Failure by design

Despite the massive adoption of the Nintendo Wii and huge fan fare did Nintendo hit a home run or set themselves up for a fall?

Current culmulative sales are as follows:

Nintendo Wii - 19 million

Xbox 360 - 16.8 million

Playstation 3 - 8 million

But what is wrong with the availability, I personally know several people who just can’t buy one. This is a huge problem for Nintendo and a major set back for the stock. The consoles pricing has narrowed huge with Sony and Microsoft both cutting prices for their consoles. Microsoft sells more games per console and has a continuous revenue stream from Xbox Live. It is well known that the major manufacturers take a hit on the actual hardware sale in lieu of a 10% royalty on game sales.

By not being able to meet demand Nintendo has short itself short on the Wii by artificially limiting games sales. Console sales will also slow as news hits the markets about the next generation of consoles based on new hardware. Nintendo bet the farm on Wii’s innovative interface, made money hand over fist but could have made more. The next generation of consoles is going to focus much more on human interfaces and be less about hardware.

Since as long as I have been around the key to console sales was powerful hardware. Nintendo proved that creativity will win and differentiated themselves from their competitors. Sony PS3 sales are improving due to the win by Sony on the bluray format, which is huge disadvantage for Microsoft who bet on HD-DVD. A Sony PS3 at current prices is almost free if you were in the market for a Bluray player from the beginning.

I wonder if Microsoft will ever flex its patent rights on direct human interfaces and bring out something truly groundbreaking.

First they brought you google search, then adsense, now the great guys at Google bring you Android the mobile platform based on Linux.

Why is this so great? Well first it is going to be cheaper to make phones, since they are developing on an open platform with the cooperation of great hardware manufacturers like Arm PLC, Marvell, Samsung, STMicro, Texas Instruments and Broadcom. Second, it gives people like me a chance to make something else out of it.

There is a HUGE community of really smart people finding uses for things that their creators never dreamed of. Whether it is off-label uses for medication, using a external harddrive as a web server or running linux on your router / phone / Xbox. Not only that, but it gives hardware a second chance at living and being useful. To the flexible and creative owner, modifying something cheap and old into something useful is a fulilling learning experience.

Take the iPhone for instance, Apple could keep the hardware closed and not release the API. Sure that would stop some, but look at all the awesome software created by thousands of rogue programmers for the iPhone / itouch. From wifi distribution points, external hard drives, portable servers, cover flow for apps and my personal favorite the wireless touchpad for a PC / Mac.

Now seriously, do you think Steve jobs thought his phone would ever be used for a Wireless touchpad. Or a portable Piano. Most likely not, but people are develeping unique uses for the hardware and it is driving sales.

If it was an impenetrable fortress, that was impossible to hack, do you think there would be this many iPhone / iTouch sales?

Embracing technology. I see car companies who focus too much on specs. Ok, for me I would rather take a 2002 Camaro over a nice civic, but for the majority of people it is more about interface.

Make something innovative, I keep stressing to make the inside of the car more high tech. Make an LED / LCD dash, make it open source. The after market would love it, and people would too. Imagine a car, that allowed you to sync your ipod/zune/MP3 player with your car. Not only that but show your song and playlist on the dash. An LCD dash would allow you to scroll through multiple slow changing gages in the same space, opening up new areas for innovative ideas. LCD prices are cheap compared to the price of a car, implementing it would significantly alter the price of a vehicle.

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