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Nintendo Has Cut The Royalty Rates On GameCube Software

by Thomas on April 12, 2003 @ 3:14 a.m. PDT

Nintendo has cut the royalty rates on GameCube software in a move aimed at encouraging third-party publishers to bring key titles to the platform, and will focus more heavily on third-party software at E3. The company, which last week announced that it had missed its 2002 shipment targets for the Cube by a massive 44 per cent, selling only 5.6 million units, admitted that major third-party titles such as Grand Theft Auto were completely overshadowing its own major franchises such as Mario and Metroid.

"The biggest games of the year last year were games like GTA and they came from an independent publisher," Nintendo of America senior VP of marketing George Harrison told news agency Reuters. "We need to make sure that we have good relationships with all the independent publishers, because you never know where the next big hit game is going to come from."

"Before our royalty rate was a little more aggressive so to the third party publisher it was a little less attractive to make games for GameCube," he confessed. The new royalty rate structure, which came into effect in March, is thought to make the Cube third party software business much more competitive with its rivals - although publishers and developers may still baulk at developing exclusives for a system with a low installed base.

There's also the small matter of the amount of time it takes a game developer to create a game; it's very difficult for a publisher to react quickly to this sort of price structure change by Nintendo, particularly as many studios will be in the middle of developing games for other consoles at present. Even if publishers consider Nintendo's new deal to be hugely attractive, it could be a year at least before the GameCube software market starts to benefit from it.

Nintendo's newfound focus on third party software will be further in evidence at E3 in May, where the company plans to place significantly more emphasis than usual on third-party developers and titles. "Games from Namco and Sega and Capcom... we think are going to be just as important in helping to sell our hardware system this year as much as our own games," according to Harrison.

Source: Reuters

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