Nintundo should not take royalties on their next system

[Legend]

When a third party game releases on any console, the console maker takes a cut of the pie. Good business and makes sense for Sony and Microsoft.

However with Nintendo, they don't even have 3rd party games to begin with, most of the time. If Nintendo switched business models and made it fully free for 3rd party games, the Nintendo platform would get good 3rd party support. The 3rd party pubs would be more likely to make money off ports, and they'd even prefer if people buy on Nintendo verse other platforms.

The lost revenue would be easily picked up by increased hardware sales and increased 1st party sales. Only negative would be if Nintendo believes they could get 3rd party support while keeping the fees. Agree?

[FLGibsonIII]

How much do these royalties usually cost?

[Mmm_fish_tacos]

Well it a good idea, but far to much money will be lost. Maybe they shouldn't collect fees till x amount of sales. That might be just as good and be a happy medium for both side's .

[Legend]

How much do these royalties usually cost?

I'm sure on google you can find something but I can't say. It's under NDA

It's significant though.

Well it a good idea, but far to much money will be lost. Maybe they shouldn't collect fees till x amount of sales. That might be just as good and be a happy medium for both side's .

Only potential money is lost. As is Nintendo is hardly selling any 3rd party software.

[Cute Pikachu]

I like that idea
a lot actually

[darkknightkryta]

When a third party game releases on any console, the console maker takes a cut of the pie. Good business and makes sense for Sony and Microsoft.

However with Nintendo, they don't even have 3rd party games to begin with, most of the time. If Nintendo switched business models and made it fully free for 3rd party games, the Nintendo platform would get good 3rd party support. The 3rd party pubs would be more likely to make money off ports, and they'd even prefer if people buy on Nintendo verse other platforms.

The lost revenue would be easily picked up by increased hardware sales and increased 1st party sales. Only negative would be if Nintendo believes they could get 3rd party support while keeping the fees. Agree?

That defeats the purpose of selling hardware.  It's actually the sole reason to sell hardware for games.  Electronics have gotten to the point where it's extremely difficult to sell hardware at a profit.  Nintendo has to stay a gen behind and rely solely on their fanbase if they wanna sell hardware at profit.  To tell you the truth, I have no idea why Nintendo's being stubborn with hardware.  It makes no business sense.  Can Nintendo turn things around?  Yes, but if they fail their next hardware, Nintendo has to take a long look at their business plan and see if it's sustainable.

[Legend]

That defeats the purpose of selling hardware.  It's actually the sole reason to sell hardware for games.  Electronics have gotten to the point where it's extremely difficult to sell hardware at a profit.  Nintendo has to stay a gen behind and rely solely on their fanbase if they wanna sell hardware at profit.  To tell you the truth, I have no idea why Nintendo's being stubborn with hardware.  It makes no business sense.  Can Nintendo turn things around?  Yes, but if they fail their next hardware, Nintendo has to take a long look at their business plan and see if it's sustainable.

I know you want Nintendo to go third party, but that's silly.

Getting rid of third party royalties does not defeat the purpose of selling hardware. For starters Nintendo does make money off their systems. Only times they don't is when they have to cut price to compete. If they have the full backing of 3rd parties, then the system doesn't need to worry as much with falling hard and needing sales to stir up interest. Plus even most game manufacturers make money off their hardware now. Microsoft is kinda having issues with all their price cuts and promotions, but Sony has made a profit since day one. That's the strongest machine this gen!

Sure of course they can't make a killing off the hardware, but they'd still be able to pull a nice profit out of it. Then they'd make the killing off the increased market for 1st party games plus simple things like paid online. You're looking at this with such a last gen business point of view. Money can be made in alternate ways.

[darkknightkryta]

I know you want Nintendo to go third party, but that's silly.

Getting rid of third party royalties does not defeat the purpose of selling hardware. For starters Nintendo does make money off their systems. Only times they don't is when they have to cut price to compete. If they have the full backing of 3rd parties, then the system doesn't need to worry as much with falling hard and needing sales to stir up interest. Plus even most game manufacturers make money off their hardware now. Microsoft is kinda having issues with all their price cuts and promotions, but Sony has made a profit since day one. That's the strongest machine this gen!

Sure of course they can't make a killing off the hardware, but they'd still be able to pull a nice profit out of it. Then they'd make the killing off the increased market for 1st party games plus simple things like paid online. You're looking at this with such a last gen business point of view. Money can be made in alternate ways.

I said it was difficult to make money off of hardware, not impossible.  Sony lucked out, they would probably be selling the PS4 at break even still if they didn't get a better deal with volume pricing and the price of some components going down faster than expected.  Microsoft is having trouble, not because of the price cuts, but because their APU is more expensive to build than the PS4s.  Even without a game, at 399 I'm sure they'd be at the break even point vs the profit Sony is making (At this point in time).  Which goes back to Nintendo being a gen behind constantly to sell at profit.  Hell the 3DS was way behind and was losing mad cash at 170.  The margins on electronics in general have been driven to the ground, it's why most manufacturers are having issues profiting (Unless they're Apple or Samsung). So with Nintendo a gen behind, why would people buy their console vs a Sony/Microsoft (Probably going to be Sony only next gen) when they'll get the superior experience in gaming with the later?  There's a reason why the Wii U isn't selling (And the 3DS) and Mario can't help it. 

So if making money on hardware extremely difficult, the next way to make money off of hardware is third party licensing money.  Nintendo profited in the Gamecube era solely on licensing money off of the GBA (Plus the profit it was sold at).  The GBA sold disgusting amount of software (3DS isn't, and likely no future Nintendo device will).  So Nintendo isn't profiting on hardware, won't profit on licensing money, all that's left is their first party.  They don't need hardware to make Nintendo games, and I'll be so bold to say they're games will be better on more powerful hardware that a third party can provide.

[Max King of the Wild]

How much do these royalties usually cost?

7 dollars per disc I think.

[Max King of the Wild]

I like the idea. It makes a lot of sense actually and was one way BRA convinced Warner Bro the support BR if I remember correctly (since HP would have been tens of millions in royalties)

But let's refine it a little. How about not take royalties for the first half a million? That way if a game flops there are very low risks on Nintendo platform and if a game is guaranteed success it will save millions (like Cod/Gta) and Nintendo will be able to earn some revenue. They could even limit the time frame, "if you apply for a dev kit within a year from its launch date (meaning a two year window since dev kits get sent out before launch) then any game two years after launch or if no game launches in that window then the first game released from the studio will be included. This would secure third parties early and when Nintendo starts collecting royalties normally then 3rd parties should already be established and be stupid to pull support

[kitler53]

i think they should lower them not eliminate them.   ..but i agree with the thoughts behind it.


actually, i think sony should lower it too.   i think consoles would do better against the new competitors (iOS) if they could lower the cost of games back to $50 and lowering that royalty fee could be just the ticket.   ..or maybe just changing things so sony only collects if their game actually sells.  the $7 per disc produced (regardless of sales) is what makes retail so risky to developers.  change that to like 10% of income would alleviate a lot of the risk of going retail.

[Legend]

I like the idea. It makes a lot of sense actually and was one way BRA convinced Warner Bro the support BR if I remember correctly (since HP would have been tens of millions in royalties)

But let's refine it a little. How about not take royalties for the first half a million? That way if a game flops there are very low risks on Nintendo platform and if a game is guaranteed success it will save millions (like Cod/Gta) and Nintendo will be able to earn some revenue. They could even limit the time frame, "if you apply for a dev kit within a year from its launch date (meaning a two year window since dev kits get sent out before launch) then any game two years after launch or if no game launches in that window then the first game released from the studio will be included. This would secure third parties early and when Nintendo starts collecting royalties normally then 3rd parties should already be established and be stupid to pull support

Yeah that could do a great job to make sure the system gets early support. The royalties after a million sales though make it kinda complex. Do goty versions count as the same game, or are they new games?


I think the simplest and best way to attract third parties would just be the very simple "no royalties ever." It'd help with marketing too. Could have that only apply to retail titles though. Then take the standard royalties on indies and DLC+microtransactions.