Lately I have seen many complaints about Nintendo having region locking on their systems, likely because they keep the newest ones hack resistant. The complaints on their own are understandable, it can suck for some people, but the way in which the complaints are worded makes me realize one problem: Few people know why region locking exists.
The problem is not cut and dry, Nintendo didn't wake up one morning and say "it would be a great idea to keep some regions from getting games!" On the contrary, it's not even their fault. They gain nothing, as a company, with region locking. So you may ask why they do it, it's because they have no choice in the matter.
First there are the hardware problems. Regions are typically one specific format or another, all other formats are considered alien, and so in the past they had to develop everything based on the region itself, a television that was made for PAL could only understand PAL in other words. Luckily this aspect is becoming a thing of the past as most hardware is no longer bound by such restrictions, but before then the costs to develop for all regions was four times that of one. The effect will be discussed in a moment.
So there is one roadblock, though that one is fading, now we face the next roadblock: Content
Each country has it's own, often ignorant or prudish, idea of what is considered legal content in media. The rating system was suppose to end this problem, but it has only made it more complicated because no one can agree on the same rating system. Games, specifically, are designed to target specific audiences. This means that they must try to keep the ratings the same in all countries. Developers in one country though will make the game based on that country's ratings causing it to get different ratings in other countries.
This means they have to make many different versions, one for each country it's released. Nintendo uses the ratings from the most strict country for each region to cut down on some costs, but it still costs them to make other versions for each rating system. The effect is the same as the hardware problem, the company must invest more money to make the product more widely available. Nintendo simply cannot afford this yet. So they continue to delegate the responsibility to the developers, which makes sense anyway.
However, to make sure they are not held responsible for laws broken, they have to lock your system to the region you claim to be in, this makes sure they are not liable for your buying a product that is deemed illegal by your own government. Yep, the crux of the issue, the governments.
This is the biggest roadblock, governments can sue companies for just about anything they want, and even the US government will harass a company that even tries to upset the apple cart by using laws which should not even exist. This means companies have to appease them, and even pay fees just to put their products on the shelves. If they fail to make the government happy, then they get sued by that government for selling an illegal product.
Nintendo has to pay all these fees, and extra development costs, just to give you, the loyal gamer, a chance to play their games. The company as a whole lost a bit of money, a few bad investments in systems they developed. This means they do not yet have the extra funds to appease the governments in the way that other companies do, like Sony or Microsoft, resulting in them having to dance around laws those others do not have to obey.
Considering all this, the very fact that Nintendo has managed to jump ahead on only one system, is actually astounding. So if you don't like region locking, place the blame on who it belongs, and that blame belongs on you. You control your government, no matter what country you are in, so it is your fault you have region locking, ultimately. Of course most of us don't mind, we just love the games we get and pay little attention to the others, and we can sit idle playing those games all we want. The ones who need this eye-opener are those complaining.
The politics involved in this matter is very heavy, and I could post pages and pages on how badly the US government is doing, even more if I were to look into all the other countries. Just a word to the wise, learn what your government is doing, what it is feeding you, and compare it to what you learn from other people who are in other countries, you may be shocked at how screwed up your laws are.
Showing posts with label sales. Show all posts
Showing posts with label sales. Show all posts
Thursday, January 23, 2014
Sunday, January 19, 2014
Sales Figures, Profits, and What's Good
I have seen many people pull up sales figures and various other indicators of a product's value. The problem is not that they are pointing to these, but that they don't understand how it describes the value of a product. Many video game fans, specifically those who just don't like Nintendo, will point to Wii U sales and claim Nintendo is a bad company.
Another fallacy I have seen is Nintendo's own president pointing to the forecast being wrong and claiming that the 3DS is somehow failing. Yeah, that's really smart Iwata, why not just say "Nintendo sucks" and remove all doubt?
These are fallacies, not because they are inherently wrong or lies, but because they are misrepresenting the information. 3DS did not do as well as they had hoped, that is the fact. This does not mean it is unpopular or selling less than other systems, all other indicators actually state the opposite. The Wii U, one of the two systems Nintendo sells, is having trouble gaining traction. This does not mean Nintendo is in trouble or a bad company, all other indicators state otherwise.
So what do all these numbers and all this data mean? On their own they mean .... nothing. They are completely meaningless on their own. A sales projection will never be perfectly accurate, and often real sales will fall short. The projections are what are shown to the investors to show confidence in your own product. That means you will want them to be a bit higher than realistic, but not so high as to demonstrate arrogance. If the projections are, say, 20% above the actual sales, the investors can safely chalk it up to hopefulness. If the projections are 50% above the actual sales, then you have some explaining to do, but if the sales at least recover the investments, it's a good product.
I know, this makes the projections seem almost inconsequential, and often they are. Always remember, don't panic. Most companies fail, the vast majority in reality, and never even recuperate the initial investments. Investors know this, they play a game of chance when deciding where to place their money by weighing the market and various aspects of the product itself. How well a product does compared to the projections does not tell how good a product is, it only tells what the risks will be involved for future investments.
Sales figures are the key to what is often called "consumer confidence," basically how good something is. But remember, they are not always telling. If you look at a market where only one product is available, and lots of people need it, you cannot use sales as a measure of consumer confidence, because the market is cornered and there is nothing to compare it too. With gaming we have a lot of things to compare it too, and the number of systems entering the gaming market increases every year.
A company is only as strong as it's best selling product, it's least selling product tells nothing of the company's strength. Yep, so the Wii U has no bearing on how well Nintendo does. Stop bringing it up until it outsells the other products. Right now the 3DS is the strongest system for Nintendo, and oddly the entire market. The 3Ds continually outsells all other systems, from all major gaming companies, and holds records in software sales.
The key is the consistency in which this is happening. Since it's release the 3DS, and all it's variants, is producing more sales for Nintendo than any system for any company. Considering the competition that it faces, that's saying a lot. Console gaming is taking a huge hit in sales from the increase in popularity for other platforms. Specifically portable devices that are not inherently designed for gaming. So as a whole the entire industry is balancing out with these other markets, mingling and mixing, thus there will be lower numbers compared to previous generations of similar consoles.
As a whole though, the gaming industry is still doing really well. The reasons for this will stray from the topic, so I will save them for another article. In spite of the balancing out with platforms that are not gaming specific, video games are more popular now than ever, and keep increasing in popularity. So Nintendo did do something awesome with the 3DS, it's a megalith now, a household name and item. I pull out my 3DS in the coffee shop once in a while and have lots of people stop to chat about it, many times I hear "I just got mine, I love this thing." That is consumer confidence that even sales numbers cannot show.
On a final note, someone once said that GTA was "on everyone's list." They had said it was more popular than any game on the 3DS, specifically, in spite of Pokemon X and Y outselling GTA V. The thing is, just because it's "on everyone's list" doesn't mean everyone bought it. If you want your game to be popular, then tell the fans to actually buy the game, then you can claim it's as popular as another.
Another fallacy I have seen is Nintendo's own president pointing to the forecast being wrong and claiming that the 3DS is somehow failing. Yeah, that's really smart Iwata, why not just say "Nintendo sucks" and remove all doubt?
These are fallacies, not because they are inherently wrong or lies, but because they are misrepresenting the information. 3DS did not do as well as they had hoped, that is the fact. This does not mean it is unpopular or selling less than other systems, all other indicators actually state the opposite. The Wii U, one of the two systems Nintendo sells, is having trouble gaining traction. This does not mean Nintendo is in trouble or a bad company, all other indicators state otherwise.
So what do all these numbers and all this data mean? On their own they mean .... nothing. They are completely meaningless on their own. A sales projection will never be perfectly accurate, and often real sales will fall short. The projections are what are shown to the investors to show confidence in your own product. That means you will want them to be a bit higher than realistic, but not so high as to demonstrate arrogance. If the projections are, say, 20% above the actual sales, the investors can safely chalk it up to hopefulness. If the projections are 50% above the actual sales, then you have some explaining to do, but if the sales at least recover the investments, it's a good product.
I know, this makes the projections seem almost inconsequential, and often they are. Always remember, don't panic. Most companies fail, the vast majority in reality, and never even recuperate the initial investments. Investors know this, they play a game of chance when deciding where to place their money by weighing the market and various aspects of the product itself. How well a product does compared to the projections does not tell how good a product is, it only tells what the risks will be involved for future investments.
Sales figures are the key to what is often called "consumer confidence," basically how good something is. But remember, they are not always telling. If you look at a market where only one product is available, and lots of people need it, you cannot use sales as a measure of consumer confidence, because the market is cornered and there is nothing to compare it too. With gaming we have a lot of things to compare it too, and the number of systems entering the gaming market increases every year.
A company is only as strong as it's best selling product, it's least selling product tells nothing of the company's strength. Yep, so the Wii U has no bearing on how well Nintendo does. Stop bringing it up until it outsells the other products. Right now the 3DS is the strongest system for Nintendo, and oddly the entire market. The 3Ds continually outsells all other systems, from all major gaming companies, and holds records in software sales.
The key is the consistency in which this is happening. Since it's release the 3DS, and all it's variants, is producing more sales for Nintendo than any system for any company. Considering the competition that it faces, that's saying a lot. Console gaming is taking a huge hit in sales from the increase in popularity for other platforms. Specifically portable devices that are not inherently designed for gaming. So as a whole the entire industry is balancing out with these other markets, mingling and mixing, thus there will be lower numbers compared to previous generations of similar consoles.
As a whole though, the gaming industry is still doing really well. The reasons for this will stray from the topic, so I will save them for another article. In spite of the balancing out with platforms that are not gaming specific, video games are more popular now than ever, and keep increasing in popularity. So Nintendo did do something awesome with the 3DS, it's a megalith now, a household name and item. I pull out my 3DS in the coffee shop once in a while and have lots of people stop to chat about it, many times I hear "I just got mine, I love this thing." That is consumer confidence that even sales numbers cannot show.
On a final note, someone once said that GTA was "on everyone's list." They had said it was more popular than any game on the 3DS, specifically, in spite of Pokemon X and Y outselling GTA V. The thing is, just because it's "on everyone's list" doesn't mean everyone bought it. If you want your game to be popular, then tell the fans to actually buy the game, then you can claim it's as popular as another.
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