Trip Hawkins (founder of EA and 3DO, currently head of Digital Chocolate and on EA’s board of directors) called out Nintendo for adding licensing agreements to the video game market, and that things were better when software companies made software on their own, for whatever hardware they wanted, whether or not the hardware companies wanted them or not. He also calls out Apple for the same thing on it’s App Store.
As I pointed out before, the legality of third parties was established when Activision started making games for the Atari 2600, despite Atari’s objections. Trip Hawkins is one of EA’s founders, the company that reverse engineered the Genesis and basically extorted a cushy agreement from Sega. Software is what drives the market, and who controls the software controls the market; however, hardware is arguably the harder thing to make. They’re made of expensive and fragile parts, they’re bigger and are harder to get out to customers, and they’re more likely to fail and need repair or replacement, which may be on the maker’s head depending on how it broke. In short, the hardware makers are chumps, and it’s a surprise that anyone would want to make hardware. But someone has to make the hardware, and it’s only natural that they’d want to get something for their trouble, and to try and exert some control over their own hardware.
Hawkins is thinking of the PC market, where control was taken away from hardware companies a long time ago, and it’s Microsoft who controls it through Windows. By making every hardware component compatible with Windows, and becoming so dominant that hardware companies wouldn’t dare try to break free from Windows, or else they’d get shut out of all the software which is Windows compatible. On the other side of the coin, the software is in a similar position, they have to make their software Windows compatible, or else they’d get shut out too, but Microsoft doesn’t hassle any of the software companies, other than charging money for dev tools like Visual Studio, because Microsoft needs the software companies to keep making Windows compatible software to hold the hardware companies under its thumb.
There is one sore spot to this, Apple. Apple remains one of the only companies that makes its own hardware, operating system, and software. They make unique hardware that can reach consumers in new and interesting ways, but they aren’t dominated by the software companies because they make their own; so when Apple opens up the iTunes store to allow other companies to make Apps for them, Apple maintains control, and if third parties don’t like it, they can leave.
Also, in stark contrast to Nintendo, which has restrictions to keep unwanted developers out as a way of maintaining control, Apple lets virtually anyone make Apps. By doing this, Apple also maintains control as the third parties are competing with each other a lot more than with Apple; no third party can get any real leverage over Apple as there are so many other developers flooding the system. Add to that Apple isn’t a video game company, and doesn’t seem to care about video games as anything more than just another class of Apps, and you have a hardware company that frankly doesn’t care about the third parties.
Have you heard that Nintendo and Apple are competing? Yeah, the iPhone with it’s App Store is the greatest threat to Nintendo and the DS/3DS? Analysts and third parties even said so. So why are Nintendo and Apple largely denying it?
Nintendo and Apple are in control of their hardware because they also make their own software, they don’t need third parties as much as hardware only companies need. If they were in competition, then they would need every advantage they could get, so they would be chasing third parties to get their support; but if they aren’t in competition and are doing their own thing, they can maintain the take-it-or-leave-it approach that keeps them in control of their own systems.
By comparison, Sony and Microsoft don’t have enough software of their own to carry their consoles, so they need third parties, and have to actively court third parties. Third parties especially like the PS3 and 360 because they can use the competition between the two to get really juicy deals from them. Third parties dislike Nintendo because Nintendo is independent enough to stand on it’s own, and now they have Apple, another independent company standing on its own two feet. Developers love the PC business, and Sony and Microsoft’s consoles, because they’ve been completely whipped.