Nintendo makes third place cool

We don't often speak of real competition around here -- that is, competition with Microsoft and Sony. There are a lot of reasons for this; after all, Nintendo themselves claim (quite rightly) that when it comes to this market, they're not competing with the other guys. They're looking to do something new.

But the fact remains that for a while, Nintendo has been in third place when it comes to the console wars. Is that really so bad? According to the New Yorker, when you're Nintendo and the other guys are bleeding money, it's just fine to come in last. We know, it seems strange on the face, but once examined, it makes sense. Without the pressure of out-processing and out-performing the other guys when it comes to power, graphics, and sound, Nintendo is free to do whatever they want -- and that shows in the Wii. We don't mean just in the innovative turn the system design took, either. It means Nintendo is free to wield their money where it counts, and in return, they reap the reward of profiting on every system that sells.

We've heard most of this before, but rarely in a context that compares the video game industry to other businesses. The New Yorker draws a comparison to car companies by posing the question of who one would rather be in that market: GM or Honda? The choice is easy. Staying near the top is a benefit when it comes to making and selling cars. But the business of games doesn't seem to follow all the same rules -- and it's interesting to look at what's going on in the industry from that perspective.

So what does that mean will happen if Nintendo continues the roll they're on with the Wii and the DS and catapults back into the spotlight as the biggest and baddest of all? Will their profitability slip? Or is Nintendo just the best business model gaming has to offer, regardless of the standings between the big three?