geordiemp
Member
No company has a long term plan to remain small and just survive. They all want mega bucks and their shareholders certainly do.
Nintendo shareholders want the Wii days back, they will be patient, but eventually something will give.
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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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No company has a long term plan to remain small and just survive. They all want mega bucks and their shareholders certainly do.
Nintendo shareholders want the Wii days back, they will be patient, but eventually something will give.
That's not gonna happen realistically. They'll build what they can but most likely won't go all in like some think they should. They're a conservative company and will focus on stabilizing the stock while looking for growth opportunities.
Eh, I think even with more games the 3DS would still be in the same position. Last year was the 3DS' best year with tons of great games being released but that didn't stop the steady decline.
If development costs and employee salaries only go up at a very rapid pace, the only way to stay even with just a flat consumer base (let alone a declining consumer base) would be to increase prices, but that is actually counterintuitive because their audience likely is price sensitive. Yes, you can try to do things like unify the OS so that development costs from generation to generation don't increase as much, but the trend is still costlier development.
They need to look for growth.
DXB-KNIGHT
Member
Expected Q1 results, outside of MK8 since Nintendo highlighted it as its there main game for this Q
You don't think the uncertainty and negativity about the systems power (before it even released) had anything to do with why 3rd parties ultimately abandoned the system?
3rd parties tried. There was plenty of 3rd party games at launch/launch window. The reason those 3rd partie games didn't sell was because no one saw any point in buying a brand new system with the same graphics fidelity as their current console to buy 3rd party games they already have access to with the same graphical fidelity. The gamepad was sure as hell not going to be the sole reason they would buy a brand new console to play these 3rd party games.
In reality graphics are very important to gamers. You don't think if the wii u came out first in the 8th Gen with powerful hardware that blew away the ps360 gamers wouldn't be pumped for it? If Nintendo came out branging about how much more powerful this new next gen console is than the tired old last gen in its adds it would get a lot of gamers on board. The power card has worked damn well for Sony. Anemic hardware is simply offputting to the audience Nintendo thought they were going to get a slice of. There's simply no reason to leave yourself at such a disadvantage to Yuri competitors. Making sure the console is attractive and comfortable Roslyn develop for should be a priority for any platform holder. Poweris a big deal to 3rd prties.
Nintendo only cared about their interests and needs for the platform and it put developers off. Which caused them to all speak very negatively about it. Developers eventual gave up because the games didn't sell. The games didn't all because Nintendo threw away its advantage of being he first of the 8th Gen with stupid decisions on how to handle the platform.
I think in 2016/17 Nintendo can come out with beastly hardware and get a lot of gamers on board for 4k gaming (of that's in any way possible at this time for a reasonable price). The te fact that the ps4/xb1 are so weak can really help it generate a lot of hype.
Btw sorry for the horrible text I'm on a shit phone.
biglittleps
Member
4k gaming is not gonna happen in Consoles for another 5 years due to the price of 4k TV which a normal consumer cannot afford, so its no use to develop the games for that and also the development time/cost for 4k games going to be huge( We already seeing the increased development time/cost from HD to Full HD now in PS4/Xbox one and we might also see increase in game prices for 4k game). So, the 3rd party developers won't do any 4k games and it they will focus more on good install base of PS4/Xbox one instead of going for New Nintendo machine which still has less chance of selling well.
I wasn't referring to their cash reserves -- total current assets.
*points at username* Nintendo bought back shares worth over 114 billion yen following Yamauchi's death from his family, there. That's the prime reason for the massive drop in current assets. They still have a veeeery comfortable margin and their liquidity ratios are still ludicrous.
Obviously, their business is not good as of now and they need a turnaround asap (which probably will come from diversification) as another year with operating loss would be tragic, but let's not get too dramatic.
Expected by whom?
Not Reuters:
Bucking the strength, Nintendo Co dived 6.3 percent to a seven-week low after the video game maker posted a worse-than-expected operating loss in the April-June quarter.
Not AP:
TOKYO (AP) -- Nintendo Co. sank to a worse-than-expected loss for the fiscal first quarter on lagging Wii U and 3DS video-game machine sales.
prag16
Banned
They can't make the Wii U NOT an overall commercial failure, yes, but having it add positively to their bottom line at some point should be doable, probably later this year through 2015 if they have their release schedule on point. Gotta take what they can get while regrouping for the next round of hardware.
pinkurocket
Member
Nintendo doesn't have just their consoles and games to rely on. They already said they're actively looking at ways to use their IPs in media other than games. For example the successful marketing campaign of Mercedes using Mario, Amiibo and I think in the future we'll see more animations/movies. Their 'quality of life' project is also being developed to break into new markets.
I'm not saying they won't try to grow, or that they can continue selling consoles with Wii U like numbers, I'm saying that I find it likely that they'll remain relatively small, aka Wii/DS levels of success will never happen again most likely.
It's worth noting that they are much bigger now than they were before the Wii and DS. That's one of the reasons they're losing money. In 2004, they had 1,223 employees. In 2007, they had 3,586 employees. As of March 2014 they have 5,213 employees.
LOL 4k.... Good god.
Anyway 3rd parties were there at launch because.... Let's just say there were "financial incentives" provided by Nintendo. When those financial incentives disappeared, and the sales were poor anyway (for a variety of reasons), so did 3rd parties. If Nintendo released something closer to the other consoles third party support would be the same or extremely similar. The markets of the major publishers simply don't align with the market Nintendo consoles usually attract. Back when there was a mid tier, when 95 percent of aaa games weren't about shooting/killing/etc for the 16-30yo male, there was more support.
No "hardcore console gamer" is going to pick up a more powerful nintendo box because of graphics. If that were even remotely true those people would be building gaming pcs exclusively, because those things are capable of much better.... Everything, really. If you need evidence that support would be the same with a more powerful box, consider how many games are getting ps360 versions even today. It's somewhere around a million bucks (give or take half a mil) and a half dozen to a dozen or so folks according to a bunch of reports to port a game to the Wii u. They're still not happening: ROI.
efyu_lemonardo
May I have a cookie?
Without knowing more about Miyamoto personally it's hard for me to address your claim. I do believe that a manager, director, or producer at Nintendo should be a perfectionist. There's no doubt this is part of how they are able to maintain such a level of quality across their products, even ones developed in collaboration with external partners.
What I do know about Miyamoto, from interviews conducted with him, is that he never had a boss of his own he could use as a role model when he became boss. I don't know if along the line, as he was gradually promoted, he was sent to managerial courses by Nintendo or if he's just been making decisions based on instinct this whole time. The second option doesn't seem like something a large corporation would let their managers do, no matter who they are. From the little we know it certainly sounds like his style of management is unconventional, but that brings benefits as well as costs to projects under his supervision, and the same can be said for any managerial style. And I can guarantee he is accountable, at the very least on a financial level (budgets vs. profits, etc), if not on a creative level.
So basically, my main problem with Miyamoto isn't anything he does personally as a developer or a manager, it's the unproportional weight he is given in the company. If there were two more groups like EAD that were run by other managers, equally capable and experienced as Miyamoto, but bringing their own style with them, I believe Nintendo's output would be much more diverse and balanced. Hopefully, as the younger generation starts replacing the older one in these positions over the next few years, a more balanced hierarchy will form.
Man, the 2DS has really not taken off at all. Unlike previous revisions (e.g. NDSi and DSi XL) which gave the platform a serious shot in the arm, the 2DS shipped only 210,000 units in the past quarter. (That's up from the 90,000 in the previous quarter.)
But consider that the more expensive 3DS XL shipped 520,000 in the same time period that the 2DS shipped 210,000.
I wonder what Nintendo thinks those kinds of sales suggest about what it should be doing in the future, both near term (new revisions) and longer term (new platforms).
But consider that the more expensive 3DS XL shipped 520,000 in the same time period that the 2DS shipped 210,000.
I wonder what Nintendo thinks those kinds of sales suggest about what it should be doing in the future, both near term (new revisions) and longer term (new platforms).
zomgbbqftw
Banned
Hopefully what they realise is that the 2DS is a piece of junk that people didn't want to buy. My sister wanted a cheap 3DS for MK7 and ALBW, I said she should look at the 2DS because it was on offer for £99 plus a game at some point but she decided against it because it's so awful. I don't blame her.
Nintendo tried so hard to cut costs with the 2DS that they forgot it still needs to appeal to consumers.
If they wanted to make a 2DS and save money on the 3D screen then it just needed to be a slightly updated 3DS with a regular acreen. People like the clamshell.
They could also completely phase out the 3D versions after that and have a 2DS and 2DSXL as the only available versions much like Sony phased out OLED on the Vita.
Sometimes I really do wonder what possesses management to make these awful decisions...
CaptainZombie
Member
Nintendo has to get smart with the next console and really come out with something that is more powerful than the PS4 and X1. They already have the IP's to back them up, they need to be working on more powerful hardware and a unified Network because the fragmented one now isn't helping matters.
Nintendo are on to something with the second screen experience. I think they need to take the handheld and find a way to make that the console experience for both home and on the go. It would be cool to be able to take the handheld, hook it up to your TV via HDMI and then use controllers to play off the TV. You only buy one version of the game that could be played on the TV or if you decide to play on the go. This helps solve the problem of trying to support 2 markets. If it can be done where the NVIDIA Shield is producing quality graphics on the same level as current gen consoles, it can be done on a console/handheld hybrid.
Or maybe just phase out the 2DS abomination and come out with a 2DS XL in a clam shell format. They get rid of the 3D, speakers are kept at mono, cut some costs on the materials that are used selling that at $109 while dropping the 3DS XL to $149 or $159 already.
Tbh it looks far better in reality than it does in official renders. It's also more comfortable than the OG 3DS, but that's more due to the fact that OG 3DS is a disaster when it comes to ergonomics, what were they thinking.
The Abominable Snowman
Member
Nintendo runs the risk of cornering themselves and being ousted in TWO markets if they don't directly address their biggest pitfalls - Third Parties and the Mobile market. They cannot compete with competitors who have more to offer third parties and better deals. They cannot offer their own app ecosystem and console-specific indie games are rarely taking off.
I would've agreed with a hybrid console in the past, but at this point, Nintendo needs to do something larger and something that would fit the modern day gamers' lifestyles if they want to sell in big quantities again. Else they would be just playing to their vanishing niche.
Even with the biggest hits being put out, the 3DS seems to be taking a dive unforeseen. That's pointing to a clearly shrinking mobile dedicated gaming device market. Piling in more resources doesn't really help. Other hybrid devices that offer more (NVidia Shield) failed to catch on at any measure. Combining the Wii U + 3DS doesnt give either a commanding marketshare or extremely competitive sales, and with Nintendos marketing recently I dont think they could get a clear message across as to what the device actually is. I don't think it's a good idea.
Narpas Sword0
Member
Cool, when are these movies coming out? Who is directing? Shareholders are breathing a sigh of relief with this post.
Graphics Horse
Member
Nine months of shipments (since launch of 2DS):
2DS Americas: 1.22 million
3DS XL Americas: 1.92 million
2DS Other: 1.19 million
3DS XL Other: 1.57 million
Granted, that's just shipments...
Edit: I should have mentioned that I updated my spreadsheet on quarterly shipments
https://docs.google.com/spreadsheet/ccc?key=0AtXhc02VTSWzdHpZWUxGWkxHQVlZN1FpTEpxNV9NUEE&usp=sharing
Nintendo really has no choice but to wait the Wii U out for the next couple of years in my mind. Maybe in 2017 they could push out a new console, and yes it should be 4k capable. But if they really want success, they're not going to find it this way. Why? Because Sony and Microsoft will always be there right around the corner with their established 3rd party relations. They're going to have to try and recreate Wii 2. Maybe this QoL is exactly what they need.
Graphics Horse
Member
Aquamarine
Member
Selling, General & Administrative Expenses:
GBA / GameCube era:
March 2000 - 95,709 expenses (240,740 of gross profit)
March 2001 - 99,342 expenses (184,040 of gross profit)
March 2002 - 101,114 expenses (220,266 of gross profit)
March 2003 - 95,488 expenses (195,609 of gross profit)
March 2004 - 99,888 expenses (207,572 of gross profit)
March 2005 - 105,653 expenses (217,176 of gross profit)
DS / Wii era:
March 2006 - 124,766 expenses (215,115 of gross profit)
March 2007 - 171,787 expenses (397,812 of gross profit)
March 2008 - 212,840 expenses (700,060 of gross profit)
March 2009 - 238,378 expenses (793,641 of gross profit)
March 2010 - 218,666 expenses (575,234 of gross profit)
March 2011 - 216,889 expenses (387,965 of gross profit)
3DS / Wii U era:
March 2012 - 190,975 expenses (153,654 of gross profit) = operating loss
March 2013 - 176,764 expenses (140,354 of gross profit) = operating loss
March 2014 - 209,645 expenses (163,219 of gross profit) = operating loss
You can see the issue clearly here. Nintendo needs a certain threshold of gross profit that the 3DS + Wii U combo is fundamentally unable to generate for the company. Back in the GameCube days, when Nintendo had half the SG&A expenses and 200 billion JPY of Gross profit, they could build a healthy profit.
But now, SG&A expenses are twice what they were in the GameCube days, and gross profit is down to an unprecedented level when adjusted for inflation.
The company is in a significantly weaker position than even a few years ago.
GBA / GameCube era:
March 2000 - 95,709 expenses (240,740 of gross profit)
March 2001 - 99,342 expenses (184,040 of gross profit)
March 2002 - 101,114 expenses (220,266 of gross profit)
March 2003 - 95,488 expenses (195,609 of gross profit)
March 2004 - 99,888 expenses (207,572 of gross profit)
March 2005 - 105,653 expenses (217,176 of gross profit)
DS / Wii era:
March 2006 - 124,766 expenses (215,115 of gross profit)
March 2007 - 171,787 expenses (397,812 of gross profit)
March 2008 - 212,840 expenses (700,060 of gross profit)
March 2009 - 238,378 expenses (793,641 of gross profit)
March 2010 - 218,666 expenses (575,234 of gross profit)
March 2011 - 216,889 expenses (387,965 of gross profit)
3DS / Wii U era:
March 2012 - 190,975 expenses (153,654 of gross profit) = operating loss
March 2013 - 176,764 expenses (140,354 of gross profit) = operating loss
March 2014 - 209,645 expenses (163,219 of gross profit) = operating loss
You can see the issue clearly here. Nintendo needs a certain threshold of gross profit that the 3DS + Wii U combo is fundamentally unable to generate for the company. Back in the GameCube days, when Nintendo had half the SG&A expenses and 200 billion JPY of Gross profit, they could build a healthy profit.
But now, SG&A expenses are twice what they were in the GameCube days, and gross profit is down to an unprecedented level when adjusted for inflation.
The company is in a significantly weaker position than even a few years ago.
Fourth Storm
Member
Thanks for those figures, Aqua. Do we have any indicators that Iwata plans on cutting some of those expenses this fiscal year?
eddfromtheriver
Banned
Yes, i think that it would be the worst decision Nintendo could make.
Aquamarine
Member
Nintendo expects 40 billion JPY in Operating Income for March 2015. The bulk of that would presumably come from an increase in Net Sales...but I assume they're going to try.
The problem is that Mr. Iwata is stuck in a predicament.
On the one hand, he needs to get costs down as much as possible so Nintendo's core business can start earning a profit.
On the other hand, Mr. Iwata refuses to shrink the size of the company. In fact, it continues to grow quite quickly.
Number of Nintendo employees:
GBA / GameCube era:
March 2002 - 3,073
March 2003 - 2,977
March 2004 - 2,985
March 2005 - 3,013
DS / Wii era:
March 2006 - 3,150
March 2007 - 3,373
March 2008 - 3,768
March 2009 - 4,130
March 2010 - 4,425
March 2011 - 4,712
3DS / Wii U era:
March 2012 - 4,928
March 2013 - 5,080
March 2014 - 5,222
And then there's the problem with HD development. The more advanced the game = the more employees it requires = the more overhead Nintendo accrues by hiring more and more staff to accommodate the transition.
Vanillalite
Ask me about the GAF Notebook
Comparing the same months so far in 2013 and 2014 the difference is massive.
Last year wasn't DS/Wii like numbers, but it still was the best selling piece of hardware last year.
This year the sales have totally tanked, and the barren release lineup doesn't help one bit.
AstroNut325
Member
Nope. If I had to put money on it... Iwata will still chase the Wii crowd and continue trying new gimmicks and pursue new fads.
The Maverick
Member
You should know why those two aren't at all an apt comparison. Come on. Nintendo is facing legitimate problems with the future of their business. It gets annoying when people wave it off with "Nintendoom" over and over.
If you didn't want to know how dire things were, avoid these threads.
What do you think we're going to see, in terms of employee number? In Q1, we've already seen one of the two NoE headquarters being closed, with quite a considerable amount of people (IIRC, more than 100) not working anymore for the company. I hope they don't fire too many people, honestly...just the right amount for streamlining operations and whatnot, if it's really necessary. That sucks, though >_>
EDIT: About cutting expenses, it's to remember how this year's E3 was cheaper for them compared to last year's.
And so much better 
Mysterious
Banned
Relaxed Muscle
Member
I feel Nintendo is heading to the same wall most publishers got stuck this last gen. That is the quickly increasing development cost which comes at the need of way more sales to recover money and make profit. They manage to avoid thanks to the incredible success in the Wii/DS era and staying behind the technical curve, but that's not resolving the problem, only delaying it.
And at the same time software (and hardware) sales are declining all around, which means less profit but higher costs. Seriously, I don't know how Nintendo is going to manage the next transition and staying healthy, unless QOL ends being incredible sucessful.
Fourth Storm
Member
Thanks again, Aqua.
Well at least Wii U hardware production costs won't eat into their profits this year. Also, in the FY ending March 2013, they didn't actually lose any money due to making some off of the exchange rates, correct? Even though they posted an operating loss...
Well at least Wii U hardware production costs won't eat into their profits this year. Also, in the FY ending March 2013, they didn't actually lose any money due to making some off of the exchange rates, correct? Even though they posted an operating loss...
Seeing that Nintendo is losing marketshare on both handheld and home console and with low interest of third parties, knowing they will share the same architecture, would be feasible that the new systems also share the same library? The portable would run the games with lower res/less effects and if is not possible to reduce the scale of the game, some sort of companion game/app for managing/farming items, equipments, etc. Both still would have some exclusive games, but the core of th library would be shared.
Shikamaru Ninja
任天å ã® å¿è
Right, the company has begun a process for internal expansion, while striving for maximum efficiency. Truthfully, the fruits of their labor have not surfaced, and probably will not until 2015. The company is struggling, but much of their struggle has come as a result of not adapting to their markets needs in a timely manner.
The skies may look gray now, but the company does have some prospects for the next couple of years.
- QoL Products for non-gaming mainstream audience
- Amiibo / Figurines for children and otakus
- IP Market Licensing (ex. food products, clothing, movies. comics)
- Refocused gaming strategy (digital episodic games, free to play games, dlc, IOS type shared architecture for next console and hand held.
Relaxed Muscle
Member
You're asuming all that will be successful and will make it for the loss of the handheld/console marketshare, Amiibo and IP licensing will make for a good extra of revenue, but QOL is a pure ? right now...
Also the refocused gaming strategy is a joke right now, and not entirely coherent of what Iwata has been saying about keeping premium prices....
Shikamaru Ninja
任天å ã® å¿è
I'm not assuming anything. I made no postulation that any of those facets would be successful, but merely that they are some of the acknowledgements that company has presented to investors.
I'm not sure what you are deducing about their refocused gaming strategy either, since it is still in the early phases (some even invisbile) at this point.
Fourth Storm
Member
This is true. Also, we have yet to see their utilization of smart devices outside of Mario Kart TV. Iwata, in May, stated that those with NNIDs may even be able to experience certain parts of games on phones and whatnot.
There is also the question of new markets, particularly China. They seem to be in the early stages of planning with this, but it's another potentially large source of revenue for them in future years.
I seriously hope we're going to see Nintendo's animated series soon, that would help immensely in visibility. Heck, just as an example: Kirby is very popular here in Italy, and Triple Deluxe is selling great as well...and I fear it's all due to the animated series :lol
Shikamaru Ninja
任天å ã® å¿è
They've been trying Chinese expansion ever since they created their IQUE subsidiary. They tried to sell a custom N64, NDS, DSi, and 3DS down there under the Ique brand. I don't think it has been successful by any means.
Relaxed Muscle
Member
"The skies may look gray now, but the company does have some prospects for the next couple of years."
Seems to imply things will be better in the couple of years....
From my point of view things still look grey even in 2 year, because nothing you mentioned seems to fix the fact the company is losing marketshare in the console/handheld market at gigantic steps...
And I'm deducing from what Iwata said in every meeting for the last year. They don't want to people value of their games drop, so they're gonna be very careful about that...
shaowebb
Member
Pretty much this and this year they have Smash Bros which sells consoles, and so far Hyrule Warriors being such a Zelda celebration to fans from any generation is showing up like its going to do quite well for itself even if it isn't another MK8.
Nintendo has a better software lineup this year. Its picking up.