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Diablos54
Member
(02-18-2013, 10:17 PM)
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Originally Posted by Iacobellis

What system sellers? Pikmin? Nintendo can't even give a release date on that one.

3D Mario, Zelda & Mario Kart. 3 System sellers right there (How many systems is debatable of course).
Baconsammy
Banned
(02-18-2013, 10:18 PM)

Originally Posted by cw_sasuke

And be replaced by whom?

By people not stupid enough to release glorified iPad games for 30-40 dollars. People not stupid enough to see overpriced software collecting dust on shelves and do nothing to change the pricing scheme. People like that. And perhaps people that see the value in cultivating a strong western third party presence so that their consoles/handhelds might not flounder in the West as they are.

Originally Posted by Diablos54

3D Mario, Zelda & Mario Kart. 3 System sellers right there (How many systems is debatable of course).

All those hit the 3DS and yet it's still pretty much flopping in the West.
Cheebo
Cheebs
(02-18-2013, 10:19 PM)
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Originally Posted by Diablos54

3D Mario, Zelda & Mario Kart. 3 System sellers right there (How many systems is debatable of course).

3DS got all of those in late 2011 yet the system is struggling in America right now. It will save the WiiU when it didn't save the 3DS?


Again to me the most alarming and important element of Nintendo's future is saving the 3DS in the west.
Plinko
Wildcard berths that can't beat teams without a winning record should have homefield advantage
(02-18-2013, 10:19 PM)
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Originally Posted by Glass Rebel

Nintendo's games are still selling well, the problem is that third-party software is almost non-existent in the charts.

Because they aren't really releasing quality software. What great 3rd-party 3DS games have released lately? Kingdom Hearts was good, but how did it sell?

What do we have to look forward to? Castlevania?
TwIsTeD
Member
(02-18-2013, 10:19 PM)
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Nintendo's Glory Days are over......The Wii U is such a mixed message to gamers with no killer app and a limited future.

I don't regret my purchase one bit, Mario isn't too bad and Nintendoland is fun with a group....but Pachter is right.. and as a loyal Nintendo supporter since the 80s its time for Nintendo to pull a Sega...but do it better.

Wii U is my new Netflix/Amazon machine while I wait for new software.....and honestly who the hell uses the 3D function on a 3DS

Ninten-don't-know Hardware anymore
Blades64
Banned
(02-18-2013, 10:19 PM)

Originally Posted by C.Monkey

As a secondary console maybe. :)

No. As a primary console. As THE console. Sure, I've had some fun with other systems, but the Wii outdid them all IMO. :)
Tobor
Look!
A crack addict with a tag!
(02-18-2013, 10:19 PM)
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Originally Posted by Gahiggidy

Pay no mind to that; it's just market noise.

2007 - 2009 does look like market noise, you're right.
dark_prinny
Junior Member
(02-18-2013, 10:21 PM)
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Thank you based Patcher.

Nintendo to dominate the market: Confirmed.
cosmicblizzard
Shounen Iconoclast
(02-18-2013, 10:21 PM)
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Originally Posted by TwIsTeD

Nintendo's Glory Days are over......The Wii U is such a mixed message to gamers with no killer app and a limited future.

I don't regret my purchase one bit, Mario isn't too bad and Nintendoland is fun with a group....but Pachter is right.. and as a loyal Nintendo supporter since the 80s its time for Nintendo to pull a Sega...but do it better.

Wii U is my new Netflix/Amazon machine while I wait for new software.....and honestly who the hell uses the 3D function on a 3DS

Ninten-don't-know Hardware anymore

A lot of people? It's a damn cool feature. Playing Fire Emblem right now and it's beautiful at points.
Plinko
Wildcard berths that can't beat teams without a winning record should have homefield advantage
(02-18-2013, 10:22 PM)
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I honestly think Nintendo releases a console/handheld hybrid next. Might be the right move for the company.
Iacobellis
Junior Member
(02-18-2013, 10:22 PM)
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Originally Posted by Baconsammy

By people not stupid enough to release glorified iPad games for 30-40 dollars. People not stupid enough to see overpriced software collecting dust on shelves and do nothing to change the pricing scheme. People like that. And perhaps people that see the value in cultivating a strong western third party presence so that their consoles/handhelds might not flounder in the West as they are.



All those hit the 3DS and yet it's still pretty much flopping in the West.

OOT shouldn't be considered a system seller based on the fact it's the same game from 13 YEARS ago.
Baki
Member
(02-18-2013, 10:23 PM)

Originally Posted by Diablos54

Successful? What, the system which wiped out their PS1/PS2 profits? Not exactly the word I'd use.

Also, if the 3DS is struggling (Which it is in the West, but killing it in the East), then the Vita is a zombified corpse, funny you'd forget about that isn't it?

You do realise that the PS3 will probably hit an LTD of over 100m (and possibly outsell the Nintendo Wii to become the #1 console of this generation?)

But again, that is completely unrelated. Pachter is talking about Nintendo and NOT Sony.

He is right, Nintendo look to face a troubling few years ahead of them. The Nintendo WiiU is unlikely to recover to reach any sort of meaningful numbers. Combine that with the fact that the dedicated handheld market faces severe declines in the western markets. Iwata gave a perfect example of this in the recent earnings call when he mentioned that DS USA sales used to represent 200% of Japanese sales, now the 3DS USA sales represents 73% of the Japanese market. That's an incredible decline and the system continues this decline (3DS January is down YoY).

As to what Nintendo decides to do next generation, well if they repeat the same backwards approach that they have used this generation. Nintendo will definitely be in serious trouble.
KojiKnight
Member
(02-18-2013, 10:23 PM)
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Originally Posted by Vane_MagicCity

I think it is.

I do think 3DS software is probably superior to 99 cent software on phones but $40 is just too much when you consider the price of HD console/PC games which most also think are overpriced.

50% more for games that generally don't last as long on actual consoles is pretty crazy... Honestly I don't see the problem with portable software being $30-40. I can get 40-50 hours out of a pokemon game, for $40 that's less than a dollar per hour of enjoyment. I'm 20+ hours into fire emblem on one save and 10ish on another and not being close to the ending (cursed relationships and class min-maxing distracting me!) and that's easily worth the $40 I paid for it.

I don't see the portable pricing hate... Most android games I paid for, I hardly got an hour or two of enjoyment out of and now they just sit on my phone taking up memory space. My best purchase from the android store was fpse for $4 so I could play my PS1 games.
bdizzle
Tom
(02-18-2013, 10:23 PM)
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Originally Posted by ari

Wii u have no system sellers. Period. That's all they need honestly.

Plenty of people will eat up a new zelda, a mario thats not 2d, smash bros and monster hunter.

And I'm one of them. I've never played a MH game before, but I'm honestly more excited about MH3U than I am about GTAV, MGS Rising, and The Last of Us. I seriously can't wait to get a Wii U end of this year. Pikmin 3, W101, Zombi U, Zelda WW, NSMBU and everything that'll be announced at e3.

I'm at the stage where graphics just don't impress me anymore. Playing DKCR was just fucking fun, that's all I want out of videos games.
Diablos54
Member
(02-18-2013, 10:24 PM)
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Originally Posted by Cheebo

3DS got all of those in late 2011 yet the system is struggling in America right now. It will save the WiiU when it didn't save the 3DS?

Originally Posted by Baconsammy

All those hit the 3DS and yet it's still pretty much flopping in the West.

Soooo, they didn't sell systems? Is that what you're both saying?

Also, I said nothing 'saving' the Wii U. I said they're system sellers. They are. Fact. How many systems? Well that depends on a multitude of different things, hence why they haven't given the 3DS the spark it needs in the west.

Originally Posted by Cheebo

It is pretty clear the market has spoken about portable software costing too much, 3DS software sales literally completely collapsed in 2012 in America and Europe.

I dunno the U.S. prices, but £30/£40 is INSANE in this day and age. They should be between £15/£25 IMO.
Cheebo
Cheebs
(02-18-2013, 10:24 PM)
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Originally Posted by KojiKnight

50% more for games that generally don't last as long on actual consoles is pretty crazy... Honestly I don't see the problem with portable software being $30-40. I can get 40-50 hours out of a pokemon game, for $40 that's less than a dollar per hour of enjoyment. I'm 20+ hours into fire emblem on one save and 10ish on another and not being close to the ending (cursed relationships and class min-maxing distracting me!) and that's easily worth the $40 I paid for it.

I don't see the portable pricing hate... Most android games I paid for, I hardly got an hour or two of enjoyment out of and now they just sit on my phone taking up memory space. My best purchase from the android store was fpse for $4 so I could play my PS1 games.

It is pretty clear the market has spoken about portable software costing too much, 3DS software sales literally completely collapsed in 2012 in America and Europe.
Natureboy99
Banned
(02-18-2013, 10:25 PM)

Originally Posted by Diablos54

3D Mario, Zelda & Mario Kart. 3 System sellers right there (How many systems is debatable of course).

Is Mario Kart really a system seller still? MK7 felt like MK64, MKDD, MKDS,and MKWii to me. I put MK in more of the 'what else do you got?'/ I need another game category, not a game that tips a console purchase. I think the "New" Mario series has hurt the franchise, and Zelda is a core game, not to mention we just got one. I'm a bit skeptical of the good ol' Nintendo system-selling franchises at the moment. They needed a revolutionary new IP a la Wii Sports bundled in with every SKU.
Last edited by Natureboy99; 02-18-2013 at 10:27 PM.
Gahiggidy
My aunt & uncle run a Mom & Pop store, "The Gamecube Hut", and sold 80k WiiU within minutes of opening.
(02-18-2013, 10:26 PM)
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Originally Posted by Plinko

I honestly think Nintendo releases a console/handheld hybrid next. Might be the right move for the company.

What exactly is that? How would this be different than a regular portable?
MikeE21286
Member
(02-18-2013, 10:26 PM)
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Originally Posted by Plinko

Everybody keeps making the same statement about poor 3D software sales.

Can we all agree that portable games are overpriced and the public has rejected the pricing structure?

Is that a thread-worthy topic?

It's a truth bomb it's not even worth discussing maybe. But some people seem to not understand or believe it.
Baconsammy
Banned
(02-18-2013, 10:26 PM)

Originally Posted by Iacobellis

OOT shouldn't be considered a system seller based on the fact it's the same game from 13 YEARS ago.

I don't think Zelda itself is a system seller on its own. Some people think the re-release of Wind Waker is going to generate huge sales. I doubt that very much.
Cheebo
Cheebs
(02-18-2013, 10:26 PM)
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Originally Posted by Diablos54

Soooo, they didn't sell systems? Is that what you're both saying?

Not many, a lot less than GBA and DS ever did during their holiday seasons. And less than 3DS did last holiday. In fact DS/GBA in their lifespan never hit the low that 3DS did just in the latest Jan numbers in America that month.

Not to mention 3ds software sales basically fell off a cliff in 2012 in the west.
Plinko
Wildcard berths that can't beat teams without a winning record should have homefield advantage
(02-18-2013, 10:26 PM)
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Originally Posted by Natureboy99

Is Mario Kart really a system seller still? MK7 felt like MK64, MKDD, MKDS,and MKWii to me. I put MK in more of the 'what else do you got?'/ I need another game category, not a game that tips a console purchase. I think the "New" Mario series has hurt the franchise, and Zelda is a core game, not to mention we just got one. I'm a bit skeptical of the good ol' Nintendo system-selling franchises at the moment. They needed a revolutionary new IP a la Wii Sports.

Mario Kart Wii sold over 30 million.

Mario Kart 3DS is probably over 8 now.

I'll say it isn't a system-seller if the Wii U version bombs.
Diablos54
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(02-18-2013, 10:26 PM)
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Originally Posted by Natureboy99

Is Mario Kart really a system seller still? MK7 felt like MK64, MKDD, MKDS,and MKWii to me.

Yes, it is.

Originally Posted by Baconsammy

I don't think Zelda itself is a system seller on its own. Some people think the re-release of Wind Waker is going to generate huge sales. I doubt that very much.

Uh, what? Who thinks this? HD remakes are never big sellers.
Pociask
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(02-18-2013, 10:27 PM)
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Originally Posted by Cheebo

It is pretty clear the market has spoken about portable software costing too much, 3DS software sales literally completely collapsed in 2012 in America and Europe.

I've started to wonder how much of the Wii U trouble could be pointed at Nintendo moving the software price point to $60. It could definitely be causing the Nintendo audience to hesitate to upgrade, even though "everyone" thinks of $60 as the new normal price.
MikeE21286
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(02-18-2013, 10:27 PM)
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Originally Posted by Gahiggidy

What exactly is that? How would this be different than a regular portable?

Portables don't hook up to your TV now
bdizzle
Tom
(02-18-2013, 10:27 PM)
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Originally Posted by miksar

A real gamer is someone who considers video games to be more than just a futile exercise in jumping from one platform to another. Someone who realizes its potential as an art form, someone who supports constant innovation and ingenuity shown by the best artists in the industry. Unfortunately such companies as Nintendo keep thinking that video games are for man children unable to distinguish real works from cheap reproductions. But as the numbers lately show, they are a dying breed. Soon they will be an insignificant minority forever trapped in their own unfullfilled fantasies of plumbers having an affair with dumb-looking blond girls.

Of course you can simultaneously have a Nintendo console and be a real gamer as most likely you own at least one since childhood. But when you reach puberty, you realize there is more to life and upgrade to better, more mature gaming systems that show the potential of gaming in its true form.

The level of condescension is just breathtaking. You actually made me feel like after 20+ years of playing video games, I don't count as a gamer.
DoctorWho
BOSS
(02-18-2013, 10:28 PM)
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Originally Posted by IcyRhythms

and like three months ago this same guy was saying the Wii U would be a huge success

I honestly don't recall when Pachter supported the Wii U. He's been pretty much saying Nintendo should have released it three years earlier and that it's kind of pointless now.
michaelpachter
He speaks, and we freak
(02-18-2013, 10:28 PM)
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First, I must apologize for calling two thirds of you assholes. It's probably more like 5%, so I was overly sensitive in my generalization.

Second, and to the point, there is actually some reasoning behind my comments that the Wii U is a mistake from which Nintendo may not recover, and I threw the 3DS' cannibalization from smart phones and tablets in there to make a point.

Nintendo has historically made money, and a lot of money, on each hardware unit sold. The DS at $99 US is more profitable for them than the 3DS at $169 (see many quotes from Nintendo in Kyoto about losing money, or being barely profitable). The DS sold 23.5 million units in FY:07 (ended March 31), 30.3 million in FY:08, 31.1 million in FY:09, and 27.1 million in FY:10. Nintendo made money, and a lot of money, in each of those years.

I think it is instructive to use operating income in Yen as a guide, since Iwata said he would consider resigning if Nintendo did not earn ¥100 billion in FY:14. Nintendo made ¥90 billion in FY:06, ¥226 billion in FY:07, ¥487 billion in FY:08, ¥555 billion in FY:09, and ¥356 billion in FY:10. In FY:11, DS sales dropped to 17.5 million units, and operating income fell to ¥171 billion; in FY:12, combined DS and 3DS sales were 18.6 million units, but operating income disappeared, and Nintendo generated a LOSS of ¥37 billion. Obviously, the loss was impacted by lower Wii sales and lower software sales, but the point here is that the 3DS doesn't generate much of a profit per unit, if any, and the DS did.

Over the same period, Wii hardware sales were 0, 5.8 million, 18.6 million, 25.9 million, 20.5 million, 15.0 million, and 9.8 million. We have been repeatedly assured by Nintendo that the company makes a profit on every Wii sold, but as sales leveled off at 10 million, the company printed its first loss ever.

In FY:13 (the current year, ending next month), Nintendo is projected to sell 17.3 million DS and 3DS units combined, and to sell 8 million Wii and Wii U units combined, and is projected to generate an operating loss of ¥20 billion. That means that current levels of sales keep the company at roughly breakeven.

My comment about the Wii U being a "mistake" from which the company "may not recover" was intended to say that if Wii U sales don't materially improve, Nintendo is unlikely to be profitable. They have around ¥1 trillion (around $11 billion) in cash, so they aren't in danger of going out of business for decades. However, if they aren't profitable, they aren't doing a good job for shareholders.

To elaborate, if the Wii U is not generating profits, and if the 3DS is not generating profits, the only thing that will generate profits is software. Nintendo is ensured high sales of its proprietary software, but it makes the most money on its royalty business, collecting fees from third parties for the privilege of letting them put out games on Nintendo platforms. Publishing (software) revenues peaked at ¥675 billion in FY:09, and are on track to come in around ¥235 billion this year; my call is that if hardware sales don't materially improve above current combined levels, software sales are unlikely to materially grow. If software sales don't materially improve, losses or break even will become the norm. Nintendo will not "recover" to its formal highly profitable glory.

The poor sales of the Wii U in January are likely to impact third party publisher plans to support the console. Notice that GTAV is not on the Wii U; that wasn't a typo, they don't see enough promise in sales to cause them to spend extra development dollars on a Wii U version. I have spoken to several publishers who are skeptical, and I think that the Wii U will see a lower level of third party support than the Wii did, unless sales materially improve. If I'm wrong, I'll admit it, but without third party titles, Nintendo will not generate its customary levels of royalties, and losses or break even could become the norm.

Many of you point out that the 3DS is selling better than the DS at a similar point. That's true, but the DS was always profitable, and the 3DS is not. Also, the DS saw sales go from 8.8 million units in its first four quarters to 18.0 million its next four, to 20.2 million in its third full year; I'm pretty confident that the 3DS will not get to 20 million units, but even if it did, it would generate little profit from hardware. Keep in mind that the DS redesign to a lite version boosted sales, and there was little competition for 12 year-old and older from smart phones and tablets. Now, parents who can afford it are opting for Kindles, iPads, and smart phones for their teenagers, and the more casual of those are perfectly happy playing Angry Birds and putting their DS or 3DS into a drawer.

The important point is that if 3DS sales level off at 15 million and Wii U sales level off at 8 - 10 million, software sales will be much lower than they were in the past. If Nintendo doesn't make a profit on hardware, they can't afford to cut prices further. If they do cut price, it will likely occur as their manufacturing costs come down, but I don't expect big hardware profits in the foreseeable future. They are stuck with software profits, and at current sales levels, they are unlikely to make an overall profit from software.

That's it, not trolling, but that is my reasoning.

To the 5% of you who ARE assholes, bring it on ;-)
Skyzard
Member
(02-18-2013, 10:28 PM)
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Well they've certainly just let go of a large portion of their previously regular gamers, and slightly older user base after releasing two consoles that are similarly lacklustre in a row.

I'd say the way they treated the wii in the later stages has done more damage to that demographic than anything the wii u can do now but it's not over for another generation of boom box games of course. But yeah the hardcore is shrinking majorly at the moment.
Plinko
Wildcard berths that can't beat teams without a winning record should have homefield advantage
(02-18-2013, 10:29 PM)
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Originally Posted by Gahiggidy

What exactly is that? How would this be different than a regular portable?

Like a reverse Wii U. The tablet is actually the console, except you could play it elsewhere. It allows you to play on any television as well as take it with you wherever you want. By 2016 they could put one out about equal to Durango/Orbis.

It could benefit them because all of their games would release for the same system from that point forward.
TheGreatMightyPoo
(02-18-2013, 10:29 PM)
Pachter's not funny anymore.
Baconsammy
Banned
(02-18-2013, 10:29 PM)

Originally Posted by Diablos54

Soooo, they didn't sell systems? Is that what you're both saying?

Also, I said nothing 'saving' the Wii U. I said they're system sellers. They are. Fact. How many systems? Well that depends on a multitude of different things, hence why they haven't given the 3DS the spark it needs in the west.

I dunno the U.S. prices, but £30/£40 is INSANE in this day and age. They should be between £15/£25 IMO.

Selling systems to core gamers and selling systems consistently to the masses are two hugely different things. Mario and Mario Kart along with a huge price cut spiked sales, and then they went right back down, cratering once again last month in the US. Unless you want me to believe that Nintendo actually planned for 3DS sales to be worse than the DS ever had, even pre-Lite.
Glass Rebel
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(02-18-2013, 10:29 PM)
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Originally Posted by Plinko

Because they aren't really releasing quality software. What great 3rd-party 3DS games have released lately? Kingdom Hearts was good, but how did it sell?

What do we have to look forward to? Castlevania?

That's a factor as well of course. Kingdom Hearts sold 200k in the August NPD, don't know what it did in Europe but I think it was a moderate success (Japan was worse than expected afaik).

The next big third-party release is probably Disney Infinity in June. Castlevania is in March but I doubt it'll make a big splash. MonHun3 is published by Nintendo. Past June there's some LEGO stuff but that's it so far. Either they haven't announced their Fall/Winter lineup or there really isn't that much to talk about.
Napoleonthechimp
Member
(02-18-2013, 10:29 PM)
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I don't know why Nintendo can't stick to handhelds to be quite honest. It seems to suit them better.
Diablos54
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(02-18-2013, 10:29 PM)
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Originally Posted by michaelpachter

First, I must apologize for calling two thirds of you assholes. It's probably more like 5%, so I was overly sensitive in my generalization.

To the 5% of you who ARE assholes, bring it on ;-)

Something something asshole Patcher. :p

Originally Posted by Baconsammy

Selling systems to core gamers and selling systems consistently to the masses are two hugely different things. Mario and Mario Kart along with a huge price cut spiked sales, and then they went right back down, cratering once again last month in the US. Unless you want me to believe that Nintendo actually planned for 3DS sales to be worse than the DS ever had, even pre-Lite.

So now they have to be a certain type of system sellers? I mean, I agree with your point, but you're kinda moving the goalposts a little. :p
NotLiquid
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(02-18-2013, 10:30 PM)
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Originally Posted by Gahiggidy

What exactly is that? How would this be different than a regular portable?

Transfarring: The Console I assume.

Originally Posted by Baconsammy

All those hit the 3DS and yet it's still pretty much flopping in the West.

That was then, 2011, and this is now.

Those games did sell consoles and they ensured that the 3DS went on to be a generally successful console. All that's left now to turn it into a must-have for consumers is an actual 3DS Zelda (i.e not a port), Animal Crossing and Pokémon, two of which are coming this year and the second of which has sold so good that Nintendo could focus their entire output exclusively in Japan and still get away with it.
AZ Greg
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(02-18-2013, 10:30 PM)
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:o
Omnistalgic
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(02-18-2013, 10:30 PM)
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This guy doesn't deserve the amount of replies to this asinine comments and speculation. How in the world isn't WiiU something Ninty can recover from? They just won last generation and are breaking sales records with 3DS? Can't take him seriously...Has to be just for hits...

-_-
Tobor
Look!
A crack addict with a tag!
(02-18-2013, 10:30 PM)
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Originally Posted by Gahiggidy

What exactly is that? How would this be different than a regular portable?

Take the Wii U and flip it. The Gamepad becomes the actual game system and the box hooked up to the TV would be a small wireless dongle.
Cheebo
Cheebs
(02-18-2013, 10:31 PM)
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Originally Posted by Omnistalgic

This guy doesn't deserve the amount of replies to this asinine comments and speculation. How in the world isn't WiiU something Ninty can recover from? They just won last generation and are breaking sales records with 3DS? Can't take him seriously...Has to be just for hits...

-_-

Breaking sales records? 3Ds is not doing any such thing right now. It fell behind ds and now is falling behind gba.
Plinko
Wildcard berths that can't beat teams without a winning record should have homefield advantage
(02-18-2013, 10:31 PM)
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Originally Posted by michaelpachter

First, I must apologize for calling two thirds of you assholes. It's probably more like 5%, so I was overly sensitive in my generalization.

Second, and to the point, there is actually some reasoning behind my comments that the Wii U is a mistake from which Nintendo may not recover, and I threw the 3DS' cannibalization from smart phones and tablets in there to make a point.

Nintendo has historically made money, and a lot of money, on each hardware unit sold. The DS at $99 US is more profitable for them than the 3DS at $169 (see many quotes from Nintendo in Kyoto about losing money, or being barely profitable). The DS sold 23.5 million units in FY:07 (ended March 31), 30.3 million in FY:08, 31.1 million in FY:09, and 27.1 million in FY:10. Nintendo made money, and a lot of money, in each of those years.

I think it is instructive to use operating income in Yen as a guide, since Iwata said he would consider resigning if Nintendo did not earn ¥100 billion in FY:14. Nintendo made ¥90 billion in FY:06, ¥226 billion in FY:07, ¥487 billion in FY:08, ¥555 billion in FY:09, and ¥356 billion in FY:10. In FY:11, DS sales dropped to 17.5 million units, and operating income fell to ¥171 billion; in FY:12, combined DS and 3DS sales were 18.6 million units, but operating income disappeared, and Nintendo generated a LOSS of ¥37 billion. Obviously, the loss was impacted by lower Wii sales and lower software sales, but the point here is that the 3DS doesn't generate much of a profit per unit, if any, and the DS did.

Over the same period, Wii hardware sales were 0, 5.8 million, 18.6 million, 25.9 million, 20.5 million, 15.0 million, and 9.8 million. We have been repeatedly assured by Nintendo that the company makes a profit on every Wii sold, but as sales leveled off at 10 million, the company printed its first loss ever.

In FY:13 (the current year, ending next month), Nintendo is projected to sell 17.3 million DS and 3DS units combined, and to sell 8 million Wii and Wii U units combined, and is projected to generate an operating loss of ¥20 billion. That means that current levels of sales keep the company at roughly breakeven.

My comment about the Wii U being a "mistake" from which the company "may not recover" was intended to say that if Wii U sales don't materially improve, Nintendo is unlikely to be profitable. They have around ¥1 trillion (around $11 billion) in cash, so they aren't in danger of going out of business for decades. However, if they aren't profitable, they aren't doing a good job for shareholders.

To elaborate, if the Wii U is not generating profits, and if the 3DS is not generating profits, the only thing that will generate profits is software. Nintendo is ensured high sales of its proprietary software, but it makes the most money on its royalty business, collecting fees from third parties for the privilege of letting them put out games on Nintendo platforms. Publishing (software) revenues peaked at ¥675 billion in FY:09, and are on track to come in around ¥235 billion this year; my call is that if hardware sales don't materially improve above current combined levels, software sales are unlikely to materially grow. If software sales don't materially improve, losses or break even will become the norm. Nintendo will not "recover" to its formal highly profitable glory.

The poor sales of the Wii U in January are likely to impact third party publisher plans to support the console. Notice that GTAV is not on the Wii U; that wasn't a typo, they don't see enough promise in sales to cause them to spend extra development dollars on a Wii U version. I have spoken to several publishers who are skeptical, and I think that the Wii U will see a lower level of third party support than the Wii did, unless sales materially improve. If I'm wrong, I'll admit it, but without third party titles, Nintendo will not generate its customary levels of royalties, and losses or break even could become the norm.

Many of you point out that the 3DS is selling better than the DS at a similar point. That's true, but the DS was always profitable, and the 3DS is not. Also, the DS saw sales go from 8.8 million units in its first four quarters to 18.0 million its next four, to 20.2 million in its third full year; I'm pretty confident that the 3DS will not get to 20 million units, but even if it did, it would generate little profit from hardware. Keep in mind that the DS redesign to a lite version boosted sales, and there was little competition for 12 year-old and older from smart phones and tablets. Now, parents who can afford it are opting for Kindles, iPads, and smart phones for their teenagers, and the more casual of those are perfectly happy playing Angry Birds and putting their DS or 3DS into a drawer.

The important point is that if 3DS sales level off at 15 million and Wii U sales level off at 8 - 10 million, software sales will be much lower than they were in the past. If Nintendo doesn't make a profit on hardware, they can't afford to cut prices further. If they do cut price, it will likely occur as their manufacturing costs come down, but I don't expect big hardware profits in the foreseeable future. They are stuck with software profits, and at current sales levels, they are unlikely to make an overall profit from software.

That's it, not trolling, but that is my reasoning.

To the 5% of you who ARE assholes, bring it on ;-)

Thanks for the explanation and clarification. Your statement makes much more sense when applied to profitability as opposed to a complete business shutdown.
DragonSworne
Satoru Iwata and his Trilateral Commission cronies are suppressing the truth about Retro. Wake up, sheeple!
(02-18-2013, 10:32 PM)
DragonSworne's Avatar
I don't neccesary think it an issue with the hardware or the concept itself. Wii U is pretty fun. It's strictly a management issue.

Nintendo never factored in how big of an impact the decline of Wii and the negative Wii U press would have on Wii U sales.

Nintendo pinned their hopes on NSMBU and year old ports with the naivety that somehow word of mouth will sell the sytem. They did little advertise the system or to combat the mud smearing that Wii U was getting all over the internet.

Keeping silence is never good.
The Giant
Member
(02-18-2013, 10:32 PM)
The Giant's Avatar
Patcher being born is a mistake that we will never recover from.
KojiKnight
Member
(02-18-2013, 10:33 PM)
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Originally Posted by Napoleonthechimp

I don't know why Nintendo can't stick to handhelds to be quite honest. It seems to suit them better.

Do you have any major investments? IRA? 401K? Hell, just some simple shares in a company?

If you do/did I'd assume you were told by anyone that gave you investment advice that diversity is key right?

That is why Nintendo isn't just in the hand held market. If you put all of your eggs in one basket, then you trip... bam no more eggs. That said, even then... Nintendo isn't nearly as diversified as it needs to be.
Natureboy99
Banned
(02-18-2013, 10:34 PM)

Originally Posted by Plinko

Mario Kart Wii sold over 30 million.

Mario Kart 3DS is probably over 8 now.

I'll say it isn't a system-seller if the Wii U version bombs.

Yeah but how many of those 30 million bought a Wii BECAUSE of MKWii? MKWii sold well because the install base was already there. It also had the wheel and online play. MKWiiU wont have any of those distinctions or advantages, not to mention there is now some great alternatives on the market such as SASRT, Modnation, even LBP Karting. I might be wrong, but I don't think MKWiiU will do as well as the 2 MK games before it.
Glass Rebel
Member
(02-18-2013, 10:34 PM)
Glass Rebel's Avatar

Originally Posted by michaelpachter

stuff

Are you honestly telling me that the site in question only picked a quote out of context to fuel some controversy?

Why would they do that D:
Baconsammy
Banned
(02-18-2013, 10:34 PM)

Originally Posted by michaelpachter

*snip tons and tons of unbiased truths*

Bravo. A lot of people on forums think they come up with the metrics for success, ignoring the fact that reality and Nintendo combine to create those metrics. And by all accounts, they're failing with both the 3DS and Wii U at this point.

Originally Posted by Diablos54

Something something asshole Patcher. :p

So now they have to be a certain type of system sellers? I mean, I agree with your point, but you're kinda moving the goalposts a little. :p

I didn't move the goalposts at all. If you spike sales and don't sustain them, what's the point? Especially if they're so inept at acquiring third party support to keep sales active during Nintendo's own lull periods.

Originally Posted by The Giant

Patcher being born is a mistake that we will never recover from.

Now you're needlessly insulting a fellow GAFer. But to be fair, he probably called you an asshole.
Last edited by Baconsammy; 02-18-2013 at 10:36 PM.
euphemism
Member
(02-18-2013, 10:35 PM)
euphemism's Avatar

Originally Posted by miksar

A real gamer is someone who considers video games to be more than just a futile exercise in jumping from one platform to another. Someone who realizes its potential as an art form, someone who supports constant innovation and ingenuity shown by the best artists in the industry. Unfortunately such companies as Nintendo keep thinking that video games are for man children unable to distinguish real works from cheap reproductions. But as the numbers lately show, they are a dying breed. Soon they will be an insignificant minority forever trapped in their own unfullfilled fantasies of plumbers having an affair with dumb-looking blond girls.

Of course you can simultaneously have a Nintendo console and be a real gamer as most likely you own at least one since childhood. But when you reach puberty, you realize there is more to life and upgrade to better, more mature gaming systems that show the potential of gaming in its true form.

Cute
The Spoony Hou
Member
(02-18-2013, 10:35 PM)
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Originally Posted by miksar

A real gamer is someone who considers video games to be more than just a futile exercise in jumping from one platform to another. Someone who realizes its potential as an art form, someone who supports constant innovation and ingenuity shown by the best artists in the industry. Unfortunately such companies as Nintendo keep thinking that video games are for man children unable to distinguish real works from cheap reproductions. But as the numbers lately show, they are a dying breed. Soon they will be an insignificant minority forever trapped in their own unfullfilled fantasies of plumbers having an affair with dumb-looking blond girls.

Of course you can simultaneously have a Nintendo console and be a real gamer as most likely you own at least one since childhood. But when you reach puberty, you realize there is more to life and upgrade to better, more mature gaming systems that show the potential of gaming in its true form.

Holy shit at this post. Is this real life?
ozfunghi
Member
(02-18-2013, 10:36 PM)
ozfunghi's Avatar

Originally Posted by michaelpachter

First, I must apologize for calling two thirds of you assholes. It's probably more like 5%, so I was overly sensitive in my generalization.

Second, and to the point, there is actually some reasoning behind my comments that the Wii U is a mistake from which Nintendo may not recover, and I threw the 3DS' cannibalization from smart phones and tablets in there to make a point.

Nintendo has historically made money, and a lot of money, on each hardware unit sold. The DS at $99 US is more profitable for them than the 3DS at $169 (see many quotes from Nintendo in Kyoto about losing money, or being barely profitable). The DS sold 23.5 million units in FY:07 (ended March 31), 30.3 million in FY:08, 31.1 million in FY:09, and 27.1 million in FY:10. Nintendo made money, and a lot of money, in each of those years.

I think it is instructive to use operating income in Yen as a guide, since Iwata said he would consider resigning if Nintendo did not earn ¥100 billion in FY:14. Nintendo made ¥90 billion in FY:06, ¥226 billion in FY:07, ¥487 billion in FY:08, ¥555 billion in FY:09, and ¥356 billion in FY:10. In FY:11, DS sales dropped to 17.5 million units, and operating income fell to ¥171 billion; in FY:12, combined DS and 3DS sales were 18.6 million units, but operating income disappeared, and Nintendo generated a LOSS of ¥37 billion. Obviously, the loss was impacted by lower Wii sales and lower software sales, but the point here is that the 3DS doesn't generate much of a profit per unit, if any, and the DS did.

Over the same period, Wii hardware sales were 0, 5.8 million, 18.6 million, 25.9 million, 20.5 million, 15.0 million, and 9.8 million. We have been repeatedly assured by Nintendo that the company makes a profit on every Wii sold, but as sales leveled off at 10 million, the company printed its first loss ever.

In FY:13 (the current year, ending next month), Nintendo is projected to sell 17.3 million DS and 3DS units combined, and to sell 8 million Wii and Wii U units combined, and is projected to generate an operating loss of ¥20 billion. That means that current levels of sales keep the company at roughly breakeven.

My comment about the Wii U being a "mistake" from which the company "may not recover" was intended to say that if Wii U sales don't materially improve, Nintendo is unlikely to be profitable. They have around ¥1 trillion (around $11 billion) in cash, so they aren't in danger of going out of business for decades. However, if they aren't profitable, they aren't doing a good job for shareholders.

To elaborate, if the Wii U is not generating profits, and if the 3DS is not generating profits, the only thing that will generate profits is software. Nintendo is ensured high sales of its proprietary software, but it makes the most money on its royalty business, collecting fees from third parties for the privilege of letting them put out games on Nintendo platforms. Publishing (software) revenues peaked at ¥675 billion in FY:09, and are on track to come in around ¥235 billion this year; my call is that if hardware sales don't materially improve above current combined levels, software sales are unlikely to materially grow. If software sales don't materially improve, losses or break even will become the norm. Nintendo will not "recover" to its formal highly profitable glory.

The poor sales of the Wii U in January are likely to impact third party publisher plans to support the console. Notice that GTAV is not on the Wii U; that wasn't a typo, they don't see enough promise in sales to cause them to spend extra development dollars on a Wii U version. I have spoken to several publishers who are skeptical, and I think that the Wii U will see a lower level of third party support than the Wii did, unless sales materially improve. If I'm wrong, I'll admit it, but without third party titles, Nintendo will not generate its customary levels of royalties, and losses or break even could become the norm.

Many of you point out that the 3DS is selling better than the DS at a similar point. That's true, but the DS was always profitable, and the 3DS is not. Also, the DS saw sales go from 8.8 million units in its first four quarters to 18.0 million its next four, to 20.2 million in its third full year; I'm pretty confident that the 3DS will not get to 20 million units, but even if it did, it would generate little profit from hardware. Keep in mind that the DS redesign to a lite version boosted sales, and there was little competition for 12 year-old and older from smart phones and tablets. Now, parents who can afford it are opting for Kindles, iPads, and smart phones for their teenagers, and the more casual of those are perfectly happy playing Angry Birds and putting their DS or 3DS into a drawer.

The important point is that if 3DS sales level off at 15 million and Wii U sales level off at 8 - 10 million, software sales will be much lower than they were in the past. If Nintendo doesn't make a profit on hardware, they can't afford to cut prices further. If they do cut price, it will likely occur as their manufacturing costs come down, but I don't expect big hardware profits in the foreseeable future. They are stuck with software profits, and at current sales levels, they are unlikely to make an overall profit from software.

That's it, not trolling, but that is my reasoning.

To the 5% of you who ARE assholes, bring it on ;-)

I'm confused. So they make most money off of software royalties, yet the hardware not being profitable is a dealbreaker? And... isn't this exactly what Sony and MS have been doing for decades?

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