Ads and placement have recieved a lot of resorces during the holiday season. That's not cheap.
-
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Nintendo lowers forecast from ¥55B profit to ¥25B loss [3DS 18M->13.5; WiiU 9M->2.8M]
- Thread starter mackaveli
- Start date
Ads and placement have recieved a lot of resorces during the holiday season. That's not cheap.
Speak for yourself. My 4 year old can use a tablet but has no problem using the 3DS and as long as MK, DK and Sonic are on a dedicated handheld he will always want use one.
clay_ghost
Member
whatever happens, i hope Nintendo do not turn to making mobile phone games.
It makes perfect sense. Their costs are pretty much fixed. The cost of R&D-ing a new console, the cost of software development, the cost of hardware purchase (manufacture), yearly advertising budget for each region etc. They know what these costs will be at the beginning of the year. Then they make a prediction as to sales and operating profit.
If you had taken their predicted sales and then reduced them to the realistic numbers we were forecasting a month ago, then used that ratio to reduce their predicted operating profit you would have come up with a very similar number to this. Fixed costs + less revenue = huge losses.
Add in extra expenses like having to pay retail to stock the machine and extra advertising and the money they make off each 3DS sold disappears in a puff of smoke.
I'm not sure what you're seeing in this thread but it's sure as hell not jubilation. The main emotions I've picked up from this thread are anger, anxiety and fear.
SolidSnakex
Member
You're looking at it entirely from a negative perspective. What if those new gamers play those old Mario games and then want to play the new ones? The only option would be for them to buy a 3DS or a Wii U. Is it a risk? Sure, but it's a risk that they probably need to take at this point. Unless Iwata has a better idea than just hoping that Mario Kart or Smash Bros. will turn around the Wii U's fortunes.
It's not "jubilation". But people saw Nintendo repeatedly making bad decisions and predicted that the company would suffer financially as a result. At the same time, people who were critising Nintendo were often met with sarcastic 'doooomed' posts, references to Nintendo's 'war chest' and fictional 'panic mode'. Myself, I want Nintendo to do well as I enjoy their games but it's hard to have sympathy for the company executives when they continue to make bad decision after bad decision.
Well, they deserve these losses : they fucked up Wii U. Providing games and online system on time, marketing it, convincing third-party publishers, alienating your customers by abandoning your console 2 years before the release of the next one. What you sow you reap. That's the game, see you next gen.
For those who want Nintendo out of console business : why? A fail and they give up? They still have money, they still have another opportunity, you don't break ties with third-party publishers forever (or CEOs are crazier than I thought). They'll see that they have no choice but to accept DLCs (so bigger built-in storage), in-app purchase, easier patching and other normal practices from them because Western companies now rule the console business.
About handhelds, I don't know what they can do more, being cheaper and generate less profit? Follow the mobile and cheaper trend? Because Western don't care about them anymore and that's a shame.
For those who want Nintendo out of console business : why? A fail and they give up? They still have money, they still have another opportunity, you don't break ties with third-party publishers forever (or CEOs are crazier than I thought). They'll see that they have no choice but to accept DLCs (so bigger built-in storage), in-app purchase, easier patching and other normal practices from them because Western companies now rule the console business.
About handhelds, I don't know what they can do more, being cheaper and generate less profit? Follow the mobile and cheaper trend? Because Western don't care about them anymore and that's a shame.
Graphics Horse
Member
How much does it cost to keep a factory going while needing little to no replenishment to your huge unsold stockpiles, I wonder.
Save 'N Quit
Banned
I want there to be change.
Those are some awful loses.
Those are some awful loses.
Pie and Beans
Look for me on the local news, I'll be the guy arrested for trying to burn down a Nintendo exec's house.
Its all the other stuff on "paying to stay in the game". Be that with paying retailers to keep space, having to invest in more servers for the digital side, and so on. 2DS won't be being sold at a loss, its more a case of thats just how badly everything else is dragging things down. Also of course that the margin of profit isn't as amazing as it was on things like GBA, DS, or Wii with their cheap as shit materials.
Samsung gets a changing mobile market and they are a huge company that can help Nintendo compete in the mobile space. and I think Tegra and the new maxwell lines will serve them well. Plus its time for a change.
Eh, that's basically the same thing though. Hoping they will buy a $40/€40 Mario game after playing those $0.99/€0.99 Mario games and in the process of selling way less 3DS'/Wii U's or whatever their next handheld/console are gonna be.
Playing games for free or at a very low cost of entry and then suddenly having to pay 40 bucks won't go too well with these casuals. These people will just expect the next Mario to be on iOS/Android devices, not that they have to buy a additional $150 device and a $40 game.
They either go full mobile or stay in the dedicated handheld/console space.
Then how about the death of THQ? The incredible debts of EA and Activision? Microsoft's gaming division still bleeding money? A record number of development studios closing over the past three years? The death of all the B and C publishers?
Perhaps the last gen did last too long and people are excited for a new gen. I guess in six months time will tell but the numbers don't lie. At the very least there's a console contraction from the previous generation but the software sales for the first couple of months really makes me nervous.
zomgbbqftw
Banned
Not that much, Nintendo don't own the assembly plants, they will pay an underutilisation fine, but it won't be that large. Foxconn can easily move the staff over to other products. The way these Chinese production lines work is that they are easily adapted to different products to avoid down time. The most specialised ones are for the iPhone but there isn't much chance of down time there so it's not a big deal.
I really think that Nintendo are breaking even on 3DS/2DS hardware as a best case scenario. The maths doesn't make sense otherwise, even taking into account a high fixed cost base (which, again, doesn't make sense for a company like Nintendo which has no production assets).
Jeezuz.
At this point it's hard to see how a further price drop would help much. The public just isn't aware of/doesn't care about the system. I believe it hit rock bottom prices in the UK already and didn't seem to make much of a difference.
This makes a new Nintendo console less likely. They need to spend money on R&D on both hardware and software. That can't happen if the company is hemorrhaging money on console sales. This matters in the long-term because they'll need to modify strategies to stay in business.
In all honesty, Iwata is the right guy to turn around the current Nintendo. Correct me if I'm wrong but the gamepad adds $140 to the cost. Take away that requirement and the losses should decrease.
I'm scared for Nintendo. They have enough liquidity to weather this storm and easily change course. Is leadership willing to change any part of their strategy?
In all honesty, Iwata is the right guy to turn around the current Nintendo. Correct me if I'm wrong but the gamepad adds $140 to the cost. Take away that requirement and the losses should decrease.
I'm scared for Nintendo. They have enough liquidity to weather this storm and easily change course. Is leadership willing to change any part of their strategy?
It's really ironic how conservative their software lineup is considering all the risks and gimmicks they take in their hardware. Somewhere in the Iwata regime, he decided only to make sure things and inexpensive or not as time consuming products. Hence the deluge of platformers back to the regular Wii days. IP mismanagement has lowered Mario's drawing power, and further killed the dormant series'.
I have a Wii U, and only a rental interest in Tropical Freeze, because I've just finished NSMBU and 3D World. Anything different takes too much time, so inevitably there will be delays and please understands.
They're gonna have to spend a lot of money to make money at this point. Which seems to not be in Nintendo's current DNA.
I have a Wii U, and only a rental interest in Tropical Freeze, because I've just finished NSMBU and 3D World. Anything different takes too much time, so inevitably there will be delays and please understands.
They're gonna have to spend a lot of money to make money at this point. Which seems to not be in Nintendo's current DNA.
Opus Angelorum
Member
I think the lowest it dropped to was £150 for the Basic. The Premium I don't think has went lower than £200 with a few games.
I understand price isn't really the problem, but they have messed up the brand identity so much it's all they can do.
Phoenician_Viking
Banned
Give me a break. Traditional gaming is not going anywhere. Hell NPD just said that software sales are up from last year. Nintendo failing does not mean the industry is dying or dead.
Graphics Horse
Member
Sounds about right. I think they're also paying royalties on the chip designs used instead of owning them outright, although that may work out cheaper in the long run with Wii U's performance.
Wolfgunblood Garopa
Member
It was obvious that they messed up their next console at that first E3 reveal.
Nintendo's R&D completely botched it, and their first party developers did nothing to help make up for it. Iwata should step down for pulling off what should be impossible- making Nintendo boring. The only person I've had any kind of discussion about the Wii U was with my girlfriend's Mom, asking if she should get an Xbox with Kinect or a Wii U with Wii Fit U for a fitness game.
Nintendo's R&D completely botched it, and their first party developers did nothing to help make up for it. Iwata should step down for pulling off what should be impossible- making Nintendo boring. The only person I've had any kind of discussion about the Wii U was with my girlfriend's Mom, asking if she should get an Xbox with Kinect or a Wii U with Wii Fit U for a fitness game.
flatearthpandas
Member
There's no way I can stomach reading all the ignorant tirades preceding my post just to get to the thoughtful and reasonable posts. I'm sure I at least partially agree with the tirades though.
I'm sure this level of failure is not a big surprise to many. Booting up the Wii U for the first time was a huge disappointment as I saw that Nintendo had only paid lipservice to bringing the features I asked for. It still has some features that are actually worse than the corresponding 3DS features that came before it. The VC is a disaster. The online shop, while organized pleasantly enough--better than SEN on the PS3/4 imo--is missing the functioning account system that makes the whole thing worthwhile.
Nintendo has inarguably ignored what many people expect and desire from their console.
That said, they've done some things right.
The Gamepad is a real treat. It is one of my favorite controllers and positioned to make the experience for most games more intuitive and less cluttered than ever before.
Almost full BC to last generation. This is something I appreciate and gave the Wii U more compatibility with our digital title from last gen than any other competitor.
Free online. Not that anyone could justify paying for Nintendo's online, but I see people justify paying for a lot of things so who knows
The games. They were a long time coming (at least on Wii U) but they are still as good as can be desired barring online integration.
None of these consoles are perfect and while Nintendo is currently experiencing a disaster that could have partially been avoided, I'm glad the system exists. I hope they can weather storm because there is no one in the industry that can replace them.
I'm sure this level of failure is not a big surprise to many. Booting up the Wii U for the first time was a huge disappointment as I saw that Nintendo had only paid lipservice to bringing the features I asked for. It still has some features that are actually worse than the corresponding 3DS features that came before it. The VC is a disaster. The online shop, while organized pleasantly enough--better than SEN on the PS3/4 imo--is missing the functioning account system that makes the whole thing worthwhile.
Nintendo has inarguably ignored what many people expect and desire from their console.
That said, they've done some things right.
The Gamepad is a real treat. It is one of my favorite controllers and positioned to make the experience for most games more intuitive and less cluttered than ever before.
Almost full BC to last generation. This is something I appreciate and gave the Wii U more compatibility with our digital title from last gen than any other competitor.
Free online. Not that anyone could justify paying for Nintendo's online, but I see people justify paying for a lot of things so who knows
The games. They were a long time coming (at least on Wii U) but they are still as good as can be desired barring online integration.
None of these consoles are perfect and while Nintendo is currently experiencing a disaster that could have partially been avoided, I'm glad the system exists. I hope they can weather storm because there is no one in the industry that can replace them.
SolarPowered
Member
Besides MS and the B/C list publishers didn't most of these have a lot more to do with bloated dev/marketing budgets and bad management? MS in particular just bled out the wazoo considering the RROD fiasco that took around three years to resolve itself. I don't even remember all that many bombas from MS game studios aside from Project Gotham Racing (ah fuck thanks for reminding me, guy).
Smaller pubs/devs definitely felt the sting of not having high enough software sales. I'll give you that. But a lot of those closures happened before Steam really took off (I'm under the impression that it only took off maybe four years ago. Please feel free to serve me crow).
Flying Toaster
Member
The drought of games is what really did the console in. I would say that a lack of third party support as well but if Nintendo has been having issues with third party support they should have compensated by putting more money into the development of more first party games to even out the lack of support.
HolyBaikal
Banned
What does this mean for Nintendo... what's going to happen to Nintendo?
crazygambit
Member
On hardware rotting away in one of their warehouses? You betcha.
Sammy Samusu
Member
This is horrible, they were really expecting Wii U to sell 9 million, lol.
Nintendo needs to focus, aim for GC numbers and stop dreaming.
Nintendo needs to focus, aim for GC numbers and stop dreaming.
Flying Toaster
Member
What would you propose they do?
Yeah, that's right. The Wii U is about the same price as a PS3 in the UK. The basic is a bit cheaper and the premium is a bit more expensive.
Captain Smoker
Member
My take on this:
There are several problems that accumulated to this date, which resulted in this "dilemma" or "current dilemma".
Market circumstances:
- The current mainstream crowd uses smart-devices for the on-the-go-fun and we know how large this segment is (Wii & NDS), even larger if you consider that everyone has smart-devices. That's a big problem for the 3DS, even more for the PSV.
- The current hardcore crowd had to wait far too long with PS3 & 360, so they eagerly awaited the PS4 & XBO. It doesn't help that the Wii U hasn't a steady pace of 1st party releases, even worse considering the 3rd Party support.
- Steam/App Store/Digital/etc. deflated the value of video games, you're either willing to pay full price for hyped AAA-games, or cheap money for everything that doesn't fit into this category.
Nintendos problems:
- They didn't expand for HD-gaming in time, the restruction should've been done before the Wii U launched.
- Wii U generates losses, 3DS maybe too (see zomgbbqftw post) and this is probably their biggest problem in regards to their profitability. They thought they're going to sell enough units to justify this, but they were wrong. They need to do everything to increase the margins.
- Marketing, especially the Wii U name!!, is very problematic, it's a bit better now, but they didn't learn from the 3DS name and did it even worse with Wii U.
- They need to enhance their own development (faster, better, modern) and create better 3rd Party (especially in the west) connections.
All these points are currently concentrating in these months.
But everything has two sides, so I want to elaborate possibilities for them (and the problems of the possibilities lol):
+
As I already mentioned some times, the smart-device market can't grow to infinity, in
the western markets (which are important for Nintendo currently), we could see a "total"
saturation in 2017 or a bit later. This gives them the possibility to attract these
costumers back with their hardware / concept.
-
We don't know how smart-devices are going to evolve until then. Maybe bluetooth
controllers are common or plastic-addons, that means, while people are saturated by
hardware, add-on-devices give new possibilities for software, so there's potential. And
we don't know if, even if we reach smartphone saturation, people are going to search for
new entertainment or just don't play like they did in the past. The 3DS probably won't
benefit from this process at all, because it's so many years in the future that we should
already see a new handheld.
+
Once the Wii U has a decent library of first party sales, hardcore gamers could pick it
up as their companion / second system, which gives them potential, aside from their
own Nintendo crowd.
-
XBO & PS4 just released, so these people are going to consider another system in a
few years maybe, but the Wii U could already be dead until then.
+
Going by Iwatas comments, he's going to focus on the digital world, we already see that
they test all different kinds of digital distribution methods, games, etc.
Furthermore, they did a 180° with their indy support and we see how many developers
support the Wii U, which is good, this is a growing market, which should increase in
importance in the future.
We also know that they research cloud technologies, and therefore I'm sure they
research further future technologies.
-
There are still problems like the lack of cross-buy, the missed opportunity with the
Virtual Console, downloads are tied to the hardware and so on.
They really, really need to get rid of this to create a competitive, overall great online
experience.
+
They build a new R&D-building, combined their hardware research teams and so on.
We know that these steps are going to ensure faster game creation, better use of
resources and assets, etc.
-
I don't know, we won't see the benefits of these steps now, we're going to see them in a
few years, probably with their new hardware.
+
There are a lot of potential markets evolving currently (Middle-South-America, China,
India, etc.), where Nintendo could increase their worldwide sales. These additional
markets could lead to overall better sales, even if they struggle in their traditional
markets.
-
Other competitors seem far better and faster in the distribution of their products there,
aside from China, Nintendo has a subsidiary (iQue) for a lot of years there. Overall, they
need to target those markets too.
There are several problems that accumulated to this date, which resulted in this "dilemma" or "current dilemma".
Market circumstances:
- The current mainstream crowd uses smart-devices for the on-the-go-fun and we know how large this segment is (Wii & NDS), even larger if you consider that everyone has smart-devices. That's a big problem for the 3DS, even more for the PSV.
- The current hardcore crowd had to wait far too long with PS3 & 360, so they eagerly awaited the PS4 & XBO. It doesn't help that the Wii U hasn't a steady pace of 1st party releases, even worse considering the 3rd Party support.
- Steam/App Store/Digital/etc. deflated the value of video games, you're either willing to pay full price for hyped AAA-games, or cheap money for everything that doesn't fit into this category.
Nintendos problems:
- They didn't expand for HD-gaming in time, the restruction should've been done before the Wii U launched.
- Wii U generates losses, 3DS maybe too (see zomgbbqftw post) and this is probably their biggest problem in regards to their profitability. They thought they're going to sell enough units to justify this, but they were wrong. They need to do everything to increase the margins.
- Marketing, especially the Wii U name!!, is very problematic, it's a bit better now, but they didn't learn from the 3DS name and did it even worse with Wii U.
- They need to enhance their own development (faster, better, modern) and create better 3rd Party (especially in the west) connections.
All these points are currently concentrating in these months.
But everything has two sides, so I want to elaborate possibilities for them (and the problems of the possibilities lol):
+
As I already mentioned some times, the smart-device market can't grow to infinity, in
the western markets (which are important for Nintendo currently), we could see a "total"
saturation in 2017 or a bit later. This gives them the possibility to attract these
costumers back with their hardware / concept.
-
We don't know how smart-devices are going to evolve until then. Maybe bluetooth
controllers are common or plastic-addons, that means, while people are saturated by
hardware, add-on-devices give new possibilities for software, so there's potential. And
we don't know if, even if we reach smartphone saturation, people are going to search for
new entertainment or just don't play like they did in the past. The 3DS probably won't
benefit from this process at all, because it's so many years in the future that we should
already see a new handheld.
+
Once the Wii U has a decent library of first party sales, hardcore gamers could pick it
up as their companion / second system, which gives them potential, aside from their
own Nintendo crowd.
-
XBO & PS4 just released, so these people are going to consider another system in a
few years maybe, but the Wii U could already be dead until then.
+
Going by Iwatas comments, he's going to focus on the digital world, we already see that
they test all different kinds of digital distribution methods, games, etc.
Furthermore, they did a 180° with their indy support and we see how many developers
support the Wii U, which is good, this is a growing market, which should increase in
importance in the future.
We also know that they research cloud technologies, and therefore I'm sure they
research further future technologies.
-
There are still problems like the lack of cross-buy, the missed opportunity with the
Virtual Console, downloads are tied to the hardware and so on.
They really, really need to get rid of this to create a competitive, overall great online
experience.
+
They build a new R&D-building, combined their hardware research teams and so on.
We know that these steps are going to ensure faster game creation, better use of
resources and assets, etc.
-
I don't know, we won't see the benefits of these steps now, we're going to see them in a
few years, probably with their new hardware.
+
There are a lot of potential markets evolving currently (Middle-South-America, China,
India, etc.), where Nintendo could increase their worldwide sales. These additional
markets could lead to overall better sales, even if they struggle in their traditional
markets.
-
Other competitors seem far better and faster in the distribution of their products there,
aside from China, Nintendo has a subsidiary (iQue) for a lot of years there. Overall, they
need to target those markets too.
Putting out a cheap handheld with expensive games will not work today. If Nintendo puts out a cheap handheld and cheap games, where will their revenue come from? Further, by targeting children, they cannot play the f2p exploitation game without damaging their brand and annoying regulators. That is their conundrum in the mobile space.
A hybrid console would flop worse than the wii u in the west. In Japan, Vita TV has near zero demand, so I doubt it would even work there. People want console experiences on consoles. & not even the idea of streaming console games to wiii u pad/vita is all that appealing.
China could be a ray of sunshine.
Flying Toaster
Member
The Wii was lightning in a bottle. There was no easy way for their next console to reach even remotely close to the same sales figures. This is not the death of Nintendo this is just going to make them go in a new direction.
Monkeylord
Member
I don't think hardware price is the problem. Software price, on the other hand... euch! Especially eShop/VC pricing.
Well the nonexistent third party support is not helping them at all .
I'm pretty sure if they had released a powerful console like the PS4/Xbox One this would have been different.
But they really need on work on their third party relationship, I don't know what they are doing but they are doing it wrong .
I'm pretty sure if they had released a powerful console like the PS4/Xbox One this would have been different.
But they really need on work on their third party relationship, I don't know what they are doing but they are doing it wrong .
digoutyoursoul
Member
Whatever they do I hope they never drop MiiVerse for future systems, it's easily one of the best things about Wii U. Really good community there especially among the Virtual Console people.
Should have been first.
At this point, a Gamepad-less relaunch is the best solution I can think to start salvaging this console from bleeding even more money. I have no idea how much of a logistic nightmare it can be, but I do think it is crazy to try to salvage the Gamepad, it's not worth it.
Can't I'm expecting short term solutions, but I do think they have start to show change next year, so work needs to be done now. Plan a re-launch, study that Virtual Console as a Netflix-like service idea. Just get some shit done this year.
Can't I'm expecting short term solutions, but I do think they have start to show change next year, so work needs to be done now. Plan a re-launch, study that Virtual Console as a Netflix-like service idea. Just get some shit done this year.
Graphics Horse
Member
Yeah their initial forecast for last april was 5.5 million LTD, so they probably produced near that many. Now it's going to be like only 800k more than what they expected a year earlier.
Do you even own a WiiU?
If they cut the gamepad they kill miiverse as well, meaning they have absolutely nothing left to distinguish themselves.
It was so embarrassing they didn't even do a presser in 2013.
BruceLeeRoy
Banned
The gamepad was a colossal mistake. Nintendo should have abandoned that and made a true next gen console with a advanced Wii Mote. I actually enjoy the gamepad but it is completely superfluous and pointless.
Interfectum
Member
Going from expecting 9 million in sales to 2.8 million? Jesus...
flyinpiranha
Member
Games? Where else could you get Nintendo games?
plank
Member
The Gamepad is the best thing about the console.