prospect?
Answer:
Iwata:
People often said that Nintendo and Apple share much in common and I've often been asked how I feel about Apple products because I myself have been using Apple products.
Quite recently, media have been reporting that iPhone is a rival to Nintendo DS, but I do not strongly agree mainly because of the difference in the customers. For the customers with whom we have the most strength, it must be rather difficult for Apple to reach, and for the customer base where Apple has the biggest strength, Nintendo products would have a hard time in receiving their appreciations.
About online sales in general, if people ask such extreme question as, "Do you think that 20 years from now, customers will still be visiting retail outlets in order to purchase the majority of software in packaged format?", I will then have to answer, "well, perhaps, the situation will be different." However, if I am told, "within a couple of years from today, there will be no retail outlets which will be selling packaged software," my reaction must be, "there's got to be something wrong with that assumption because I do not believe people's behaviors can change in such a short time."
Already today, a number of people are aware of and appreciate the convenience of online shopping. Accordingly, Nintendo must be making efforts to provide them with the new mode of shopping. Simultaneously, however, I do not believe the competitive edge that packaged software has today will easily be taken up anytime soon.
Also, I do not imagine that iPhone will dominate the Nintendo DS market at once. My impression as the person who has used iPhone is, it is very attractive but, frankly, I did not feel that it was designed to be appreciated by a wide variety of people like how Nintendo has been designing its products.
I'd like to ask about your company's online strategy as a whole. During the last Game Developers Conference, so many third parties were showing iPhone applications that I expected a surge in their download sales. How does President Iwata evaluate iPhone? How do you feel about the current situation of Nintendo's WiiWare and DSiWare? What is your future prospect?
Answer:
Iwata:
People often said that Nintendo and Apple share much in common and I've often been asked how I feel about Apple products because I myself have been using Apple products.
Quite recently, media have been reporting that iPhone is a rival to Nintendo DS, but I do not strongly agree mainly because of the difference in the customers. For the customers with whom we have the most strength, it must be rather difficult for Apple to reach, and for the customer base where Apple has the biggest strength, Nintendo products would have a hard time in receiving their appreciations.
About online sales in general, if people ask such extreme question as, "Do you think that 20 years from now, customers will still be visiting retail outlets in order to purchase the majority of software in packaged format?", I will then have to answer, "well, perhaps, the situation will be different." However, if I am told, "within a couple of years from today, there will be no retail outlets which will be selling packaged software," my reaction must be, "there's got to be something wrong with that assumption because I do not believe people's behaviors can change in such a short time."
Already today, a number of people are aware of and appreciate the convenience of online shopping. Accordingly, Nintendo must be making efforts to provide them with the new mode of shopping. Simultaneously, however, I do not believe the competitive edge that packaged software has today will easily be taken up anytime soon.
Also, I do not imagine that iPhone will dominate the Nintendo DS market at once. My impression as the person who has used iPhone is, it is very attractive but, frankly, I did not feel that it was designed to be appreciated by a wide variety of people like how Nintendo has been designing its products.
Yes. I know. That's why I said that Apple and Nintendo are 2 different categories. Recent reports all say that Nintendo is STARTING to feel Apple's stress on them.
I'm not a fanboy. They are in completely different departments, Nintendo is strictly for gaming while Apple is SUCCESSFULLY making the iPhone a viable gaming platform. It took a very short while for Apple to catch up so fast. Get my point? Prove to me that Apple is not catching up. Any? Then I guess Nintendo must be lying.
If you think they are in different departments then we don't have to argue. In terms of mobile phones, the AppStore games are of course very successful. Just not in terms of video games.
I gave what I think is proof in my first post. If you look at the appstore mile stones that Apple announced (500 million sold, 1 billion sold, 1.5 billion sold...) and compare it to the number of iPod Touches and iPhones sold you will see that they have reached a certain level now of 4 or 5 downloads per user per month. At an average price of maybe 20 cents (because most apps are downloaded for free) this revenue of maybe $1 per customer per month (half of which is not even gaming) is far lower than Nintendo's.
Again, this is per customer! Each and every Apple customer (that includes you and me) would have to spend more on their AppStore games. Do you see that happening? I don't. Therefore Apple hardware needs to outsell Nintendo hardware by X:1 to reach equal software sales.
PS: I didn't say you're a fanboi, but that's how an Android fanboi would explain me why Android will eventually catch up to and kill the iPhone. In both cases, the dynamics are not there.
If you think they are in different departments then we don't have to argue. In terms of mobile phones, the AppStore games are of course very successful. Just not in terms of video games.
I gave what I think is proof in my first post. If you look at the appstore mile stones that Apple announced (500 million sold, 1 billion sold, 1.5 billion sold...) and compare it to the number of iPod Touches and iPhones sold you will see that they have reached a certain level now of 4 or 5 downloads per user per month. At an average price of maybe 20 cents (because most apps are downloaded for free) this revenue of maybe $1 per customer per month (half of which is not even gaming) is far lower than Nintendo's.
Again, this is per customer! Each and every Apple customer (that includes you and me) would have to spend more on their AppStore games. Do you see that happening? I don't. Therefore Apple hardware needs to outsell Nintendo hardware by X:1 to reach equal software sales.
PS: I didn't say you're a fanboi, but that's how an Android fanboi would explain me why Android will eventually catch up to and kill the iPhone. In both cases, the dynamics are not there.
Yeah OK. If I sounded harsh in my first post then I'm sorry. Friends?
This whole comment goes to show how ignorant you really are.
1. the DS is far from a lemon, I have already said we have three and have never had an issue with any of them. Neither have I said that the PSP or the iPod is a lemon either, if you get your jollies off by making things up, you must be real excited right about now.
2. You might want to look outside of the USA, just because you have stupid consumer laws where you live, doesn't mean it is like that in other places, and the consumer laws are much stronger where I live, and I can get items fixed for free outside of the warrantee period if the expected life span is deemed to be longer than the warantee period.
I don't think it was a lemon either. I just said it to throw what you've been saying back at you. You take things so hard.
The problem that is evident here is that not only you don't try to uphold at least some journalistic standards, you seem actively hostile to them. \ Since when I as a reader have to start looking for the sources which verify what is written in an article? This is not acceptable in academic writing and in better journalistic outlets as well (especially considering how cheap and easy it is to set link on a Internet medium). If you don't bother just mark it as a opinion piece.
We've supplied sources several times. It's your fault, because you decide that you don't want to believe, or possibly read them because they don't support your point of view. There's two sides to this. You can find pages that say that Nintendo never said that. Responsibility is on both sides.
This is a thread in a forum. We are not journalists. Neither are you.
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Ad hominem.
Oh please! If you think that's a real attack, that's sad.
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Doesn't state that Nintendo issued anything, only that the iPhone is a competitor (that I never denied in the first place).
Actually, it did.
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The. mind. boggles.
It boggles that you have such a problem reading that properly.
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But Nintendo expects its profit to fall for the first time in four years in the current year to March 2010 as the Wii's momentum slows and the company faces increased competition in the handheld business from Apple Inc's (AAPL.O) iPhone.
You can't tell that they are paraphrasing what Nintendo itself said?
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NINJA EDIT:
It's regrettable that you did let chance slide to post a link to where one might acquire the conference call. Priorities?
As I mentioned, that link was already posted, twice. It costs $54 for an English transcription.
What I don't understand about you is why, if you're so certain that Nintendo didn't say this, you don't find this yourself, and post it, if you think it's so easy to get. Then, if you were right, you could have the last word.
You don't judge the situation between Apple and Nintendo right, and I think this may in large part be due to Appleinsider's piece leading you on, which can only be described as Apple fan service because it doesn't paint an objective picture of the two platforms' and companies' situation, leaving out any points in Nintendo's favour.
It's your analysis that's missing some understanding here.
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A few facts:
- Nintendo is vastly profitable, in fact it was and remains the only consistently profitable company in gaming hardware, comparable to Apple on the PC market. Profits for the last 12 months were around $5 bn.
Nintendo is very profitable. They've done an amazing job this generation with the cheap Wii, and the DS over the past five years.
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- Nintendo had a slight slump last quarter, again comparable to Apple's Mac business which was also 8 % down year-over-year (And we don't want to call that a bad omen either, do we?). Nintendo did not change its forecast for the fiscal year that ends in March 2010.
Nintendo had a major drop in profit this quarter. not a slight slump. 66% is considered major by any standards. And Apple's computer sales weren't down by 8% year over year. The last quarter they were up 4%. They were down a few percent earlier, but then, the industry was down much further, and still is, even though Apple's sales were up.
Apple has not had a profit drop. In fact, this was their best non holiday quarter ever.
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- The Nintendo DS has sold close to 110 million times, the iPhones OS devices 50 million times. That's a 60 million headstart. Both are currently selling at a rate of about 30 million per year. Apple has no chance to catch the DS in the next 2 or 3 years. Besides that, Apple would have to outsell the DS by a ratio of 2:1 or 3:1 to make up for the fact that DS owners are far more dedicated to buying games.
The iP/T have been out for two years. The DS line, for five years. For Apple to have sold that much product in two years is pretty serious.
Apple's iP/T sales will continue to increase. somehow you have the notion that sales will continue at 30 million units a year. They won't. Next year, Apple will sell considerably more, and considerably more the year after that. It looks as though Nintendo's DS sales will remain about the same.
Apple will surpass them in three years.
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- The Nintendo DS software market currently has a volume of around 250 million copies per year or $10 billion per year. The AppStore hasn't even broken $1 billion per year, far from it. The iPhone games market is between 20 and 100 times smaller than the DS market.
You seem to forget that the App Store has only been open for one year. Look to yearly sales of games, not the total over time. How do you expect to compare the past five years totals with the totals of the first year? How many games sold for the DS the first year? Do you know?
Apple makes several times as much profit on an iPhone as the sales price for the DS. They likely make almost as much profit off the iPod Touch as the price of the DS. Apple isn't that interested in making money off the software. Nintendo MUST make money off the software.
Nintendo sells machines to make money off software sales. Apple sells software to make money off hardware sales.
You have to understand this in order to understand the difference between the two companies.
The DS is likely priced lower than Nintendo would have to price it if it weren't for software licensing income.
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- The AppStore is not in explosive growth anymore, if you look at the milestones Apple has announced and the number of apps released each day. It is growing fine, but not faster than the installed base anymore. That leads me back to what I state above: Apple would have to vastly outsell Nintendo on hardware if they wanted to match them on software revenue. That will give developers pause.
Actually, downloads are speeding up. You can't look at the first two or three months, and extrapolate from that alone. Downloads went from nothing when the store opened to what seemed to be a large amount at the time, but is dwarfed by current use.
You will have to show something that proves what you are saying about growth.
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If you consider those things I think you'll agree that Apple still has a long, long way to go before it can challenge Nintendo in gaming. Now there are are a lot of fine details about the respective advantages and disadvantages of the 2 companies' offerings, but to consider those objectively you have to get over the assumption that Apple is steamrolling Nintendo.
Considering that what much of what you said is incorrect, the answer is no, I don't have to agree.
And no one is saying that Apple is steamrolling over Nintendo except for your remake just now.
All I've said is that Apple is causing problems for them, and over time, sales of the iP/T will exceed that of the DS.
But at some point, Nintendo will, I expect, discontinue the DS series as they have the others before it, and will replace it with a more advanced model. They will have to.
If that model offers more, then they may be able to stave off the loss of the number one position. Of course, it would have to be backwards compatible. We'll just have to see.
So? It's still selling 1:1 in hardware and 1:20 or more in software. Apple is showing no signs of catching up. If they were catching up, fine! But they're not. Seriously, don't be like the Android fanbois now.
You are so very wrong. Apple is catching up. In two years they have sold half as many units of iP/T as Nintendo sold DS's in five years. That tells you nothing?
And you are not looking into the markets in which both companies are selling.
Nintendo is selling into what has seemed to be a fairly mature handheld game machine market. Just two companies, them and Sony. Now there is a third.
But the sales of both Nintendo's and Sony's machines have been fairly flat.
Apple is now selling into a quickly growing market, the smartphone market. Two years ago when the iPhone came out, smartphones were 10% of the overall phone market of about a billion phones a year.
Apple captured 10% of the smartphone market which is what they announced they wanted to do (before the phone came out).
But smartphones are rapidly growing as a percentage of the phone market. Apple is selling into that rapidly growing market. Apple has about 11% of it.
So, even if Apple doesn't raise their percentage of that market, their sales will grow at a good rate. It's estimated that a few years from now, smartphones will be 75% of the phone market. Even if the overall market didn't grow, not very likely, then that would be a least 750 million smartphones, of which Apple would have 11% of, or about 82 million phone sales a year. As the Touch is selling at the rate of between one third to one half of that of the iPhone, there could be anywhere from 27 to 41 million of them selling each year as well. That would be a total of over 109 million units a year, to as much as 123 million units a year.
And that assumes that Apple's phone doesn't increase its marketshare, and the phone market doesn't grow.
There is no way that Nintendo will ever sell over 100 million handheld units a year.
Where did you get that from? Just guessing? Nintendo has always sold their hardware on profit from day one (unlike other manufacturers), and they maintain their prices for a long period of time, therefore achieving higher and higher margins. Overall, they have a operating proift margin of 20-30%, which is exactly what Apple makes.
That's because Nintendo gets much of it's profits from software licensing. That's always more profitable than selling hardware. Why do you think that MS makes so much profit on their sales?
Apple's operating margins are a bit lower than that.
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Apple, by the way, had a very aggressive price drop for the iPod Touch last year (from $300 to $230), and in their conference call they admitted that the margin would therefore be lower. I wouldn't be surprised if the iPod Touch 8G currently had a lower gross margin than the Nintendo DS. I certainly wouldn't claim the opposite without any base for that claim.
Apple doesn't actually drop prices for the latest products. The iTouch line goes for $229. $299, $399.
I don't know what the margins on that model are either.
I'd like to ask about your company's online strategy as a whole. During the last Game Developers Conference, so many third parties were showing iPhone applications that I expected a surge in their download sales. How does President Iwata evaluate iPhone? How do you feel about the current situation of Nintendo's WiiWare and DSiWare? What is your future prospect?
Answer:
Iwata:
People often said that Nintendo and Apple share much in common and I've often been asked how I feel about Apple products because I myself have been using Apple products.
Quite recently, media have been reporting that iPhone is a rival to Nintendo DS, but I do not strongly agree mainly because of the difference in the customers. For the customers with whom we have the most strength, it must be rather difficult for Apple to reach, and for the customer base where Apple has the biggest strength, Nintendo products would have a hard time in receiving their appreciations.
About online sales in general, if people ask such extreme question as, "Do you think that 20 years from now, customers will still be visiting retail outlets in order to purchase the majority of software in packaged format?", I will then have to answer, "well, perhaps, the situation will be different." However, if I am told, "within a couple of years from today, there will be no retail outlets which will be selling packaged software," my reaction must be, "there's got to be something wrong with that assumption because I do not believe people's behaviors can change in such a short time."
Already today, a number of people are aware of and appreciate the convenience of online shopping. Accordingly, Nintendo must be making efforts to provide them with the new mode of shopping. Simultaneously, however, I do not believe the competitive edge that packaged software has today will easily be taken up anytime soon.
Also, I do not imagine that iPhone will dominate the Nintendo DS market at once. My impression as the person who has used iPhone is, it is very attractive but, frankly, I did not feel that it was designed to be appreciated by a wide variety of people like how Nintendo has been designing its products.
It's interesting.
His next to last statement is very revealing.
"Also, I do not imagine that iPhone will dominate the Nintendo DS market at once."
My bold.
That sure does read that he expects it to happen, but not right away. It seems like a slip.
Was he speaking in English, or was this a translation?
If it was in English, then I think it is as it was written, because the English used is very good.
If it can be shown to be a translation, then, just maybe, it's possible that it might be shown that the word wasn't the one that was meant, but it doesn't seem to be.
This was an interesting piece by Charles Cecil - on releasing "Under a Steel Sky" for iPhone.
<from Eurogamer>
Quote:
"Everything is f***ed up." Something dark flashes behind Cecil's normally kind eyes and his bald pate turns a darker shade of rosy. "When it comes to retail, everything is f***ed up, all the way down the line. If we sell a game in a shop, the retailer takes 40 per cent of the cover price, the format holder takes 15 per cent and the publisher pays us 20 per cent of what's left. That money has to be set against our development costs, so you can imagine how many copies of a game we have to sell to recoup. But on iPhone we receive 70 per cent of the game price immediately and we can sell direct to our audience. So we can charge a fraction of the price of a boxed product."
The iPhone OS has almost as many unit sales under its belt as the PSP. So it is becoming a credible platform.
What is specifically attractive to developers is that they can sell a title at $10 - and make more money per sale than a console product gives them priced at $35.
It is the App store which is making Nintendo nervous. Not the iPhone hardware per se.
This was an interesting piece by Charles Cecil - on releasing "Under a Steel Sky" for iPhone.
<from Eurogamer>
The iPhone OS has almost as many unit sales under its belt as the PSP. So it is becoming a credible platform.
What is specifically attractive to developers is that they can sell a title at $10 - and make more money per sale than a console product gives them priced at $35.
It is the App store which is making Nintendo nervous. Not the iPhone hardware per se.
C.
That's exactly right. It's also why we can't directly compare the dollars spent on other platform games against Apple's as some here want to do..
We are going to see Microsoft, Sony and Nintendo move increasingly towards direct-download games. Both for handheld, and regular titles.
This cuts out the middle-men (the stores) and allows them to reduce the end-price to consumers.
This looks a lot like the iTunes model. But there is a twist.
On AppStore the revenue split is 70:30
On XBLA the revenue split is 30:70
C.
In addition, right now, Nintendo limits downloads to 40 MB. There is no limitation for the App Store if you're using WiFi or your computer network for it.
One app with turn by turn directions is about 800 MB.
You are so very wrong. Apple is catching up. In two years they have sold half as many units of iP/T as Nintendo sold DS's in five years. That tells you nothing?
And you are not looking into the markets in which both companies are selling.
Yes you are quite correct, Nintendo sells their systems to people that want to play games. Apple has sold their systems as primarily a media player, or a phone, but not primarily a games machine, while it may very well be a very good games machine, not all purchases of the device are going to play games on it.
Look at the Wii for example, it has sold the most out of the current generation of consoles, but has the lowest attachment rate of them
Comments
Erm, I suppose Nintendo started on the DS quite some time back before the iPhone/iPod Touch?
So? It's still selling 1:1 in hardware and 1:20 or more in software. Apple is showing no signs of catching up. If they were catching up, fine! But they're not. Seriously, don't be like the Android fanbois now.
The software is very important in getting customers for the products. Apple make almost all of its profits from the hardware. Nintendo makes a large percentage of profits from the software. Maybe most of it.
Where did you get that from? Just guessing? Nintendo has always sold their hardware on profit from day one (unlike other manufacturers), and they maintain their prices for a long period of time, therefore achieving higher and higher margins. Overall, they have a operating proift margin of 20-30%, which is exactly what Apple makes.
Apple, by the way, had a very aggressive price drop for the iPod Touch last year (from $300 to $230), and in their conference call they admitted that the margin would therefore be lower. I wouldn't be surprised if the iPod Touch 8G currently had a lower gross margin than the Nintendo DS. I certainly wouldn't claim the opposite without any base for that claim.
So? It's still selling 1:1 in hardware and 1:20 or more in software. Apple is showing no signs of catching up. If they were catching up, fine! But they're not. Seriously, don't be like the Android fanbois now.
I'm not a fanboy. They are in completely different departments, Nintendo is strictly for gaming while Apple is SUCCESSFULLY making the iPhone a viable gaming platform. It took a very short while for Apple to catch up so fast. Get my point? Prove to me that Apple is not catching up. Any? Then I guess Nintendo must be lying.
http://www.nintendo.co.jp/ir/en/libr...0508qa/02.html
Question:
I'd like to ask about your company's online strategy as a whole. During the last Game Developers Conference, so many third parties were showing iPhone applications that I expected a surge in their download sales. How does President Iwata evaluate iPhone? How do you feel about the current situation of Nintendo's WiiWare and DSiWare? What is your future prospect?
Answer:
Iwata:
People often said that Nintendo and Apple share much in common and I've often been asked how I feel about Apple products because I myself have been using Apple products.
Quite recently, media have been reporting that iPhone is a rival to Nintendo DS, but I do not strongly agree mainly because of the difference in the customers. For the customers with whom we have the most strength, it must be rather difficult for Apple to reach, and for the customer base where Apple has the biggest strength, Nintendo products would have a hard time in receiving their appreciations.
About online sales in general, if people ask such extreme question as, "Do you think that 20 years from now, customers will still be visiting retail outlets in order to purchase the majority of software in packaged format?", I will then have to answer, "well, perhaps, the situation will be different." However, if I am told, "within a couple of years from today, there will be no retail outlets which will be selling packaged software," my reaction must be, "there's got to be something wrong with that assumption because I do not believe people's behaviors can change in such a short time."
Already today, a number of people are aware of and appreciate the convenience of online shopping. Accordingly, Nintendo must be making efforts to provide them with the new mode of shopping. Simultaneously, however, I do not believe the competitive edge that packaged software has today will easily be taken up anytime soon.
Also, I do not imagine that iPhone will dominate the Nintendo DS market at once. My impression as the person who has used iPhone is, it is very attractive but, frankly, I did not feel that it was designed to be appreciated by a wide variety of people like how Nintendo has been designing its products.
Here's some Nintendo quote from May, which I think is quite insightful:
http://www.nintendo.co.jp/ir/en/libr...0508qa/02.html
Question:
I'd like to ask about your company's online strategy as a whole. During the last Game Developers Conference, so many third parties were showing iPhone applications that I expected a surge in their download sales. How does President Iwata evaluate iPhone? How do you feel about the current situation of Nintendo's WiiWare and DSiWare? What is your future prospect?
Answer:
Iwata:
People often said that Nintendo and Apple share much in common and I've often been asked how I feel about Apple products because I myself have been using Apple products.
Quite recently, media have been reporting that iPhone is a rival to Nintendo DS, but I do not strongly agree mainly because of the difference in the customers. For the customers with whom we have the most strength, it must be rather difficult for Apple to reach, and for the customer base where Apple has the biggest strength, Nintendo products would have a hard time in receiving their appreciations.
About online sales in general, if people ask such extreme question as, "Do you think that 20 years from now, customers will still be visiting retail outlets in order to purchase the majority of software in packaged format?", I will then have to answer, "well, perhaps, the situation will be different." However, if I am told, "within a couple of years from today, there will be no retail outlets which will be selling packaged software," my reaction must be, "there's got to be something wrong with that assumption because I do not believe people's behaviors can change in such a short time."
Already today, a number of people are aware of and appreciate the convenience of online shopping. Accordingly, Nintendo must be making efforts to provide them with the new mode of shopping. Simultaneously, however, I do not believe the competitive edge that packaged software has today will easily be taken up anytime soon.
Also, I do not imagine that iPhone will dominate the Nintendo DS market at once. My impression as the person who has used iPhone is, it is very attractive but, frankly, I did not feel that it was designed to be appreciated by a wide variety of people like how Nintendo has been designing its products.
Yes. I know. That's why I said that Apple and Nintendo are 2 different categories.
I'm not a fanboy. They are in completely different departments, Nintendo is strictly for gaming while Apple is SUCCESSFULLY making the iPhone a viable gaming platform. It took a very short while for Apple to catch up so fast. Get my point? Prove to me that Apple is not catching up. Any? Then I guess Nintendo must be lying.
If you think they are in different departments then we don't have to argue. In terms of mobile phones, the AppStore games are of course very successful. Just not in terms of video games.
I gave what I think is proof in my first post. If you look at the appstore mile stones that Apple announced (500 million sold, 1 billion sold, 1.5 billion sold...) and compare it to the number of iPod Touches and iPhones sold you will see that they have reached a certain level now of 4 or 5 downloads per user per month. At an average price of maybe 20 cents (because most apps are downloaded for free) this revenue of maybe $1 per customer per month (half of which is not even gaming) is far lower than Nintendo's.
Again, this is per customer! Each and every Apple customer (that includes you and me) would have to spend more on their AppStore games. Do you see that happening? I don't. Therefore Apple hardware needs to outsell Nintendo hardware by X:1 to reach equal software sales.
PS: I didn't say you're a fanboi, but that's how an Android fanboi would explain me why Android will eventually catch up to and kill the iPhone. In both cases, the dynamics are not there.
If you think they are in different departments then we don't have to argue. In terms of mobile phones, the AppStore games are of course very successful. Just not in terms of video games.
I gave what I think is proof in my first post. If you look at the appstore mile stones that Apple announced (500 million sold, 1 billion sold, 1.5 billion sold...) and compare it to the number of iPod Touches and iPhones sold you will see that they have reached a certain level now of 4 or 5 downloads per user per month. At an average price of maybe 20 cents (because most apps are downloaded for free) this revenue of maybe $1 per customer per month (half of which is not even gaming) is far lower than Nintendo's.
Again, this is per customer! Each and every Apple customer (that includes you and me) would have to spend more on their AppStore games. Do you see that happening? I don't. Therefore Apple hardware needs to outsell Nintendo hardware by X:1 to reach equal software sales.
PS: I didn't say you're a fanboi, but that's how an Android fanboi would explain me why Android will eventually catch up to and kill the iPhone. In both cases, the dynamics are not there.
Yeah OK. If I sounded harsh in my first post then I'm sorry. Friends?
Yeah OK. If I sounded harsh in my first post then I'm sorry. Friends?
Haha, ok, sorry for the f-word. :-) Nothing is meant personal here, just arguing some random subjects. ;-)
This whole comment goes to show how ignorant you really are.
1. the DS is far from a lemon, I have already said we have three and have never had an issue with any of them. Neither have I said that the PSP or the iPod is a lemon either, if you get your jollies off by making things up, you must be real excited right about now.
2. You might want to look outside of the USA, just because you have stupid consumer laws where you live, doesn't mean it is like that in other places, and the consumer laws are much stronger where I live, and I can get items fixed for free outside of the warrantee period if the expected life span is deemed to be longer than the warantee period.
I don't think it was a lemon either. I just said it to throw what you've been saying back at you. You take things so hard.
Yes, you're a very exciting fellow.
And just who determines that?
The problem that is evident here is that not only you don't try to uphold at least some journalistic standards, you seem actively hostile to them.
We've supplied sources several times. It's your fault, because you decide that you don't want to believe, or possibly read them because they don't support your point of view. There's two sides to this. You can find pages that say that Nintendo never said that. Responsibility is on both sides.
This is a thread in a forum. We are not journalists. Neither are you.
Ad hominem.
Oh please! If you think that's a real attack, that's sad.
Doesn't state that Nintendo issued anything, only that the iPhone is a competitor (that I never denied in the first place).
Actually, it did.
The. mind. boggles.
It boggles that you have such a problem reading that properly.
But Nintendo expects its profit to fall for the first time in four years in the current year to March 2010 as the Wii's momentum slows and the company faces increased competition in the handheld business from Apple Inc's (AAPL.O) iPhone.
You can't tell that they are paraphrasing what Nintendo itself said?
NINJA EDIT:
It's regrettable that you did let chance slide to post a link to where one might acquire the conference call. Priorities?
As I mentioned, that link was already posted, twice. It costs $54 for an English transcription.
What I don't understand about you is why, if you're so certain that Nintendo didn't say this, you don't find this yourself, and post it, if you think it's so easy to get. Then, if you were right, you could have the last word.
melgross,
You don't judge the situation between Apple and Nintendo right, and I think this may in large part be due to Appleinsider's piece leading you on, which can only be described as Apple fan service because it doesn't paint an objective picture of the two platforms' and companies' situation, leaving out any points in Nintendo's favour.
It's your analysis that's missing some understanding here.
A few facts:
- Nintendo is vastly profitable, in fact it was and remains the only consistently profitable company in gaming hardware, comparable to Apple on the PC market. Profits for the last 12 months were around $5 bn.
Nintendo is very profitable. They've done an amazing job this generation with the cheap Wii, and the DS over the past five years.
- Nintendo had a slight slump last quarter, again comparable to Apple's Mac business which was also 8 % down year-over-year (And we don't want to call that a bad omen either, do we?). Nintendo did not change its forecast for the fiscal year that ends in March 2010.
Nintendo had a major drop in profit this quarter. not a slight slump. 66% is considered major by any standards. And Apple's computer sales weren't down by 8% year over year. The last quarter they were up 4%. They were down a few percent earlier, but then, the industry was down much further, and still is, even though Apple's sales were up.
Apple has not had a profit drop. In fact, this was their best non holiday quarter ever.
- The Nintendo DS has sold close to 110 million times, the iPhones OS devices 50 million times. That's a 60 million headstart. Both are currently selling at a rate of about 30 million per year. Apple has no chance to catch the DS in the next 2 or 3 years. Besides that, Apple would have to outsell the DS by a ratio of 2:1 or 3:1 to make up for the fact that DS owners are far more dedicated to buying games.
The iP/T have been out for two years. The DS line, for five years. For Apple to have sold that much product in two years is pretty serious.
Apple's iP/T sales will continue to increase. somehow you have the notion that sales will continue at 30 million units a year. They won't. Next year, Apple will sell considerably more, and considerably more the year after that. It looks as though Nintendo's DS sales will remain about the same.
Apple will surpass them in three years.
- The Nintendo DS software market currently has a volume of around 250 million copies per year or $10 billion per year. The AppStore hasn't even broken $1 billion per year, far from it. The iPhone games market is between 20 and 100 times smaller than the DS market.
You seem to forget that the App Store has only been open for one year. Look to yearly sales of games, not the total over time. How do you expect to compare the past five years totals with the totals of the first year? How many games sold for the DS the first year? Do you know?
Apple makes several times as much profit on an iPhone as the sales price for the DS. They likely make almost as much profit off the iPod Touch as the price of the DS. Apple isn't that interested in making money off the software. Nintendo MUST make money off the software.
Nintendo sells machines to make money off software sales. Apple sells software to make money off hardware sales.
You have to understand this in order to understand the difference between the two companies.
The DS is likely priced lower than Nintendo would have to price it if it weren't for software licensing income.
- The AppStore is not in explosive growth anymore, if you look at the milestones Apple has announced and the number of apps released each day. It is growing fine, but not faster than the installed base anymore. That leads me back to what I state above: Apple would have to vastly outsell Nintendo on hardware if they wanted to match them on software revenue. That will give developers pause.
Actually, downloads are speeding up. You can't look at the first two or three months, and extrapolate from that alone. Downloads went from nothing when the store opened to what seemed to be a large amount at the time, but is dwarfed by current use.
You will have to show something that proves what you are saying about growth.
If you consider those things I think you'll agree that Apple still has a long, long way to go before it can challenge Nintendo in gaming. Now there are are a lot of fine details about the respective advantages and disadvantages of the 2 companies' offerings, but to consider those objectively you have to get over the assumption that Apple is steamrolling Nintendo.
Considering that what much of what you said is incorrect, the answer is no, I don't have to agree.
And no one is saying that Apple is steamrolling over Nintendo except for your remake just now.
All I've said is that Apple is causing problems for them, and over time, sales of the iP/T will exceed that of the DS.
But at some point, Nintendo will, I expect, discontinue the DS series as they have the others before it, and will replace it with a more advanced model. They will have to.
If that model offers more, then they may be able to stave off the loss of the number one position. Of course, it would have to be backwards compatible. We'll just have to see.
So? It's still selling 1:1 in hardware and 1:20 or more in software. Apple is showing no signs of catching up. If they were catching up, fine! But they're not. Seriously, don't be like the Android fanbois now.
You are so very wrong. Apple is catching up. In two years they have sold half as many units of iP/T as Nintendo sold DS's in five years. That tells you nothing?
And you are not looking into the markets in which both companies are selling.
Nintendo is selling into what has seemed to be a fairly mature handheld game machine market. Just two companies, them and Sony. Now there is a third.
But the sales of both Nintendo's and Sony's machines have been fairly flat.
Apple is now selling into a quickly growing market, the smartphone market. Two years ago when the iPhone came out, smartphones were 10% of the overall phone market of about a billion phones a year.
Apple captured 10% of the smartphone market which is what they announced they wanted to do (before the phone came out).
But smartphones are rapidly growing as a percentage of the phone market. Apple is selling into that rapidly growing market. Apple has about 11% of it.
So, even if Apple doesn't raise their percentage of that market, their sales will grow at a good rate. It's estimated that a few years from now, smartphones will be 75% of the phone market. Even if the overall market didn't grow, not very likely, then that would be a least 750 million smartphones, of which Apple would have 11% of, or about 82 million phone sales a year. As the Touch is selling at the rate of between one third to one half of that of the iPhone, there could be anywhere from 27 to 41 million of them selling each year as well. That would be a total of over 109 million units a year, to as much as 123 million units a year.
And that assumes that Apple's phone doesn't increase its marketshare, and the phone market doesn't grow.
There is no way that Nintendo will ever sell over 100 million handheld units a year.
Where did you get that from? Just guessing? Nintendo has always sold their hardware on profit from day one (unlike other manufacturers), and they maintain their prices for a long period of time, therefore achieving higher and higher margins. Overall, they have a operating proift margin of 20-30%, which is exactly what Apple makes.
That's because Nintendo gets much of it's profits from software licensing. That's always more profitable than selling hardware. Why do you think that MS makes so much profit on their sales?
Apple's operating margins are a bit lower than that.
Apple, by the way, had a very aggressive price drop for the iPod Touch last year (from $300 to $230), and in their conference call they admitted that the margin would therefore be lower. I wouldn't be surprised if the iPod Touch 8G currently had a lower gross margin than the Nintendo DS. I certainly wouldn't claim the opposite without any base for that claim.
Apple doesn't actually drop prices for the latest products. The iTouch line goes for $229. $299, $399.
I don't know what the margins on that model are either.
iPhone margins are running about 58.5% though.
Here's some Nintendo quote from May, which I think is quite insightful:
http://www.nintendo.co.jp/ir/en/libr...0508qa/02.html
Question:
I'd like to ask about your company's online strategy as a whole. During the last Game Developers Conference, so many third parties were showing iPhone applications that I expected a surge in their download sales. How does President Iwata evaluate iPhone? How do you feel about the current situation of Nintendo's WiiWare and DSiWare? What is your future prospect?
Answer:
Iwata:
People often said that Nintendo and Apple share much in common and I've often been asked how I feel about Apple products because I myself have been using Apple products.
Quite recently, media have been reporting that iPhone is a rival to Nintendo DS, but I do not strongly agree mainly because of the difference in the customers. For the customers with whom we have the most strength, it must be rather difficult for Apple to reach, and for the customer base where Apple has the biggest strength, Nintendo products would have a hard time in receiving their appreciations.
About online sales in general, if people ask such extreme question as, "Do you think that 20 years from now, customers will still be visiting retail outlets in order to purchase the majority of software in packaged format?", I will then have to answer, "well, perhaps, the situation will be different." However, if I am told, "within a couple of years from today, there will be no retail outlets which will be selling packaged software," my reaction must be, "there's got to be something wrong with that assumption because I do not believe people's behaviors can change in such a short time."
Already today, a number of people are aware of and appreciate the convenience of online shopping. Accordingly, Nintendo must be making efforts to provide them with the new mode of shopping. Simultaneously, however, I do not believe the competitive edge that packaged software has today will easily be taken up anytime soon.
Also, I do not imagine that iPhone will dominate the Nintendo DS market at once. My impression as the person who has used iPhone is, it is very attractive but, frankly, I did not feel that it was designed to be appreciated by a wide variety of people like how Nintendo has been designing its products.
It's interesting.
His next to last statement is very revealing.
"Also, I do not imagine that iPhone will dominate the Nintendo DS market at once."
My bold.
That sure does read that he expects it to happen, but not right away. It seems like a slip.
Was he speaking in English, or was this a translation?
If it was in English, then I think it is as it was written, because the English used is very good.
If it can be shown to be a translation, then, just maybe, it's possible that it might be shown that the word wasn't the one that was meant, but it doesn't seem to be.
<from Eurogamer>
"Everything is f***ed up." Something dark flashes behind Cecil's normally kind eyes and his bald pate turns a darker shade of rosy. "When it comes to retail, everything is f***ed up, all the way down the line. If we sell a game in a shop, the retailer takes 40 per cent of the cover price, the format holder takes 15 per cent and the publisher pays us 20 per cent of what's left. That money has to be set against our development costs, so you can imagine how many copies of a game we have to sell to recoup. But on iPhone we receive 70 per cent of the game price immediately and we can sell direct to our audience. So we can charge a fraction of the price of a boxed product."
The iPhone OS has almost as many unit sales under its belt as the PSP. So it is becoming a credible platform.
What is specifically attractive to developers is that they can sell a title at $10 - and make more money per sale than a console product gives them priced at $35.
It is the App store which is making Nintendo nervous. Not the iPhone hardware per se.
C.
This was an interesting piece by Charles Cecil - on releasing "Under a Steel Sky" for iPhone.
<from Eurogamer>
The iPhone OS has almost as many unit sales under its belt as the PSP. So it is becoming a credible platform.
What is specifically attractive to developers is that they can sell a title at $10 - and make more money per sale than a console product gives them priced at $35.
It is the App store which is making Nintendo nervous. Not the iPhone hardware per se.
C.
That's exactly right. It's also why we can't directly compare the dollars spent on other platform games against Apple's as some here want to do..
That's exactly right. It's also why we can't directly compare the dollars spent on other platform games against Apple's as some here want to do..
We are going to see Microsoft, Sony and Nintendo move increasingly towards direct-download games. Both for handheld, and regular titles.
This cuts out the middle-men (the stores) and allows them to reduce the end-price to consumers.
This looks a lot like the iTunes model. But there is a twist.
On AppStore the revenue split is 70:30
On XBLA the revenue split is 30:70
C.
We are going to see Microsoft, Sony and Nintendo move increasingly towards direct-download games. Both for handheld, and regular titles.
This cuts out the middle-men (the stores) and allows them to reduce the end-price to consumers.
This looks a lot like the iTunes model. But there is a twist.
On AppStore the revenue split is 70:30
On XBLA the revenue split is 30:70
C.
In addition, right now, Nintendo limits downloads to 40 MB. There is no limitation for the App Store if you're using WiFi or your computer network for it.
One app with turn by turn directions is about 800 MB.
And just who determines that?
There is a government department you can lodge a complaint with if the company who sold it won't come to the party when it comes to repairs.
But at the end it varies by item and price etc
You are so very wrong. Apple is catching up. In two years they have sold half as many units of iP/T as Nintendo sold DS's in five years. That tells you nothing?
And you are not looking into the markets in which both companies are selling.
Yes you are quite correct, Nintendo sells their systems to people that want to play games. Apple has sold their systems as primarily a media player, or a phone, but not primarily a games machine, while it may very well be a very good games machine, not all purchases of the device are going to play games on it.
Look at the Wii for example, it has sold the most out of the current generation of consoles, but has the lowest attachment rate of them