Nintendo Reports First Loss In 30 Years

[buzz_n64]

"Gone are the days of Nintendo’s dominance. Once a video game powerhouse in the 80s and 90s, the Japanese play makers all but fizzled out at the turn of the century. Then, in 2006 Nintendo brought the Wii into living rooms once more as families gathered together to play games of virtual golf or give way to nostalgia and play their favorite games of yore, the likes of Super Mario Brothers or Donkey Kong.

The next year, Apple introduced the iPhone and iPod touch, sending shockwaves all the way to Tokyo. When the App Store was introduced in 2008, mobile gaming took off to a level not seen since the heyday of the GameBoy. After subsidiaries, a new iPhone cost about as much as a Nintendo Wii, but the games available in the App Store are dramatically cheaper, 99 cents to $10-$15 as opposed to $50-$75 for the Wii. As the iPhone improved, so too did the quality of games in the App Store. Nintendo stubbornly refused to jump onboard, staring defiantly in the face of excessive demand as Apple users clamor to play their favorite 80s and 90s Nintendo games on their portable devices.

Now, they are starting to feel the pinch as the company reported a massive net loss of 43.2 billion yen ($532.5 million), their first loss in 30 years. In previous year, they had managed to generate a 7.6 billion yen profit.

Last year, Nintendo fell short of their projected Wii sales, moving only 9.8 million consoles instead of the 13 million they had hoped for. Ditto for the 3DS, which fell short of their estimated sales by 2.5 million units. As for their DS, Nintendo only managed to ship half of the 11 million units it hoped to sell.

Nintendo can’t only blame the emergence of Apple and other smartphone and tablet makers for these numbers.

In order to get devices in the hands of customers, the company was forced to sell their 3DS at a loss. According to Nintendo president Satoru Iwata, these deep cuts weren’t the only thing to go wrong with the 3DS this past year:

“What went wrong was that sales of the 3DS didn’t take off as we expected,” Iwata said according to Bloomberg.

“Sales of the 3DS in Europe have not been as buoyant as those in Japan.”

Even though Nintendo was able to move more than 13 million 3DS devices, the fact that they took a hit on each one leaves analysts worried about the future of the gaming company.

They aren’t yet throwing in the towel. In a statement reminiscent of RIM’s Thorsten Heins’ “Back to basics” comments, Nintendo says they will continue their “basic strategy of ‘Gaming Population Expansion’ by offering compelling products that anyone can enjoy, regardless of age, gender, or gaming experience.”

Nintendo is also placing high hopes on its new Wii U console. This new console will go on sale during the very lucrative holiday shopping season and features high definitions graphics and a 6.2 inch controller which will be used to shift the content between the screen and controller.

This new device will not address a main drawback to every Nintendo device: Seamless, go-anywhere gameplay. Gamers can take their iPads, iPhones, and iPods everywhere they want to go, continuing one game while in bed, on the bus, or on the toilet.

Furthermore, some analysts are still calling for Nintendo to start selling their games on competing devices in order to cash in on this incredible demand.

“Nintendo has to deal with the change and let Mario games be played on non-Nintendo devices,” said Nanako Imazu, analyst for CLSA in Tokyo, according to Reuters.

“I think it will take at least couple of years to see that.”

Source: redOrbit (http://s.tt/1a6rM)"

http://www.redorbit.com/news/sci-fi-...s-in-30-years/




Simply the Gamecube sucked, the Wii was a nice gimmick for a lot of people and they still have some big game franchises, but their gimmick has wore thin and Mario/Zelda games alone are not going to make up for all the rest of the third party crap.

[Tupin]

Nintendo would probably never allow their games on any other platform unless they were desperate or got massive share of the profits and control over distribution.

The Wii U may end up doing worse than the Wii, but when you try to follow up the best selling console of all time, of course they may be disappointment.

[Cloud121]

Simply the Gamecube sucked

Signed,

Resident Evil Rebirth, Resident Evil 4, Eternal Darkness, Metroid Prime, Metroid Echoes, Star Fox Adventures, Star Fox Assault, Fire Emblem: Path of Radiance, F-Zero GX, Sands of Time Trilogy, Beyond Good and Evil, Rogue Squadron II and III, Tales of Symphonia, Baten Kaitos and Baten Kaitos Origins, Skies of Arcadia Legends, Killer7, Viewtiful Joe, Metal Gear: Twin Snakes.

Do I need to keep going?


Yes, I mentioned quite a few multi-platform titles, but that doesn't change the fact they were great GameCube games.

[Tupin]

The Gamecube sucked in terms of sales. 20 million to the Xbox's 50, and to the PS2's 100.

[buzz_n64]

The Gamecube sucked in terms of sales. 20 million to the Xbox's 50, and to the PS2's 100.

^This. Plus if there was a multi-platform game, I would always get the Xbox version because it would almost always be better. The Gamecube had some good games, but the other systems had more good games in comparison

[Cloud121]

Last I saw the Xbox had the GameCube beat by only a few million. Where are you getting this "50 million" total?

[Swamperon]

There are 2 main reasons why Nintendo have lost money, and neither is nothing to do with how their software is selling (brilliantly btw).

1. The huge cut in the 3DS launch price.

2. The appreciation of the Yen. Which basically damages all of their profits outside of Japan & devalues their foreign currency holdings (People well versed in economics will be able to explain this better)

Since the price cut, the 3DS has been selling brilliantly. A fact all these "analysts" neglect to mention. This is their 1st loss in 30 years and it was less than predicted. They still have have over 14 BILLION in the bank. Nintendo are going nowhere.

If the WiiU were to completely fail, then yes, maybe it would be time to start worrying about their decline.

And yes, at most Xbox sold 30 million, with GC 22-25 million IIRC. 50 million is a total lie.

[Tupin]

I just remembered that the Xbox sold a little bit more than the GCN, but both were way outsold by the PS2. Now that I think of it, 30 million for the Xbox makes sense, though I think that part of the reason is that it only had three full years on the market.

[RPG_Fanatic]

The Wii U may end up doing worse than the Wii, but when you try to follow up the best selling console of all time

The Wii the best selling console of all time????? Sorry, I don't think it will catch the PS2 in worldwide sales 95.5 million to over 150 million.

[Gamevet]

The Gamecube sucked in terms of sales. 20 million to the Xbox's 50, and to the PS2's 100.

More like Gamecube 21 million, Xbox 23 million and PS2 150 + million.

[Leo_A]

PS2 broke the 150 million mark over a year ago. But otherwise those numbers are right from what I know. Edit - Already fixed it yourself from 140 million, so nevermind.

There's no way that the original Xbox sold 50 million.

[NE146]

The Gamecube sucked in terms of sales. 20 million to the Xbox's 50, and to the PS2's 100.

Uhhh.. weren't most people saying the Wii is a repackaged Gamecube? Because in that case the Gamecube sold a lot more.

[The 1 2 P]

It was bound to happen with the Wii declines. But they made so much money the first three years that the Wii was on sale that this won't hurt them much. Now if they lose money the next full year(which would include atleast two months that the Wii U was on sale) then we can start to have a more interesting discussion.

[joshnickerson]

There are 2 main reasons why Nintendo have lost money, and neither is nothing to do with how their software is selling (brilliantly btw).

1. The huge cut in the 3DS launch price.

2. The appreciation of the Yen. Which basically damages all of their profits outside of Japan & devalues their foreign currency holdings (People well versed in economics will be able to explain this better)

Since the price cut, the 3DS has been selling brilliantly. A fact all these "analysts" neglect to mention. This is their 1st loss in 30 years and it was less than predicted. They still have have over 14 BILLION in the bank. Nintendo are going nowhere.

Heyyyy... wait a minute! He's using logic to support his argument! You know that's not allowed on the internet!

This new device will not address a main drawback to every Nintendo device: Seamless, go-anywhere gameplay. Gamers can take their iPads, iPhones, and iPods everywhere they want to go, continuing one game while in bed, on the bus, or on the toilet.

He's right. There is no known Nintendo device that you can take anywhere.




Nope. None.

[Griking]

I seem to remember another thread a little while back about it being the first time that Nintendo took a loss.

[BetaWolf47]

Simply the Gamecube sucked, the Wii was a nice gimmick for a lot of people and they still have some big game franchises, but their gimmick has wore thin and Mario/Zelda games alone are not going to make up for all the rest of the third party crap.

Good argument. Gamecube sales and third-party games are completely relevant to Nintendo's profits in 2011-2012. Best logic I've seen in a long time.

I just remembered that the Xbox sold a little bit more than the GCN, but both were way outsold by the PS2. Now that I think of it, 30 million for the Xbox makes sense, though I think that part of the reason is that it only had three full years on the market.

It came out mere days before GameCube in 2001 and lasted until early 2007. That's Slightly more than three if I can still math.

[jonebone]

There are 2 main reasons why Nintendo have lost money, and neither is nothing to do with how their software is selling (brilliantly btw).

1. The huge cut in the 3DS launch price.

2. The appreciation of the Yen. Which basically damages all of their profits outside of Japan & devalues their foreign currency holdings (People well versed in economics will be able to explain this better)

Since the price cut, the 3DS has been selling brilliantly. A fact all these "analysts" neglect to mention. This is their 1st loss in 30 years and it was less than predicted. They still have have over 14 BILLION in the bank. Nintendo are going nowhere.

Agreed with the reasons, but it's more cause for concern than you think.

When you develop something initially, you have a price in mind that allows you to make a profit. I forget the exact price cut, but it was something ridiculous like $250 to $170 with 3-6 months? 33% cut is going to cripple any potential profit margins, and a drop that quick is unheard of. I can't remember a Nintendo price drop that quickly since the Virtual Boy. That speaks volumes.

The more important concern is the tablet / smartphone entry into the handheld gaming realm. Nintendo will have to get very creative to maintain market share in the handheld realm while facing more competition than ever. If I can get an app for $1 that entertains me for an hour, I'm less likely to drop $40 on a new game.

Also, in this economy, console upgrades aren't as big of a priority. I'm just tired of seeing the DS repackaged so many times... DS Fat -> DS Lite -> DSi -> DSi XL -> 3DS, and I might have missed one. Many people are content with keeping the prior gen system and not upgrading right at release.

[buzz_n64]

Good argument. Gamecube sales and third-party games are completely relevant to Nintendo's profits in 2011-2012. Best logic I've seen in a long time.

You have a decent point here, but profits they made and didn't make from that era still effected the company. They were able to get past it sure, but at the lose of a fan base. So, yes, what they did with their focus on kiddie and family oriented stuff that many "hardcore" realized wasn't for them. I was a HUGE Nintendo fan boy from the NES up to the N64 because I saw them as the company that tried to have the best hardware while having my favorite franchises on their systems. All they have now is their franchises, the game systems lack in comparison for two generations. The only area where it looks like Nintendo is putting a lot of effort into is the handheld market, and after a lot of struggle, they remain in the game and on top.

[j_factor]

Posting a loss once doesn't mean they're in dire straits. However, I'm skeptical that their new console will do anywhere near as well as the Wii did.

[Gamevet]

Good argument. Gamecube sales and third-party games are completely relevant to Nintendo's profits in 2011-2012. Best logic I've seen in a long time.


It came out mere days before GameCube in 2001 and lasted until early 2007. That's Slightly more than three if I can still math.

They quit manufacturing the Xbox after 3 years. Yeah, 3rd party publishers continued to support the console, but MS took its first party titles over to the 360.