• Hey, guest user. Hope you're enjoying NeoGAF! Have you considered registering for an account? Come join us and add your take to the daily discourse.

Was this Iwata's Master Plan All Along?

Status
Not open for further replies.
B

BD1

Banned
Nintendo is burning according to many on GAF. And while the WiiU is definitely having its problems, I'm asking myself, was this the master plan the whole time? Nintendo finished with a red ledger in it's last fiscal year. The first loss in 30 years. There were a variety of factors that contributed to that loss, many still affecting the company, but Nintendo still gave guidance that they would return to profitability by their fiscal end this March.

During the US Holiday season, the WiiU sold 885,000 units. You've all seen the reactions to those numbers on the front page. This is not the thread to have that discussion. The Wii U is also the only hardware Nintendo is currently selling at a loss. The 3DS (now profitable) sold 1.79m units, DS (profitable) sold 840,000 units and remarkably the Wii sold 895,000 units. That's 3,525,000 units of money making hardware over a 60 day trading period. Of that, the Wii and DS combined for 1,735,000 units. The Wii and DS were profitable in 2006/2007, and their margins have only gotten fatter since.

So was this the real strategy? Launch the Wii U to the hardcore fans and begin to build their install base while taking a small loss-to-small profit, but protect the bottom line by pulling every last dollar out of the Wii/DS and 3DS? Clearly Wii U is not performing to guidance or expectation, but the continued success of the Wii/3DS/DS will improve the companies profitability.

Nintendo is a business after all, and their number one responsibility is to make money.

EDIT
I guess I did not articulate my point. Theory is that Nintendo is happy to see such huge numbers for the Wii, DS and 3DS and in fact likes the parity across four systems this holiday because it is more profitable for them.
 
D

deviljho

Member
Regardless of the 5.5 million target, no one, including Iwata, saw Animal Crossing and the subsequent 3DS sales numbers coming.
 
N

nickcv

Member
that's everyone strategy every single time, in every single electronic businness
the reason because you keep around old hw is because it's a huge profit compared to the newest one.

but if you think they intended to sell so few Wii U units, you are wrong
 
E

erpg

GAF parliamentarian
I had no idea irrationality through brand loyalty had become this bad.

The first three quarters of you post include mentions of fiscal loss, but you finish up with the definition of a business and profit. I'm not seeing the genius scheme here.
 
S

stilgar

Member
I think the strategy for launch was "we already buit the name, the buzz will do the rest". It parlty failed. Move on to another plan.
 
M

metalslimer

Member
Uh if it takes one software purchase to be profitable unless the Wii U had an attach ratio less than 1 Nintendo would be making money with more Wii U sold so this "master plan" sounds very foolish
 
B

BD1

Banned
Lyphen said:
I had no idea irrationality through brand loyalty had become this bad.

The first three quarters of you post include mentions of fiscal loss, but you finish up with the definition of a business and profit. I'm not seeing the genius scheme here.
Click to expand...

I own and play games on all the consoles.

You might want to read my post again.
 
I

Ingueferroque

Banned
I'd like some more information about the fact that WiiU is selling at a loss, I find it hard to believe.. unless those are R&D costs.

At $350 it was never going to be a huge mainstream hit, and without the hook of the original Wii (and let's face it, the gamepad itself doesn't really seem to do it for hardcore gamers/isn't a huge hit with the the mainstream crowd).. I think Nintendo tried too hard to appeal to both markets and ended up missing both. Not to mention the Wii-U name itself is just terrible and confusing. People don't know what it is.

Of course this could all change with Nintendo's software offerings... E3 is going to be insane this year.
 
M

meltingparappa

Member
Iwata (or probably just Reggie) said that the Wii U is profitable after they sell a single game. Since the basic system doesn't come with one, you'd expect they aren't looking at those sales numbers and going "Christ, oh god, please... I hope people stop buying our system, it's killing us!"

The discount on the digital purchases in the deluxe bundle almost guarantees that people will be using the store, and even with the discount, that probably has a MUCH bigger profit margin than retail copies.

But of course all launches of course take advantage of "hardcore" early adopters. They're much more willing to pay a higher price point, and more likely to buy more games, even typically crummier ones at that. Call that the "Red Steel" effect, and it benefits everyone except the goodwill of the consumer.
 
Z

Zia

Member
I recently had someone explain to me that iOS 6 Maps was a calculated effort by Apple to force Google to bring the very best version of Maps to iOS, after the iOS version started lagging behind the Android version.

That is slightly less insane than what you've posted, OP.
 
K

Kusagari

Member
What the fuck is this thread? Besides being spin.

And no I don't think Nintendo is happy that the system is sitting on shelves and the games are selling atrociously.
 
P

Pie and Beans

Look for me on the local news, I'll be the guy arrested for trying to burn down a Nintendo exec's house.
Interfectum said:
This NPD has been rough for some of you.
Click to expand...

What goes up must come down. People rarely react well to plummeting back to Earth from Sales Heaven at speed though so we get to enjoy the hysteria as they do.
 
B

BD1

Banned
Interfectum said:
This NPD has been rough for some of you.
Click to expand...

Nope. I will readily admit that Wii U has serious issues ahead of it and is not selling to Nintendo's guidance or GAF expectations. This thread is not about that.

This thread is about Nintendo's strategy to market and sell all four platforms, specifically the profitable ones.
 
D

dollartaco

Member
meltingparappa said:
Iwata (or probably just Reggie) said that the Wii U is profitable after they sell a single game. Since the basic system doesn't come with one, you'd expect they aren't looking at those sales numbers and going "Christ, oh god, please... I hope people stop buying our system, it's killing us!"

The discount on the digital purchases in the deluxe bundle almost guarantees that people will be using the store, and even with the discount, that probably has a MUCH bigger profit margin than retail copies.

But of course all launches of course take advantage of "hardcore" early adopters. They're much more willing to pay a higher price point, and more likely to buy more games, even typically crummier ones at that. Call that the "Red Steel" effect, and it benefits everyone except the goodwill of the consumer.
Click to expand...

Just FYI, Nintendo walked that "profitable after one game" claim. They didn't indicate how many games it really took.
 
R

RurouniZel

Asks questions so Ezalc doesn't have to
I love Nintendo and all, but seriously people, face facts. The Super Wii is not creating the same hype and excitement the original did. It will not have any significant new announcements for a few months to help this. It may even suffer a 3DS-esque price cut. The 3DS is not going to dominate the handheld space like the DS did. Not in the world of smartphones and tablets.

This isn't some master plan. It's just the natural cycle of things. Nintendo is not doomed. They're just not red hot anymore.
 
M

metalslimer

Member
If Wii U doesn't perform well, 3rd parties won't give a crap about it. If 3rd parties don't give a crap, that negatively affects Wii U down the line. Nintendo is the most incompetent company in videogames if this their idea of a master plan. Luckily, this is probably not the case
 
P

Phaethon0017

Member
"If you outsell me, my company will become more powerful than you could possibly imagine."

KtGyo.jpg
 
1

1-D_FTW

Member
BD1 said:
Nintendo is burning according to many on GAF. And while the WiiU is definitely having its problems, I'm asking myself, was this the master plan the whole time? Nintendo finished with a red ledger in it's last fiscal year. The first loss in 30 years. There were a variety of factors that contributed to that loss, many still affecting the company, but Nintendo still gave guidance that they would return to profitability by their fiscal end this March.

During the US Holiday season, the WiiU sold 885,000 units. You've all seen the reactions to those numbers on the front page. This is not the thread to have that discussion. The Wii U is also the only hardware Nintendo is currently selling at a loss. The 3DS (now profitable) sold 1.79m units, DS (profitable) sold 840,000 units and remarkably the Wii sold 895,000 units. That's 3,525,000 units of money making hardware over a 60 day trading period. Of that, the Wii and DS combined for 1,735,000 units. The Wii and DS were profitable in 2006/2007, and their margins have only gotten fatter since.

So was this the real strategy? Launch the Wii U to the hardcore fans and begin to build their install base while taking a small loss-to-small profit, but protect the bottom line by pulling every last dollar out of the Wii/DS and 3DS?

Nintendo is a business after all, and their number one responsibility is to make money.

EDIT
I guess I did not articulate my point. Theory is that Nintendo is happy to see such huge numbers for the Wii, DS and 3DS and in fact likes the parity across four systems this holiday because it is more profitable for them.
Click to expand...

Impossible to have an intelligent discussion without discussing the facts.
 
Neff

Neff

Member
Nintendo's strategy: Don't do anything stupid (conveniently ignoring the VB here) or cash-haemorrhangly expensive, and release games people want.

It's worked ever since they started in the videogame business, and it's still working.
 
D

Dave Meltzer

Banned
Reggie said the Wii U is profitable if you buy a game. So seeing as everybody buys a game, I'm not seeing the necessity to intentionally perform like crap during what is traditionally one of the best periods for a system.
 
O

outunderthestars

Banned
No CEO's strategy involves letting the stock price drop roughly 75%.

Dave Meltzer said:
Reggie said the Wii U is profitable if you buy a game. So seeing as everybody buys a game, is not seeing the necessity to intentionally perform like crap during what is traditionally one of the best periods for a system.
Click to expand...

He misspoke and corrected his statement.

Also, if the Op's theory was true, why is the lead image on the Wii U site people using the Wii U as a karaoke machine?

sing-party-2.jpg
 
T

Taker666

Member
metalslimer said:
If Wii U doesn't perform well, 3rd parties won't give a crap about it. If 3rd parties don't give a crap, that negatively affects Wii U down the line. Nintendo is the most incompetent company in videogames if this their idea of a master plan. Luckily, this is probably not the case
Click to expand...

If Wii U does perform well...3rd parties won't give a crap about it.

It really doesn't seem to matter if Nintendo sells 20 million or 100 million when it comes to 3rd party support for their home consoles...

...or their handhelds (in the west).
 
M

monome

Member
Nintendo of course use their products porfolio to stay competitve and make money.
So yeah they definitely launched both 3DS and WiiU at a time when Wii/DS would still make them money so they build a userbase steadily without bleeding money and make bank with some evergreen titles once their portfolio is 99% WiiU/3DS.

that said I would dare say they're probably a good 6 months late when it comes to the release dates of their last 2 consoles.
Hopefully the new research center and new organisation will help smooth the next transition.
 
K

krae_man

Member
Considering the number of sales the 3ds and DS had over the holidays. Nintendo probably wasn't making money off of those either.
 
B

Bony Manifesto

Member
BD1 said:
Nope. I will readily admit that Wii U has serious issues ahead of it and is not selling to Nintendo's guidance or GAF expectations. This thread is not about that.

This thread is about Nintendo's strategy to market and sell all four platforms, specifically the profitable ones.
Click to expand...

Surely you've torpedoed your own argument there though? If you agree that the Wii U has not sold as much as Nintendo hoped, surely you have to agree that there can't have been some deliberate strategy from Nintendo to keep Wii U sales as low as possible.

It's the same old horseshit that was going around at the PS3 launch in order to justify low sales of Sony's new platform at the same time their older one was still selling gangbusters.
 
B

BD1

Banned
monome said:
Nintendo of course use their products porfolio to stay competitve and make money.
So yeah they definitely launched both 3DS and WiiU at a time when Wii/DS would still make them money so they build a userbase steadily without bleeding money and make bank with some evergreen titles once their portfolio is 99% WiiU/3DS.

that said I would dare say they're probably a good 6 months late when it comes to the release dates of their last 2 consoles.
Hopefully the new research center and new organisation will help smooth the next transition.
Click to expand...

This is the point I'm trying to make.
 
B

BD1

Banned
Bony Manifesto said:
Surely you've torpedoed your own argument there though? If you agree that the Wii U has not sold as much as Nintendo hoped, surely you have to agree that there can't have been some deliberate strategy from Nintendo to keep Wii U sales as low as possible.

It's the same old horseshit that was going around at the PS3 launch in order to justify low sales of Sony's new platform at the same time their older one was still selling gangbusters.
Click to expand...

Please show me where I said it was a deliberate plan for Wii U to sell below expectations? You decided this thread was some sort of justification for Wii U's sales numbers, which I clearly pointed out it wasn't.

My point is that, the Wii and DS were a huge piece of the puzzle for Nintendo this Holiday. They wanted huge numbers of those systems. More importantly, they needed huge numbers for those systems to insure a profitable fiscal year.
 
O

outunderthestars

Banned
BD1 said:
Please show me where I said it was a deliberate plan for Wii U to sell below expectations? You decided this thread was some sort of justification for Wii U's sales numbers, which I clearly pointed out it wasn't.

My point is that, the Wii and DS were a huge piece of the puzzle for Nintendo this Holiday. They wanted huge numbers of those systems. More importantly, they needed huge numbers for those systems to insure a profitable fiscal year.
Click to expand...

The marketing message is not gear towards hardcore fans. The company was clearly trying to reach the casual/family audience.

Looks at this happy Nintendo family!

wii-u-tv-ad.jpg


wiiu-us-580x319.jpg


5d985fe01394329a960e766f191c24a3.jpg


That is not a marketing campaign aimed at the hard core
 
Status
Not open for further replies.

Similar threads

Full Q&A English Summary of Nintendo's Financial Results Briefing for Fiscal Year Ended March 2024
Business
0
400
Thick Thighs Save Lives replied
GVMERS: Lies, Confusion and The Tragedy of Wii U
Drama
44
3K
Alan Wake replied
Nintendo says it will overcome challenges of generational transition with ‘unique propositions’
News Platform 2
56
4K
newtypepilot replied
Nintendo Q3 FY 23/24 Earinings Report: Hardware 6.90m, LTD 139.36M. SMB Wonder 11.96M
Sales-Age 2
86
6K
Oberstein replied
Is the Meta Quest a Wii U-sized flop? Software numbers suggest it might be - Arse Technica
Sales-Age
46
4K
Reallink replied
Top Bottom