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[Narpas Sword0]

Not financially. GBA/DS/Wii were designed to be profit bearing day one, Wii U was not.

The only other Nintendo hardware that ever took a day one loss was Gamecube, and there it was relatively minor (around $20 iirc).

The Wii U is supposedly profitable with one game purchase, so this is not so different from the GameCube. Sony and MS were losing hundreds of dollars on cutting edge consoles and Blu Ray tech. Not resistive touchscreens.

 

[zomgbbqftw]

I wonder if Nintendo stock could actually fall below where there were during the Gamecube days. I know with inflation they are already below it.

They made money during the Gamecube days, right now they don't so it is definitely possible.

Be a dear and ask about bundled software too.



But it does still make a difference.

Sure, what specifically do you want to know, just the proportion of bundled software to the total shipped software?

Not enough to have a serious discussion about.

 

[lunchwithyuzo]

At least, it shouldn't be as overshipped as 3DS was (hardware wise)

Total 3DS shipment: 3.61
Japan 3DS shipment: 1.06
Americas 3DS shipment: 1.32
Others 3DS shipment: 1.23

Japan 3DS sales (from February, 26th to March, 27th): 0.8
US 3DS sales (from March, 27th to April, 2nd): 0.4
Other 3DS sales (from March, 25th to March, 27th): 0.33

...And 3DS obtained to ship other 700k in Q2 despite the hyper massive overshipment.

Yeah, Nintendo's new Wii U targets look perfectly reasonable given where they're at now. With almost all their 1st party stuff pushed to Q2, it'll be interesting to see if they can bounce back or not that quarter pre-E3.

 

[Blueblur1]

I get what you're saying. I guess my point more focuses on the "legs" of the system - the selling potential throughout its life span. Those are the consumers that turn a 5 million selling console into a 20-50 million selling console. (Though this is nothing new when it comes to console sales)

I still think that both the Orbis and Durango will have the early adopters just like the Wii U, but less than either the 360 or PS3 saw in its initial months (again, just like Wii U compared to Wii). Public perception is drastically different than the last console cycle - more people will wait for a lower price point than in prior generations. This will force Nintendo/Sony/MS to drop their prices earlier than they have in the past in order to grab the market share before a competitor does. Basically, what happened with the 3DS. No one had ever seen a console price drop that quickly (and drastically) to fairly positive results.

I don't understand the logic of people thinking that the next-gen systems will sell like hotcakes out of the gate. That's never really the case and I don't see how the Wii U is any different. Sure, Nintendo has a lot to prove, especially this year, but they've shown that they're not only listening to their audience (I think the Nintendo Directs are a pretty bold attempt at transparency with the audience) but also have the ability to turn a lackluster console launch around with software to back it up (Nintendo 3DS).

Spoiler

And don't get me started on the people that want Nintendo to go 3rd party. What is wrong with you!?

An great example of a rational post. If anything GAFers should be preparing themselves for the Wii U sales to improve and for the new consoles to struggle. And yes, thinking that Nintendo will go under has been and continues to be an absolutely ludicrous prediction.

 

[lunchwithyuzo]

The Wii U is supposedly profitable with one game purchase, so this is not so different from the GameCube. Sony and MS were losing hundreds of dollars on cutting edge consoles and Blu Ray tech. Not resistive touchscreens.

It turns out that was a misquote, and Nintendo clairified it was more than one game to profit on hardware. So the per unit loss is over $60 minimum, and we fon't have a maximum.

How much per unit do you think PS1, PSP and Vita lost btw?

 

[metalslimer]

It turns out that was a misquote, and Nintendo clairified it was more than one game to profit on hardware. So the per unit loss is over $60 minimum, and we fon't have a maximum.

How much per unit do you think PS1, PSP and Vita lost btw?

I'm starting to believe Nintendo is actually completely inept at designing hardware if the Wii U seriously cost them over 360 dollars to make. If this is true a price cut would be awful for them.

It's time to get really desperate Nintendo. As mentioned earlier, I really feel sorry for the devs working on games now. They will be under tremendous stress in the next couple of years.

I wouldn't. They have some of the best job security in the business right now.

 

[pestul]

I think the post-launch drought will hurt Nintendo even more than they were calculating. With communications advancing exponentially even since Wii/PS3/360 launch, our ADHD culture will crucify them with bad press and word-of-mouth. I don't even think 1 title per month after March is going to be enough...

It's time to get really desperate Nintendo. As mentioned earlier, I also really feel sorry for the devs working on games now. They will be under tremendous stress in the next couple of years.

 

[Steve Youngblood]

It turns out that was a misquote, and Nintendo clairified it was more than one game to profit on hardware. So the per unit loss is over $60 minimum, and we fon't have a maximum.

How much per unit do you think PS1, PSP and Vita lost btw?

Isn't that a faulty assumption? If they said it took exactly one game to break even, even for first party stuff -- unless we're talking about the eShop -- they don't actually make $60 per copy of New Super Mario Bros. sold.

 

[Gahiggidy]

I'm starting to believe Nintendo is actually completely inept at designing hardware if the Wii U seriously cost them over 360 dollars to make. If this is true a price cut would be awful for them.



....

How do you know? Do you know what's in the box and how much each component performs and costs to include?

 

[MickeyPhree]

Does GTA still sell well? Serious question. I just didn't think it had the same weight it used to.

Why would you think it wouldn't hold weight? It's going to sell extremely well.

 

[KillerMan91]

I actually really can't understand why Nintendo is making losses. 3DS hw should be profitable, they sell tons of more 1st party software than MS or Sony and they went with low tech route with WiiU. Then you have original DS and Wii that bring still nice amount of revenue. What is eating so much money?

 

[metalslimer]

Isn't that a faulty assumption? If they said it took exactly one game to break even, even for first party stuff -- unless we're talking about the eShop -- they don't actually make $60 per copy of New Super Mario Bros. sold.

Well they make around 45-50 right. They don't have to pay royalty fees to themselves.

I actually really can't understand why Nintendo is making losses. 3DS hw should be profitable, they sell tons of more 1st party software than MS or Sony and they went with low tech route with WiiU. Then you have original DS and Wii that bring still nice amount of revenue. What is eating so much money?

The loss from wii u. And then the 3DS only began making money in July I believe.

 

[lunchwithyuzo]

Sure, what specifically do you want to know, just the proportion of bundled software to the total shipped software?

Not enough to have a serious discussion about.

Yes. In the US I know that Deluxe bundles accounted for ~75% of sales, which would raise the tie ratio pretty dramatically off the bat. UK figures were something like 70/15/15 Deluxe/Basic/ZombiU iirc.

I'd rather wait for the digital/bundled figures before discounting them as relevant or not. Anecdotally, by your count my household would be a 0 attach rate, but by Nintendo's figures it'd be 5.

 

[Bruno MB]

I'm starting to believe Nintendo is actually completely inept at designing hardware if the Wii U seriously cost them over 360 dollars to make. If this is true a price cut would be awful for them.



I wouldn't. They have some of the best job security in the business right now.

Yep, it's also hard to swallow that they are losing money selling the Wii U (Premium) at 350 dollars. If true they need to pay the consequences of such a poor management.

 

[AranhaHunter]

I wonder if Nintendo stock could actually fall below where there were during the Gamecube days. I know with inflation they are already below it.

Talking about NTDOY ADR

Current:
$12.25

Mid GC lifecycle:

May 10, 2004 $11.25

During Wii and DS' heyday, i.e. 2007

Oct 31, 2007 $78.50

The drop from Nintendo's heyday to today is not Sony like, IIRC they went from $150 a share (after the split in 2000) to $9.50 just last month but it's still pretty bad.

 

[Steve Youngblood]

Well they make around 45-50 right. They don't have to pay royalty fees to themselves.

Well, there's the store's cut, and manufacturing and distribution costs at a bare minimum. I'm not sure what those total to, but it's obviously less than the full MSRP of $60. Using that as be basis for them stating that it takes X amount of games to be profitable to conclude that they lose "X x $60" per Wii U sold seems off base to me.

 

[Gahiggidy]

Today we've learned the US Economy is shrinking again. Do you think this will put pressure on Microsoft/Sony to cut costs from their new machines in order to come in at a lower price point? Could we see a drop in RAM or Cores?

 

[lunchwithyuzo]

I'm starting to believe Nintendo is actually completely inept at designing hardware if the Wii U seriously cost them over 360 dollars to make. If this is true a price cut would be awful for them.

Well thanks to CS, we know the "replacement cost" for the major components:

Wii U Console: $200 USD
Wii U Game Pad: $100 USD

That probably gives us a good rough idea where the money was spent proportionately.

Isn't that a faulty assumption? If they said it took exactly one game to break even, even for first party stuff -- unless we're talking about the eShop -- they don't actually make $60 per copy of New Super Mario Bros. sold.

You're right, we can't put down an exact figure due to not knowing wholesale prices. Same for the console actually too.

All we can say is more than one game sale to profit on hardware, which comfortably puts it outside even the Gamecube comparison imo.

 

[KillerMan91]

The loss from wii u. And then the 3DS only began making money in July I believe.

Well then WiiU must be sold with rather huge loss and I really can't comprehend how that is possible.

 

[Mpl90]

Ah, for everyone asking about the "Corporate Management Policy Briefing".

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

It happened last year too.

 

[zomgbbqftw]

Today we've learned the US Economy is shrinking again. Do you think this will put pressure on Microsoft/Sony to cut costs from their new machines in order to come in at a lower price point? Could we see a drop in RAM or Cores?

No.

 

[Jarnet87]

Most new consoles are sold at a loss for a decent amount of time correct?

 

[marc^o^]

Well then WiiU must be sold with rather huge loss and I really can't comprehend how that is possible.

One day you'll learn to love the GamePad.

 

[Schnozberry]

The numbers are not what they projected, but given what the last two console launces have done (3DS and Vita), I think they might have had rose colored glasses on with the initial projections.

In any case, it's good to see them making money, especially now that they aren't releasing hardware this year and can concentrate on the games they have in the pipe. All of which appear to be pretty good, from what we've seen. Profits are good. Competition is good. E3 will be a good event for gamers of all stripes.

 

[lunchwithyuzo]

Most new consoles are sold at a loss for a decent amount of time correct?

Wii is the only one that wasn't for 3 generations now.

 

[Schnozberry]

Well then WiiU must be sold with rather huge loss and I really can't comprehend how that is possible.

Not huge. The Gamecube was sold at a small loss as well. Luckily this time around Nintendo's software attach rate is higher and they made some money.

 

[Schnozberry]

Today we've learned the US Economy is shrinking again. Do you think this will put pressure on Microsoft/Sony to cut costs from their new machines in order to come in at a lower price point? Could we see a drop in RAM or Cores?

I doubt we'll see any changes to the hardware now. What it does say is that Sony and Microsoft will need to deliver thunder bolts of joy to the hardcore gaming crowd at E3 to grab as many early adopters as possible this holiday season. If they don't, they won't reach economies of scale fast enough to drop their prices and appeal to the mass market. No way these things come in under $400 unless it's a super tard pack.

 

[Father_Brain]

Hmm, the IR calendar still doesn't list a results briefing for the 31st (tonight). There has to be one, right?

 

[DaBoss]

Not huge. The Gamecube was sold at a small loss as well. Luckily this time around Nintendo's software attach rate is higher and they made some money.

The Gamecube had a great software attach ratio.

 

[Mpl90]

Hmm, the IR calendar still doesn't list a results briefing for the 31st (tonight). There has to be one, right?

It is listed

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

 

[KillerMan91]

Not huge. The Gamecube was sold at a small loss as well. Luckily this time around Nintendo's software attach rate is higher and they made some money.

It must be rather huge if they as company barely make profit. They have three proftable hardwares(3DS,DS, Wii) and they sell huge amount of 1st party software and still are expecting losses. Something here is not right.

 

[lunchwithyuzo]

Not huge. The Gamecube was sold at a small loss as well. Luckily this time around Nintendo's software attach rate is higher and they made some money.

I'm pretty sure Gamecube had a higher attach rate than Wii or Wii U at launch, though I don't have figures handy. GC actually had a pretty good launch, it's issues were longer term.

 

[metalslimer]

Today we've learned the US Economy is shrinking again. Do you think this will put pressure on Microsoft/Sony to cut costs from their new machines in order to come in at a lower price point? Could we see a drop in RAM or Cores?

Dude get over it.

Also the economy did not shrink due to consumer spending so I don't know how that is relevant.

 

[DashReindeer]

If 3DS sales continue to dissapoint (outside of Japan it has consistently done worse than Nintendo's projections) and Wii U doesn't turn around how long can Iwata stay as CEO?

I posted as much in the Media Create thread, but at this point, how much longer could he possibly stay in that role? I would consider this two hugely failed hardware launches in a row, and the fact that the 3DS has finally turned around in Japan doesn't change the fact that no one wants one outside of Japan, and no one wants a Wii U anywhere.

I know we're all crying doom all the time, so I won't go that far, but this is really not good for the big N. They are going to have to make some drastic changes at this point. The way they have been doing things is not working anymore obviously.

 

[Trevelyan]

The GameCube was not sold at a loss at launch, however. Wii U is the first Nintendo console where they've taken a hit on a day one. GameCube only sold at a loss once they dropped the price to $99.

 

[Father_Brain]

It is listed

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

Well, never mind. Must have just been a browser cache issue.

 

[Stumpokapow]

PS1 and PS2/PSP weren't profitable enough to keep SCE in the black during their transitions either. Same for Xbox, why are we holding Nintendo to a different standard?

Well, for one, because Nintendo is a games company, and Sony/Microsoft are big consumer companies with games divisions, so the sustainability of running losses during generational transitions are different in both cases.

 

[Mpl90]

I posted as much in the Media Create thread, but at this point, how much longer could he possibly stay in that role? I would consider this two hugely failed hardware launches in a row, and the fact that the 3DS has finally turned around in Japan doesn't change the fact that no one wants one outside of Japan, and no one wants a Wii U anywhere.

I know we're all crying doom all the time, so I won't go that far, but this is really not good for the big N. They are going to have to make some drastic changes at this point. The way they have been doing things is not working anymore obviously.

Sure. Except for 20 millions of people in less than two years, no one wants a 3DS outside Japan.

Spoiler

lol

 

[1-D_FTW]

Today we've learned the US Economy is shrinking again. Do you think this will put pressure on Microsoft/Sony to cut costs from their new machines in order to come in at a lower price point? Could we see a drop in RAM or Cores?

No. Is simply puts pressure on them to release a console that people actually want. Plenty of products still do gangbusters in this economy. Releasing a sub-par product that ignores what people actually want, however, is a recipe for failure.

 

[noffles]

When's the investor meeting?

 

[lunchwithyuzo]

It must be rather huge if they as company barely make profit. They have three proftable hardwares(3DS,DS, Wii) and they sell huge amount of 1st party software and still are expecting losses. Something here is not right.

They're expecting a loss for the year. All year they'd have had loss bearing hardware (3DS in Q1/2, Wii U in Q3/4), and this is their first profitable quarter (Q3). Nintendo's also incredibly sensitive to currency fluctuations given they're a Japanese company who does about 75% of their business overseas, so often that profit/loss can be exaggerrated.

 

[Gahiggidy]

No. Is simply puts pressure on them to release a console that people actually want. Plenty of products still do gangbusters in this economy. Releasing a sub-par product that ignores what people actually want, however, is a recipe for failure.

What do you mean? Sub-Par? :confused

 

[hellclerk]

Honestly, the fact that they're in the black I think is probably the best thing for them. They lost no money on an HD console launch, and so they have headroom for something very important: Price Cuts. I don't think it would be beyond Nintendo to overshadow Oribis and Durango by simply reducing their console price and having a year of games already released. Nintendo has the advantage of the first to market, which allows them to be proactive in market mindshare. You guys really think that Nintendo is just going to sit idle and let Microsoft and Sony take the limelight? Of course not, they're going to drop price and push their hardware over MS and Sony, and this time, they don't have the same crutch the Wii had with a lack of programmable shaders. With scaling being such an important feature of modern game engine tech these days, Nintendo's system will be capable of the multiplats, and their exclusive drives sales. The only thing left to consider is how the rest of the industry responds.

 

[Father_Brain]

When's the investor meeting?

Tonight. Starts at 8 or 9 PM EST, not sure which exactly.

 

[DashReindeer]

Sure. Except for 20 millions of people in less than two years, no one wants a 3DS outside Japan.

Spoiler

lol

Sorry, should have chosen different wording. It's not that no one wants one, rather that seemingly not enough people want them. Otherwise, Nintendo wouldn't have had to cut its hardware projections by 2 million and its software projections by 20 (and that's after the first cut of one and three million respectively).

 

[metalslimer]

Honestly, the fact that they're in the black I think is probably the best thing for them. They lost no money on an HD console launch, and so they have headroom for something very important: Price Cuts. I don't think it would be beyond Nintendo to overshadow Oribis and Durango by simply reducing their console price and having a year of games already released. Nintendo has the advantage of the first to market, which allows them to be proactive in market mindshare. You guys really think that Nintendo is just going to sit idle and let Microsoft and Sony take the limelight? Of course not, they're going to drop price and push their hardware over MS and Sony, and this time, they don't have the same crutch the Wii had with a lack of programmable shaders. With scaling being such an important feature of modern game engine tech these days, Nintendo's system will be capable of the multiplats, and their exclusive drives sales. The only thing left to consider is how the rest of the industry responds.

They did lose money on this launch it was just covered up by their other revenue. A price cut would just increase the loss further although Nintendo may hae a good enough year with the 3DS to make up for it.

But is it even Nintendo anymore without Iwata? What would be the point anymore?

 

[Gahiggidy]

I posted as much in the Media Create thread, but at this point, how much longer could he possibly stay in that role? I would consider this two hugely failed hardware launches in a row, and the fact that the 3DS has finally turned around in Japan doesn't change the fact that no one wants one outside of Japan, and no one wants a Wii U anywhere.

....

But is it even Nintendo anymore without Iwata? What would be the point anymore?

 

[lunchwithyuzo]

The GameCube was not sold at a loss at launch, however. Wii U is the first Nintendo console where they've taken a hit on a day one. GameCube only sold at a loss once they dropped the price to $99.

Nope, it was a slight loss both times (at $199 in 2001 and $99 in 2003). Both times the sale of a single 1st party game per hardware unit pushed them to profitability too.

The losses were incredibly short lived too iirc (it was profit bearing already for the $149 cit in 2002), Nintendo's engineers and partners really pulled off a miracle with Gamecube hardware wise for the time.

 

[zomgbbqftw]

They're expecting a loss for the year. All year they'd have had loss bearing hardware (3DS in Q1/2, Wii U in Q3/4), and this is their first profitable quarter (Q3). Nintendo's also incredibly sensitive to currency fluctuations given they're a Japanese company who does about 75% of their business overseas, so often that profit/loss can be exaggerrated.

They actually downgraded their outlook from a small profit to an operating loss despite the weakening Yen. They expected the year to be profitable, I guess from Wii U software where expectations have been massively downgraded.

 

[DashReindeer]

But is it even Nintendo anymore without Iwata? What would be the point anymore?

Hey, I'm inclined to agree, and would be greatly saddened if this did indeed happen, but I'm just looking at this from a shareholder perspective. Iwata is failing in his job. If I was a Nintendo shareholder, I would be calling for his head by now. I can't imagine the Board of Directors is happy with what's been going on.