Be careful what you wish for

There certainly has been a lot of talk lately about whether or not Nintendo should quit hardware and become a third party.  This sort of discussion baffles me because I’m not aware of any year Nintendo ever lost money to such an extent that “going third party” was a necessity.  In fact, even in the recent “trouble years,” according to several game news websites, Nintendo still pulled down billions in profit.  The comparisons to Sega are thrown around as if they meant anything, despite Sega’s situation having been the result of a decade of financial missteps.  Sega was losing money for years before they were forced to become a third party in order to stay alive in the industry.  Nintendo is sitting fat on billions upon billions of dollars, and has never posted a yearly loss, ever.

I wonder why there is no pressure on Microsoft to “go third party.”  So far, Microsoft hasn’t made a single red cent on the Xbox 360.  Now before some jackass tries to throw a fiscal report in my face showing that the 360 made profits in the last few years… yes, they have.  But they are still pretty short of the losses they incurred from the 360 launch and the RROD warranty writedown.  As it stands, the Xbox 360 has made $2 billion in profits in the last three years vs. $3 billion in losses in its first two.  That’s still in the red, gentlemen.  Not to mention they still have $4 billion in losses to make up from the original Xbox.  It will be a while before MS ever climbs out of this hole.  Humorously, the biggest driver of revenue for Microsoft’s game division lately has been the Kinect, so it has been more responsible for Microsoft making a profit than anything.

Also, how come Sony isn’t constantly pestered to leave the video game hardware market?  They’re worse off than Microsoft!  Sony’s Game Division has somehow, with the PSP and PS3, squandered an entire decade’s worth of profit, such that every single penny that they’ve ever earned in video games is now completely gone.  Where are the calls for Sony to leave?

But, that’s a different issue for a different time.  For now, I’m only concerned with the nuttiness that is fantasizing with a future where Nintendo is a third party making games for Microsoft or Sony.  And as is the case with such fantasies, one should be careful what he wishes for.

What would happen?  Thought experiment time!  Tomorrow, Nintendo announces that they are going third party.  Instantly a bidding war opens between Microsoft and Sony over Nintendo’s top franchises.  If you thought third parties felt small when making games on Nintendo’s own systems before, just imagine when they are no longer on the speed dial anymore.  In fact one of the main reasons other third parties complain about making games on Nintendo’s hardware is that it isn’t fair because Nintendo is intricately knowledgeable about the hardware and most of the Wii’s and DS’s consumers strongly favor Nintendo’s games over theirs.  (One wonders if quality has something to do with this, but who knows?)  How would this change when Nintendo becomes a third party?  Suddenly, New Super Mario Bros. on the PS Vita has sold more than 15 million copies and your game is still flaccid in comparison.

The second thing that will happen is that Nintendo will not repeat Sega’s mistake and become a developer for hire.  Nintendo will pick only one company, MS or Sony, in order to maintain game quality.  The other one will be doomed to leave the industry after Nintendo almost immediately.  Nintendo would become the “kingmaker,” so to speak.  If Nintendo chooses Sony, Japan will be forever lost to Microsoft and they’ll end up as nothing more than bit players in the US only, losing to the combined East/West Appeal of Sony’s regionalized franchises and Nintendo’s worldwide appeal with their own games.  If Nintendo chooses MS, suddenly Microsoft has a big inward angle into Japan (one would even think MS would have the console be branded “Nintendo” for that market) and Sony will be left to be a bit player in Japan only with a small presence in Europe too.

The third thing that will happen is that whoever Nintendo picks will suddenly give in to the hardware demands that Nintendo puts down.  Nintendo will have the most clout of any third party ever, so it would behoove their new benefactor to acquiesce or Nintendo will leave to their competitor.  Nintendo would be like Squaresoft was in the 90’s for Japan.  Essentially anything they say will be listened to by each console manufacturer.

And in case other third parties didn’t feel inadequate enough, Nintendo would soon be getting the biggest moneyhats around, simply because Nintendo’s games are so much more popular than theirs.

If you were a third party, why in the world would you suddenly want a fresh and moneyed Nintendo unleashed onto your domain?  If you were Sony or MS, why would you want a 50% chance at permanent irrelevancy?  If you were a “hardcore gamer” why would you want Nintendo to suddenly start pulling massive influence on the company that was left?

It doesn’t make sense.