In addition, I think a franchise like Zelda is so solidified that the people who want it know it's coming and buy the system ahead of time. I don't think the same is quite as true of something like Mario Kart or even Smash Brothers.
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Nintendo Q3 FY15 Results - Beats Market Expectations; Lowers Full-Year Forecast
- Thread starter vinnygambini
- Start date
In addition, I think a franchise like Zelda is so solidified that the people who want it know it's coming and buy the system ahead of time. I don't think the same is quite as true of something like Mario Kart or even Smash Brothers.
Because that is a great price for a console in 2013, especially the most powerful console on the market?
I think shinra's point is that the process of bringing a leading console to market is not a happy accident. We're talking years of planning on both the hardware and software and third-party relations side, and you can see from this generation, neither is easy. Were it easy, nobody would screw up, and yet every generation it seems to happen.
The idea that Sony owes their success in large part to Nintendo and Microsoft screwing up is pretty misguided and suggests there's not much to learn from how they designed things. Sony's strongest growth regions appear to be in markets where they were strong last generation anyway. Sony's lead would be gradually diminished as their advantages (or let's say their competitors' disadvantages) were removed, and yet their lead continues to grow.
There's entirely too much credit given to "this is 4 the players" (advertising) and not the absolutely monumental shift Sony pulled off in the development community to the point where now PS4 is the lead platform for basically every western-developed console game...and I suppose the few remaining ones that exist in Japan (marketing). The effort that went into that is not easily dismissed.
shinra-bansho
Member
I think that also drives home a point that's probably worth noting but often overlooked.
Third parties are also customers for these hardware vendors. Platform royalties are the core of the business model they operate on.
And designing a platform for third parties as customers has been as much a key to the success of the PS4, as designing the platform for the core target consumer market.
And lack of consideration for the needs of these customers, has been a key to Nintendo's current ailing.
Third parties are also customers for these hardware vendors. Platform royalties are the core of the business model they operate on.
And designing a platform for third parties as customers has been as much a key to the success of the PS4, as designing the platform for the core target consumer market.
And lack of consideration for the needs of these customers, has been a key to Nintendo's current ailing.
Yeah, that was sort of what I was getting at. Essentially, for someone who wants the system for Zelda, there's already been ample opportunity to get the system and a lot of notable software to serve as tipping points to purchase. I think it's been noted in MC threads how the HW impact is progressively muted for these big titles.
ZSaberLink
Media Create Maven
While definitely true, I think the one last barrier left for the Wii U is its price point, which is still pretty ridiculous for a Nintendo console, especially one that's selling like the Wii U (I realize they're trying to make profits, etc.). If the price eventually lowers by $100 (I think it should happen this year in all honesty, but Nintendo is hard to predict), I could see some of those folks buying the system. I actually know enough folks that are waiting for Zelda, so while I agree the impact will be less b/c of Hyrule & WWHD, there will be some impact (as the impact from those titles was pretty small anyhow imo).
Calamari41
41 > 38
Very well said. If you look at my previous posts, you'll see that I'm on your side. I put Sony's development and execution of the PS4 forward as something that Nintendo needs to take a serious look at. Obviously they can't carbon copy everything Sony did, nor should they, but they need to understand what worked and why.
I was only conceding to snakeyes that Nintendo and Microsoft did make missteps, many of which were severe, and that did have an effect.
Edit: and yes, $400 is a good price. But my point is that hall wouldn't have exploded if Microsoft hadn't announced that their weaker, more constricted console was $500 just beforehand.
deltatheta
Member
Looks like the release date for Project Giant Robot was updated to "1st Half 2015", so that's actually coming out. I had thought before that it might have been part of Star Fox.
shinra-bansho
Member
I don't think only Hyrule Warriors and Wind Waker HD have served as tipping point titles. The core Nintendo fan-base that will drive Zelda sales has had ample reason and opportunity to buy the system by way of the array of titles they've already released. Zelda just doesn't really strike as the type of bridging title that can attract new buyers in the same way a Mario Kart or Smash Bros can.
Meanwhile, I still don't see that degree of price cut happening. You're talking about a reduction in HW revenue that essentially amounts to or exceeds this years operating income forecast. It would be partially offset by whatever increased software revenue the minor improvement on HW units produces, but given the lack of big titles this year, I imagine that would still decline overall in FY3/16 regardless.
a $100 reduction seems like a pretty hard sell. they're including two games at $300 already. if they take it down to $250, they might unbundle nintendoland or something and maybe throw in mario kart 8 permanently as that is pretty much what the machine is to people. include the dlc too. maybe a mario amiibo too. that's probably their best bet between trying not to lose too much money on a price drop while making the system seem more appealing than it was last year.
with the gamepad being what it is, i don't see the $199.99 (or lower) price point happening until nintendo is in need of just selling everything.
with the gamepad being what it is, i don't see the $199.99 (or lower) price point happening until nintendo is in need of just selling everything.
ZSaberLink
Media Create Maven
I'm still not getting it =/. Why does everyone think they haven't found a way of reducing the price of the GamePad? They managed to create the weird thing that's the 2DS after all, have it for $99 and still make a profit (probably better margins than before too considering they phased out the normal 3DS). Would normally super conservative Nintendo make a console that they could basically never reduce in price without it selling fairly well? They still have never reduced the price of the console itself.
As far as I can tell, they have finally shipped their initial 9M Wii Us they were initially expecting to sell the first year right? As in they must be producing more Wii Us in order to keep selling the hardware?
I just can't believe they are that idiotic or at least not smart enough to work around it. If not, I feel like they would have abandoned the GamePad rather than embracing it fully. I feel like you can take modified 2DS touchscreen tech + the Wii U streaming tech (hopefully more efficient) and likely create a similar experience to the GamePad imo. Making it smaller costs less, and flash memory costs less than before as well.
Unbundle some software (aka just Mario Kart), cut the price by $50 around May w/ Splatoon or something (plan for big pushes around then & E3 hopefully too), possibly have a kind of MS level pricecut (another $50) during the holidays. They probably might as well leave out JP from this strategy since I think the Wii U is hopeless there, and then see what their major territories (mostly the US at this point), can yield them.
the only number i heard thrown around was 12m gamepads, which would mean another fiscal year before doing drastic things like making a cheapo verson of the system and gamepad or decoupling the gamepad from the platform in order to offer it at a much lower price. mario kart + system for $149.99, gamepad + nintendoland separately for $99.99, for instance. that would be in 2016 when there's really nothing coming out and the next console is 2017.
ZSaberLink
Media Create Maven
Is that from any actual source though? Or is that just some # thrown around? It'd seem weird to me to produce 12M GamePads when you forecast 9M Wii U sales for the first fiscal year and it was clear VERY VERY early that the Wii U was having problems.
I feel like a pricecut should actually accompany some software. A pricecut/cheapo version in 2016 might as well not come at all, especially if you have a new console around the corner and very little new software to compel anyone to buy the new cheap system.
Also on a lighter note, lol at the Amazon hourly charts. Looks like it's the toy section instead =P.
If they produced already 12m gamepads in the previous years that cost is already sunk, so it shouldn't influence future profits. But I don't believe they produced 3m more gamepads than consoles (remember the statement at the beginning of 2014 that achieving target for FY 2014 means getting rid of all the stock). So for next year I think they will have a new production. And I don't really think they are able to cut costs on the new production by $100 (remember also the discussion that the GPU seem to be quite expensive and as they are not really selling in huge numbers that cost can't be reduced enough), I hope they can at list cut $50.
Edit: As for the operating income, margins and exchange rate, as long as they are not producing everything in Japan - and I think most of the components within the console are not - this plays both ways.
Aquamarine
Member
nintendo's original goal was 12.45 million ltd by march 31st, 2014.
now, nearly a year behind, they're still only at 9.20 million.
zomgbbqftw
Banned
The issue Nintendo will have with cutting price/cost is that there is not much they can reasonably cut because of poor internal design wrt to silicon. The major cost factor is the MCM and the CPU can't be dropped down to 28nm or 20nm process nodes because of the legacy silicon on the new chip, it is, AIUI, incompatible with newer nodes. The GPU can be shrunk but I don't think the saving will be all that large given that it isn't a very impressive/large GPU, and RAM is already at base cost.
Similarly they can't cut the cost of the gamepad because it is already at base cost, if anything if the next tranche may be more expensive because of low volume penalties or parts and assembly.
Nintendo need to look for a software emulation solution next time and dump all of the legacy silicon for their next home console.
Similarly they can't cut the cost of the gamepad because it is already at base cost, if anything if the next tranche may be more expensive because of low volume penalties or parts and assembly.
Nintendo need to look for a software emulation solution next time and dump all of the legacy silicon for their next home console.
I would put part of the succes also on the good vibe Sony was on in the 2 years before. PS3 had the best release schedule in 2012-2013, with interesting firstparty titles, great versions of third party, PSN+ giving away free games that amazed everyone (at least in EU) etc..
Sony enthousiasm was at a high level.
Microsoft screwed up here, by not investing in their later years and really aiming for that kinect crowd. It worked from a profitability pov, but you could feel part of the xbox gamers were feeling neglected, sometimes buying a PS3, but also more ready to jump ship to PS4. They saw microsofts future as investing less in exclusives, and more into casuals and movies.
Nintendo did worst in this area. They neglected their Wii userbase in the last 2 years, and were unable to show interesting new concepts during both their release as their first year. It took until early 2014 for people to get any kind of enthousiasm (about the time mario 3D world was actually released, and not just shown, mario kart started to look great, so did smash, some unannounced projects, the WiiU OS that good improved etc).
The Wii U at launch wasn't that attractive as a product at the price they had, with the outlook of games releasing for it soon.
In hindsight, nintendo should've made a "wii plus" that could play wii games in HD around 2010, and double downed on those last 2 years. That way they could easily launch together with sony and microsoft, with a console that could be "almost on par" with those two but also a unique twist (gamepad, amiibo at launch).
But like i said, this is all easy to say in hindsight.
It is because you value your stock in your accounting. I don't know if they've devalued these yet in their accounts.
Final Verdict
Member
Wii U has sold 3.03m this fiscal year (unless I'm misreading). That's in line with what they projected.
Yep. Will be tomorrow
Are those all sold in numbers, or sold through?
Iwata thought the Wii U was going to sell 5.5 million units in it's launch year. It only sold 3.45 million.
Then Iwata said that Wii U's second year was going to be the one where the booster rockets were really going to kick in, and predicted that it would sell 9 million in it's second year, for 12.45 million total. Sales were low all year, but right before Nov/Dec (Nintendo's best selling period), Iwata reiterated that everything was going smoothly. The Wii U stalled out over the holiday and ended up selling 2.72 million in it's second year (6.17 total), which was worse than even it's underperforming launch year.
Iwata shut down production and put out the fire, but production doesn't start and stop on a dime, these things take time to get up to speed and you've made all sorts of contracts with suppliers. Since Wii U crashed into Holiday 2013 anticipating 12.45 million in sales, it stands to reason that Nintendo bought 12 million units or more worth of various parts before it had to shut down. That's why people think Nintendo is sitting on enough parts to make 12-15 million Wii U's.
Nintendo took a big loss in 2013 because they had to pay for those unused parts, but since then they've been able to go back to assembling Wii U units and calling that profitable.
The Wii U was unprofitable before it crashed. It started out as Nintendo's least profitable system by far, and it's bad first year forced Nintendo to make a price drop they didn't want. The Wii U apparently blows a lot of money on the GamePad and overall the system wasn't designed to quickly drop in price like the GameCube was. It was designed to... I dunno. Even Nintendo's first party studios never asked for the GamePad. Such a senseless design.
Anyways, Nintendo toughed it out, and kept throwing great games at the system, one after another, even announcing more games than they originally signed up for (when they could've been spending that effort on the 3DS), and now they seem to have one or two years of life left in the Wii U, and they seem to be one or two years away from selling 12-15 million consoles at near-full price.
If Nintendo drops the price of the Wii U to try and sell more units faster, they're going to lose their profit margin, and once they run out of spare parts, they're going to have to find new suppliers who can make compatible parts, which probably means a "slim" redesign, but they're going to have to put money on the table again, probably push Wii U back into a money-losing position, and bet that the Wii U has more life left in it. Which is crazy, because Nintendo has almost gotten most of their money back from the last time they bet money on Wii U, and if the price cut and slim redesign don't work, Zelda won't be able to pull Nintendo's butt out of the fire. Zelda has it's work cut out for it as-is. And if Zelda fails, that's when they fall back on the price drop.
The new narrative for Wii U's success is how much fun it is and how many great games it had on it. It's never going to reach GameCube's numbers, so it's pointless to get worked up about how close it can get to them.
Narpas Sword0
Member
Nailed it
Calamari41
41 > 38
Yup. Nintendo's path forward for the Wii U is not to sell as many systems as possible. Their path forward is to sell as many games (and as much DLC) as possible. Get some money out of this shitty situation and move on when able. As I said before, if they can emerge from the 3DS/Wii U era having lost little or even having made a modest profit overall, it will have been a bullet dodged.
And hell, they can re-release the "best of Wii U" on handheld and home console in the future to get some more money out of these games.
mckmas8808
Mckmaster uses MasterCard to buy Slave drives
CosmicQueso
Member
Following that logic, they then would want to announce new hardware this E3 in time for 2016 holiday launch wouldn't they?
The Artisan
Member
beats market expectations? so they did better than they thought?
vinnygambini
Why are strippers at the U.N. bad when they're great at strip clubs???
Beat Q3 expectations - but not full-year results; hence the market sell-off.
Eh, I think they'll employ the same strategy as MSFT & Sony: reveal the same year as they launch.
The Artisan
Member
okay, and I'm guessing they went for really modest Q3 expectations?
Calamari41
41 > 38
I'm thinking they keep quiet on it during this year's E3, but yeah, I see that as the optimal path. Four years is enough for a system that has been rejected so abjectly by the market as a whole. Especially if they have their whole "cross compatible, common architecture and OS" philosophy in line by then. If Wii U games are somehow playable on their next generation system, their studios don't even have to miss a beat in development.
Another thought with regards to the actual Wii U console production discussion from earlier: since Nintendo is sitting on a sizeable stock of consoles, an earlier than normal launch of the next system would mean that they may not actually need to spend much more money buying Wii U components and building systems.
Sold in. Nobody really used sold through until Sony started with the PS4. Standard has typically been shipped as the value. It's what Nintendo and MS use, and what Sony used to use (and probably will again)
ZSaberLink
Media Create Maven
So they're basically holding back the 3DS (from obvious pricecuts, promotions, etc. that they'd probably do w/o the Wii U dragging them down) to deal w/ the sunk costs of the Wii U GamePads is the theory? They already wrote off those costs in 2013 so they should be looking forward rather than worrying about some set of GamePads lying around, right? I'm not really worked up about the sales themselves, I just don't get this line of logic that folks seem to be going about. Also is that GamePad production history actually some public knowledge from investor reports or just inferred by comments? If so, Iwata was just being stupidly bullish and no wonder they're in this situation. The one time they had games (2012), they already under-performed severely. Why the 2013 lineup suddenly change that...
Ah ok, thanks Aqua.
Sony still uses shipped for the earnings report. They've just been combining them, presumably to hide the awful vita numbers. The sell through numbers are a handy way to brag about PS4 sales without de-obfuscating the shipment numbers.
Yeah, I don't see a compelling reason to announce before the year they're releasing in unless they're releasing in the Spring.
So basically if they release it around the same time they did with the 3DS.
LegendofLex
Member
The Wii name didn't stop Twilight Princess from becoming the best-selling Zelda, Mario Galaxy from becoming the best-selling 3D Mario, Smash Bros. Brawl from becoming the best-selling Smash Bros., Mario Kart Wii from becoming the best-selling Mario Kart, etc. Those are Nintendo's biggest heavy-hitting franchises.
The GamePad obviously didn't appeal to a very large audience at the Wii U price. But it was designed to appeal to third-party multiplatform developers who wanted the primary controller to have input parity with Xbox and PlayStation.
Wii U is exactly what a modern Nintendo console targeted at core gamers would look like. What Wii U is not is a Sony or Microsoft console that plays Nintendo games. I think people are quick to confuse those two sentiments.
Hero of Legend
Member
Funny that Wii and Wii U were unveiled a year and a half prior to launch; Wii at E3 2005 and out in Nov 2006, and Wii U at E3 2011 and out in Nov 2012.
Granted they had very little to show other than the console's design and final name for Wii U. Though both had a surefire game announcement (Wii: Metroid Prime 3, Wii U: Lego City Undercover).
3DS at E3 2010 fucking killed it in terms of showing what was on the way; Animal Crossing, Paper Mario, Street Fighter 4, Kingdom Hearts, Metal Gear Solid, Kid Icarus: Uprising, Nintendogs + Cats, Ocarina of Time 3D and Star Fox 64 3D, etc.
i think the wii u was delayed. it was supposed to launch in mid-2012 and was pushed back to fall. few games were ready at launch and launch window games were delayed quite a bit. it probably wasn't supposed to have a second e3 before launch unless it was literally right before the launch.
the 3ds was probably delayed too for that matter. i think it was their desire to get it out in the fall of 2010. that was another piece of hardware that had very little at launch and then some rushed games for the holiday. i get the feeling nintendo thought they could use the 3ds like the gba and kind of coast on by with it while they got their shit together for the wii u. then when they had to focus on the 3ds, it worsened conditions for the wii u too.
basically it was shit hitting the fan for not growing the company like they should have in 2008 and 2009. they really shouldn't have had to pull apart a three-man team making a 3ds zelda game so they could get wii u launch titles out the door two years later.
For the Wii, that was an era when pretty much everything was unveiled much earlier in advance. With the fast cycle refreshes of today though, even slow cycle companies tend to keep the same reveal pace.
I agree with AniHawk that the Wii U was probably not intended to take so long from unveil to release.
LegendofLex
Member
By Wii U launch, we'd only seen the following games (that weren't licensed games/third-party IP) from Nintendo:
- Nintendo Land
- New Super Mario Bros. U
- Game & Wario
- Pikmin 3
- The Wonderful 101
- Wii Fit U
By Wii launch, we'd already seen:
- Wii Sports
- Wii Play
- The Legend of Zelda: Twilight Princess
- Excite Truck
- Fire Emblem: Radiant Dawn
- Metroid Prime 3: Corruption
- Super Mario Galaxy
- Super Smash Bros. Brawl
Is it any wonder people weren't anywhere near as excited for Wii U?
vinnygambini
Why are strippers at the U.N. bad when they're great at strip clubs???
I think one should expect a 3DS & Wii U successor to be announced at E3 2016, launched in early November.
FY16 will be about QOL and improving margins. Wii U is dead after Zelda.
FY16 will be about QOL and improving margins. Wii U is dead after Zelda.
Refreshment.01
Member
Home console on 2016? The same year as the portable system, which at the earliest is late 2016? i don't think so.
i don't think so because Nintendo is not aiming to allow full compatibility of software between platforms and it takes time to develop games for each one. Yes, even with the more homogeneous development across paltforms and asset sharing.
So doubtful in my opinion.
Iwata is aiming for "Nintendo-like" profits in 2016 and everything he has said points to that being a big year for Nintendo so I would expect we get at least one platform next year.
Exactly. Closer to launch, a new Zelda would have absolutely been a system seller. 3 years later? I really think most people who want Zelda already own a Wii U.
Anecdotally I have found this to be the exact opposite, lol, because a lot of the people who I know that would play Zelda and will play Zelda have no reason to buy the WiiU until it is out and they feel no pressure to buy a WiiU because they know it will be out eventually, and then they'll buy it with WWHD.
It is so solidified and guaranteed that they feel no need to support the console until it exists, I guess would be the point.
CosmicQueso
Member
Why are you so sure they're separate systems? Rumors have been going on for some time that it might be one device that acts as both.
LegendofLex
Member
The only actual comments from Iwata suggest an iOS-like platform that runs on a "family of systems."
CosmicQueso
Member
Going with that, well then if the new platform is to run on a family of systems, wouldn't they all be released at the same time?
KuwabaraTheMan
Banned
I think it's pretty clear they're talking about a shared OS between both platforms (which would probably also have a lot more cross buy for indies and other downloadable titles built in), but nothing that would require both systems coming out at the same time. The systems will obviously still have different specs and run completely different retail software. But there will probably be an increased focus on connectivity as well as almost all data and functions aside from games being shared between both systems.
The absolute earliest that Nintendo's next home console would release is holiday 2017.
Nope. Wouldn't necessarily even make sense from a production-line sense since that'd be a lot of things to produce at once. How many chips can AMD conceivably make within a given time period? Would it make sense to split that by some arbitrary ratio between two systems? Would it be reasonable to expect a proper pricepoint on the more power chip that would go into the console (presumably)?
The games can be made such that they can run on either system ala iOS (with some games being limited to one or the other for various reasons) but the home console should offer more power and a bigger resolution than what the handheld can do to be "attractive" as an additional or standalone purchase. Or they can be made to interact but not necessarily be cross-compatible to avoid cannibalizing each other.
They launch the handheld first, build a library and user base, then launch the more powerful home console that can run the same games at higher resolutions/performance or just run new games with features/connectivity to the handheld. By then the manufacturing process would have been better streamlined, less demand outright for the handheld unlike at launch, and, in theory, the process would have possibly gotten cheaper to manufacture allowing for the stronger "console" to be cheaper to make.
I think they'd be best served by going with a mixed approach where some games are cross-buy/cross-compatible in that they don't care which console they find themselves on, and will play accordingly, and some which are more tailored for their specific console. Make indies/small titles the former, make big releases the latter.
I think the big takeaway is that for a successful launch Nintendo's next system has to have a good mix of titles that appear to casual and hardcore audiences for the right price.
Wii had Wii Sports and Legend of Zelda Twilight Princess plus some good third party games like Trauma Center and Super Monkey Ball and Red Steel.
Wii had Wii Sports and Legend of Zelda Twilight Princess plus some good third party games like Trauma Center and Super Monkey Ball and Red Steel.