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[Aquamarine]

Operating income is a loss. So they lost money?

Help me understand. I'm an idiot

Nintendo's initial FY 2013 predictions:

Net sales: 820,000
Operating income: 35,000
Ordinary income: 35,000
Net income: 20,000

Nintendo's most recent FY 2013 predictions:

Net sales: 670,000
Operating income: -20,000
Ordinary income: 20,000
Net income: 14,000

The reality (announced today):

Net sales: 635,422
Operating income: -36,410
Ordinary income: 10,482
Net income: 7,099

(in millions of yen)


Operating income is the most important metric for Nintendo that defines the health of the company.

Negative numbers = Operating loss = bad news.

 

[zomgbbqftw]

Apart from it hasn't been released outside of Japan and America at least on 3DS. Plus that never seemed the reason that people jumped on the DS in the first place it was because - 1)Cheap 2)Lifestyle device.

Yes, and the lifestyle aspect came from stuff like having Brain Age on the system, stuff that couldn't be replicated anywhere else because of the touch screen. Brain Age was a huge sensation, and Nintendo's advertising was absolutely on point to make DS into the lifestyle choice that you point out.

3DS doesn't have that advantage now because there is no game on 3DS that has the same broad appeal like Brain Age that can't be replicated on other devices.

 

[Pie and Beans]

The operating loss is worse than WSJ predicted? I apologize, I'm not good at reading fiscal numbers. ;_;

Yep, by double pretty much bang on.

With regards to 3DS, I imagine Nintendo are hoping the newest Pokemon is going to be a hardware driver like none others before it, flanked by Zelda for the older market.

 

[shinra-bansho]

Horrid WiiU numbers.

Could Apr-Jun numbers be even worse??

Probably. Numbers tend to trend down during this period in terms of sell-through. Additionally the first week of 2013 the Wii U was still coming down from launch in Japan and sold 70K i.e. about 7 weeks worth of current sales.

you guys act like the DS is some ancient console... even with my shitty memory I clearly remember Brain Age and Nintendogs being the catalysts. the DS Lite was of course a huge factor as well, but it was the blue ocean games that caused the surge.

Nintendogs released in April 05 (?), when the systems sales were still being combined with the GBA in NPD to mask the numbers.

Although, I don't dispute that such software was what pulled in these new consumers, the system really wasn't resonating until the DS Lite it seems.

 

[RurouniZel]

Yep, by double pretty much bang on.

With regards to 3DS, I imagine Nintendo are hoping the newest Pokemon is going to be a hardware driver like none others before it, flanked by Zelda for the older market.

Thanks. Sucks they're losing money overall. :/

 

[Aquamarine]

Thanks. Sucks they're losing money overall. :/

Nintendo's most recent FY 2013 predictions:

Net sales: 670,000
Operating income: -20,000
Ordinary income: 20,000
Net income: 14,000


Thomson Reuters analyst aggregate predictions:

Net sales: x
Operating income: x
Ordinary income: x
Net income: 14,050


Bloomberg analyst aggregate predictions:

Net sales: x
Operating income: -18,700
Ordinary income: x
Net income: 14,000 likely


The reality (announced today):

Net sales: 635,422
Operating income: -36,410
Ordinary income: 10,482
Net income: 7,099

(in millions of yen)


Any way you shake it, Nintendo missed all predictions and targets.

 

[Ty4on]

Yes, and the lifestyle aspect came from stuff like having Brain Age on the system, stuff that couldn't be replicated anywhere else because of the touch screen. Brain Age was a huge sensation, and Nintendo's advertising was absolutely on point to make DS into the lifestyle choice that you point out.

3DS doesn't have that advantage now because there is no game on 3DS that has the same broad appeal like Brain Age that can't be replicated on other devices.

Yeah and it's clear that the 3DS won't reach anything like the DS numbers, but even more worrying that it is struggling with sales declining despite all the games release lately. The graph over handhelds sold oversees vs Japan really showed how dire the situation was getting. Wonder what Pokemon and no DS will do to those sales.

 

[jcm]

I can't believe they made that ridiculous 100B JPY operating profit forecast. What's the upside? It's obviously a bullshit round number. They will almost certainly revise it down or miss (or both, if they continue their trend of the last several years!). And if they have a great year and hit it, they won't even get any real credit - they'll just be meeting expectations.

They are really, really bad at forecasting results and managing expectations.

 

[grimshawish]

For the sake of the discussion:

GBA Sales as of March 31 2003 (Launched March 2001)
33.81 Million

3DS Sales as of March 31 2013 (Launched Feb 2011)
31.09 Million

http://www.nintendo.com/corp/report/fiscal2003.pdf

 

[Aquamarine]

I can't believe they made that ridiculous 100B JPY operating profit forecast. What's the upside? It's obviously a bullshit round number. They will almost certainly revise it down or miss (or both, if they continue their trend of the last several years!). And if they have a great year and hit it, they won't even get any real credit - they'll just be meeting expectations.

They are really, really bad at forecasting results and managing expectations.

The issue is that Iwata already made a stupid 100B JPY operating profit commitment...Nintendo can't back down from it now, or it will make Iwata look really fucking incompetent as a CEO.

 

[DaBoss]

Good to know Kid Icarus is a million seller.

The GBA was a beast of its own.

 

[Mpl90]

A big part of the 100B Yen forecast depends on Yen exchange rate. If it's like right now (or if it even improves), not only it allows greater profits, but gives them room for price cuts, especially if not so big like a possible 3DS price cut would be (from 169.99 to 149.99 and from 199.99 to 179.99 for the XL).

 

[zomgbbqftw]

Yeah and it's clear that the 3DS won't reach anything like the DS numbers, but even more worrying that it is struggling with sales declining despite all the games release lately. The graph over handhelds sold oversees vs Japan really showed how dire the situation was getting. Wonder what Pokemon and no DS will do to those sales.

Well this is the first Pokemon on 3DS so there will be a good hardware boost, at least enough to offset the current decline, maybe slightly more, but I don't see how it goes from 14m to 18m and software from 49m to 80m.

I can't believe they made that ridiculous 100B JPY operating profit forecast. What's the upside? It's obviously a bullshit round number. They will almost certainly revise it down or miss (or both, if they continue their trend of the last several years!). And if they have a great year and hit it, they won't even get any real credit - they'll just be meeting expectations.

They are really, really bad at forecasting results and managing expectations.

Yes, there is literally no upside to predicting 100bn operating profit. It seems like Iwata made a rod for his own back when he mentioned that as a target in the interview. He should have said "baseline profitability" rather than a specific figure. That gives him a lot more leeway. If he sticks to his guns then I could definitely see Iwata having to resign this time next year when Nintendo inevitably miss the 100bn target by quite some distance.

The worst part is that 30-40bn operating profit and 20bn net profit would be a good target for them and give them latitude to cut Wii U prices and meet shipment targets because as I see it the 9m Wii U shipment target and 100bn operating profit target are mutually exclusive, they can't both be right.

 

[Diddy Kong]

Glad that Kid Icarus + Mario Tennis hit a million sales

 

[Mpl90]

Well this is the first Pokemon on 3DS so there will be a good hardware boost, at least enough to offset the current decline, maybe slightly more, but I don't see how it goes from 14m to 18m and software from 49m to 80m.

The answer? There's not just Pokémon for this year on 3DS. It's more like Pokémon + Mario&Luigi + Mario Golf + Mario Party + Zelda ALTTP2 and so on. There's a big amount of releases incoming, + third party releases, especially in Japan (MH4 being the biggest of them by far right now).

 

[phosphor112]

Sucks they didn't even hit the 4m units they dropped their forecasts to.

 

[zomgbbqftw]

The answer? There's not just Pokémon for this year on 3DS. It's more like Pokémon + Mario&Luigi + Mario Golf + Mario Party + Zelda ALTTP2 and so on. There's a big amount of releases incoming, + third party releases, especially in Japan (MH4 being the biggest of them by far right now).

The people who want those games probably already own a 3DS except some guys who want Pokemon. There is nothing like Brain Age to expand the audience like Nintendo were able to for DS.

This is what made DS explode:

http://www.youtube.com/watch?v=qMxfi7zs5ls

And that just isn't going to happen this time. All of the games you listed play to the same audience, namely gamers.

 

[shinra-bansho]

Just looking at sell-through v. shipment.

North America
Shipment = 1.520M
Nov-Mar NPD LTD = 1.075M
Δ = 445K

Weekly sales rate (Jan-Mar average) = 13.57K*
Apr-Jun based on this sales rate = 176K

Even with presumably some Canadian sales, the channel will probably still be really full heading into next quarter.

Japan
Shipment = 920K
Famitsu LTD (through Apr 14) = 885K
Δ = 35K

Weekly sales rate (Jan 07-Apr 14 average) = 11.91K*
Remaining H1 = 131K

----

zomg, not sure if you can say anything with regard to European sales and how likely they are to be able to sell through their shipments.

EDIT: *Looking at today's MC/Famitsu, I'm probably being overly generous with both of these sales rates.

 

[jcm]

The issue is that Iwata already made a stupid 100B JPY operating profit commitment...Nintendo can't back down from it now, or it will make Iwata look really fucking incompetent as a CEO.

Oh, right, I was suggesting they revise it yet. That said, I think the prediction itself makes Iwata look really fucking incompetent as a CEO. Maybe he was given an ultimatum? It just doesn't make sense to back yourself into a corner like that.

 

[Linkified]

The people who want those games probably already own a 3DS except some guys who want Pokemon. There is nothing like Brain Age to expand the audience like Nintendo were able to for DS.

This is what made DS explode:

http://www.youtube.com/watch?v=qMxfi7zs5ls

And that just isn't going to happen this time. All of the games you listed play to the same audience, namely gamers.

Better that than call yourself a lifestyle device and being directly compared with Apple. At least they are trying to differentiate the product. Honestly I would hazard the guess the PSP audience who wants Monster Hunter 4 haven't switched yet for 3DS yet.

 

[zomgbbqftw]

zomg, not sure if you can say anything with regard to European sales and how likely they are to be able to sell through their shipments.

It's not going well. But the 1.01m shipment for "other" is much lower than for US, but sell through is still quite poor. If there are any gaps in Nintendo's data tomorrow I will do my best to fill them.

 

[Morfeo]

Neither Wii U or 3DS look especially healthy according to these numbers. 3DS have lower margins, lower hardware-sales, lower software-sales, and maybe more importantly, less thirdparty support than its predecessor, while the Wii U is of course almost a Vita-level disaster at this point. This will probably change somewhat when Shenmue 3/Versus XIII/F-Zero UX/Panzer Dragon Saga Remake/Metroid Another M/Star Tropics 3 - or maybe rather Galaxy 3 and Mario Kart 8 releases later this year, but it seems apparent to me that Wii u will most probably end up like an N64/NGC-level flop with an irrelevant marketshare - but still profitable for Nintendo. Maybe 35 million sold is a decent guess? It will be interesting to see what kind of foundation this will lay for another generation, and how it will affect their focus on creativity and alternative thinking.

 

[zomgbbqftw]

Better that than call yourself a lifestyle device and being directly compared with Apple. At least they are trying to differentiate the product. Honestly I would hazard the guess the PSP audience who wants Monster Hunter 4 haven't switched yet for 3DS yet.

Yes, that may be true, but the premise of the discussion is that 3DS will not be able to match DS sales because it lacks the titles that gave access to the expanded audience. I don't get why you seem to disagree with this idea.

Neither Wii U or 3DS look especially healthy according to these numbers. 3DS have lower margins, lower hardware-sales, lower software-sales, and maybe more importantly, less thirdparty support than its predecessor, while the Wii U is of course almost a Vita-level disaster at this point. This will probably change somewhat when Shenmue 3/Versus XIII/F-Zero UX/Panzer Dragon Saga Remake/Metroid Another M/Star Tropics 3 - or maybe rather Galaxy 3 and Mario Kart 8 releases later this year, but it seems apparent to me that Wii u will most probably end up like an N64/NGC-level flop with an irrelevant marketshare - but still profitable for Nintendo. Maybe 35 million sold is a decent guess? It will be interesting to see what kind of foundation this will lay for another generation, and how it will affect their focus on creativity and alternative thinking.

The difference between GCN and Wii U is that GCN was profitable from the start and they had huge hardware profit margins. Wii U currently has a negative margin.

For the sake of the discussion:

GBA Sales as of March 31 2003 (Launched March 2001)
33.81 Million

3DS Sales as of March 31 2013 (Launched Feb 2011)
31.09 Million

http://www.nintendo.com/corp/report/fiscal2003.pdf

Same number of quarters:

NDS - 35.61m Q32006/7

However they are not CY aligned so it's a weird comparison. With next quarter included, NDS gets up to 40.29m for FY2007. I don't see 3DS matching that performance. Then in the next quarter it did 6.98m, again I don't see how 3DS is going to be up from 1.86m YoY to anywhere near that level.

 

[Plinko]

For the sake of the discussion:

GBA Sales as of March 31 2003 (Launched March 2001)
33.81 Million

3DS Sales as of March 31 2013 (Launched Feb 2011)
31.09 Million

http://www.nintendo.com/corp/report/fiscal2003.pdf

That's impressive considering the vastly different marketplace in which each was released.

 

[Morfeo]

The difference between GCN and Wii U is that GCN was profitable from the start and they had huge hardware profit margins. Wii U currently has a negative margin.

Oh yeah, I definitely agree, which is why it will be especially interesting how it will affect their general approach going forward.

 

[Linkified]

Yes, that may be true, but the premise of the discussion is that 3DS will not be able to match DS sales because it lacks the titles that gave access to the expanded audience. I don't get why you seem to disagree with this idea.

Because those consumers won't buy another handheld/console that plays games and that is what Brain Age is was, for a long time. Those consumers tried the entertainment genre but aren't ingrained enough in that genre to buy another device like that. So it is unreasonable to ever assume another platform to ever going to gain the same level of units ever again.

So they are trying to distance themselves from that reliance on lifestylers.

 

[jcm]

For the sake of the discussion:

GBA Sales as of March 31 2003 (Launched March 2001)
33.81 Million

3DS Sales as of March 31 2013 (Launched Feb 2011)
31.09 Million

http://www.nintendo.com/corp/report/fiscal2003.pdf

Do you have the GBA quarterly numbers? I'd like to add them to my TTM comparison, but I'm too lazy to track them all down.

 

[zomgbbqftw]

Do you have the GBA quarterly numbers? I'd like to add them to my TTM comparison, but I'm too lazy to track them all down.

http://en.wikipedia.org/wiki/Nintendo_DS_sales

Because those consumers won't buy another handheld/console that plays games and that is what Brain Age is was, for a long time. Those consumers tried the entertainment genre but aren't ingrained enough in that genre to buy another device like that. So it is unreasonable to ever assume another platform to ever going to gain the same level of units ever again.

So they are trying to distance themselves from that reliance on lifestylers.

Which is what most people here are pointing out, so what's the problem? 18m seems like a big target because like you (and others) have pointed out there is no software coming that appeals to the expanded audience beyond those who would have bought a 3DS anyway.

 

[zomgbbqftw]

DP

 

[Z3M0G]

Oc-Dc 3.06
Ja-Mr 0.39

Holy... shit...

 

[jcm]

http://en.wikipedia.org/wiki/Nintendo_DS_sales

Thanks, but those are DS, and parmenides helpfully puts them in the OP for us . I wanted GBA.

 

[grimshawish]

However they are not CY aligned so it's a weird comparison. With next quarter included, NDS gets up to 40.29m for FY2007. I don't see 3DS matching that performance. Then in the next quarter it did 6.98m, again I don't see how 3DS is going to be up from 1.86m YoY to anywhere near that level.

We'll see what happens with Pokemon later I suppose; but lets be honest if 3DS were going to match the DS peak numbers, it should technically already be there.

Do you have the GBA quarterly numbers? I'd like to add them to my TTM comparison, but I'm too lazy to track them all down.

Well I just took it from the FY reports, so you should find breakdowns quarter to quarter in those.
http://www.nintendo.com/corp/annual_report.jsp

Nothing for before 2003 there though.

 

[Linkified]

Which is what most people here are pointing out, so what's the problem? 18m seems like a big target because like you (and others) have pointed out there is no software coming that appeals to the expanded audience beyond those who would have bought a 3DS anyway.

Nah I'm not saying that, I'm saying the lifestylers have left gaming - therefore the worst thing Nintendo can do is produce software which caters for them. The 18m doesn't seem that insane when you consider this whole year is going to be sold on nostalgia alone.

 

[Nirolak]

While the Wii U gets the most focus financially, I can't help but feel Nintendo should continue looking into ways to spur the 3DS in the West.

At least the software line-up is more optimistic this fiscal year.

 

[speedpop]

Which is what most people here are pointing out, so what's the problem? 18m seems like a big target because like you (and others) have pointed out there is no software coming that appeals to the expanded audience beyond those who would have bought a 3DS anyway.

This argument seems silly. Why did so many people buy a PS2 then?

While the Wii U gets the most focus financially, I can't help but feel Nintendo should continue looking into ways to spur the 3DS in the West.

At least the software line-up is more optimistic this fiscal year.

Nintendo's future lies in the ways of bridging handheld and console. The days of a dedicated piece of hardware to hook up to the TV exclusively are over. (or that's the way I want it to go)

 

[StreetsAhead]

While the Wii U gets the most focus financially, I can't help but feel Nintendo should continue looking into ways to spur the 3DS in the West.

At least the software line-up is more optimistic this fiscal year.

Pokemon, Golf, Zelda, Donkey Kong, Mario Party and M&LRPG are just about the biggest things they could drop. If they don't spur sales, there's no hope.

Unless there's a 3DSocial, with better camera, original size but larger screen, more RAM with integrated Miiverse. Or a price drop to DS levels.

 

[Meier]

Wii

Wii Sports - 2,390,000 / 81,990,000
Mario Kart Wii - 1,820,000 / 34,260,000
Wii sports Resorts - 1,750,000 / 31,890,000
Super Mario Galaxy - 1,040,000 / 11,720,000
New Super Mario Bros. Wii - 1,020,000 / 27,880,000
Super Smash Bros Brawl - 690,000 / 11,490,000
Wii Fit Plus - 380,000 / 20,860,000

Those Wii software numbers are unbelievable. My goodness.

 

[speedpop]

Pokemon, Golf, Zelda, Donkey Kong, Mario Party and M&LRPG are just about the biggest things they could drop. If they don't spur sales, there's no hope.

Unless there's a 3DSocial, with better camera, original size but larger screen, more RAM with integrated Miiverse. Or a price drop to DS levels.

Or a new IP to deal with the social times of 2010+

Those Wii software numbers are unbelievable. My goodness.

Just remember that Konami were patting themselves on the back for the overall sales of Metal Gear in the 30m+ position. Pack-in bundle or not, to face the fact that Mario Kart Wii shat all over that 30-year franchise kinda drives the point home that some companies and franchises mean nothing in the grand scheme of things when it deals with the gaming industry.

 

[Polari]

Pokemon, Golf, Zelda, Donkey Kong, Mario Party and M&LRPG are just about the biggest things they could drop. If they don't spur sales, there's no hope.

Unless there's a 3DSocial, with better camera, original size but larger screen, more RAM with integrated Miiverse. Or a price drop to DS levels.

They really need to come out with a 3DS Lite for $140-150 at E3. The hardware can't cost them that much to make anyway.

 

[StreetsAhead]

Or a new IP to deal with the social times of 2010+

Short of a break out hit, like Pokemon, most IP take a few releases to become something that spurs sales.

 

[Mileena]

Wii U numbers will get worse. There's like zero releases till later Summer lol

 

[jvm]

Thanks, but those are DS, and parmenides helpfully puts them in the OP for us . I wanted GBA.

Quarterly figures for GBA are not available before a certain date. I'll have my data out later, but for now I'm at work.

 

[lunchwithyuzo]

Wii U numbers will get worse. There's like zero releases till later Summer lol

Yeah, unless there's a MAJOR price drop, Q2 and half of Q3 can essentially be written off. And really, it's not like August is really even all that strong (Pikmin 3, Blacklist), the real heat isn't coming until fall.

 

[Pie and Beans]

Wii U numbers will get worse. There's like zero releases till later Summer lol

I can only assume they're going to SegaSaturn SOMETHING at E3. Wonderful 101 maybe and Wii Fit U?

Or maybe they'd be crazy enough to Excitebots Retro's next big thing and jam that into July?

 

[Schnozberry]

Oc-Dc 3.06
Ja-Mr 0.39

Holy... shit...

Not good, but I guess it can only go up.... You'd think.

They need games and an actual marketing plan.

 

[Sammy Samusu]

In addition, we are planning to more actively support the Japanese software developers in distributing their key titles overseas.

Good to hear.

 

[Captain Smoker]

Thanks, but those are DS, and parmenides helpfully puts them in the OP for us . I wanted GBA.

Left hardware / right software

shipped numbers. (!yearly totals are wrong because of combined quartals!)

 

[speedpop]

Short of a break out hit, like Pokemon, most IP take a few releases to become something that spurs sales.

What Nintendo needs to do is re-tap in to that additive nature of today's generation. People want to complete shit, but without the hoops and jumps it might take from setting up a cable to trade or getting online. But they also want to represent themselves - humanity loves to show off. Fashion will always dictate our lives.

Owning a monster or three of various subsets isn't going to amount to anything in this lifestyle. We need to be different from Person A00000001 through to Person Z59876432. Nintendo seem to have nailed down these concepts together with Pokemon and Animal Crossing and Tomodachi Collection, but it's all about combining them together in to something brand new and unveiling it within a gameplay perspective. Something that goes beyond what we think of The Sims or what have you.

 

[Shao Kahn Brewing a Stew]

1. Good to hear about Iwata's promotion.
2. Good to hear there was no net loss as predicted by 'analysts'.
3. Sad to see poor sales for WiiU. They better sell 10+million units by the end of the year.

 

[StreetsAhead]

What Nintendo needs to do is re-tap in to that additive nature of today's generation. People want to complete shit, but without the hoops and jumps it might take from setting up a cable to trade or getting online. But they also want to represent themselves - humanity loves to show off. Fashion will always dictate our lives.

Owning a monster or three of various subsets isn't going to amount to anything in this lifestyle. We need to be different from Person A00000001 through to Person Z59876432. Nintendo seem to have nailed down these concepts together with Pokemon and Animal Crossing and Tomodachi Collection, but it's all about combining them together in to something brand new and unveiling it within a gameplay perspective. Something that goes beyond what we think of The Sims or what have you.

I mean this in the nicest possible way but do you work in marketing? That sounds like exactly the kind of buzz-word-filled, but incredibly vague product brief I used to get.