On those Wii-U Rumours…

… seriously, does anyone really believe an anonymous bitching session by an unnamed and untested source over the public statements of Capcom, SEGA, Valve, Ubisoft, Sigil, Epic Games and others?

Look, the rumours are that the Wii-U isn’t as powerful as the current generation X-Box 360 and PS3. They state that technically, it isn’t as strong or capable in certain areas like shaders and that to recoup costs on the controller, Nintendo are cutting corners on the actual hardware specs.

Of course, many have believed this and are throwing their hands in the air and proclaiming, once again, Nintendo are doomed. I could go into why specs-wise this is total rubbish, but ReviewTechUSA did a lengthy YouTube video as to why this is simply untrue and to be quite honest with you, they already made that case so I won’t have to. Click the link to see the video.

Instead, I would like to focus on what I focus on best – the financial issues, as well as the general state of the industry. So let us begin.

For a start, let’s discuss this issue of old technology. Aging hardware can be overclocked and enhanced to get more performance out of it, but this often costs more than the entry level baseline hardware and is often not considered a viable route. It also dramatically lowers the lifespan of the hardware. To put this into very basic terms, an old friend of mine stated that for every 10% more performance you can get out of something, you can expect the components to have a 15-25% reduced lifespan. This means that a CPU at 3.2GHz like in the X-Box 360 being overclocked at 10% will only get a performance increase of 0.32GHz – at the expense of a lifespan reduction of about a year, if you consider the average lifespan of a machine is said to be five years. Does this really sound like a good trade-off? Hardly. When you consider a basic CPU upgrade is likely to  not even push double digits in terms of dollars, overclocking old architecture makes absolutely no viable technical sense.

Overclocking nulls and voids a warranty for multiple other reasons too – to offset the increased power required for an overclock, other components will also need to have more power and be overclocked, and should any one of these components fail, you will be faced with a serious hardware failure. When you consider the multiple issues faced this very generation with cooling systems and failing internal components, only the most genuinely mentally disadvantaged of technicians would overclock old hardware.

Part of this – to come onto the finances – is because technology available now, which is many more times powerful than the aging technology inside the X-Box 360 and PS3, is comparatively cheaper as well. The Wii has come to the end of its lifespan because the internal components required for it now have to be specially made for it, as the industry itself has moved on. This makes those old components more expensive, and therefore the longer a generation progresses the more expensive technology becomes. This is why we see generational leaps – as old technology is phased out and becomes pricier to maintain, we see new and better technology that is comparatively cheaper (as it is made in larger quantities for general consumption) take over.

As TechReview made clear, the current old specs for the Wii-U – the old beta build for development kits – knocks the old machines out of the window. It’s not just more powerful, but at least twice as powerful and in some regards, three to four times more powerful than what is currently on offer. Of course, it is how this is utilised that makes the difference but Epic, SEGA and others are incredibly excited by the proposition that the Wii-U is delivering to them, and not just because of the shiny controller.

If current “rumours” are to be believed, the next generation Playstation and X-Box will be up to 10 times more powerful than this generation. This is possible with the technology available to them, but is it cost effective?

Sony learned a very hard lesson with the PS3 and its Cell processor – power doesn’t always mean you can do more. Whilst it was, arguably, more capable of running certain tasks than the 360, it’s complex nature and split personality made it a headache for porting anything to it. It was expensive and a costly error on the part of Sony to do something so radically different. A brave move, I will agree with people on. But ultimately, in an industry focused on the bottom line, it meant tailoring games specifically for the PS3 when they also wanted to release them on the 360 meant that one version would have to be altered. You can’t financially justify having two departments working on builds for two different consoles.

Equally, everyone focuses on that DX video by Epic. As I remind you all again that that particular software demo was indeed running in realtime, I also remind you that it was running on £3000+ of hardware. And whichever way you slice it, you can’t financially justify loss leading of more than 50% of the hardware value. When the average console can range from £299.99 to £499.99 on release, that’s an awfully big chunk of money to lose. And ask Sony – they haven’t seen a return on the PS3. Microsoft did, but they also suffered by pushing the X-Box Live interface, which costs them an exorbitant amount of money.

When a console is faced with a lifespan of about 6 years, you have to predict the financial curve and understand how and why technology becomes cheaper. As new models, and new variations, are released to the general public for their own PC consumption, the value of the older models and variants drops. This, many claim, makes them cheaper. Except truthfully, it doesn’t. The old variants cost the same amount of money to make more or less, they’re just not tuned as much as newer variations of the same model. When new models come out, the older ones are usually in mass production making them cheaper to make. It isn’t the lacking of power that makes them cheaper – it’s the volume being made. It is this, for console manufacturers like Microsoft, Sony and Nintendo, that allows them to get the very best deals. When you have a six year lifespan and a predicted range of 50-100 million units to sell, you can negotiate far better deals than buying just a handful of units because the units will be mass produced to cater to that demand. A baseline average of 10 million units a year is simply enormous.

But towards the end of that lifespan, the costs rise as the people making the parts are having to dedicate a portion of their product line to making these old components. This invariably sees costs rise. Usually, we don’t see this being an issue as old generations are generally over long before this becomes an issue, but the Wii – based on ten year old architecture – has demonstrated it perfectly. Nintendo made their billions on the Wii, but now at this point of its life it is no longer financially viable to keep it running. Sales drop, less parts are needed and so it costs more to keep the old machines running on old tech.

This clearly means little to most of us. So let me put it in a more direct way.

*ahem* The 3DS is more powerful than the Wii.

There. It’s been said. And it’s sadly true – comparatively speaking, the 3DS is a far superior piece of technology than its home console counterpart. That a handheld at roughly the same sort of price point is more powerful than its home console brother demonstrates perfectly the issue at hand. The Wii, as a console, is old. Very old. And time has moved on, technology has moved on.

My point, overall, is that it is virtually impossible for the Wii-U to be less powerful than what we have on offer in terms of home consoles now. It would take an insane financial investment to be WORSE than that we have on offer now. And that makes no sense, does it?

And likewise, ten times more powerful for the next X-Box or Playstation is nothing more than hot air. If the technology isn’t financially viable, it ain’t going to happen. And it takes years before a consoles true potential shines through anyway – Nintendo have the added bonus with the Wii-U of that controller, which has excited pretty much every major development studio in the world with the possibilities it brings. That as a unique selling point is a huge deal.

I have no doubt that the next X-Box and Playstation WILL be more powerful than the Wii-U. Of course they will. But they so far can’t be seen to so blatantly copy Nintendo and their controller. They will focus on traditional controls but stronger tech, and that is fine too. It likely won’t be twice as powerful as the Wii-U though, probably a 50% increase at best. A negligible amount, and if the Wii-U becomes the console standard (i.e. outsells its rivals) that extra power is likely only ever going to be utilised by their first-party offerings, and not much else. You won’t see a huge noticeable difference in games between the machines though.

I say it again, unless Nintendo are investing heavily in trying to bankrupt themselves, it is virtually impossible for the Wii-U to be anything more than twice as powerful as what we have in the 360 and PS3. That’s not hot air – that is simply because the technology available to them now is that way. That’s what the market is offering them. That’s what is there to buy.

Why would you pay more for inferior technology? People seem to think Nintendo are stupid. But when the Wii has sold 100 million units, 40million more than its rivals, and has made profits of more than a billion on the hardware alone, that’s hardly stupidity. The 3DS has taken over from the DSi as the fastest selling handheld ever – outselling the PS Vita consistently. That’s hardly stupidity.

Of course, all is subject to change and once again, I will imply here on my blog that SOFTWARE sells consoles. Software sells hardware. It’s a fact. Hardware sales rise when a huge release is planned out in the first couple of years as people buy the hardware for that killer app.

It’s handy then that Nintendo are also known for their software then, isn’t it?

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