The Future of Console Gaming
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Much of Nintendo's corporate history is available on their web site, or dozens of fan sites, but for the sake of this article we'll touch on events since the release of the Super Nintendo system. In 1991, with the advent of CD-ROM based systems from Sega and NEC/TTI, Nintendo began looking at methods to increase game data storage in their software. Around that time they entered into a partnership with Sony to create a CD add-on device for the SNES. The unit was to sit under the SNES and use the expansion port on the bottom of the system. The system was a very real product, and at one point one of our staff interviewed Howard Lincoln about software development on the platform to which he replied:
From what I've been able to gather (and I must note here that this has to be listed is as pure speculation based on personal contacts over the years and at the time), one of the main reasons that this system never saw the light of day is because Sony wanted to be first in collection of profits from any game produced for the device. Putting Nintendo into a situation where if they wanted to release a CD game, they would have to pay Sony a royalty, much in the same way that companies must pay Nintendo a fee for the manufacture of cartridges. The picture was then that Nintendo felt Sony was making a power play against them and development on the system started to fall apart. In an effort to pull Sony back to the table as a partner, Nintendo then began public talks with Phillips in hopes that Sony would feel threatened and come back to the table. While initially the press talked about Sony and Nintendo getting back together, Sony didn't take the bait and left for good. Following that, the proposed project between Nintendo and Phillips broke down since it looked like it was going to consist of a redesign, not to mention that Phillips wanted to add CD-i compatibility to the system (a handful of CD-i based Nintendo games were supposedly a spin off of this project). In hindsight, it appears that Sony ended up using Nintendo more to get a feel for the business, and when the partnership was no longer convenient for them they left.
An observation from this is that Nintendo has always seemed to avoid situations where they might put the future of the company under the whim of another company. Given this it would seem that the partnership with Sony was doomed to failure from the beginning. Especially, considering Sony's general attitude of having full control and final say over everything that they are involved with, which persists even to this day.
In any event, this entire situation began years of speculation by the general gaming press that Nintendo would have to release a CD-ROM drive or fail as a company. Speculation increased even more once the PlayStation and Saturn were released. The common question for the 1990's was "How can Nintendo hope to compete?"
Clearly Nintendo has not only been able to compete with Sega and Sony over the last decade, but they have actually done pretty well for themselves. Before you listen to people who state that Nintendo is in trouble, or that Nintendo can't keep up, remember that almost everything you've heard has been said repeatedly for a decade now, both prior to the launch of the SNES and the N64. It would be good to note that while Nintendo may have sold less N64s then Sony has PlayStations, the N64 has been consistently exceeding the sell-through numbers of the Super Nintendo at comparable stages in the systems lives. Do you know many people who would consider the SNES to have been a market failure. Clearly this is a case of overall larger volumes obscuring the relevance of the figures.
One also has to remember these days when looking at the numbers that sell through quantities are higher in every respect than they were ten or even five years ago. According to the top sales tracking agency in the country (TRSTS® Video Games Report(3)) it is noted that as recently as both 1998 and 1999, Nintendo's corporate developed games held four of the top five games sold over each year. The non-Nintendo game in 1998's top five was Sony's Gran Turismo, and in 1999 it was Sony's Gran Turismo 2. How can someone honestly say that a company is doing poorly when they consistently hold the top spots in software sales for the industry? No matter what the many and varied reasons are that people come up with to explain the rankings, the numbers are still there. Even without exact dollar amounts it is simple deduction to see that Nintendo is making money at what they do. Therefore, it is easy to say that, as long as this trend continues Nintendo will be in no threat of going under anytime soon.
Without a doubt, Nintendo recognizes their frequent high sales rankings and is proud of it. They claim it is a sign of consumer confidence and the general quality of their games as can be seen in a comment made in an interview by USA Today with Howard Lincoln in July of 1999:
Of course, no discussion about Nintendo can be complete without a mention of Nintendo's designer/producer(*) ace-in-the-hole of Shigeru Miyamoto. While there are many talented programmers and designers at Nintendo, it is Mr. Miyamoto who has been involved with a significant number of Nintendo's most successful games and has allowed the company to pull off records like the release of Legend of Zelda for the N64 which sold over 2.5 million copies in just 39 days. While there is no question that management is a significant part of Nintendo's success around the world, it is safe to say that without Mr. Miyamoto's talents, the company would not likely be as endeared to so many gamers in the marketplace.
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