Analyst Says NX Doesn’t Have To Compete Against PS4 And Xbox One To Be A Success

Matt Diener, who is a qualitative analyst for EEDAR, says that he doesn’t believe that the forthcoming Nintendo NX platform will need to compete against the Xbox One and the PlayStation 4 for it to be a success. Diener points towards the Wii, which was radically different from the PlayStation 3 and Xbox 360, which was a huge success for Nintendo. He admits that when you take big risks, you’re going to have a few missteps along the way.

“I don’t think the NX needs to compete against the PlayStation 4 and Xbox One to be successful. Nintendo has a history of doing things its own way, and that’s partially what’s allowed it to deliver excellent, oddball experiences like Splatoon and Super Mario Makercompletely out of left field. When this experimentation works, as it did so well for the Wii, DS, and 3DS, it has paid dividends for Nintendo – but, unfortunately, when you take big risks, you’re going to have a few missteps along the way,”

“For the NX to succeed in the current gaming ecosystem, it needs to focus on delivering a clever, Nintendo-only experience while enticing third-party developers to port major releases onto it,” Diener said. “One rumor about the NX contends that it will be a hybrid handheld / console device, and I think that’d be a fantastic move for both Nintendo and players for the amount of freedom it would give.”

“The worst-case scenario I could see for the NX is if Nintendo tries to copy the PlayStation 4/Xbox One too closely in an attempt to entice more third party support for the platform. Those 8th generation console gamers without a Wii U are already well established in the Sony and Microsoft camps, and convincing them to leave for an experience that doesn’t offer anything different from what they’re already getting seems like an incredibly hard sell,” Diener said.

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Pachter Claims Nintendo NX “Is Doomed” Without Third Party Support

Outspoken video game industry analyst Michael Pachter believes that Nintendo’s upcoming NX platform is “doomed before it even launches” without strong third-party support. We heard earlier this year that Nintendo said that they have received “joint initiatives” from third-party developers during E3 2015. So it’s clearly something they are working out. Here’s what Pachter had to say.

“If Nintendo gets the same level of support for NX that it got for the Wii U, it’s doomed before it launches. That’s much, much more important than the price. If they get third-party support, if they make it in such a way that everyone can port every game over and the incremental cost to make if for Xbox One, PS4 and NX is $1-2 million, every game will be there. If it’s a whole different language, or requires a whole different programming scheme, or requires something to do with the GamePad where you’ve got the controller different the way Wii U works, it’s doomed. No one’s going to support it.

I think the publishers are leery of Nintendo, the third-party publishers. I think they got burned by the Wii, they were never good on the Wii, they got burned by the Wii U – especially Ubisoft. So, I think they are going to be very, very cautious. The more this thing looks like a PS4 or Xbox One I think the better it does, and, ultimately, the only people who are going to buy it are people that don’t have a PS4 or Xbox One. Or, people who have a PS4 or Xbox One, and want to play Nintendo games.

There are a lot of the latter and by the time NX comes out – assuming it comes out in 2016 – the PS4 and Xbox One will be barely halfway through saturating their potential install base. So, perhaps the NX will capture a third of that remaining market, because if you don’t have either a PS4 or Xbox One and you can play everything on PS4 or Xbox One except first-party titles, what are you giving up? You get all Nintendo first-party, and you’re giving up a handful of Microsoft and Sony first-party. So, it’s going to be back to close to a level playing field, but it really depends on third-party support.

Don’t know what they are going to do, don’t know when the NX will come, [don’t] really know what Nintendo’s got planned – we don’t know many details. I am sure we are going to see something on the NX next year, [but] I’m not sure when it’s launching. When I hear more, I reserve the right to change my mind about exactly what things are going to do and how well they’ll sell.”

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Thanks, MasterPikachu6 for the tip.

Analyst David Gibson Believes It’s Likely Nintendo NX Will Launch Next Year

Following on from our story of Nintendo distributing software kits for the Nintendo NX, David Gibson an analyst at Macquarie Capital Securities believes it’s increasingly likely that Nintendo plans to launch the platform next year. Gibson attributes this notion to the slowing sales of the Wii U and Nintendo 3DS.

“We are increasingly of the idea that Nintendo might launch the NX in 2016 because of the softness of 3DS and Wii U.”

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Analyst Doesn’t Believe Wii U Will Ever Catch Up With PlayStation 4 And Xbox One

Ed Barton, a video games industry analyst at Ovum consultancy, has told the BBC that he doesn’t hold any hope of the Wii U catching up with the PlayStation 4 and Xbox One in terms of sales. Barton acknowledges that the company has some great games in the pipeline but is unconvinced that they will make consumers invest in Wii U.

“They have a relatively good games pipeline, but the big question is about its hardware.”

“The Wii U is so far behind now, and the perception of the audience that it’s a relatively under-powered console compared to the PlayStation 4 and Xbox One is now pretty firmly cemented.”

“Given how inaccurate some of Nintendo’s forecasts have been going into their results in terms of hardware and software sales in the past, I’m not optimistic.”

Analyst David Gibson Projects That Nintendo Won’t Quit Hardware

David Gibson, Senior Analyst and Regional Head of Software & Services at Macquarie Research Japan, has told CNBC that despite Nintendo’s current struggles he very much doubts that Nintendo will exit the hardware business. Instead Gibson thinks that Nintendo will focus on opening up its own platform for developers.

CNBC Host:
And remember, as Kari was highlighting to us, plenty of earnings on tap this week: Nintendo will reveal the magnitude of their troubles with their full year earnings due out Wednesday. At least, given the sizable setback that we see on the Nikkei, Nintendo quite fairly resilient we should say, down only just by a third of 1% (-0.29%). The company has warned it is headed for its third consecutive annual loss, weighed down by weak Wii U sales. Nintendo slashed its Wii U [yearly] sales forecast by almost 70% to 2.8 million units for the year [April 2013 – March 2014]. This is [after] rivals Sony and Microsoft racked up huge sales last year for the PlayStation 4 and Xbox One since their launches in November. Let’s get straight out to Tokyo, just next to Kari is David Gibson, senior analyst and regional head of Software & Services at Macquarie Research Japan, and remember our guest host for the hour Wong Sui Jau, General Manager of David, very nice to see you again. So, is this a case for Nintendo where it’s no longer really about the Dollar / Yen story, it’s just that they just don’t have the right strategies in place, and there’s not much that Super Mario can do?

David Gibson, Senior Analyst and Regional Head, Macquarie Research Japan:
That’s right. They’ve been getting beaten like Nokia has been by Apple, by Samsung, Google Play, and that’s a real challenge for them, for you and I as consumers. You know, we buy our smartphones and tablets and we have a whole plethora of options that are free to play, that sort of thing isn’t viable on the Nintendo platforms. So, obviously though, as she said, they have great brands, which they still need to try and monetize, but we do think there are some things they can do. But it’s not going to be the hope that some would that they’ll exit hardware. We think that remains off the agenda in this stage in this strategy session coming up this week.

CNBC Host:
Yeah is it just simply too late to get in on the whole mobile sphere, because that’s where everything is going whether you look at one company or another’s earnings, it’s all about how quickly and efficiently they have that strategy worked out.

David Gibson, Senior Analyst and Regional Head, Macquarie Research Japan:
Yeah, that’s right. Iwata-san the president has had a smartphone, had an iPhone for many years, and a Mac laptop when he presents—so he’s known about the threat. But really, I think he’s misunderstood the pricing difference that free-to-play really does dominate now globally for mobile games. His angle is “We provide quality and hence people pay upfront,” but look, you know, we’ve all got alternatives, we’ve got alternatives for our entertainment now, and they look much less competitive. So, what we think the option for him is a simple one…is that…he might try and copy the store rather than join them, he might actually do what they are doing and open up his own platform for developers. It’s very difficult now for anyone now to sign up for an individual developer like you can with Apple…you know, it’s very simple cost. We think Nintendo might actually open it up themselves, which means you’d be able to get Clash of Clans and Puzzles & Dragons on the Nintendo platform, but also get Mario as well. And that’s their potential strategy…we see it potentially announced on Thursday.

CNBC Host 2:
Hi David, sitting next to Chloe in Singapore. You know, I’m not a gaming expert, but just curious…you know, the market seems to be discriminating against Nintendo, and criticizing it for not moving “with the cheese,” so to speak…and making its games more readily available on these mobile devices…but what about all of the other competitors?

David Gibson, Senior Analyst and Regional Head, Macquarie Research Japan:
Do you mean from the Mario brands, I’m presuming that’s what you mean?

CNBC Host 2:
Yes, talking about the Sonys of this world, and also the Microsoft Xbox…are all their games available on these mobile devices?

David Gibson, Senior Analyst and Regional Head, Macquarie Research Japan:
Tend to be both have a strategy, yes. PlayStation and Xbox Glass, definitely they’re putting their titles on other platforms and making them…the main PS4 and the main Xbox One games made by each other are not on other platforms, but generally speaking yes they are doing mobile as well. But relying on the installbase of smartphones and tablets, that’s their leverage play, not as hardware manufacturers on portables, as Nintendo has intended to do.

CNBC Host 2:
Ah, okay. What is the best way forward for Nintendo? I mean, we’re talking about what happened to Sega of course in the old days and dumping their console device, is that the path that would be best for Nintendo in this console environment?

David Gibson, Senior Analyst and Regional Head, Macquarie Research Japan:
You know, long term it probably is, but I think we’re a year or two before that ever gets considered. In the meantime he’s going to try and fix what they have. The reality is, the 3DS—yes the Wii U has been a disaster—but the 3DS has not so far. Even though they cut their numbers, software sales in North America are up 45% year-on-year, hardware sales are up 15%, you know, he’s actually getting growth out of that for the moment. Not huge growth like we see on smartphones, that says to me, to him and the market that we gonna stick with our strategy and try and make ourselves more relevant to smartphones…and I think that’s going to be a challenge.

CNBC Host 2:
I wonder…in the old days, so to speak (I’m only talking about 5 years ago), people used to say “Well, to stay one head of the game, you’ve really got to come up with new games and new software to keep these gamers interested.” In terms of the competition, does Nintendo have that right? Is it at all about the types of games they’re coming out with to attract this certain audience?

David Gibson, Senior Analyst and Regional Head, Macquarie Research Japan:
It’s a good question. I think they’ve traditionally made a real mix of titles, and what I mean by that is the titles that are attractive to everybody, not only to the core gamer but also the more casual user, using the brands of Mario. I think the challenge then is that now, that as more casual users in particular—the Wii audience for example—we’ve all got smartphones and tablets now and we’re playing other games, and I think that’s their challenge. It’s just our time is going elsewhere. And so he’s got the good brands but not as relevant from a pricing point of view…but engagement and experience? Definitely. They’ve introduced lots of innovations to the games market over the last decade or two. So you’re right, they need to do some more innovation basically and they need to come out and surprise us basically on their games and also maybe even new hardware going forward.

CNBC Host:
Yeah, a lot of homework to do it seems like over there…certainly the element of surprise has been lacking on that front. Thank you so much for that. Always nice to hear your thoughts. David Gibson of Macquarie Research Japan.

Analyst Predicts Nintendo Will Lower Wii U Sales Forecast Again

An analyst has predicted that Nintendo will once again lower its Wii U sales forecast. Although the company expects to sell nine million Wii U consoles by the end of its 2014 fiscal year, research analyst David Gibson says he thinks that figure will be lowered to 4.3 million, even though Super Mario 3D World – which was released toward the end of November – probably helped drive Wii U sales in December.

Analyst Predicts PS4 Will Likely Outsell Wii U By Summer

Michael Pachter has predicted that the PlayStation 4 will likely outsell the Wii U by the summer. The Wedbush Securities analyst is adamant that Sony’s latest system – which launched in November 2013 – will surpass the Wii U console’s lifetime sales in 2014. Pachter previously said that he thinks Wii U will sell less than 20 million units by 2016.