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Nintendo post first net loss since 2003
Atomika
Live fast and get fucked or whateverRegistered User regular
Live fast and get fucked or whateverRegistered User regular
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So, not too good for the House of N. My take? Nintendo, despite being an industry leader for 25 years, has really struggled at figuring out how to take the experience of their platforms further than just their flagship 1st-party titles, while also continuing to adhere to an extremely limited business model.
Nintendo's business model since the N64 came out has been to develop low-cost consoles and flood the market with 1st-party titles, and while their margins may be smaller than their competitors, the additional sales will close (and usually far exceed) the gap.
However, with both the N64 and the GameCube, Nintendo was also offering cutting-edge gameplay and graphics, and the opportunity cost vs. at-the-time competition of Playstations 1 & 2, Xbox, and Dreamcast skewed sharply in favor of Nintendo, as not only where the graphical capabilities and processing speeds of the Nintendo products as good (if not better), you had a range of popular franchises to choose from, and you got all of this actually cheaper than you would the other systems.
However, in the age of the Wii and DS, these facts are no longer true. While you still pay less for your console over the competition, the gameplay specifications and utility of these newer consoles has been relatively stagnant, while the competition has grown both qualities in leaps and bounds.
It will be interesting to see what direction the next few years takes Nintendo. Will they continue their current path, relying on franchise recognition and low cost to overcome the utility gap? Or will they finally try to compete with the other brands?
In the six months leading up to September 30, 2009, Nintendo sold 11.7 million DS units worldwide. In the six months leading up to September 30, 2010, that figure has dropped by nearly half, to 6.69 million.
It's to be expected, of course. Not only is the DS getting a little long in the tooth as it approaches its sixth birthday, but with the 3DS now at the forefront of people's attention, interest in a soon-to-be-outdated handheld was always going to wane.
Wii sales were also down, from 5.75 million at the same time last year to to 4.97 million over the past six months.
These declines, coupled with a big slip in the value of the Yen, means Nintendo's net income was down 33.7% over the same time last year, while its operating income was down 48%.
So, not too good for the House of N. My take? Nintendo, despite being an industry leader for 25 years, has really struggled at figuring out how to take the experience of their platforms further than just their flagship 1st-party titles, while also continuing to adhere to an extremely limited business model.
Nintendo's business model since the N64 came out has been to develop low-cost consoles and flood the market with 1st-party titles, and while their margins may be smaller than their competitors, the additional sales will close (and usually far exceed) the gap.
However, with both the N64 and the GameCube, Nintendo was also offering cutting-edge gameplay and graphics, and the opportunity cost vs. at-the-time competition of Playstations 1 & 2, Xbox, and Dreamcast skewed sharply in favor of Nintendo, as not only where the graphical capabilities and processing speeds of the Nintendo products as good (if not better), you had a range of popular franchises to choose from, and you got all of this actually cheaper than you would the other systems.
However, in the age of the Wii and DS, these facts are no longer true. While you still pay less for your console over the competition, the gameplay specifications and utility of these newer consoles has been relatively stagnant, while the competition has grown both qualities in leaps and bounds.
It will be interesting to see what direction the next few years takes Nintendo. Will they continue their current path, relying on franchise recognition and low cost to overcome the utility gap? Or will they finally try to compete with the other brands?
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eventually people are gonna say do I really need a 4th ds
no I was reading the chart wrong they have 'only' sold 135 million of them.
Edit: Maybe it's just my local best buys and such, but every time I go into a store with a Wii on display I swear they've tweaked the tv settings to be a blurry as possible too. Just horrible looking.
That's what the VG sales thread concluded. At least a quarter ago.
Seriously... their second net loss for every quarter since they started writing down their income.
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Here, I found article that actually spells it out.
http://www.redorbit.com/news/technology/1939755/nintendo_posts_first_loss_in_seven_years/
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But seriously, it was inevitable. If anything, kudos' to Ninty for timing the 3DS just right. I mean as soon as they start dropping their figures, they have a new machine everybody wants right there.
Overall I would call this thread a net loss.
Wait a second, I still am! MotherF- Got me again.
Turns out Nintendo continues to suck at the monetary market just like in 2003.
Actually that's a good point. They are likely spending a significant chunk of cash on producing 3DSs (and everything that entails, like starting up new factories, hiring workers, etc etc) without the product being available yet to make that money back.
Really all this will turn into is next year they'll probably be reporting their highest profit in years instead.
They (especially Microsoft) can easily afford to take the hits.
This is Nintendos sole market.
Nintendo can easily afford to take hits. They know how to be cheap enough that the hits are never insane. If they were sinking hundreds of millions of dollars into a product in the hopes of it being successful when it wasn't, that might be one thing. A decrease in sales during the period where they are generally the lowest while expected sales can continue to be fairly high for a console is another.
Even the Virtual Boy didn't cause a negative quarter.
Seriously, Nintendo is a lot of things, but they don't just blow money out the airlock the way some companies do.
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ya sure they posted a loss but they still made a shit ton of money. it's not like they actually lost money
edit - oh wait they actually did lose money
well never mind!
Yeah, I imagine a line graph of their monthly profits is going to hit near-vertical by Spring.
They just give Miyamoto a blank check and tell him to do something with it. Then they make billions of dollars. I always find it odd that the most powerful guy in the videogame industry is just some old guy in his late 50's and always has a smile on his face. The guy made a game about having a pet dog and it sold over 20 million copies.
If the Wii and DS proved anything, it's that casuals care about top of the line graphics and processing capabilities, internet focus, and 3D at a luxury pricepoint.
Secret to success:
The only hard part is the first one.
oh, it also proved that processing power is important to attract serious attention from developers.
Which means unless Nintendo can deliver something new with the next console, it's going to need more beef.
It also proved that developers aren't necessarily bright. For example, they will complain about development costs while complaining about poor graphical abilities of a cheaper system.
I know it's hard for long-time game developers and people who are deep in this stuff to accept, but most people don't care how much a game costs to make or what technology is running it as long as it's fun.
That does not guarantee people will play though.
Meanwhile, my favorite game is free, open source, and written for Linux.
What is a core game? I would call Halo a casual game and pokemon a core game. I would call MW2 a casual game as well.
I haven't really paid much attention since 2003, and barely in the few years before that, so I only know a few games by name, and not much else about them. The ads and a few bouts with my brother's PS3 have not inspired me to take a deeper look.
It really doesn't help that I would need to get a new game system to properly try them.
Until then, the 5 DS's that are in my house will just... continue to be used religiously because those fucking Pokemon aren't going to catch themselves.