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Jul - News - Nintendo slides to massive loss as revenue falls by 36.2% New poll - New thread - New reply
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FieryIce

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Posted on 04-26-12 01:36:53 PM Link | Quote
The 3DS and Wii could do nothing to save Nintendo during its most recent fiscal year.

The company today released the results of its fiscal year that ended March 31 (PDF) and revealed that revenue slid 36.2 percent compared with the previous fiscal year. Nintendo ended its year with revenue of 647.6 billion yen (about $8 billion), versus over 1 trillion yen in the prior year.

Due to sluggish sales, Nintendo posted a net loss for the year of 43.2 billion yen ($532.5 million). In the prior year, it had generated a profit of 77.6 billion yen.

Nintendo's troubles over the year were numerous. For one, the company was forced to sell the Nintendo 3DS portable below cost in order to attract customers. This meant that the iconic game firm took a hit on every unit sold. Meanwhile, sales of Nintendo's Wii console continued to drag, and the company's software franchises were off the mark on the year. Add that to a strong yen, and Nintendo could do little to turn things around.

The disintegration of Nintendo's business is striking. Wii sales hit just 9.84 million units in the just-closed fiscal year, down from 15 million units in the prior year. During the 12-month period, Nintendo sold 102.3 million Wii software titles, down from the 171 million in the previous year. Sales of the DS portable game machine dropped to 5.1 million last year, down from 17.5 million in the previous 12 months.

Nintendo's 13.5 million 3DS unit sales last year were impressive, but considering the vast majority of those devices were sold at a loss, investors can't find too much comfort in its success.

Still, Nintendo has a plan to try to turn things around. The company says it will continue its "basic strategy of 'Gaming Population Expansion' by offering compelling products that anyone can enjoy, regardless of age, gender, or gaming experience." In addition, it plans to start selling the 3DS for a profit toward the middle of this fiscal year.

But the big revenue generator this year, the company believes, will be its Wii U console. The Wii replacement is scheduled to hit store shelves before the end of the year and comes with HD graphics and a 6.2-inch LCD-touchscreen-equipped controller.

Looking ahead, Nintendo expects its net sales to climb to 820 billion yen during its current fiscal year. It also expects to post a small profit of 20 billion yen.


Source

I don't know what to say - I don't even have a 3DS yet and I'm probably not going to get a Wii U anytime soon. Real life has taken its toll and now I'm not sure how much I can stretch my current savings, so I can't go around spending it on video game consoles. Though, I hate playing games on my phone so I don't see that as a good alternative, either...
Orlandu


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Posted on 04-26-12 03:14:46 PM Link | Quote
I don't think the Wii U is going to save them. It'll probably do strong in Q4 during the holiday season, but I'm predicting it'll plummet in 2013 sales. Or at least not do as strongly as they'd hoped. The touchscreen controller seems interesting, but it's more of a novelty item than a practical gaming device.

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Lunaria

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Posted on 04-26-12 09:06:20 PM Link | Quote
Software sells units. The wii is soon phased out, no wonder the sales are starting to go down. There are also very few attractive titles out for the 3DS, add to that a few of them are remakes of games many have already played. There is really nothing strange about the 3DS not doing too well.

The wii is also not seeing a whole lot of support anymore as it's slated to be replaced by the wii u. Furthermore, Nintendo is losing more and more of by not having any good support for downloadable titles. They are not account base, meaning you only have it on one system, buying things on the 3DS shop is also a pain since it's very hard to manage. (Did it get updated in the new patch?)

In all honesty, I'm not surprised at the loss here at all.

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Posted on 04-26-12 09:19:02 PM Link | Quote
You also have to remember that the Wii has been out for years now. Over four! I don't have statistics in front of me, but having strong sales all the time means that eventually it's going to saturate the market and you'll have to move on.


The Xbox 360 has a solution to this problem and it's the online service with subscription costs. Online multiplayer that's easy to work and fun + subscription fees and other add-ons that people will easily get = each console sold is more revenue down the line. The Wii (and probably Wii U with now Ninty is) just have a shitty store with a horrible interface and nothing really worth buying if you don't love shovelware.


This doesn't surprise me a whole lot. If the Wii U has anything of value out when it releases (instead of a really sub-par launch like has been the usual lately) it might pull things around, but as it is...


I don't think Ninty is going anywhere, though. That'd be a real surprise.

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Posted on 04-26-12 09:20:23 PM Link | Quote
One thing I'm surprised isn't mentioned anywhere is the currency issue- the Japanese yen has been very strong in recent years, which isn't good news for Japanese companies that do most of their business abroad (like Nintendo).

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Orlandu


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Posted on 04-26-12 09:35:24 PM Link | Quote
Originally posted by Xkeeper
I don't think Ninty is going anywhere, though. That'd be a real surprise.

Back when the Dreamcast was new, did you ever think Sega would stop making consoles? The same could happen to Nintendo if the Wii U doesn't turn the company around. Granted they still have the larger portion of the handheld market, but cellphones have been pecking away at their share for a while. Who knows, maybe in 4-5 years we'll see Xbox and Playstation running Mario games.

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Darkdata
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Posted on 04-26-12 09:42:41 PM Link | Quote
The 3DS has 9/10 games in the top ten selling in Japan at the moment, and has outsold the DS in the same time period.

I mean really, it's like this every console change. I should dig up all the news-stuff after the Gamecube. (Mario on Xbox? The Fall of Nintendo!)

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Posted on 04-26-12 11:19:07 PM Link | Quote
Peardian

  
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Posted on 04-26-12 11:22:35 PM Link | Quote
After the whole price cut with the 3DS, I'm not surprised. Still, they're doing a lot better than they could be as far as the 3DS goes.

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Posted on 04-26-12 11:25:03 PM Link | Quote
Nintendo isn't coming in with three failed consoles-slash-expensive console addons, compared to Sega.

Their 3DS gamble looks like it has hurt them dearly though - They really overestimated what people would pay for one.
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Posted on 04-26-12 11:37:02 PM Link | Quote
I don't think what they overestimated was what people would pay for one, I believe it was how many people would buy the console without any games for it. The 3D thing was cool when it came, but surprise, half a year after the release of the system we see phones with the same thing. (Arguably not as good, but whatever.)

The 3DS did not ship with any amazing titles, mario kart and 3D land was a bit late to the party, to say the least. People are not going to invest in a system until they know there will be and that there are plenty of titles for it that they will enjoy to play. Likewise, they advertised to have a bunch of third party support for the system, none of which we have seen much of yet.

Heck, even gamefreak now decided to make B&W 2 for the DS and not for the 3DS. :I

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Posted on 04-26-12 11:42:01 PM (last edited by Xenesis at 04-26-12 08:43 PM) Link | Quote
That's why Nintendo always sold their console hardware at a profit - so even if their attach rate is terrible and their sales aren't the best, they are still profitable from the hardware sales alone. The Gamecube was a pretty good example of that.

They're finding for the very first time now that they're selling the console at a loss that suddenly their attach rate will matter a lot. Who knows, maybe the 3DS will finally turn Nintendo into something a bit less third-party unfriendly.
Lunaria

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Posted on 04-26-12 11:47:19 PM Link | Quote
That would be a good change, I have heard the horror stories about developing for the Wii ware. :I

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Posted on 04-26-12 11:49:29 PM (last edited by Darkdata at 04-26-12 08:56 PM) Link | Quote
Originally posted by Lunaria

Heck, even gamefreak now decided to make B&W 2 for the DS and not for the 3DS. :I


That's a time/assets thing. It would cost a shit-ton of time/effort to port over all the BW stuff to 3ds (and redraw everything for the new resolution.)

They can make a DS version that can be played on the 3DS, and sell to both sides for profit while working on Pokemon Chrome and Pokemon Firefox.

Originally posted by Xenesis
They're finding for the very first time now that they're selling the console at a loss that suddenly their attach rate will matter a lot. Who knows, maybe the 3DS will finally turn Nintendo into something a bit less third-party unfriendly.




You think it's selling at a loss? At it's current price, it's selling for a profit, just less of one than Nintendo would of liked.

Also, as of 46 weeks in, it's beat the GBA for consoles sold in the same time period (in Japan).



I love that curve though. It's such a strange thing.

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Posted on 04-26-12 11:58:31 PM (last edited by Xenesis at 04-26-12 08:59 PM) Link | Quote
Edit: Huh, I swear it was reported that the 3DS was no longer being sold as a profit. *shrug*

I shudder to think what the art assets costs for re-drawing Pokemon is, especially that they still appear to be using Sprite animation. It's no surprise that they've always cheaped out in the 'third versions'.

The other factor that is really huge is the currency thing. I don't know exactly how the USD and Euro compares to the Yen historically, but I know from local perspectives that a high currency SUCKS BALLS if you're a producer and exporter. If your local currency goes up by 10%, that's 10% of your turnover instantly taken out from overseas purchasing and sales unless you raise the price to match...which will reduce your demand.

The double hit of taking purchase-losses on 3DS units and a currency rise is hurting them a lot.
Lunaria

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Posted on 04-27-12 12:09:57 AM Link | Quote
Originally posted by Darkdata
That's a time/assets thing. It would cost a shit-ton of time/effort to port over all the BW stuff to 3ds (and redraw everything for the new resolution.)

They can make a DS version that can be played on the 3DS, and sell to both sides for profit while working on Pokemon Chrome and Pokemon Firefox.
Of course I know this. But seeing as there was such a long time between B&W everyone (or at least I was) was under the impression that they would not make a third version for them, and it made more sense to make the next entries in the series for the 3DS.

In fact, if I may be as bold as to say, I think there was at least a large chunk of people who thought they would start working on the next pokemon games for the 3DS after HG/SS as generation 4 was, at that point, as big as generation 3. Plus it would make sense to have pokemon ship early in a new consoles life, it would sell units to be sure.


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Posted on 04-27-12 01:24:44 AM Link | Quote
Originally posted by Darkdata


You think it's selling at a loss? At it's current price, it's selling for a profit, just less of one than Nintendo would of liked.

From Nintendo's investor presentation:
I would like to tell you next about the product profitability of the Nintendo 3DS hardware, which affected our profit the most in the last fiscal year. As I informed you before, in the first half of this fiscal term we will get out of the situation that we sell the hardware below cost. We anticipate the improvement of the product profitability of the hardware alone.

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Posted on 04-27-12 06:46:05 AM Link | Quote
Originally posted by Lunaria
But seeing as there was such a long time between B&W everyone (or at least I was) was under the impression that they would not make a third version for them
Yes, because they have such a lengthy history of skipping third versions.

In fact, if I may be as bold as to say, I think there was at least a large chunk of people who thought they would start working on the next pokemon games for the 3DS after HG/SS as generation 4 was, at that point, as big as generation 3.
I'm sorry, I'm not seeing the correlation. B&W still count as generation 5, regardless of the hardware.

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Posted on 04-27-12 10:56:24 AM Link | Quote
Originally posted by Stigandr
I'm sorry, I'm not seeing the correlation. B&W still count as generation 5, regardless of the hardware.
Uh, yeah, I never said anything else. Too clarify, I was under the impression that generation 4 would possibly be the last generation to grace the DS/DSl/DSi hardware. And that HG/SS would also be the last of generation 4. I know that B&W are classed as generation 5.


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Posted on 04-27-12 12:25:26 PM Link | Quote
Originally posted by Lunaria
Originally posted by Stigandr
I'm sorry, I'm not seeing the correlation. B&W still count as generation 5, regardless of the hardware.
Uh, yeah, I never said anything else. Too clarify, I was under the impression that generation 4 would possibly be the last generation to grace the DS/DSl/DSi hardware. And that HG/SS would also be the last of generation 4. I know that B&W are classed as generation 5.

I agree with this; my boyfriend and I were quite surprised to hear that generation 5 would also be released for the DS. But seeing as I wasn't going to be able to afford a 3DS back then, I was pretty happy.

In a way I'm glad they delayed the 3DS' release in such a way, and it makes sense when you consider how much the DS has sold so far. For reference, realize that the GBA was released in 2001, the DS in 2004, and the 3DS not way the hell till 2011 (and still getting games in 2012). I really do not think this was a bad thing, it reflects good on the DS, actually.
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Jul - News - Nintendo slides to massive loss as revenue falls by 36.2% New poll - New thread - New reply


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