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[KillerMan91]

The gaming division is a drop in the bucket compared to divisions that actually make money, like the credit dept

Oh. Sure. Margins have never been that high for their gaming division. If I remember right even during heyday of PS2 they only made something like little over a billion during best year. Maybe this gen though they will manage to monetize their leading position better trough PSN for example.

 

[vinnygambini]

"Uh," wrong. Securities do not equal raw cash and deposits on hand in the bank. Did I write "cash and cash equivalents?" No, I did not.

You can lose the backhanded snippy Nintendo Defense Force "uh" sarcasm any time.

You knew very well what the previous poster was claiming.

Prior to their Buyback program, Nintendo had 10 Billion in Cash & Equivalents.

Now, their liquid assets are at 8 Billion $.

Please.

 

[The Abominable Snowman]

A few observations:

• Gross Profit last year was 31.6% while it's 47.3% this year. This is the good news - they are much more profitable making their products. I'm assuming they're getting better pricing on parts now. There might be some product mix driving this as well. EDIT: SW/HW splits are 53.3%/46.7% of sales for last year and 53.4%/46.6% of sales this year, so any mix is most likely hardware mix.

Would this be affected by the tens of thousands of Wii U consoles they had to buy back/get returned last year during the same time frame?

 

[Father_Brain]

Any idea on numbers?

Afraid not, just heard from an acquaintance in the accounting department that a bunch of his managers were laid off. Something to do with at least a partial consolidation of NOA and NOC operations

 

[RavenXtra]

Better than expected, hopefully they can keep it up!

 

[Schnozberry]

Would this be affected by the tens of thousands of Wii U consoles they had to buy back/get returned last year during the same time frame?

Yeah, they took a pretty significant hit in reporting periods last FY due to share buybacks and higher than predicted inventory.

 

[Celine]

"Uh," wrong. Securities do not equal raw cash and deposits on hand in the bank. Did I write "cash and cash equivalents?" No, I did not.

You can lose the backhanded snippy Nintendo Defense Force "uh" sarcasm any time.

There is a reason they are called "cash equivalents".

 

[casiopao]

Afraid not, just heard from an acquaintance in the accounting department that a bunch of his managers were laid off. Something to do with at least a partial consolidation of NOA and NOC operations

If it is not reported, i would guess that it is the normal lay off? Like maybe one or two people being lay-off due to inefficient or something like that rather than the NoE ones which is a huge lay off(in Ninty case) due to moving their HQ to other city?

 

[AirBrian]

Would this be affected by the tens of thousands of Wii U consoles they had to buy back/get returned last year during the same time frame?

Depends on how they recorded it. I don't remember what exactly they did - do you have a link? The only thing I can find is the share buy-back, which does not affect GP.

 

[Snakeyes]

Do we know of anyone else who usually live tweets Nintendo's investor meetings aside from David Gibson?

 

[JinjoUnchained]

This is encouraging news. Nintendo's goal was to always remain profitable through good times and bad. Even while getting trounced in during the Game Cube era, they still were profitable off of the device compared to their competitors. Some of us were concerned that the home console market has become prohibitive to that kind of strategy, but it appears that they went in the red due more to some poor decisions than the inherent nature of the market. It's particularly heartening because I love their new software strategy and I'd like to see it encouraged by healthy sales. Good job Iwata!

 

[Elios83]

Not a lot to say:

+ Profitable quarter, but a quarter alone doesn't make a trend.

- Really low console sales both for Wii U and 3DS

 

[Rösti]

Do we know of anyone else who usually live tweets Nintendo's investor meetings aside from David Gibson?

None that I know of. NStyles live tweeted from the the 74th Annual General Meeting of Shareholders, but I don't think he/she is an analyst or institutional investor, I could be wrong.

It would be great if Nintendo made available a webcast of these briefings. Microsoft, Sony and a bunch of other companies in the industry do so I find it strange that Nintendo doesn't. At least in this context, there's little to gain from being different. The slides and the Q&A are of course great and work well, but still.

 

[Professor Renegade]

 

[Tripon]

Do we know of anyone else who usually live tweets Nintendo's investor meetings aside from David Gibson?

David Gibson isn't allowed to live tweet investor meetings anymore.

 

[Pociask]

David Gibson isn't allowed to live tweet investor meetings anymore.

What the what. Booooo.

Good on Nintendo for climbing out of the hole. Still, comparing third year Wii U hardware and software sales to third year Wii hardware and software sales... uhg. What a waste of a generation.

 

[Muzy72]

How soon does Nintendo usually post the English slides online?? I don't know if I can handle the lack of live tweets! DX

 

[DXB-KNIGHT]

A bit early for that and I don't think the WiiU is what will be printing Nintendo money.
Iwata needs to be more strict like during the Wii generation, it seemed he softened up during 3DS and WiiU same with Reggie. Both looked very confident before launching the DS and Wii and both looked skeptical during 3DS and WiiU. Did Nintendo internally hated the Wii/DS era that pushed Iwata to expand Nintendo beyond Video Games?

 

[KooopaKid]

Excellent news. It means Nintendo doesn't need huge sales to stay in business and keep making hardware and software.

 

[Unknown One]

Needs a photoshop with pennies.

 

[The Abominable Snowman]

Depends on how they recorded it. I don't remember what exactly they did - do you have a link? The only thing I can find is the share buy-back, which does not affect GP.

I mean they just recorded it as a negative shipment. I doubt they detailed the expense.

 

[Eolz]

Do we know of anyone else who usually live tweets Nintendo's investor meetings aside from David Gibson?

I remember that sometimes there's some journalists or investors part of a publication like bloomberg being there, but it's really not at each meeting. Can't remember the publication or the journalist too, only that tweets were in english, but that it was a local (japan/asia) journalist.

 

[jett]

I guess Nintendo won't be lowering the Wii U price any time soon if they can squeak by a profit as it is.

 

[BengaBenga]

I guess Nintendo won't be lowering the Wii U price any time soon if they can squeak by a profit as it is.

It's probably the exact opposite. They are now in a position where they probably can lower the price to increase the longer term revenue from software sales. Nintendo has this insane amount of cash relative to its market cap because it's extremely conservative when it comes to its financials. Q3 will no doubt be very profitable, which means they have some financial headroom to lower the revenue from console sales.

 

[IncandescentPrecept]

How did they go from loss to profit within a quarter? What changed?

 

[vinnygambini]

How did they go from loss to profit within a quarter? What changed?

Nintendo said it was also being helped by a cheaper yen, which boosts the value of overseas sales. The yen's downward trend inflated its operating profit by around 2 billion yen over the April-September period, it said.

http://www.businessinsider.com/r-nintendo-second-quarter-beats-forecasts-says-on-track-for-full-year-profit-2014-10

Coupled with lower administrative expenses, advertising expenses, a decreased number of employees, and higher profitability margins (software) due to less hardware being sold.

 

[methodman]

IIRC during the last financial meeting, there wasn't just gibbogame tweeting the event. There was some others as well. Hopefully we can figure out the other people tweeting it out

 

[JoeM86]

http://www.businessinsider.com/r-nintendo-second-quarter-beats-forecasts-says-on-track-for-full-year-profit-2014-10

Coupled with lower administrative expenses, advertising expenses, a decreased number of employees, and higher profitability margins (software) due to less hardware being sold.

Nintendo hasn't made anyone redundant outside of NOE. Not really a factor, unless I missed something.

 

[narton]

I thought Gibson was told not to livetweet anymore these events. Do we have a time of when it should begin?

 

[Acquiescence]

Just think, somebody preemptively made this gif before the Wii U came out, so confident were they that it would dominate the market just like its predecessor did.

Spoiler

i hope that person is okay

 

[DizzyCrow]

IIRC during the last financial meeting, there wasn't just gibbogame tweeting the event. There was some others as well. Hopefully we can figure out the other people tweeting it out

I think it was NStyles

 

[vinnygambini]

Nintendo hasn't made anyone redundant outside of NOE. Not really a factor, unless I missed something.

It does actually.

Nintendo Phuten closed as of end of May.

Nintendo of Europe layoffs of 130 employees, off the Nintendo payroll + 190 temp workers.

Lower personnel costs.

 

[Rösti]

I thought Gibson was told not to livetweet anymore these events. Do we have a time of when it should begin?

10.00 A.M. JST, I posted a countdown earlier here.

 

[hatchx]

It's probably the exact opposite. They are now in a position where they probably can lower the price to increase the longer term revenue from software sales. Nintendo has this insane amount of cash relative to its market cap because it's extremely conservative when it comes to its financials. Q3 will no doubt be very profitable, which means they have some financial headroom to lower the revenue from console sales.

Makes me wonder if they could afford a WiiU price drop over the holiday. A Smash or Kart bundle at 299.99 might move units, but one at 249.99 would really move units.


EDIT - Think anything will come of the investor meeting? Sometimes release dates hit then

 

[Meier]

Good to see a profit but it's hard to fathom they're down across the board in sales (on the 3DS). The handheld market is a tough one but I'm still a bit shocked that the 3DS isn't experiencing more growth.

 

[Hero of Legend]

10.00 A.M. JST, I posted a countdown earlier here.

Is this the one we are looking forward to or is it tomorrow?

 

[Rösti]

Is this the one we are looking forward to or is it tomorrow?

It is the one we are looking forward to, the Corporate Management Policy Briefing/Second Quarter Financial Results Briefing.

IR calendar: http://www.nintendo.co.jp/ir/en/schedule/index.html

 

[narton]

Is this the one we are looking forward to or is it tomorrow?

That would be in 3 hours yes. They have the Q and A after it, but it won't be translated for awhile.

 

[shinra-bansho]

You are correct they wrote off the loses pertaining to the production of Wii U and the write-down (50$ price cut) in FY14.

What they accomplished in FY15 is costs reductions (promotional activities, employees being laid off) among many factors and a bigger contribution of software sales - higher margins.

From a further look, software sales seem similar, if not less than the equivalent period (H1), from a quick glance, if not down over last year. Their mix of revenue from hardware v. software is the essentially the same. The reduction in SG&A from things like those layoffs seems comparatively small (although non-trivial at around 4B yen) to the 19B yen increase in gross margin.

So perhaps the inventory write-down is a considerable factor in this H1's profitability? That and/or significant reduction in hardware production cost.

 

[The Giant]

1 hr to go.

 

[vinnygambini]

From a further look, software sales seem similar, if not less than the equivalent period (H1), from a quick glance, if not down over last year. Their mix of revenue from hardware v. software is the essentially the same. The reduction in SG&A from things like those layoffs seems comparatively small (although non-trivial at around 4B yen) to the 19B yen increase in gross margin.

So perhaps the inventory write-down is a considerable factor in this H1's profitability? That and/or significant reduction in hardware production cost.

In Nintendo's Year-end report:

Notes to consolidated statements of income
*1. The ending inventory balance is the amount after write-down of book value due to decline in profitability, and the loss on valuation of inventories included in cost of sales for the years ended March 31, 2013 and 2014 were as follows:

Previous fiscal year
(From April 1, 2012 to March 31, 2013) : Loss on valuation of inventories ¥ 8,758 million

Current fiscal year
(From April 1, 2013 to March 31, 2014) : Loss on valuation of inventories ¥ 22,958 million

http://www.nintendo.co.jp/ir/pdf/2014/annual1403e.pdf

So I guess no Inventory Write-down didn't hurt their bottom line in H1 FY15 comparatively to last year, coupled with small changes in administrative expenses?

 

[uncredited male]

Nintendo getting that nut. As they historically do.

Will be interesting to see what tack they take after the holidays.

 

[DizzyCrow]

There will be a thread for the meeting?

 

[shinra-bansho]

Yeah, could be. Although from memory the write-down occurred at the end of the year? Maybe 3DS is providing better margins as well?

I'm actually curious as to the accounting rules regarding products sold below cost by design as part of a loss-lead strategy.

I mean typically, inventories should be recorded at the lower of cost or market?

Are they written down immediate to trade price as soon as they're considered finished goods? Do they call it a discount and book the negative margin as negative revenue?
When they recorded that write-down were they essentially writing it down to current trade price i.e. are they now selling each Wii U at a 0 margin?

 

[Eolz]

There will be a thread for the meeting?

We should get one once there is the documents/translations out as usual.
No livetweets though...

 

[Mory Dunz]

Been sitting on this for one a while?
It's actually a well made GIF though.

Hopefully Nintendo's next console will be successful, white and look like the Wii U, so this GIF can get usage. That way, everyone wins.

 

[Nibel]

 

[Scum]

Fucking great to see Iwata again.

 

[akashhhhh]

supplementary material is up:
http://www.nintendo.co.jp/ir/pdf/2014/141030e.pdf

via: https://twitter.com/Sab_Mas/status/527627222014631936

 

[Rösti]

Where is that from, Nibel, what source?