No New DS Redesign Until Sales Fade

If you’re looking to see what the next greatest DS hand-held will look like, plan to wait until Nintendo starts to see declining sales trends for their current DS hardware. Sensible from Nintendo’s standpoint, but a major bummer for those hand-held gamers who want to see something new and cool out of the Nintendo camp.

While the DS sells great, many of us tech fans would love to see what a new generation of DS would look like. Perhaps something closer to the iPod touch in screen size and touch-abilities with real WiFi capabilities connecting to the Internet? Wouldn’t it be neat if they added GPS location and tilt abilities much akin to the iPhone or iPod Touch?

Personally, I envision a system where you are in total control of your character from leaning, to sliding, to moving your fingers around the screen and communicating over the Internet sharing high scores, drop-in drop-out multiplayer titles with complete voice communications.

Alas, Nintendo tends to gimp most of their hardware from hot innovation such as Internet communication, much like the Wii. While Nintendo has the next-generation capabilities now for Internet communication they’ve constantly opted to have a more useless version of connectivity to “protect the consumer.”

We need a DS store, much like the Xbox Live Marketplace for downloading DS casual games, considering DS game size is much smaller than a PC, PS3 or Xbox 360 title. We need a smaller form factor mimicking the iPod in thickness and durability with a larger screen or unfolding dual screen to double the size of an iPod style play area.

Hardware innovation seems to be more acceptable to Sony and their PSP product while Nintendo always opts for something more simple. Unfortunately, the PSP cannot compete against the DS which will leave them in the lead with very little desire to re-up their hardware with new capabilities and sexy new designs.

Oddly enough, the DS is the perfect device for the mass market which means they’re not going to be forced to innovate beyond its current capabilities for now. Apparently people don’t desire huge leaps in technology, screen size and speed, or we’d would probably see a decline or dis-interest in the DS hardware, thus forcing Nintendo to re-innovate and evolve.

The day will come, but probably not for a long time.

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This week’s episode has a lot of tangential videogame news, but the discussions turn in interesting directions. No Gaming Flashback or Gaming History unfortunately.

The news includes:

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No Question of the Week either – just ask us anything.

Wallets Shrink, Used Game Market GrowsWallets Shrink, Used Game Market Grows

Over the last year we’ve seen developers scrambling to find “value add” features to new game purchases. Their goal is to convince the customer to buy new instead of used because developers don’t see a penny from a used game sale. While GameStop sees 48% profit margins from the used game market developers struggle to stay floating in the industry.

for-saleThis is not the fault of GameStop and their 48% profit margins because they’re only getting 7% to 20% profit margins (say analysts) on new game sales. As someone that’s run a game store online, if you’re getting 15%+ on a new game you’ve got some great hookups in the distribution channel or are buying in huge quantities.

Buying games in huge quantities to build profit margins can be a huge mistake in this industry. Gamers are fickle little creatures and they’re going to buy their top tier games for a few weeks and then sales will drop significantly. No retail chain wants to purchase a thousand copies of GTA IV (only as an example) and sell seven hundred over the first few week to be stuck holding onto a few hundred copies when the dust settles. Now you’ll have to put them on sale to get them out of the store because the hardcore gamer have already done their shopping and you’re not going to get any price protection if you’re not a major player in the industry.

Why take 7% profit margins when you can get 48% on a used game? The gamers don’t seem to mind because they’ll trade in a used copy of a sports title like Madden to save $5.00 on the latest franchise release. Gamers will buy Fable 2, beat it in a week and rush to the store to get the “most for their dollar” before the game gets stale and buy-back prices drop like a stone. Why not rent Fable 2 and save yourself $50.00? Of course, renting pisses off developers as well because they see no additional revenue.

While the economy struggles and consumers fight for their jobs, the entertainment side of life continues to grow. People would rather “cocoon” in their homes playing video games and watching movies on their brand new HD television because it takes them away from the low points of the economy if only for a few hours. History has shown us trends in entertainment during the down points of economies, it’s natural to want to get away for a bit.

But, consumers want to play these games on the cheap because their job may not be there tomorrow. Saving $5.00 knowing the store just took the title in for half the price doesn’t bother you; $5.00 in your pocket is better than in their pocket right? The fact that they just pocketed upward of 40% on the game doesn’t matter to you — it’s all about your bottom line!

While we’re bargain hunting during the recession developers are going to try and up sell you to a new copy of the game. If that means giving you special game items and features with a “one time code” upon purchase, it will be up to you to decide if it’s valuable. All the while GameStop will lock out the game industry from selling used games because 42% of their overall gross profit is from used game sales.

You, the consumer, benefits from a slightly cheaper game, bargain bin fire sales and additional game features if you do choose to buy new. The economic down turn is a great time to be a gamer, as long as you remain employed.

Phil Harrison’s Building a 100 Million Dollar FranchisePhil Harrison’s Building a 100 Million Dollar Franchise

Once upon a time, Activision Blizzards CEO Bobby Kotick kicked a few franchises to the curb: Riddick and Ghostbusters. No doubt, this was a result of the Activision and Blizzard merger requiring some resources to the merged together while others were cut from the lineup. Phil Harrison, the new big suit at Atari/Infogrames has raised these little birds from the ashes with a dream to build them into 100-million dollar franchises.

While Bobby Kotick said the titles, “don’t have the potential to be exploited every year on every platform with clear sequel potential and have the potential to become $100 million dollar franchises,” Phil Harrision sees it as a personal challenge to prove him wrong.

“What Bobby, perhaps unhelpfully said, was that those games were franchises which wouldn’t make $100m of revenue and generate sequels. If that’s his benchmark, then fine — and we’d love to aspire to the same benchmarks. But you know what? I would love to turn Ghostbusters into a $100m franchise, just to prove him wrong.” (1up)

In many ways, this is the difference in attitudes from a large firm compared to a smaller firm with strong goals and a vision for success. Activision Blizzard is big now, perhaps the biggest publisher in the industry, they can’t be bothered with minuscule 80-million dollar franchises. Others, like Atari, strive to take a title from nothing to something of greatness. Granted, Atari’s failed in a lot of franchises, but with their new ex-Sony executive behind the helm things could turn around and this might be the first step.

Most of the best game franchises in existance today started from nothing but a dream. Big publishers don’t have time to dream, they’re too busy making money off the fanboys of their current franchises.