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Going Third-Party Didn't Fix Sega, Will it Fix a Third-Party Nintendo?
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Going Third-Party Didn't Fix Sega, Will it Fix a Third-Party Nintendo?
by Bryan Cashman on 01/22/14 09:34:00 pm   Featured Blogs

The following blog post, unless otherwise noted, was written by a member of Gamasutra’s community.
The thoughts and opinions expressed are those of the writer and not Gamasutra or its parent company.

 

The author, Bryan Cashman ( @consulgamer ), blogs about business issues in the video game industry at CONSULGAMER. This article represents Bryan's personal opinion only.

If Nintendo becomes a third-party and sells games on competing video game consoles, will a third-party Nintendo see stronger sales? History tells us the bump in business may not be as strong as some think.

After poor sales and stronger competition from other consoles, Sega became a third-party publisher in 2001, releasing games across a range of platforms and eventually abandoning the company’s last home console, Dreamcast. By moving the company’s esteemed brands to PlayStation 2, Xbox and GameCube, Sega hoped to boost software sales significantly by leveraging the larger install base of other consoles.

Analysts today say Nintendo should release software on Microsoft and Sony’s consoles to take advantage of their larger install-base, as Nintendo continues to struggle to sell consoles of the new Wii U platform. After two holiday seasons, the Wii U only halved its annual sales target for Wii U software, from 38 million to 19 million units.

Sega’s experience with bringing Sonic the Hedgehog, their top franchise, to other consoles is a telling story of what could happen to premiere Nintendo franchises like Mario. If Nintendo becomes a third-party publisher for other consoles, Mario will certainly see an initial sales spike on other platforms, but the brand and its content may slowly become commoditized as existing Nintendo consumers opt for other games from other publishers.

Mulit-platform Sonic Sales Figures

Mulit-Platform Sales Figures for the Sonic the Hedgehog Series

As shown, above, Sonic sales doubled after initially launching on other consoles. While the first Sonic Adventure sold 1.26 million units on Dreamcast in North America, a multi-platform release boosted total units sold to 2.13 million. However, after multiple iterations, the game’s sales performance dropped steadily. By the time Sega rebooted the franchise with 2006’s Sonic the Hedgehog, the franchise was selling less units across all systems than it originally sold on Dreamcast alone. Sega would later see restored sales among some future Sonic games, such as Sonic Unleashed, but the Sonic brand never returned as a system selling AAA franchise, as it once was when on Sega consoles.

Ports of Back-Catalogs May Not Sell

Nintendo has a range of GameCube and Wii games that could easily be remastered in HD and released for Xbox and PlayStation platforms, but based on the performance of Sega’s Crazy Taxi franchise, consumers may not be willing buyers for game ports. Crazy Taxi sold one million copies on Dreamcast, and the sequel performed even better, at 2.5 million units sold. However, success on Dreamcast did not translate into sales on other consoles, as the game only saw a fraction of its success on other consoles. By the time of the Xbox-exclusive release of Crazy Taxi 3, the franchise had lost its charm, selling only 140,000 units.

Multi-Platform Sales Figures of Crazy Taxi

Multi-Platform Sales Figures of Crazy Taxi

Annual Demand Remains Unchanged on More Competitive Platforms

While Sonic and Crazy Taxi’s performance may be due to quality issues within franchise releases, the annual releases of well reviewed games in the NBA 2K and NFL 2K clearly illustrate that Nintendo may not receive a boost in sales when releasing games on other consoles.

Multi-platform Sales Figures of the NBA 2K Series

Multi-Platform Sales Figures of the NBA 2K Series

A view of the performance of the NBA 2K series and the NFL 2K series shows that demand did increase annually for Sega’s sports series, but not by a significant multiplier. On Dreamcast, Sega’s sports series did not have to compete with EA Sports releases, but once moved to other platforms, Sega did not see significant sales boosts due to the far more competitive environment as a third-party publisher.

Multi-platform Sales Figures of the NFL 2K Series

Multi-Platform Sales Figures of the NFL 2K Series

After being acquired by Take 2, the 2K sports series did see a sales boost for their ESPN 2K5 releases, but the boost is more a result of the games’ $20 retail price, hinting further at the level of commoditization pushed on the games by a more competitive multi-platform environment with EA Sports titles on Xbox and Playstation.

A Third-Party Nintendo Could Still Succeed

Still, Nintendo’s experience going third-party may not mirror Sega’s. Nintendo’s franchises are among the most well-known in the world, and may see sustained demand on other platforms due to the caliber of their quality and brand power.

Further, given the Wii U only has a global install base of 4.3 million consoles compared to Dreamcast’s 10.6 million, Nintendo may see larger sales boosts than Sega due to Wii U’s extremely limited install base.

Finally, Nintendo's third-party opportunities outside of consoles are far greater than Sega's in 2001. With the massive adoption of mobile devices running on iOS and Android, Nintendo has the opportunity to sell content to a new set of consumers.  While other consoles are already saturated with console game experiences, mobile devices are not.  Mobile devices also have proven demand for classic Nintendo games, as evident by existing demand for emulators across mobile devices.

If anything, comparisons to Dreamcast should indicate that going multi-platform is not a clear winning strategy for Nintendo. Sales may increase initially, but the company will have to focus on more than just a multi-platform console strategy to succeed.


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Comments


Jay N
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Excellent summary. Going third-party didn't fix Sega, and if anything, their output today is more meager than it ever was.

Going third-party won't fix Nintendo either. The company is struggling with HD, and its online components are in shambles, not to mention its decade-long lack of experience with DLC and microtransactions, veritable must-haves for mobile gaming.

Nintendo's core franchises might sell well on other consoles, but their lesser known ones will likely drown in the competition. The reason they even do as well as they do is probably due to the lack thereof on Nintendo's own consoles.

And of course there are licensing fees to consider when launching on other companies' platforms, fees Nintendo want others to pay them rather than have to pay themselves.

Nintendo's back catalog is enviable, but very spent. Most gamers who have any kind of relationship to these titles already own them, or have owned them in the past. There's probably not a huge sales potential in re-releasing them, especially on smart phones, where most of them wouldn't fit very well due to the lack of physical buttons.

I'd love to see what new IP Nintendo could come up with on mobile, however (or any of their platforms, for that matter) but that's something they can do on a device they own themselves, if they decide to.

Danny Champlin
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I don't think comparing Nintendo to Sega is a good comparison. Nintendo games have traditionally been way better. They make games that (even today) are considered some of the best ever. Sega, especially since going multi platform, had not had remotely close to the same quality.

For this reason, I believe Nintendo games would continue to be just as good on other consoles, and their back catalog would translate very well to other consoles. This quality will translate into better sales.

Terry Matthes
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I don't think the current Nintendo software lineup would do well on other platforms. I believe in every genre of video game Nintendo's offerings are bottom of the barrel right now, with the exception of 2D Platformer. If they released better titles in the future to third party systems then I'm not sure there would be a reason to buy an actual Nintendo.

I love the idea of selling back-catalouge games, but their prices (like Square's) are literally insane. A lot of the games should be sold for 1-5 dollars and they are way way more. Even this as just a start would be a good test to see if their brand name holds any weight with the current 3rd party markets.

Merc Hoffner
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I find it literally difficult to read some of the stuff you and others are saying. It strains my comprehension.

Mark Nelson
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Perhaps rather than going multi-platform, they choose a single platform and hammer out super-preferential terms. E.g., if Apple releases a media center/console (with controller), they go exclusive in exchange for a permanent top-level category in the app store. And also flesh out a series of touch screen games so that they can propagate to Apple mobile devices with a top-level category there as well.

They could tie the terms of the deal to potential sales numbers of the new Apple media center/console, and lead with new Mario/Zelda/Metroid games and a series of well made ports of back catalog games.

I think an Apple pairing would weaken Sony/Microsoft rather than strengthen them (...better for Nintendo?) and Android is probably too open a platform for them...


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Some background: I purchased a GBA and Nintendo DS to play the Advance Wars series. I purchased a Wii to play Mario, Zelda and Metroid games. While I've reached exhaustion for Zelda and Mario games, I would likely have purchased a Wii U for a platform-defining Advanced Wars or Metroid game...

Now that I think back, I've only purchased two third-party games for a Nintendo platform since the N64...

Sterling Reames
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It's unfortunate, because Sega actually was one of the best suited companies to be first party. Their lineup of games spans across almost all the big genres people look for (sports, racing, adventure, fighting, rpg, etc). While you could say Nintendo has done the same, it's hard to make that case when most of their franchise games include Mario spin-off titles. Nintendo structures their games to be played on their platforms. They've built an incredibly strong brand over three decades, and I doubt they'll be selling that out for short-term gains any time soon.

Ryusei Mikkola
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Nintendo is not in the same situation as Sega was. Nintendo has a lot more money than Sony does. There has been some articles saying that Sony is highly going to be bankrupted in the next two years. It was over 70% while Nintendo has 14% if I remember correctly. Sony is selling buildings and Nintendo is building buildings. Wii U sales are not going to hit Nintendo that hard. They know what they did wrong with Wii U. Third party company support ainīt that great. There are reasons for it, but I donīt think most of them are the right once.

Ordani Briton
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Nintendo drop the ball by just catering to the family-friendly Wii players and did very little to entice the hard core gamer to its console. The third party developers just didn't seem excited to make games for it.
Even EA kind of shied away from Nintendo. Yeah you can say that Skylanders sold the most on the WiiU,
but that is just one title.

Nintendo should just stick with the handheld devices that the kids enjoy to play on. That is Nintendo's
Tour de Force.

Eric Harris
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Why so much hate on the family minded segment of Nintendo? The only reason why the Wii U seems to not be doing well is because there are not as many exclusive games out yet. Games move the systems, not the hardware specs. Like you said: "Skylanders sold"... When more games come out for the Wii U, they will sell more systems.

wes bogdan
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My primary issue with Nintendo is how backwards their policies have become this is the same co. That said ONLINE IS a fad...IT will pass and I bet they expected it to that and going with Sega when they left console hardware they always were 1st out...1st out of date look at genesis,sega CD,32x then saturnday and dreamcast'

Nintendo had gcn then Wii and a weak follow up to the wii in Wii u.

Everyone fears they're going to loose their identity and beloved series will exist in name ONLY as they don't resemble what came before.

I believe ninty could become the next Ubisoft with their war chest of funds.

As for dlc and microtransactions they can be done right and wrong marvel vs capcom,sf 4 etc asks how many ryu can you buy I remember when games shipped finished and not blacked out for bleeding....while borderlands 2 doesn't just unlock content as the dlc IS up to and over 1gb much better as that wasn't on the disc

Nintendo could release another box in 2017 to compete against x1 and ps4 but it would still likely be their dreamcast.


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