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Going Third-Party Didn't Fix Sega, Will it Fix a Third-Party Nintendo?

Going third-party may not fix Nintendo's problems, as evident by analysis of Sega's performance after going multi-platform after Dreamcast. Sales data included inside.

The author, Bryan Cashman ( @consulgamer ), blogs about business issues in the video game industry at CONSULGAMER. This article represents Bryan's personal opinion only.

If Nintendo becomes a third-party and sells games on competing video game consoles, will a third-party Nintendo see stronger sales? History tells us the bump in business may not be as strong as some think.

After poor sales and stronger competition from other consoles, Sega became a third-party publisher in 2001, releasing games across a range of platforms and eventually abandoning the company’s last home console, Dreamcast. By moving the company’s esteemed brands to PlayStation 2, Xbox and GameCube, Sega hoped to boost software sales significantly by leveraging the larger install base of other consoles.

Analysts today say Nintendo should release software on Microsoft and Sony’s consoles to take advantage of their larger install-base, as Nintendo continues to struggle to sell consoles of the new Wii U platform. After two holiday seasons, the Wii U only halved its annual sales target for Wii U software, from 38 million to 19 million units.

Sega’s experience with bringing Sonic the Hedgehog, their top franchise, to other consoles is a telling story of what could happen to premiere Nintendo franchises like Mario. If Nintendo becomes a third-party publisher for other consoles, Mario will certainly see an initial sales spike on other platforms, but the brand and its content may slowly become commoditized as existing Nintendo consumers opt for other games from other publishers.

Mulit-platform Sonic Sales Figures

Mulit-Platform Sales Figures for the Sonic the Hedgehog Series

As shown, above, Sonic sales doubled after initially launching on other consoles. While the first Sonic Adventure sold 1.26 million units on Dreamcast in North America, a multi-platform release boosted total units sold to 2.13 million. However, after multiple iterations, the game’s sales performance dropped steadily. By the time Sega rebooted the franchise with 2006’s Sonic the Hedgehog, the franchise was selling less units across all systems than it originally sold on Dreamcast alone. Sega would later see restored sales among some future Sonic games, such as Sonic Unleashed, but the Sonic brand never returned as a system selling AAA franchise, as it once was when on Sega consoles.

Ports of Back-Catalogs May Not Sell

Nintendo has a range of GameCube and Wii games that could easily be remastered in HD and released for Xbox and PlayStation platforms, but based on the performance of Sega’s Crazy Taxi franchise, consumers may not be willing buyers for game ports. Crazy Taxi sold one million copies on Dreamcast, and the sequel performed even better, at 2.5 million units sold. However, success on Dreamcast did not translate into sales on other consoles, as the game only saw a fraction of its success on other consoles. By the time of the Xbox-exclusive release of Crazy Taxi 3, the franchise had lost its charm, selling only 140,000 units.

Multi-Platform Sales Figures of Crazy Taxi

Multi-Platform Sales Figures of Crazy Taxi

Annual Demand Remains Unchanged on More Competitive Platforms

While Sonic and Crazy Taxi’s performance may be due to quality issues within franchise releases, the annual releases of well reviewed games in the NBA 2K and NFL 2K clearly illustrate that Nintendo may not receive a boost in sales when releasing games on other consoles.

Multi-platform Sales Figures of the NBA 2K Series

Multi-Platform Sales Figures of the NBA 2K Series

A view of the performance of the NBA 2K series and the NFL 2K series shows that demand did increase annually for Sega’s sports series, but not by a significant multiplier. On Dreamcast, Sega’s sports series did not have to compete with EA Sports releases, but once moved to other platforms, Sega did not see significant sales boosts due to the far more competitive environment as a third-party publisher.

Multi-platform Sales Figures of the NFL 2K Series

Multi-Platform Sales Figures of the NFL 2K Series

After being acquired by Take 2, the 2K sports series did see a sales boost for their ESPN 2K5 releases, but the boost is more a result of the games’ $20 retail price, hinting further at the level of commoditization pushed on the games by a more competitive multi-platform environment with EA Sports titles on Xbox and Playstation.

A Third-Party Nintendo Could Still Succeed

Still, Nintendo’s experience going third-party may not mirror Sega’s. Nintendo’s franchises are among the most well-known in the world, and may see sustained demand on other platforms due to the caliber of their quality and brand power.

Further, given the Wii U only has a global install base of 4.3 million consoles compared to Dreamcast’s 10.6 million, Nintendo may see larger sales boosts than Sega due to Wii U’s extremely limited install base.

Finally, Nintendo's third-party opportunities outside of consoles are far greater than Sega's in 2001. With the massive adoption of mobile devices running on iOS and Android, Nintendo has the opportunity to sell content to a new set of consumers.  While other consoles are already saturated with console game experiences, mobile devices are not.  Mobile devices also have proven demand for classic Nintendo games, as evident by existing demand for emulators across mobile devices.

If anything, comparisons to Dreamcast should indicate that going multi-platform is not a clear winning strategy for Nintendo. Sales may increase initially, but the company will have to focus on more than just a multi-platform console strategy to succeed.

Bryan Cashman is the founder of Callvention, a service enabling phonecalls with game developers.

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