3DS result for Q1 has been havily influenced by shipments for last quarter. I.e. they shipped too much in Q4. Heck, the platform sold to customers more than that just counting Japan and US.
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Nintendo FY13: $70M Net Income; WiiU 3.45M, NDS retires, 3DS/WiiU miss expectations
- Thread starter Parmenides
- Start date
3DS result for Q1 has been havily influenced by shipments for last quarter. I.e. they shipped too much in Q4. Heck, the platform sold to customers more than that just counting Japan and US.
Justzisguyukno
Member
So, Nintendo needs to sell about 460,000 Wii U systems per month to reach 9million by next year, but yet they only sold 390,000 in the last 3 months? Am I reading that correctly?
I know there's a lot of speculation about Nintendo, but one thing I'm certain of is that that is not an 'if'.
Some call it Animal Forest 64-4 already
I just find it funny when people blame Activision for their yearly rehashes and then keep mentioning Nintendo for their innovativeness, which is clearly missing at the moment. Quite obviously, that's related to their business performance as those titles keep costs down (everything's already in place from art style to some assets to game play mechanics) and they sell well as they have some brand recognition.Magicpaint
Member
It's basically a ripple effect of the horrible Q4 performance for the 3DS. The software lineup outside Japan was just not great enough to move the hardware shipments.
Will be interesting to see what's announced that could possibly move 9m WiiUs.
Annoying Old Party Man
Member
Their software is selling consistently brilliantly. They have so many games scheduled to release this year - if they don't make a profit next financial year, it means Nintendo's business model is not working, or Wii U is a level A disaster for the company.
I just don't see them achieving this goal at all...I do expect Wii U sales will likely start improving after E3, but not nearly to the degree Nintendo needs them to, or rather Iwata needs them to, if he is to keep his job. If he had until the end of 2014 to turn it around, then I might be more optimistic.
ULTROS!
People seem to like me because I am polite and I am rarely late. I like to eat ice cream and I really enjoy a nice pair of slacks.
I'm pretty sure Dragon Quest VII and Monster Hunter 3 cracked a million (solely because of Japan). I'm not sure about KH3D... It didn't do so hot in Japan.
zomgbbqftw
Banned
Just doing some more sums, they predict a revenue increase of 44% to ¥920bn this pretty much rules out any price action on 3DS but leaves the possibility of a smallish price cut on Wii U. My guess is that Nintendo intend to couple their Q4 software releases with a $50 price cut on the deluxe unit and hope that it jumpstarts Wii U sales to try and reach that 9m forecast.
$360m operating loss. It's bad. Saved by currency gains, that's not going to happen every year.
$360m operating loss. It's bad. Saved by currency gains, that's not going to happen every year.
Osiris
I permanently banned my 6 year old daughter from using the PS4 for mistakenly sending grief reports as it's too hard to watch or talk to her
So having to cut the Wii U forecast from 5.5million to 4 million, then failing to even hit that by over half a million is "not terrible"?
No, it really is pretty terrible.
The next Kingdom Hearts subtitle?
GetemMa
Member
how is it possible for them to report a net profit of 71 million dollars but such a massive operating loss?
What else does Nintendo do that would make up for such a big operating loss on HW and software?
EDIT: nevermind. I forgot about the currency issue. This is a big let off for Nintendo really. Their mainline business is failing but they don't have to dip into the war chest yet.
What else does Nintendo do that would make up for such a big operating loss on HW and software?
EDIT: nevermind. I forgot about the currency issue. This is a big let off for Nintendo really. Their mainline business is failing but they don't have to dip into the war chest yet.
Wouldn't it be much easier to do a small 3DS price cut seeing the current exchange situation (if it continues to be like now)? Genuine question.
It's easy to forget that it had a good November before sales fell off that cliff.
shinra-bansho
Member
It's not what Nintendo's done, it's what Shinzo Abe's done.
Operating losses in years where consoles don't launch are usually a lot smaller, so your point about the net income not coming every year is factual but doesn't touch on the fact that losses also will not be anywhere near as bad this year.
efyu_lemonardo
May I have a cookie?
what is this about Iwata becoming CEO of NoA?
besides acknowledging they have a problem in that region, what does it effectively mean?
edit: perhaps it means Iwata will be more involved in attempts to secure third party content in the west, as well as communicate directly with large retailers?
besides acknowledging they have a problem in that region, what does it effectively mean?
edit: perhaps it means Iwata will be more involved in attempts to secure third party content in the west, as well as communicate directly with large retailers?
Gianni Merryman
Member
But it sold better in NA and Europe for all I know.
Their war chest is even bigger now XD
zomgbbqftw
Banned
I'm basing it on ¥90 to the dollar and ¥120 to the Euro which is what they have used, but yes in September if it looks like there is not going to be any significant strengthening of the yen from current levels (100/130) then it does give Nintendo room to cut 3DS pricing without eating into profitability.
Wii U is still selling for below cost, and it is going nowhere fast. The only way to meet the 9m projection is to cut prices which will increase the negative margin, or at least piss away any cost saving they make. The Wii U is stuck in a vicious cycle right now of not selling enough software to make up negative hardware margins, but not having sold enough hardware to get software moving. The only way to break the cycle is to aggressively price hardware at a level where the ecosystem becomes self-sustaining long term even with negative hardware margins. Sony achieved this in 2009 when the PS3Slim came out for $299 (below cost) but software sales boost was so huge the division posted a profit overall.
It means a more coherent message and a more streamlined approach, NoA's CEO obviously won't be tied down by Iwata anymore, so hopefully for us it means better western 1st and 2nd party development and better colors for 3DS XL.
StreetsAhead
Member
So, with regards to 'more titles for the rest of the year' for Wii U, for Japan at least:
April: Pokemon Rumble U (eshop)
May: Zzz
June: NSMBU DLC (New Super Luigi)
July: Pikmin
They also have:
Wii Party U ("Summer")
Wii Fit U
LozWWHD ("Fall")
TW101 (Spring~Summer, unless it's further pushed back)
Rayman Legends (Unless deal fell through)
Lego City Undercover
which means they're probably going for 1~2 releases per month in the second half of this year.
April: Pokemon Rumble U (eshop)
May: Zzz
June: NSMBU DLC (New Super Luigi)
July: Pikmin
They also have:
Wii Party U ("Summer")
Wii Fit U
LozWWHD ("Fall")
TW101 (Spring~Summer, unless it's further pushed back)
Rayman Legends (Unless deal fell through)
Lego City Undercover
which means they're probably going for 1~2 releases per month in the second half of this year.
I am definitely curious how Iwata's role as CEO as NoA will change how NoA behaves. Like many of you are saying, I hope this means that more Japanese games will see NA shores, without it taking an extra year or two to do so.
Also...maybe help foster relationships with Western 3rd parties?
Also...maybe help foster relationships with Western 3rd parties?
never going to fucking happen...
shinra-bansho
Member
If they intend for the Wii U to sell 9M units then they're presumably going to incur losses again; it's already selling below cost apparently and it will require a significant price cut to alter its course.
So i'm reading from the comments that their net operating loss was double what Bloomberg predicted, but other articles are saying they made a full year profit of $70Mil. So does that mean despite operating losses they made a profit overall on the whole fiscal year and not the predicted loss?
Yeah. 3DS is actually selling less software units than the PSP.
PSP
FY 2006 - 54.7M
But FY 2014 should be a much better year and they shouldn't have any problem hitting the target.
zomgbbqftw
Banned
Currency translation gains on weaker yen. It is not included in operating income because it is not repeatable.
Thunder Monkey
Banned
Does Nintendo have a feature exclusive better looking GTA5 coming along with their wares this fall?
How do they get 9 million units this coming fiscal year?
How do they get 9 million units this coming fiscal year?
Which games are supposed to push ps4/durango?. I keep hearing people expecting them to thrive and dominate the wii u as soon as they are released yet we don't even know the price nor the launch lineups. Yet we know major WiiU titles are coming this year
That is one angle, of course if you mention the angle of 100b yen profit, a price cut would be the complete opposite direction for them. Honestly I think dropping the deluxe Sku and just adding 32GB to basic + DD of nintendoland is the way forward for Wii U, it looks like a price drop, but more or less it is just a very slight upgrade to the basic model. They could of course still sell a Wii U bundle for the deluxe price, something like Zombi U's bundle, but probably MarioKart U.
9 million is a lofty goal, but focusing on profit will make investors happy, so cutting Wii U's price beyond what I am mentioning would be a bad move for the system IMO.
Bruno MB
Member
Wii U will likely be the least profitable Nintendo system after Virtual Boy, so yes.
Angel Whispers
Member
Kid Icarus has been over a million for quite a while. Since January, IIRC. This is great news, and one would expect it to have more as more people buy a 3DS. More than that, I hope it will encourage them to use this IP more, perhaps make a Wii U game. Ocarina Of Time 3D doing as well as it has can be an encouraging sign for Wii U Wind Waker. We shall see.
zomgbbqftw
Banned
Because of a one off gain. The normal business operations lost them $360m this year.
I expect we're going to have to go through this same dance in a couple of weeks when Sony release their FY data too. Though they won't have an operating loss.
Focussing on long term profitability will please investors. If Iwata came out and said tomorrow that "we're going to cut deeper into the Wii U's margins to force adoption this year to ensure that the installed base is high enough for strong software sales going forwards" it would bring a lot of investor cheer. Right now Nintendo's money is doing nothing and their business is sinking.
Also, your plan makes no sense, it's better to get rid of the Basic SKU and cut the price of the Deluxe to $299 as psychologically people react better to price cuts than added value.
Without aggressive price action the 9m target is not achievable. Unless they score FIFA14 and COD as exclusives there just isn't a route to 9m without a significantly lower entry cost.
tehrik-e-insaaf
Member
Double the predicted operating loss - that's really, really bad - the net income is illusory - it might mean they book accounting gains - but for all intents and purposes, that money is going to stay in US dollars and so it will just be a mark-to-market of their cash assets
The only thing I imagine is if investors trust Nintendo has written off EVERYTHING this time around that needs to be written off and spent the bulk of cash needed to secure software and paid up front for hardware parts for volume discounts - and they know Iwata is going to the US to personally oversee operations there - and despite the big miss they are confident about the operating profit plan - then I can see some stock gains happening (probably why the stock closed up in Japan)...
Still, as optimistic as I am, doubling your expected operating loss without warning, and then backing up your future operating plan on historically unreliable internal projections - makes me extremely nervous
The only thing I imagine is if investors trust Nintendo has written off EVERYTHING this time around that needs to be written off and spent the bulk of cash needed to secure software and paid up front for hardware parts for volume discounts - and they know Iwata is going to the US to personally oversee operations there - and despite the big miss they are confident about the operating profit plan - then I can see some stock gains happening (probably why the stock closed up in Japan)...
Still, as optimistic as I am, doubling your expected operating loss without warning, and then backing up your future operating plan on historically unreliable internal projections - makes me extremely nervous
shinra-bansho
Member
If they went single SKU of the Deluxe only and dropped the price by $100, then you might have a potentially compelling value proposition against a $200 Kinect Family Fun bundle and $149 PS3 Ugly 32GB.
Your stated plan doesn't create a particularly appealing product offering, and if Nintendo is only willing to go half-measures like that then they're willing to let the Wii U languish.
Apparently this guy:
Oh, I thought you were talking about profit for a moment. Then it's just the first guy.
bolded ain't happening.
I figure they won't sell 9 million Wii Us, your plan is suppose to be a way for them to? but it costs Nintendo a whole lot more to compete @ $250 with their deluxe sku, obviously their profit would suffer a lot more this way. Going with the Wii U basic and slightly upgrading it @ the cost of 32GB flash vs the current 8GB flash (and a DD voucher for nintendoland which isn't going to cost Nintendo anything) puts the Wii U at 1 sku with both black and white models, it might only sell 6 or 7 million this year but it would actually not hurt Nintendo as badly as the plan you are coming up with, even if they sell another million or so with your idea, I still think it is a bad one.
peanutbutterlatte
Member
Some call it Animal Forest 64-4 already
You're making the mistake that every Mario title is the same. For every lazy NSMB rehash, we get a 3D Land or a Galaxy. There's no way Wii U Mario will be the same game either.
Thunder Monkey
Banned
I'm just trying to figure out how they expect to sell 9 million WiiU's this fiscal year.Apparently this guy:
and this guy:
Oh, I thought you were talking about profit for a moment. Then it's just the first guy.
I mean Smash Bros, Kart, and 3D Mario can be big draws... but they are looking at selling only 1-1.5 million worldwide by August. And that's being optimistic.
Smash, Kart, Zelda, and a feature exclusive GTA5 that looks better than the PS3/360 versions is the only way I can see them selling 8 million units from September to March.
I wonder how many times it will need to be adjusted down in the coming year?
Some charts...
thanks. do you have any for software sales on each platform launch aligned?