efyu_lemonardo
May I have a cookie?
I think the bigger issue is that Japanese gaming got left behind, and Sony was able to make a timely transition while Nintendo decided to stick to their guns.
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Nintendo FY14 Q1: 0.82M 3DS, 0.51M Wii U, MK8 2.82M shipped, 10 billion yen loss
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I think the bigger issue is that Japanese gaming got left behind, and Sony was able to make a timely transition while Nintendo decided to stick to their guns.
Clearly Nintendo is still paying for losing 3rd parties from SNES. The games are still very good but the market doesn't seem responsive to their offerings.
Without backup from huge corporations and dependent on their output alone, not to mention attacks from the press and console fanatics, hopefully, Nintendo will be able to weather through this.
Without backup from huge corporations and dependent on their output alone, not to mention attacks from the press and console fanatics, hopefully, Nintendo will be able to weather through this.
Yeah, that happened too. I was thinking about a bit earlier though. The moment where I stood in a club looking at a WipEout demo pod and thinking 'hmm, console gaming has changed'. I remember a lot of cats that had left gaming in the MegaDrive days suddenly finding out that games were now 'cool'.
I think Nintendo needs to keep a close eye on the other consoles sales this gen, to help them get a better idea of how the market is shifting. The next years will be painful for the gaming industry, things are changing, cell phones, tablets, streaming services, digital distribution, all these things will shake things up significantly.
While Nintendo isn't going anywhere soon, they need to decide how they want to roll with this. My guess is they will stay a small company that will keep delivering quality games to their fans, trying to get healthy sales, but not achieving explosive growth. Wii and DS-like success will never happen again, phones and tablets will make sure of that, but they need to figure out a way to return to profitability, which is probably not going to happen anytime soon with 3DS entering its 4th year and Wii U doing abysmally.
As for Wii U, I don't think anything can save it, maybe a relaunch would help, but I understand that spending a significant amount of money doing it is a risky move. Unless a miracle like Wii Sports happens, they'll just have to keep launching great games like they've been doing to keep current owners happy.
While Nintendo isn't going anywhere soon, they need to decide how they want to roll with this. My guess is they will stay a small company that will keep delivering quality games to their fans, trying to get healthy sales, but not achieving explosive growth. Wii and DS-like success will never happen again, phones and tablets will make sure of that, but they need to figure out a way to return to profitability, which is probably not going to happen anytime soon with 3DS entering its 4th year and Wii U doing abysmally.
As for Wii U, I don't think anything can save it, maybe a relaunch would help, but I understand that spending a significant amount of money doing it is a risky move. Unless a miracle like Wii Sports happens, they'll just have to keep launching great games like they've been doing to keep current owners happy.
This comment is absolutely baffling in light of how much the WiiU is struggling in Japan. If what you say is true, Nintendo is the most incompetent video game currently around.
family_guy
Member
I don't think the Wii U needs saving. I think it would be better if it just died so Nintendo could just move development of whatever titles they have left to a newer console. They can even port the popular existing ones on the Wii U if they want.
Kazuma Kiryu
Member
It just proves the earlier point in this thread that they need to do something different, and not to try and compete in the "hardcore" market, because they will do very poorly there, in comparison with their competitors.
TheDarkKnight774
Member
You do that and you erode consumer confidence and enter 32X/Sega CD/Saturn territory.
Neff
Member
Software and hardware sales of the generation prior (or even the generation prior to that). This in a time when development costs are higher than those generations.
Well if we're going that far back, you can apply 'shrinkage' and 'growth' to several hardware players in the industry, including Nintendo.
Saying things like 'People are losing interest in Nintendo' is a very vague, broad thing to say, especially when there are numerous factors constituting Wii U/3DS' appeal or otherwise.
PdotMichael
Banned
Well, Iwata is the wrong guy to turn Nintendo into a truely international operating company.
Just look at the cooperation and software deals - they are generally done with other Japanese companies. Combine it with the fact that NoA barely does anything anymore and you will see that Nintendo was never more Japan focussed than under Iwata.
I would be perfectly ok with this.
Wouldn't stop the portbegging though.
The Wii U can't be saved, and there'd be no benefit to trying either - Nintendo need to use the Wii U's failure as a lesson in deciding which direction they want to head in for the next set of consoles.
BruiserBear
Banned
Psycho_Mantis
Banned
Its more like Japanese gaming left Nintendo behind. They simply abandoned Nintendo's home console's ever since the PS1 era.
I do agree that Sony has decided to focus on Western gaming more now and rightly so since that is where most the money is if we are talking dedicated devices.
MisterGrey3000
Member
Yep.
When Nintendo went back to the "basics" with the Wii/DS (new, simple, and intuitive family/casual-focused hardware/software) and stopped focusing on trying to find a place in the young male market (N64 and NGC) they managed to be incredibly successful.
All that graph tells me is that Nintendo should really stop trying to make efforts to compete in Sony/MS's market and pay attention to their bread & butter consumers (Like, Why 3D? Why Street Fighter? Why was Zombie U a thing? Why did NOA care so much about Batman? Why did the WiiU need to be PS3/360-level hardware?)
edit:
Agreed.
family_guy
Member
You make it sound like consumer confidence is high to begin with. Maybe they can do some type of Ambassador program.
Works for consoles, but not really for handhelds. GameBoy is a weird case, I believe it had decent sales at the beginning, then nearly died in mid-'90s and was reinvigorated in the late '90s by Pokemon.
GBA sales were completely crazy, but it's life was cut short when DS was rushed to the market. It sold less than both it's predecessor and successor, but it had comparatively short life.
Many don't remember it, but DS had a really rough start, but it eventually managed to succeed.
3DS found itself in a completely changed market though, and it's definitely a case of both misjudged market and a variety of new trends on the market.
efyu_lemonardo
May I have a cookie?
Agreed, and I think it's rather interesting how these two trends seemed to happen in tandem and perhaps even influence one another. The internal struggles between SEGA's American and Japanese divisions, which are a pretty well documented part of their demise, are also interesting to look at in this light.
Nintendo's monopolistic practices under Yamauchi were surely another big reason why Japanese third parties abandoned the company when PSX came out, but even your mention of WipEout, a game developed by a Sony studio in England if I'm not mistaken, could be an example of how Sony's more global approach to videogame development and publishing was different from Nintendo's approach almost from the beginning.
During the PSX era Japanese titles were probably still dominating in global sales, but that began to change pretty quickly on PS2 I believe, and by the time PS3 launched was almost a 180 degree difference from PSX.
I honestly don't know where to draw the line between Japan abandoning Nintendo and gaming abandoning Japan, perhaps it would be a good topic for research. The shift in 3rd party support was very drastic and easy to identify for us outsiders, in comparison to the shift to a more western oriented industry which took around 5-6 years to become obvious, but we don't know too much about the internal politics and business strategies at the time. The only thing I remember reading once, which I found rather fascinating, was that Ken Kutaragi, even as he was just launching the original Playstation, had already identified Microsoft as a significant future threat, and this influenced a lot of his decisions at SCE.
Little kids and casuals aren't coming back.
Kids don't have any disposable income of their own. They have limited purchasing power and depend on their parents for their needs. Casual gamers don't care enough for videogames to look beyond the countless time-wasters that are, both incredibly affordable, as well as available on machines they already own.
These demographics aren't going to abandon their smartphones in favor of dedicated game machines and higher priced software. They used to game on consoles at large numbers mainly because there used to be no alternative option for them.
Even in a hypothetical scenario where you manage to create THE game and make the casual audience go nuts, there's no way you can make them become regular consumers for higher priced software in the post-iOS/Android world.
Kids don't have any disposable income of their own. They have limited purchasing power and depend on their parents for their needs. Casual gamers don't care enough for videogames to look beyond the countless time-wasters that are, both incredibly affordable, as well as available on machines they already own.
These demographics aren't going to abandon their smartphones in favor of dedicated game machines and higher priced software. They used to game on consoles at large numbers mainly because there used to be no alternative option for them.
Even in a hypothetical scenario where you manage to create THE game and make the casual audience go nuts, there's no way you can make them become regular consumers for higher priced software in the post-iOS/Android world.
Yes, we can. What's wrong with also applying to other players in the industry? I don't care if you want to say Sony's audience is shrinking compared to the PS2 or something (I probably would agree, if I see evidence of that fact), but we're talking about Nintendo here. Would you say Apple's audience has grown or shrunk for iPhones when you look at their shipment stats? Or would you say that it is a very vague, broad thing to say, and you can't say whether or not it has grown or shrunk?
The problem with taking this as a broad rule is that either company tends to stumble when designing for international audiences (N64, 2DS; FF9, FF12, FF13, FF14 1.0) but succeed when they create a quality product even when it targets Japan first and foremost (DS, Wii; FF7, FF10, FF11, FF14 2.0).
Laying aside the Wii U as a product that satisfies absolutely no one, I think it's better from an R&D perspective to assume that the itch you're trying to scratch is basically universal once you hit mass-market success in any region, and leave the regional variance to marketing (and here, Nintendo's swimming upstream to begin with against the fat sacks of MS cash saying "drop the kiddie platformers and adolescent anime melodrama, and let's blow shit up" and Sony cash saying "we're all grown up and shootmans too, 'cause those are the best games", but Iwata's emasculation of NoA definitely hasn't helped.)
I thought distribution channel is different between Japan and overseas for Hyrule Warriors. In Japan Nintendo isn't even publishing it, right?
Aquamarine
Member
Koei Tecmo is publishing Hyrule Warriors in Japan. I assume Nintendo will help with advertising and distribution.
Nintendo of America is localising and publishing Hyrule Warriors in the USA. It's getting licensed to be sold as a "Nintendo product," but it's officially categorised as a third-party title.
Porting the upcoming Zelda to the next console would do wonders for early adoption. I think that was one of the magical elements that kickstarted the Wii.
(I wouldn't be saying this if I was a Wii U owner)
It's not good, but its not crippling. They haven't stemmed the bleeding and Mario Kart 8 didn't give them the big push in hardware they thought it would, despite having really solid sales.
Its very unlikely they'll recover with Wii U but they should have an ok holiday with what's released in the US. I fully expect to see a 3DS successor sometime in 2015 though.
So Nintendo has blown through about $1.5 billion of its 'warchest' in the last 12 months. Looks like Pachter was right when he said a couple of years ago that Nintendo has about 10 years before they run out of money, and it looks like Iwata is content to stay the course and burn the company's cash until they are forced to go Sega and hope they come out with their shirts still on.
theprodigy
Member
this never would have happened if they had just gone to e3.
Yeah its not like they're not greatly expanding the company and buying back a ton of stock after you died after all.
It's more of being forced out than exiting by choice
opticalmace
Member
Great plots, thanks jvm.
ZSaberLink
Media Create Maven
Yes, we can. What's wrong with also applying to other players in the industry? I don't care if you want to say Sony's audience is shrinking compared to the PS2 or something (I probably would agree, if I see evidence of that fact), but we're talking about Nintendo here. Would you say Apple's audience has grown or shrunk for iPhones when you look at their shipment stats? Or would you say that it is a very vague, broad thing to say, and you can't say whether or not it has grown or shrunk?
Sure it's growing, but that graph does seem to indicate the growth is slowing at the very least though (although I believe Android is picking up the slack there).
They lost money.
Revenue is how much money you receive.
Income is revenue after costs are subtracted.
Operating income refers to the portion related to actual operations of the business. You should focus on this.
Net income refers to income not related to normal operations. This is like income or losses from investments or fluctuations in currency exchange costs. You shouldn't focus on this as much as operating income if you're concerned about how they are actually running their business.
The_Endgamer
Member
Damn. Such negativity toward a 42% attach rate. I'm sure any publisher/developer would be ecstatic with that sort of result no matter what the platform was.
Chittagong
Gold Member
Software and hardware sales of the generation prior (or even the generation prior to that). This in a time when development costs are higher than those generations.
This really reveals how much of a doubly lucky strike and anomaly the DS/Wii combo was. They hit two casual markets at once during the very the moment where the tech was there to do it (resistive touch, motion sensors), there was renewed consumer interest to accessible gadgets (due to iPod) and the competitive markets hadn't been born yet (iPhone, iPad).
Sadly as often happens the management attributed this success fully to their own skills of reading trends and didn't understand how much of the success was due to the lucky circumstances. This gave rise to some catastrophically arrogant product propositions trying to ride the trends the management observed (3D, tablet) without a broader consideration of the consumer choice context.
clem84
Gold Member
Thank you for the explanation!
So they lost almost 10 billion Yen, around 97 million USD.
I don't know about all the costs generated by operating a company like Nintendo but it just blows my mind how a company can sell millions of games for each of their key franchises and still lose money.
Chittagong
Gold Member
The excellent execution I certainly agree with - clean Wii packaging, advertising showing the experience, Touch Generations initiative for creative non-games, the Jony Ive inspired design, memorable branding... they nailed it on many fronts. What I mean by lucky circumstances is that there was a fortunate opening in the market they were able to fully capitalise on with their great execution. I'm not sure there ever was a realistic opening for Wii U and 3DS even if the execution would have been good (which it wasn't) and the ideas would have been right (they weren't). The world had simply moved to a post-handheld, post-console future where Nintendo can't stand a chance in hardware.
MisterGrey3000
Member
I don't think he's criticizing the idea of using bar graphs to view a company's growth/shrinkage in a specific industry.
He's criticizing the idea of using these specific Nintendo graphs to jump to the conclusion that Nintendo was/is destined to completely collapse in the home console space if one ignores the Wii (for some reason)
It's kind of easy to see why the N64/NGC were failures and why the NES/SNES/Wii/non-3DSportables were successes.
That would require S-E to play ball. They can't just make 3rd parties release games.
I think he definitely is criticizing the idea of using sales as barometer of growth and shrinkage. He puts the terms in quotes, and makes the argument that we should look at other hardware players using the same type of data.
If you follow the original conversation thread, it starts with the idea that Nintendo's audience is not shrinking.
Aquamarine
Member
Thank you for the explanation!
So they lost almost 10 billion Yen, around 97 million USD.
I don't know about all the costs generated by operating a company like Nintendo but it just blows my mind how a company can sell millions of games for each of their key franchises and still lose money.
Net sales = The amount of money Nintendo brings in by selling their products
- Cost of sales = Direct costs in producing and selling their products
=
Gross profit = How much direct, raw profit Nintendo makes from selling their products
- Selling, General and Administrative Expenses = Salary expenses + Advertising Expenses + Operating costs of Nintendo and its subsidiaries (like rent, utility costs) + Depreciation + Amortization
=
Operating profit = How much profit Nintendo makes in its core operations. It measures Nintendo's health as a company. If Nintendo doesn't consistently make a core profit (and they haven't been since 2011), it means something is wrong with how they're conducting their business.
Forms of Non-operating income include extraordinary gain / losses, interest income, taxes, foreign exchange losses, etc.
Net profit = How much money is left over...the bottom line.
The bolded part of Nintendo's income statement is where they're having trouble.
Nintendo has lots of property that's expensive to maintain and thousands and thousands of employees to pay (Nintendo doesn't like to fire employees).
It works great when Nintendo makes a lot of revenue but recently their sales have been way down (the Wii U being a failure + the 3DS underperforming compared to the DS).
Nintendo's first operating loss in a very, very long time was the year beginning April 2011 and ending March 2012.
MisterGrey3000
Member
You're right my mistake.
However, I'm still of the idea that interpreting the data as "Nintendo's home console business is destined to fail...if you ignore the Wii...." is pretty disingenuous and troll-y.
It basically ignores why the N64 and NGC were failures. It ignores why Nintendo's handhelds, NES/SNES, and Wii were successful. Plus, it sort of makes the SNES out to be a failure; which, despite it's 12 mill or so drop off from the NES's LTD, wasn't anywhere near being one.
InsaneZero
Member
Well, in his eyes there's no difference. But in any case, I think we can both agree that Miyamoto's style of management can no longer suffice for the major projects that Nintendo works on. When you have a perfectionist dictating development without any sort of accountability or supervision that's a surefire recipe for trouble.
lold more than I should at the end part
Cant grow forever specially when you're in the range of 100+ million phones in a fiscal year range
.
Having huge cash reserves is not be-all end-all. Quite on the contrary, it's considered to be detrimental.