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The story
Yoshiki Okamoto, a founding member of Capcom who worked on titles like Street Fighter II, made waves on 5ch after saying in his own YouTube video that third-party publishers didn’t actually make money during the Famicom/Super Famicom era. According to Okamoto, when publishers asked Nintendo to manufacture cartridges, they had to pay in advance, and even the cost of disposing of unsold inventory fell on the manufacturer’s side. In response, some 5ch users pushed back, citing the fact that Street Fighter II is said to have sold around 6 million copies worldwide and that Capcom reportedly shipped more than 15 million units of software during that era, arguing “there’s no way you don’t profit from selling that much.” Others countered by pointing to cost factors that aren’t visible from unit sales alone, such as interest expenses and Nintendo’s system of shipping stock in installments, and the debate devolved into arguments over how reliable the numbers really are.
What people said
For details, check Okamoto's latest YouTube video
Most of the comments there have a negative image of Nintendo too
Capcom made huge money in arcades, nearly went under after a failed real estate speculation deal, and only got saved when Resident Evil sprouted up out of nowhere
Then Monster Hunter saved them next
Nintendo hardware must really have been hell for them
Old Capcom made most of its money in arcades
Ghosts 'n Goblins and Street Fighter II made more money than their Famicom software did
That's clearly just Street Fighter II talking
Nothing to do with Nintendo
Super Famicom Street Fighter II sold like 6 million copies worldwide
Apparently Capcom sold 15 million units of software on Famicom/Super Famicom
If you take the software price, subtract Nintendo's royalty and the retailer's cut, then multiply by those 15 million units
you get roughly 50 billion yen
Where exactly is the "didn't make money" part?
Where did that money go?
If that's the total take over 13 years, from 1983 to 1996, isn't that actually pretty underwhelming?
That "math checking out" thing
those are just numbers you made up
If you want to verify whether your "made-up math" is actually correct, go copy-paste Re: #42 and DM the man himself
These days you can appeal directly even to someone like Elon Musk
Looking forward to your report
"My company basically made [Fire Emblem: The Sacred Stones] on our own."
"It started out as an original game, but since reusing [Fire Emblem: Blazing Blade]'s system made it easy to build, it became a Fire Emblem title."
"Fire Emblem at the time was hard and had a narrow entry barrier."
"We made it possible to grind levels, made it easier, and widened the entry barrier."
"Looking at the casual-friendly, difficulty-select direction Fire Emblem took starting with [Awakening], what we did back then was the right call."
So that's why the vibe is different from the previous two games
・Unsold leftover stock was the third party's responsibility, and Capcom had to scrap it themselves
Does "leftover stock" here mean units that were overproduced and never even shipped out?
From what I've heard, stores had no choice but to dump stock at discount prices and struggled with it, but I've never heard of anything like a book-return system for games
The inventory sat with the wholesalers, you know?
Dead stock got marked down at wholesale price, and stores would buy it in to sell cheap too
Contracts were set up so that cut into what wholesalers paid the manufacturer too
(Back in the Shoshinkai era, you were at the mercy of the wholesalers buying your stock in the first place)
He explains both why they had to release on Famicom and why it strained their cash flow
"Didn't make money" just means the profit margin was bad because of interest costs, the big losses from holding inventory, and America's return policy — it doesn't mean they were running a deficit
My impression is that he's taken a story about Capcom being sloppy — or really just inexperienced — and packaged it well enough to go viral. Gotta hand it to him
But given that PlayStation ended up stealing the market afterward, I think Nintendo's approach back then deserves the criticism it gets
You're just stating the obvious, but what exactly do you understand about the ROM business yourself?
You haven't refuted at all what Okamoto is saying — that Nintendo tried to profit without taking on any risk, and ended up losing the market because of it
Nah, isn't that just impossible? There's no way Nintendo — fabless, leaving distribution to wholesalers — could do the same thing as SCE, which owned its own CD pressing plants and even its own shipping company
That's like telling a snake to fly because birds can do it — an unreasonable demand
Honestly, this is exactly the area where NEC and Panasonic had the potential to win, lol
Though their thinking was too hardware-centric for it to work out
Rather than some glib "tell it to fly" line, Okamoto's words carry more weight since he was actually on the front lines of the game business at the time
Exactly
It's less that Nintendo's approach was bad, and more that Sony's manufacturing speed and distribution were just overwhelmingly appealing
Since it cut down on the things that caused cash flow headaches
"Nintendo was awful"
"Third parties had it rough"
Coming from someone who doesn't even understand what "long tail" means…
https://chatgpt.com/share/6ade0bee-bfc4-83e8-9ced-6414f605d3c9
In the 5th slide there, he says something to the effect of "once you subtract the bank interest, there's basically no profit left at all"
But when I asked ChatGPT ("Chappy"), it answered that "half a year's bank interest is only around 3%, so even borrowing 300 million yen only comes out to about 9 million yen"
So the whole story's math has already fallen apart
Everyone already knows you have to subtract all those costs — making sure there's still a profit after that is Capcom's own job to figure out, and if they couldn't manage that, isn't that just Capcom being incompetent?
On top of the already-thin profit margin, you stack labor costs, advertising costs, etc., so there's almost nothing left — and then unsold inventory squeezes the profit even further
How much exactly is that "thinned-out profit"?
According to Chappy, it's 300 million yen
And even borrowing that only costs 9 million yen in interest
So how many units would 300 million yen in software manufacturing cost cover?
Let's say, hypothetically, a minimum of 100,000 units.
9 million divided by 100,000 is 90 yen
So out of Capcom's cut per unit, only 90 yen gets deducted
How does that make the profit "thin"?
PlayStation, on the other hand, put the manufacturing decision in the hands of the publisher instead of the wholesaler. That extra risk probably came with bigger profit too.
Kenji Eno said he couldn't get the production numbers he wanted and morphed the PlayStation logo into a Sega Saturn one in protest
One reason Nintendo was disliked was their installment shipping — a publisher might order 300,000 units, and only 100,000 would actually arrive by release day
The remaining 200,000 would come in batches, like 100,000 a month later and another 100,000 two months later
By the time two months had passed, interest in the game had cooled off, and even though the publisher kept 50,000 units in reserve to meet repeat demand, those units would just end up as dead stock
Okamoto probably figured bringing this detail up would be too risky, since he didn't mention it in the video either, lol
Background and key points of this discussion
During the Famicom/Super Famicom era, third-party publishers placed bulk orders with Nintendo to manufacture their cartridges and paid for them upfront, while Nintendo and the wholesalers held the real power over how many units got made and how shipments were paced. Even hit titles shipped in small batches and took a long time to get restocked, while unsold inventory became the manufacturer’s own burden to dispose of — and that structure is the backdrop to the feeling that “it sold, but we didn’t make money.” What split opinion in the thread was whether to treat Okamoto’s remarks as weighty testimony from someone who spent decades in the industry, or dismiss them as a vague “impression” unbacked by concrete figures. It’s also worth noting that the counterarguments citing numbers don’t agree with each other either — the assumptions behind the interest calculations and sales figures differ from post to post, and none of them are based on verifiable primary sources. Some posts in the thread do point out that “didn’t make money” doesn’t necessarily mean “ran a loss,” but a reader skimming just the headline could easily come away thinking it was a deficit.
*This article is excerpted and summarized from the 5ch (Hardware/Industry (Geha)) thread “Yoshiki Okamoto: “Third parties really didn’t make money during the Famicom and Super Famicom era”.”
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