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Adachi · May 7, 2015

AniHawk said:
that's not exactly a strong argument to slash an entire department that brings them in hundreds of millions of dollars to fund future projects.

When in the world have people become so warped to think that it's the hardware that's bringing in all the cash? That was only the case with Wii & DS because they were always sold at hefty profit, the Wii U isn't sold at a profit at all and the 3DS certainly doesn't seem to be able to make up for that much at all.

It is software that makes money plus the Amiibos at the moment since they are probably sold at a good profit as well.

casiopao · May 7, 2015

KillerMan91 said:
Sony started to combine numbers when they noticed that Vita was flopping badly. Back then PSP still shipped some millions a year so it made numbers look better. I really doubt that nowadays it accounts more than 400k at most of yearly sales. It's pretty weird that they have still kept producing them while discontinuing PS2.

I can find more brand new PSP than Vita in Indonesia for sure here tx to piracy.

Notor!ousG · May 7, 2015

JoeM86 said:
Because of reasons that have been explained on scores of occasions. The hardware pays for the software development. Without the hardware, the amount of software will drop and we'll end up with annual Mario and ridiculous downsizing.

The hardware is profitable, Nintendo are at a profit. You'd think this sort of ridiculous statement would be over now that they have bounced back.

Also, who's to say that they won't succeed with a new gimmick?

I agree. Seeing the rough years they had, it's simply amazing how they turned back to profit.
And I believe this is still an early phase of recovery.

I wonder if they'll announce a successor of 3DS at E3.

casiopao · May 7, 2015

Adachi said:
When in the world have people become so warped to think that it's the hardware that's bringing in all the cash? That was only the case with Wii & DS because they were always sold at hefty profit, the Wii U isn't sold at a profit at all and the 3DS certainly doesn't seem to be able to make up for that much at all.

It is software that makes money plus the Amiibos at the moment since they are probably sold at a good profit as well.

Probably because during GBA and Gamecube, the console brought tons of money too? Software while selling well, always had the backing of a profitable hardware to give Ninty all that safety net they need.

random25 · May 7, 2015

Adachi said:
http://www.bloomberg.com/news/artic...utlook-disappoints-and-mario-can-t-save-wii-u

The Wii U is not profitable, it isn't paying for shit and in a couple of years their handhelds will most likely not be profitable anymore either. Why the hell do you think investors were so ecstatic about Nintendo going into mobile gaming?

Software is and has always been the money maker in gaming, you'd think this would be known by now, so to assume that Nintendo game output would suffer because of the change to being a 3rd party dev does not make any sense.

I think you're really pushing too hard to make Nintendo go 3rd party lol.

E-phonk · May 7, 2015

Adachi said:
Software is and has always been the money maker in gaming, you'd think this would be known by now, so to assume that Nintendo game output would suffer because of the change to being a 3rd party dev does not make any sense.

Euh.. you linked to the same article you did five posts back.
* Nintendo makes 15/20% more then most other companies on their software, because they don't have to pay Sony/MS as a platform holder.
* They also get 15/20% from third party hits. Like yokai watch and monster hunter on 3DS for example.
* As a hardware manufacturer, they create patents that make/can make money for many years
* 3DS made a huge profit, even with the pricecuts. It's not only the console itself, but also accesoires etc.
* Wii U, arguably, did not. Although one of the reasons why it's still so expensive is probably because they didn't want to take a loss on the hardware and focused on profitability compared to units sold.

This is only just a few of the financial arguments. For nintendo fans, the more important one is the creative one - and I there are some well understood arguments to be made why customers are better of with nintendo as a platform owner, both in their diverse output, the creativity, the experimentation they bring to video games in general and as the only producer of dedicated portable hardware that sells.

Nintendo third party would be a serious blow in the long term for Nintendo itself, for nintendo fans and for video games as a whole.

Adachi · May 7, 2015

Eolz said:
I really don't think you understand how their business (and other pubs) works. It'd more risky to do titles not selling well without hardware profits to fall back on.

Oh and the WiiU is profitable since last year. Probably not by much though.

Jesus Christ, the Wii U is not profitable, the Wii U was just not being produced for a lot of the business year.

"Analysts also say that costs may rise from resuming Wii U production. The manufacturing cost for much of the Wii Us sold so far this business year was already booked, making this years sales of Wii U exceptionally profitable on its books."

http://blogs.wsj.com/digits/2015/01/27/nintendo-earnings-what-to-watch-7/

These magical hardware profits you people are talking about do not exist. Nintendo is able to make these riskier projects becausee they have safe projects that make their money back like Pokemon, Mario Kart or Smash etc.

E-phonk · May 7, 2015

Adachi said:
These magical hardware profits you people are talking about do not exist.

Euhm...

Adachi · May 7, 2015

random25 said:
I think you're really pushing too hard to make Nintendo go 3rd party lol.

I'm not gonna lie and say that I wouldn't like the new Zelda on my PS4, but I'm generally just a firm believer that they'd be a way healthier company without hardware.

JoeM86 · May 7, 2015

Tron#1 said:
was trying to get conformation on this thanks. Even if its 10 dollars a console they are MAKING money evertime they sell one. i would rather make a dollar on everyone sold than lose one.

Indeed. A large part of their first ever financial loss was due to selling the 3DS at a loss. They gave it that price cut and then bam...it took off and sold 11 million units in 6 months. if we take the idea that it was $50 loss per unit (speculation), then that's $550,000,000 lost and the software didn't make it back.

Wii U is now at a profit again. Unsure how much, but price dropping it just for sales is a horrible business idea.

Adachi said:
I'm not gonna lie and say that I wouldn't like the new Zelda on my PS4, but I'm generally just a firm believer that they'd be a way healthier company without hardware.

They would have to downsize ridiculous amounts to do it and would get nowhere near the revenue they're getting now.

Adachi · May 7, 2015

E-phonk said:
Euhm...

Revenue, good job that's totally meaningless.

By that logic Sony should keep their mobile division because it's one of the biggest divisions in revenue.

Oh and I should edit and say that the hardware profit doesn't exist nowadays, it existed with the Wii and DS

Mory Dunz · May 7, 2015

Weird that Project Treasure is listed in Europe and nowhere else.

Not that it really matters.

Adachi · May 7, 2015

JoeM86 said:
They would have to downsize ridiculous amounts to do it and would get nowhere near the revenue they're getting now.

Who gives a shit about revenue? Revenue =/= Profit

JoeM86 · May 7, 2015

Adachi said:
Oh and I should edit and say that the hardware profit doesn't exist nowadays, it existed with the Wii and DS

It does though. 3DS has been profitable since late 2012 and Wii U has been profitable for about a year now.

You're looking at the loss they had at the start of their life and assuming that they will be there the entire life of the device.

Plus you're ignoring licensing fees for third parties. Not as big on the Wii U (exists for indies still though), but still huge on the 3DS. That creates a hell of a lot of revenue.

Plus a craptonne of other things. You're not looking at the big picture, you're looking at a tiny corner of negative and declaring outright that Nintendo should just give up, without knowing all the facts or knowing about the business.

E-phonk · May 7, 2015

Adachi said:
Revenue, good job that's totally meaningless.

Oh and I should edit and say that the hardware profit doesn't exist nowadays, it existed with the Wii and DS

But they make a profit, that's the point. 3DS does, Wii U does (at this point). Even if it's small, it's still considerable. Also, you still didn't take in account the extra revenue they gain as a platform holder (both on first party software and on third party royalties, plus add-ons, the eshop etc)

casiopao · May 7, 2015

Adachi said:
Revenue, good job that's totally meaningless.

By that logic Sony should keep their mobile division because it's one of the biggest divisions in revenue.

Umm... Don't that show how even during DS and Wii era and crazy amount of software sold, hardware has always been Ninty biggest money maker? Which is why getting the right hardware is more important than just giving up?

Mihael Mello Keehl · May 7, 2015

JoeM86 said:
Indeed. A large part of their first ever financial loss was due to selling the 3DS at a loss. They gave it that price cut and then bam...it took off and sold 11 million units in 6 months. if we take the idea that it was $50 loss per unit (speculation), then that's $550,000,000 lost and the software didn't make it back.

Wii U is now at a profit again. Unsure how much, but price dropping it just for sales is a horrible business idea.

They would have to downsize ridiculous amounts to do it and would get nowhere near the revenue they're getting now.

Horrible idea bur it would win the console wars. 10$ Wii U and it will overtake PS4 in sales in a month.

AniHawk · May 7, 2015

Adachi said:
http://www.bloomberg.com/news/artic...utlook-disappoints-and-mario-can-t-save-wii-u

The Wii U is not profitable, it isn't paying for shit and in a couple of years their handhelds will most likely not be profitable anymore either. Why the hell do you think investors were so ecstatic about Nintendo going into mobile gaming?

Software is and has always been the money maker in gaming, you'd think this would be known by now, so to assume that Nintendo game output would suffer because of the change to being a 3rd party dev does not make any sense.

nintendo as a first party developer, pays no royalties, sets the rules, and earns royalties from third-party developers. the 3ds is experiencing a pretty normal decline for a decently normal system. it will be five years old at the end of this fiscal year. that by itself doesn't really scream the end of nintendo's time as a hardware manufacturer. the wii u is, unlike the 3ds, a collection of problems that nintendo themselves created for some reason. i think replicating the kinds of boneheaded moves that led to the wii u being what it was would actually take a degree of effort.

neither one of the wii u or 3ds signal that nintendo needs to get out of the hardware business. however, they do signal that nintendo should probably adapt to the new video game market, one that is becoming less and less reliant on the model of needing dedicated boxes that hook up to a tv for video games. they can also learn from the mistakes of the 3ds and wii u. two big ones are nintendo's lineup gaps and the increased focus of the online marketplace. imagine their next platform isn't a console, but rather a digital system, more like steam, that can be used across multiple hardware devices. nx would effectively be their handheld and their console. in the short-term, it lets them make consoles and handhelds. in the long-term, it sets up nintendo the platform-holder in the digital space, for when dedicated hardware is meant for hobbyists and enthusiasts. working this way, they wouldn't need to develop two mario karts a generation or four mario platformers a generation. instead of creating fatigue and disinterest within their own fanbase, they can reach into their past catalog and come out with new takes on old games, or have teams work on new ideas more frequently.

this kind of freedom doesn't happen if they don't have their own platform to work on. without a dedicated gaming platform that nintendo makes, nintendo doesn't earn money on royalties from third-parties. it means they don't as big a cut on software. it means they have to learn new hardware. killing 55% of the revenue they take in means they don't get enough money to spend on the 500 million dollars they pour into research and development on a yearly basis, software that never leaves development, and games that do after enough time to polish them to an acceptable level.

random25 · May 7, 2015

Tron#1 said:
isnt the whole industry?

Well...yeah you're right lol.

Adachi said:
I'm not gonna lie and say that I wouldn't like the new Zelda on my PS4, but I'm generally just a firm believer that they'd be a way healthier company without hardware.

There's just a lot of financial factors out there that we're not seeing because it's all blinded with news of hardware sales flopping and all that. I mean, we may question their gaming-related decisions but at the end of the day, they are still one of the most resilient companies in the gaming industry, and they know quite well how to do business. One of them is keeping hardware sales and development. There's just good money behind being 1st party and having their own gaming platform, from licensing, less profit sharing, less cost of development, profit margins on the hardware itself (which didn't happen to the Wii U), to loyalties in cartridges (in case of 3DS). After all, if they believe there's no more money in hardware they would've easily dropped the Wii U by now, never released a new 3DS revision, and stopped developing their new platform NX.

JoeM86 · May 7, 2015

Mihael Mello Keehl said:
Horrible idea bur it would win the console wars. 10$ Wii U and it will overtake PS4 in sales in a month.

It would also bankrupt Nintendo

BronzeWolf · May 7, 2015

It's amazing that even in a return to profit year, people still call for nintendo's Doom in the hardware space. We've heard this since the N64 and it's not been true since then.

Nintendo won't stop making hardware anytime soon, will people get ver that?

deleted · May 7, 2015

JoeM86 said:
Indeed. A large part of their first ever financial loss was due to selling the 3DS at a loss. They gave it that price cut and then bam...it took off and sold 11 million units in 6 months. if we take the idea that it was $50 loss per unit (speculation), then that's $550,000,000 lost and the software didn't make it back.

Wii U is now at a profit again. Unsure how much, but price dropping it just for sales is a horrible business idea.

They would have to downsize ridiculous amounts to do it and would get nowhere near the revenue they're getting now.

That entirely depends on the software sales. If they had more 3rd party royalties and sales of their own software would skyrocket due to the price cut, it might be a worthwhile endeavor.
You also have to remember that a way to get hardware costs down is to produce a lot of it.

I'm not saying it must pay off, but it's the same thing with steam-sales really. If you can sell 10 times as much as usual by cutting the price by 75%, were does that leave you money wise?
All the money they would earn on extra Mario Kart 8, NSMBU, Mario 3D World and Smash Bros copies would most likely be pure profit, since the costs were all spread over these past years. They could get Splatoon in many more households, which would be important for DLC and Amiibo sales and maybe to establish it as a brand.

So let's say they cut the pice by 50$, make a loss of 25$/console for the next year and sell a few million more consoles. Will the software sales not only make up for it, but provide more profit than otherwise? Will it appease the shareholders, will there be enough positive word of mouth to be in a positive light once their next project launches?
These are all things they have to consider and there are many arguments for and against a price cut.

CaviarMeths · May 7, 2015

Adachi said:
Jesus Christ, the Wii U is not profitable, the Wii U was just not being produced for a lot of the business year.

"Analysts also say that costs may rise from resuming Wii U production. The manufacturing cost for much of the Wii Us sold so far this business year was already booked, making this years sales of Wii U exceptionally profitable on its books."

http://blogs.wsj.com/digits/2015/01/27/nintendo-earnings-what-to-watch-7/

These magical hardware profits you people are talking about do not exist. Nintendo is able to make these riskier projects becausee they have safe projects that make their money back like Pokemon, Mario Kart or Smash etc.

You really don't seem to understand how this works. You're looking at it like it's a basic math equation.

Hypothetical math:
Wii U costs $320 to manufacture.
Wii U sells for $300.
Wii U loses $20 on each sale.

But you're ignoring the bigger picture here. The biggest of all is money. Spending money and making money is Economics 101. If they cut hardware and went 3rd party, they would be spending less money, but they'd also be making less, billions less. Revenue pays for shit. Lots and lots of shit. Even if Nintendo makes a tidy profit on every game they sell, they still wouldn't have the revenue stream to fund the big projects that they really want. Hardware sales do in fact create the revenue stream necessary to fund riskier creative projects.

You're also ignoring the benefits of being a platform holder. They don't need to pay for licensing to publish on another platform. They collect licensing fees from other publishers on their own platforms. Like, balls almighty, can you even imagine how much money Yokai Watch and Monster Hunter 4 made for them? And they didn't even do fuck all for them. They just allowed them to be released on their machines. Of course 3rd party 3DS software is much more successful than Wii U, but there are enough releases on Wii U to have a big enough cash flow to not ignore. Hell, maybe it even makes up for that hypothetical 20 bucks they lost on the hardware sale. Being the owner of several hardware patents also gives a steady stream of income.

TL;DR - Hardware helps pay for shit and Nintendo collects money from doing fuck all.

AniHawk · May 7, 2015

Adachi said:
I'm not gonna lie and say that I wouldn't like the new Zelda on my PS4, but I'm generally just a firm believer that they'd be a way healthier company without hardware.

what was the last first-party that went third-party and was obviously better for it?

LOCK · May 7, 2015

Adachi said:
Who gives a shit about revenue? Revenue =/= Profit

You don't know what you are talking about.

Revenue signifies growth potential of a company. Along with Operating income it shows business growth and operations success.

Low revenue or stagnant revenue usually leads to fewer investors. Few investors usually lead to lower business expenses and activity.

Joni · May 7, 2015

AniHawk said:
what was the last first-party that went third-party and was obviously better for it?

Bandai.

Adachi · May 7, 2015

JoeM86 said:
It does though. 3DS has been profitable since late 2012 and Wii U has been profitable for about a year now.

You're looking at the loss they had at the start of their life and assuming that they will be there the entire life of the device.

Plus you're ignoring licensing fees for third parties. Not as big on the Wii U (exists for indies still though), but still huge on the 3DS. That creates a hell of a lot of revenue.

Plus a craptonne of other things. You're not looking at the big picture, you're looking at a tiny corner of negative and declaring outright that Nintendo should just give up, without knowing all the facts or knowing about the business.

Ok, so for how freaking long are you people going to ignore the sources that I'm providing that say that the Wii Us' hardware is NOT profitable.

Thrid party licensing would be lost, true, but those will be dropping heavily in the next 5 years anyway, due to the further drop in the dedicated handheld market.

And I didn't say they should just give up, I said they should either go third party or revamp their hardware business so that it can be profitable on really small numbers, way smaller than what they are putting out now.

I mean seriously people, the fact that Nintendo, who was extremely opposed to that idea a couple years ago, has decided to enter the mobile gaming market, means that even they realize that their dedicated hardware business doesn't provide that great of an outlook for them.

CaviarMeths · May 7, 2015

Tron#1 said:
yeah thanks for the info but any links on it actually being sold at profit... not that I dont believe you I know it has been rumored for a while now

I could be wrong, but I thought the cost of manufacturing Wii Us was already written off in a previous year and production was stopped. Dodgy accounting, but that would mean the Wii U is being sold at a profit now.

Adachi said:
due to the further drop in the dedicated handheld market.

What further drop? The sales of the 3DS have had a slow, steady decline, typical of any piece of hardware in the twilight of its life cycle. Mobile certainly hit dedicated handhelds hard, but we can't say for sure that it's still hitting now. N3DS launch was more successful than the 3DS XL launch, which is a good sign.

AniHawk · May 7, 2015

Joni said:
Bandai.

and all they had to do was merge with namco after they couldn't merge with nintendo.

Adachi · May 7, 2015

casiopao said:
Umm... Don't that show how even during DS and Wii era and crazy amount of software sold, hardware has always been Ninty biggest money maker? Which is why getting the right hardware is more important than just giving up?

Not really. What was the Wii? $200? And the DS? $130?

Pretty obvious that revenue for those things was higher than for software, where they get like what $25-30 per first party game?

LOCK said:
You don't know what you are talking about.

Revenue signifies growth potential of a company. Along with Operating income it shows business growth and operations success.

Low revenue or stagnant revenue usually leads to fewer investors. Few investors usually lead to lower business expenses and activity.

Exactly, along with operating income, revenue on it's own entirely pointless, tell me what the operating income for the hardware is and then we can talk.

A company can have massive revenue streams, if they don't make any profit from it then that's completely worthless.

samar11 · May 7, 2015

BronzeWolf said:
It's amazing that even in a return to profit year, people still call for nintendo's Doom in the hardware space. We've heard this since the N64 and it's not been true since then.

Nintendo won't stop making hardware anytime soon, will people get ver that?

I think it might be due to the fact Nintendo is only a games company, they have nothing else to fall back on if they fail in the console market.

JoeM86 · May 7, 2015

Adachi said:
Ok, so for how freaking long are you people going to ignore the sources that I'm providing that say that the Wii Us' hardware is NOT profitable.

Thrid party licensing would be lost, true, but those will be dropping heavily in the next 5 years anyway, due to the further drop in the dedicated handheld market.

And I didn't say they should just give up, I said they should either go third party or revamp their hardware business so that it can be profitable on really small numbers, way smaller than what they are putting out now.

I mean seriously people, the fact that Nintendo, who was extremely opposed to that idea a couple years ago, has decided to enter the mobile gaming market, means that even they realize that their dedicated hardware business doesn't provide that great of an outlook for them.

For one, those aren't sources. Those are analysts guessing and are in contrary to information we've heard from the source itself.

You did say for them to give up, and your suggestion of revamping is irrelevant considering they ARE profitable.

Joni · May 7, 2015

AniHawk said:
and all they had to do was merge with namco after they couldn't merge with nintendo.

That is like saying Enix couldn't survive without Square. Bandai was a highly profitable company which called off a SEGA merger earlier in its life when the Tamagotchi became a hit. That was a merger of opportunity and growth, not need. But it is easy to look at the market and see that Bandai and SEGA are the only companies to have ever made the transition from first party to third party. Every other company either went bankrupt or had to leave the gaming industry before ever getting that chance.

The following companies are still active on the hardware market.
- Microsoft
- Nintendo
- Sony Computer Entertainment

The following companies stopped on the hardware market and survived on software:
- Bandai
- SEGA

The following companies went bankrupt with their hardware.
- Atari which was later revived under Atari-Infogrames.
- Coleco
- Commodore
- RCA
- SNK which was later revived under SNK Playmore.

The following companies are still alive outside of gaming without ever trying third-party:
- Emerson
- Mattel
- Magnavox as owned by Philips
- Milton Bradley Company as owned by Hasbro
- NEC
- Nokia
- Philips

Neff · May 7, 2015

Adachi said:
http://www.bloomberg.com/news/artic...utlook-disappoints-and-mario-can-t-save-wii-u

The Wii U is not profitable, it isn't paying for shit and in a couple of years their handhelds will most likely not be profitable anymore either. Why the hell do you think investors were so ecstatic about Nintendo going into mobile gaming?

Software is and has always been the money maker in gaming, you'd think this would be known by now, so to assume that Nintendo game output would suffer because of the change to being a 3rd party dev does not make any sense.

This may help you understand why hardware is important to Nintendo.

Porcile · May 7, 2015

samar11 said:
I think it might be due to the fact Nintendo is only a games company, they have nothing else to fall back on if they fail in the console market.

Good thing they are diversifying then.

MrNyarlathotep · May 7, 2015

Adachi said:
Ok, so for how freaking long are you people going to ignore the sources that I'm providing that say that the Wii Us' hardware is NOT profitable.

Alex_Mexico · May 7, 2015

It's crazy depressing how Nintendo expects less than 4 million WiiUs sold in the entire world for a complete year.

Meanwhile Sony expects to sell 4 times as that! But thanks to the failing WiiU is possible that that's the reasons for a Nintendo Land at Universal Studios, lol.

samar11 · May 7, 2015

Porcile said:
Good thing they are diversifying then.

How so?

Edit: you mean entering mobile market? We don't know their plans yet

AniHawk · May 7, 2015

Adachi said:
Ok, so for how freaking long are you people going to ignore the sources that I'm providing that say that the Wii Us' hardware is NOT profitable.

Thrid party licensing would be lost, true, but those will be dropping heavily in the next 5 years anyway, due to the further drop in the dedicated handheld market.

And I didn't say they should just give up, I said they should either go third party or revamp their hardware business so that it can be profitable on really small numbers, way smaller than what they are putting out now.

shrinking their hardware business might not be the right way to go. expecting it won't be as big as it was is probably a good thing to keep in mind, but i think a more fluid hardware business is better for them, and they can achieve that.

i really doubt we'll see another actual console and another actual handheld that work completely independently from one another.

I mean seriously people, the fact that Nintendo, who was extremely opposed to that idea a couple years ago, has decided to enter the mobile gaming market, means that even they realize that their dedicated hardware business doesn't provide that great of an outlook for them.

the real crux of the problem is that dedicated hardware doesn't have a great outlook anywhere aside from sony's ps4. at least with the current model. aside from just having one hardware from this generation having the potential to outsell its predecessor, everyone's showing signs of forming their own digital platforms. ea has ea access and origins, square-enix has two or three things of their own. ubisoft has ubisoft play, sony has ps now and psn. even warner bros. got into the mix with their own thing. the dedicated market has reached a point where it's really just too damn expensive to keep going as is for a whole lot longer.

on the japanese side of things you can see sega peacing out of the traditional market for pc and mobile, konami burning every last bridge, and tri-ace becoming a mobile developer exclusively. even monster hunter 4 is a way for capcom to pour money into mobile in the hopes that something will click. i'm not sure what good it would do for nintendo to jump from one sinking ship to another far less profitable one when they could be securing their future their own way.

Adachi · May 7, 2015

CaviarMeths said:
I could be wrong, but I thought the cost of manufacturing Wii Us was already written off in a previous year and production was stopped. Dodgy accounting, but that would mean the Wii U is being sold at a profit now.

What further drop? The sales of the 3DS have had a slow, steady decline, typical of any piece of hardware in the twilight of its life cycle. Mobile certainly hit dedicated handhelds hard, but we can't say for sure that it's still hitting now. N3DS launch was more successful than the 3DS XL launch, which is a good sign.

And still Nintendo is expecting only 7.6 million in 3DS shipments this year and anybody can pretty much see that the 3DS is going to be the lowest selling Nintendo handheld excluding the Virtual Boy.

Also what do you expect to happen in the next couple years? Literally all analyst expect the mobile gaming market to significantly grow in the next years, do you think that this won't have an impact on dedicated handheld gaming? It sure as hell had an impact until now. You think Nintendos next handheld isn't going to suffer from that market decline?

nephilimdj · May 7, 2015

Neff said:
This may help you understand why hardware is important to Nintendo.

Considering the 3rd party position of WiiU and 3ds, that pic says a lot both ways
Basically making a fraction from wiiu and 3ds that they got on wii from 3rd party licensing (series like Just Dance selling 20million on wii).

JoeM86 · May 7, 2015

nephilimdj said:
Considering the 3rd party position of WiiU and 3ds, that pic says a lot both ways
Basically making a fraction from wiiu and 3ds that they got on wii from 3rd party licensing (series like Just Dance selling 20million on wii).

Third party is still large on the 3DS, especially in Japan.

Yes, they're making a fraction of what they did in the past, but that by no means means that they should just drop it and get nothing. There is no logic to that.

They just need to make their hardware enticing

AniHawk · May 7, 2015

Joni said:
That is like saying Enix couldn't survive without Square. Bandai was a highly profitable company which called off a SEGA merger earlier in its life when the Tamagotchi became a hit. That was a merger of opportunity and growth, not need. But it is easy to look at the market and see that Bandai and SEGA are the only companies to have ever made the transition from first party to third party. Every other company either went bankrupt or had to leave the gaming industry before ever getting that chance.

it wasn't a matter of existing, but being better as a third-party than as a first-party. sega's management is perpetually and hilariously fucked up, but they had more creative freedom as a first-party and more value to the industry back then, too.

bandai's run as a first-party was probably the only example where it was a complete non-factor, probably because they only made a handheld and only in japan and were still making games for other platforms. i wouldn't call their existence after the wonderswan worse. i don't know if it was obviously better though, before the merger.

also, hudson went in halvsies on the pc engine. in the end they were bought by konami just so they could be shut down.

Porcile · May 7, 2015

samar11 said:
How so?

Edit: you mean entering mobile market? We don't know their plans yet

QoL, mobile, toys to life, broader licensing of I.P. There's potentially good money to be had, if they play their cards right. Let's see how it pans out.

Mpl90 · May 7, 2015

Adachi, to be honest, about Nintendo going to mobile, not only Iwata was open to the idea of having their IPs in mobile games (not just apps) since January 2014 (and the was already in the talk with DeNA for a while), but (while the plans went bigger than we expected) one of the main purposes of the mobile push is to get more people interested in their IPs (which connects with their intention of leveraging on their properties) and, consequently, on the more premium experiences that can be found only...on their platform. So much that (as reiterated in this Financial Results) their mobile games will be different from their console games. They're using it as an expansion / advertising tool that can help them both revenue-wise and to gain more people to be interested in their more traditional efforts, not as a substitute to their handheld devices.

And still, I think that, in a few years, the handheld / home distinction won't hold such huge relevance anymore, except for just differentiating the form factors you can choose from in order to get into the Nintendo environment.

Joni · May 7, 2015

AniHawk said:
it wasn't a matter of existing, but being better as a third-party than as a first-party. sega's management is perpetually and hilariously fucked up, but they had more creative freedom as a first-party and more value to the industry back then, too.

The thing is, they didn't go third-party because they thought it would be better than their high points in the console market. They went third-party because at that moment they had a choice between being a bankrupt first-party or being a middling third-party. So, yes, they're better of as third-party seeing as the alternative is them being bankrupt. That is the entire problem with the discussion: so many companies worked themselves to the ground trying to remain first party, SEGA just had the luck to have a little bit of money left before completely self-destructing. Nintendo won't go third-party as long as they can make money on hardware, and if they can't make money on hardware, they will have lost too much money to make it on third-party software.

Adachi · May 7, 2015

JoeM86 said:
For one, those aren't sources. Those are analysts guessing and are in contrary to information we've heard from the source itself.

You did say for them to give up, and your suggestion of revamping is irrelevant considering they ARE profitable.

You mean this?:

"With respect to the impact of Wii U hardware sales on profit and loss, in order to sell 3.60 million units, we have to produce some more hardware units on top of our current hardware inventory. However, since the loss arising due to the hardware production costs being higher than our trade price was taken into account in the previous fiscal year, you could assume that there will be almost no loss this fiscal year for the sales of the 3.60 million hardware units."

http://www.gamnesia.com/news/wii-u-no-longer-being-sold-at-a-loss#.VUs-kJOE0tI

They literally NEVER said that the Wii U was now not being sold at a loss anymore.

dragonfart28 · May 7, 2015

This kinda proves Nintendo didn't need third parties or high sales to make a healthy profit.

They have a solid business model as long as they can create solid first party titles, but we've known this since the N64 era.

Herb Alpert · May 7, 2015

AniHawk said:
nintendo as a first party developer, pays no royalties, sets the rules, and earns royalties from third-party developers. the 3ds is experiencing a pretty normal decline for a decently normal system. it will be five years old at the end of this fiscal year. that by itself doesn't really scream the end of nintendo's time as a hardware manufacturer. the wii u is, unlike the 3ds, a collection of problems that nintendo themselves created for some reason. i think replicating the kinds of boneheaded moves that led to the wii u being what it was would actually take a degree of effort.

neither one of the wii u or 3ds signal that nintendo needs to get out of the hardware business. however, they do signal that nintendo should probably adapt to the new video game market, one that is becoming less and less reliant on the model of needing dedicated boxes that hook up to a tv for video games. they can also learn from the mistakes of the 3ds and wii u. two big ones are nintendo's lineup gaps and the increased focus of the online marketplace. imagine their next platform isn't a console, but rather a digital system, more like steam, that can be used across multiple hardware devices. nx would effectively be their handheld and their console. in the short-term, it lets them make consoles and handhelds. in the long-term, it sets up nintendo the platform-holder in the digital space, for when dedicated hardware is meant for hobbyists and enthusiasts. working this way, they wouldn't need to develop two mario karts a generation or four mario platformers a generation. instead of creating fatigue and disinterest within their own fanbase, they can reach into their past catalog and come out with new takes on old games, or have teams work on new ideas more frequently.

this kind of freedom doesn't happen if they don't have their own platform to work on. without a dedicated gaming platform that nintendo makes, nintendo doesn't earn money on royalties from third-parties. it means they don't as big a cut on software. it means they have to learn new hardware. killing 55% of the revenue they take in means they don't get enough money to spend on the 500 million dollars they pour into research and development on a yearly basis, software that never leaves development, and games that do after enough time to polish them to an acceptable level.

never understimate Nintendo.
Never.

JoeM86 · May 7, 2015

Adachi said:
You mean this?:

"With respect to the impact of Wii U hardware sales on profit and loss, in order to sell 3.60 million units, we have to produce some more hardware units on top of our current hardware inventory. However, since the loss arising due to the hardware production costs being higher than our trade price was taken into account in the previous fiscal year, you could assume that there will be almost no loss this fiscal year for the sales of the 3.60 million hardware units."

http://www.gamnesia.com/news/wii-u-no-longer-being-sold-at-a-loss#.VUs-kJOE0tI

They literally NEVER said that the Wii U was now not being sold at a loss anymore.

It was said in the May 2014 financial briefing

http://www.nintendo.co.jp/ir/en/library/events/140508qa/index.html

you could assume that there will be almost no loss this fiscal year for the sales of the 3.60 million hardware units.

Deal with it.

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Two copies sold? That's not a bomb guys, stop trolling!!!

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