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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
LunaticHigh
Member
Third party support is going to define this gen. And Wii-U isn't capable of getting it.
She definitely is.
No doubt. Nintendo can no longer rely on just their first party games to bail them out like they could back in the NES to Wii days. 3rd party support is very big within a lot of gamers nowadays, & sadly, Wii U happens to be the weakest link in that category by many 3rd party publishers.
Otakumegane
Member
As much I could care less about most 3rd party games, they are powerful. Nintendo needs to do something to get these on board. And if it means paying for ports they gotta do it.
What exactly is wrong with Nintendo's online that it would effect these games?
$199 Wii U and re-branding in time for Mario Kart or Smash Bros(whichever comes out first). I think that alone could significantly boost the Wii U into healthy sales.
Just look at what they did with the 3DS. It wasn't selling at $250 then they did that $70 price drop that completely turned things around.
Why haven't they been this aggressive with the Wii U? It's like they themselves don't believe it can be a success.
Just look at what they did with the 3DS. It wasn't selling at $250 then they did that $70 price drop that completely turned things around.
Why haven't they been this aggressive with the Wii U? It's like they themselves don't believe it can be a success.
Otakumegane
Member
SSB will have Namco netcode. Super excited.
Where to begin? Lack of integrated user id, friend codes, lack of voice chat, no party system?
I think the opposite question is more interesting: what does nintendo online do right?
The 3DS was making a huge profit at $250. The WiiU is taking a loss at $300.
Dropping it to $200 wouldn't be in Nintendo's best interest.
Where to being: There is a User ID. There are no friend codes. There is voice chat. There is a party system.
This is what I absolutely hate. You guys bitch and moan and bitch and moan but never bother to educate yourself.
It has integrated user ID. It doesn't have friend codes. It has voice chat.
Get your information up to date before you complain
PotionBleue
Member
Maybe it's free?
D
Deleted member 752119
Unconfirmed Member
They lose money on each Wii U sold due to the gamepad.
The 3DS they probably still made a small profit (or at least lost a lot less) at $180. They were just greedy trying to sell it at $250. With the Wii U, they screwed themselves with the Gamepad making it costly and not easy to drop price without losing millions.
Party systems are a part of those games (and have been in the past). Voice chat is unknown at this point in time but it has nothing to do with Nintendo's online infrastructure.
It's a developer choice, yes. Voice chat is featured in Nintendo online games going back to the DS. It has nothing to do with the infrastructure or the system. It's completely a developer choice.
I still find it funny that almost their entire financial loss can be associated with the increase in R&D and Advertising of ¥15B and ¥8B respectively. Then there's the new building and hirings (though does their new building count in the R&D budget or as something else?)
It really furthers the point that Nintendo are expanding, and as always when businesses are expanding, the results won't be seen for a bit.
So much of this entire situation has been blown up by lack of information being spread by media :/
Sometimes, it just doesn't fit the game. However, I fully expect it in MK8 and Smash Bros. The reason why it wasn't in Wii games was because the tech wasn't there, but here it is built into every GamePad.
It really furthers the point that Nintendo are expanding, and as always when businesses are expanding, the results won't be seen for a bit.
So much of this entire situation has been blown up by lack of information being spread by media :/
Sometimes, it just doesn't fit the game. However, I fully expect it in MK8 and Smash Bros. The reason why it wasn't in Wii games was because the tech wasn't there, but here it is built into every GamePad.
The way sony and MS have done it is that you can talk to your friends regardless of developer. Thats called forward looking. Even in killzone that initially had no public chat, i could still talk to my friends in a party. Thats the base of what Nintendo should offer. Leaving us hostage to the whims of Nintendo 1st party is not acceptable in 2014. These are the trends Iwata is admitting they missed on.
H_Prestige
Banned
Currently almost no one is buying the Wii U at 299. You think there are a significant amount of people just chomping at the bits to buy one if it were 199?
MK and Smash aren't going to do squat, if NSMB and 3DW together couldn't do anything. Wii U is past the point of no return. It will continue spiraling downwards no matter what Nintendo does to it.
Visualante2
Member
The NES and SNES didn't really have third party issues...She definitely is.
No doubt. Nintendo can no longer rely on just their first party games to bail them out like they could back in the NES to Wii days. 3rd party support is very big within a lot of gamers nowadays, & sadly, Wii U happens to be the weakest link in that category by many 3rd party publishers.
Investments into buildings do not affect the business performance. They just lead to an increase in PPE.
It's more like capitalism in action.
Ah, thanks. I wasn't sure. Still, the increase in R&D and Advertising budgets almost adding up to their entire loss is rather interesting, at least to me.
Only when reaching for the lowest common denominator of the masses. There are millions who want a quality experience that current phones do not and cannot provide. Just because there is a rush of new people who are satisfied doesn't mean the rest of us should suffer with their learning period. Hey, as it's all free right ? But again the minority are the people who want to pay for their entertainment, ad free.
Smartphone games and handheld games or not perfect substitutes.
Something else is at work that drags the handheld market down. A misalignment between between the games on the market and the declared interests of the gamers might be a trail to discover more about the current situation.
zomgbbqftw
Banned
It shouldn't be because those two items have multipliers attached to them and should bring in extra revenue higher than the initial outlay. If they have not then Nintendo are actually in worse trouble than most here are talking about.
It is much more likely that Nintendo's losses are more than accounted for by negative margins on Wii U hardware.
Yeah, but the increase in R&D won't have payoff until after this fiscal year. Advertising though, that's more now than later.
I was talking strictly numbers, anyway.
ThatNaiveCube
Banned
Honestly all nintendo needs to do is to look back at every system theyve put out since the n64 and do every they did wrong right. Release this system. Profit.
-Reach out to third parties
-Dont make your system hard to program for
-keep traditional controls at the forefront. Leave motion control to peripherals.
-Hardware parity. No more weak shit
-Competent online and features
-Nintendo magic and innovation
Coupled with aggressive marketing this system would certainly help to move nintendo back into the mainstream. For a global company they are far too insular.
-Reach out to third parties
-Dont make your system hard to program for
-keep traditional controls at the forefront. Leave motion control to peripherals.
-Hardware parity. No more weak shit
-Competent online and features
-Nintendo magic and innovation
Coupled with aggressive marketing this system would certainly help to move nintendo back into the mainstream. For a global company they are far too insular.
Justagamer80
Banned
You get what you pay for and that is why PSN and XBL is destroying Nintendo Network.
Look at it this way: It'll take 3 or so years for them to meet their original forecast.
zomgbbqftw
Banned
That's not how it works. R&D costs are amortised into products over their expected lifespan. An increase in R&D expenditure doesn't have an immediate effect on the P&L, but it will have an effect on future profitability if the multiplier is poor or negative.
The numbers you are talking about arise from negative margins on Wii U hardware, a probable inventory impairment and not enough profit elsewhere to make up the difference because 3DS/2DS hardware margins are probably sitting at around break even or very slightly above.
I have a family, I dont need online in Mario Kart nor Smash, so yeah?.
Research expenses affect the P&L immediately, only development expenses can be capitalised.
This is a critical point in Nintendo's future. They have cash reserves and their bleeding is relatively minor, but the thing that keeps the bleeding from gushing is their shrinking mobile market. They have to act fast or things will get nasty.
zomgbbqftw
Banned
True enough. Not sure what Nintendo would be researching that is so costly. Possibly a hybrid console or VR, but I don't see why they would do that now and not next year when there is less pressure on their finances.
PotionBleue
Member
Is there a chart showing the evolution of Nintendo's R&D spendings over the last decade?
What Nintendo had in the next few months.
Mario Kart? Smash? Those should have been launch titles.
That's really interesting math you have there.
With a solid helping of hubris and myopia.
Randolph Freelander
Member
Even if it worked the way you thought it did, I don't know why you would find it interesting. Say they eliminated those expenditures and any associated revenues and they actually broke even. That simply isn't good enough. Do you know the value of a business that can only break even? If you follow through and become a Nintendo investor, you better.
No, I know that. I never said that it would suddenly make it good. I'm just saying that the actual numerical values are interesting, plus it shows expansion. Please don't put words in my mouth.
I would also like to know this
One Japanese yen is close to one American penny.
So 200,000 million yen = 2000 million dollars, or $2,000,000,000 (two billion dollars).
Assuming that a WiiU is being called $300 worth of hardware, that's 6.666 million units.
Assuming that the 3DS is being called $170 worth of hardware (2DS costs less, 3DSXL costs more), that's 11,765 million units.
There's probably a combination of everything in their warehouses, since Nintendo expected to sell a lot more of everything. As the thread title says, they expected to sell 4.5 million more 3DS, and 6.2 million more WiiU.
Aquamarine
Member
I would call myself a Nintendo employee, but I'm not on their payroll. I just get my share of their dividend payouts, haha!
If I actually worked for the company and they found out I was posting on message boards, I would be in trouble. Their NDAs are very strict.
I'm under a few already from my intimate connection with the company.
shinra-bansho
Member
As expected Nintendo dived on the Nikkei (random query to anyone: does dumping bad news after market close on Friday actually mitigate the impact?).I would call myself a Nintendo employee, but I'm not on their payroll. I just get my share of their dividend payouts, haha!
If I actually worked for the company and they found out I was posting on message boards, I would be in trouble. Their NDAs are very strict.
I'm under a few already from my intimate connection with the company.
Aqua, I've seen you talk about Jefferies investor notes before, just curious if they espouse on why they have a price target of 29K yen and actually raised it on this recent news.
Are they just a lot more optimistic (than I am) that current management isn't just talking platitudes and is actually serious about making real changes?
Yes and no. It usually means less attention from the media and less people seeing the news as well as giving a company 2 days of PR opportunities before Monday's bell. And since stock price is a function of investor psychology more than anything else, it can mitigate.
However, facts are facts and stating them on Friday doesn't chang e that.