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[Diablos54]

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

Who could replace him is another question. They have a ton of world class developers, but they don't make great CEO's, at least not usually.

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.

Some of the shareholders should be told to STFU considering how much they keep going on about iOS, some of them have no idea how the industry even works going off what I've seen from the Q&A's. And wouldn't it be Yamauchi's decision to get rid of Iwata, or the BoD in general?

 

[Captain Smoker]

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).

Hardware sales in the west are going to rise in 2013 anyway.

 

[michaeltraps]

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

How is Wii U sub par from a hardware standpoint? They can't just release a me-too HD console and expect it to do well. The GameCube was arguably the most powerful console of its generation and was the poorest-performing of the three.

that ignores what people actually want, however, is a recipe for failure.

What do people want from a Nintendo console other than software, which will come eventually. Expecting Nintendo to release a Zelda, 3D Mario, Mario Kart and Smash Bros in the launch window is a crazy proposition. No one expects that of ANY software developer.

 

[BoboBrazil]

They are not making a profit. They lowered forecasts of Wii U hardware, Wii U software, 3DS hardware, 3DS software, and changed their forecast from a profit to a loss. Someone ought to add the Reuters news story to the first post to add some context to the numbers:

Nintendo Co Ltd, the world's leading gaming company by machines sold, said it will post an operating loss for a second straight year as the sales of its Wii U, successor to the 100-million selling Wii, faltered.

The company caught investors off guard by predicting a loss of $220 million in the year to March 31, reversing a profit forecast for the same amount, putting its new guidance well short of a consensus estimate of 12.1 billion yen ($133.48 million) profit from 19 analysts.

The grim outlook came even as a weaker yen provides a boost for a company that sells almost three quarters of its products outside Japan.

"It was a somewhat negative surprise," said Yasuo Sakuma, portfolio manager at Bayview Asset Management.

Wow, that is horrible. It is obvious these are shipped and not sold numbers too that they released.

 

[Schnozberry]

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.

I could be wrong, but if I remember correctly the Gamecube launch was one of the reasons Nintendo posted it's first loss in 62 years. It was November of '03.

Found the artice: http://articles.latimes.com/2003/nov/14/business/fi-nintendo14

I think things improved after that, but I believe the following E3 Nintendo lowered the price and announced Metroid Prime and Mario Sunshine for the Cube's second holiday season.

 

[noffles]

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

I guess I'm going to be staying up until silly-o-clock UK time to see what happens. Sigh.

 

[lunchwithyuzo]

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.

Yeah, delaying 4 1st party Nintendo games will have that sort of effect. :/

 

[Miles X]

So Wii won't even pass 100m in this next upcoming Q! Can't believe how much it's slowed.

I don't think it's going to beat PS1 now.

 

[zomgbbqftw]

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.

How many times does this need to be said. The company is not profitable. The profit figure comes from a revaluation of foreign assets to take into account a weaker Yen. The Wii U wiped out profits from Wii, DS and 3DS hardware as well as software from all units.

 

[DashReindeer]

They are not making a profit. They lowered forecasts of Wii U hardware, Wii U software, 3DS hardware, 3DS software, and changed their forecast from a profit to a loss. Someone ought to add the Reuters news story to the first post to add some context to the numbers:

Nintendo Co Ltd, the world's leading gaming company by machines sold, said it will post an operating loss for a second straight year as the sales of its Wii U, successor to the 100-million selling Wii, faltered.

The company caught investors off guard by predicting a loss of $220 million in the year to March 31, reversing a profit forecast for the same amount, putting its new guidance well short of a consensus estimate of 12.1 billion yen ($133.48 million) profit from 19 analysts.

The grim outlook came even as a weaker yen provides a boost for a company that sells almost three quarters of its products outside Japan.

"It was a somewhat negative surprise," said Yasuo Sakuma, portfolio manager at Bayview Asset Management.

That's such a great response.

 

[Elios83]

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.

If you read things carefully it's not like that, Iwata stated that the company is losing money on Wii U hardware and software sales are not at the expected levels to make up for it.
The company is posting an operative loss and forecasting an operative loss for the full FY, so they're losing money.
Nintendo being back in black with net profits is basically a gift of the weak yen to japanese companies (other big exporters like Toyota, Canon, Sony, Panasonic will benefit of this as well).
There is a reason the stock is down almost 8% today.
So no there isn't a lot of room to cut the price on Wii U without keeping a losing money strategy.

 

[Diablos54]

The Wii U wiped out profits from Wii, DS and 3DS hardware as well as software from all units.

You should make it clear you mean for this year, otherwise people might think you mean wiped out in the PS3 sense.

 

[zomgbbqftw]

Yeah, delaying 4 1st party Nintendo games will have that sort of effect. :/

Shouldn't have delayed them in that case...

 

[lunchwithyuzo]

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.

Fair enough, though I'd argue the sustainability of PlayStation is also an open question these days going by their previous two transitions (PS2 -> PS3, PSP -> PSV).

 

[Gahiggidy]

By the way...

I suspect the $60 MSRP on Wii U games is the biggest thing holding back sales. That is a lot of &^$%# money for a plastic disc. It may fly for the enthusiast, hardcore, crowd... but that is not Nintendo's base and I think the higher game prices are discouraging Nintendo's people from throwing in with Wii U.

 

[Diablos54]

Shouldn't have delayed them in that case...

Cause releasing unfinished/rushed games is a great way to build confidence in the system/software. I mean, it worked great of Wind Waker, right? The old Shiggy quote is applicable here, I think.

 

[metalslimer]

Cause releasing unfinished/rushed games is a great way to build confidence in the system/software. I mean, it worked great of Wind Waker, right? The old Shiggy quote is applicable here, I think.

I guess it did because Twilight Princess sold great.

 

[Schnozberry]

You should make it clear you mean for this year, otherwise people might think you mean wiped out in the PS3 sense.

Yeah, they lost a substantial amount of money in Q1 and Q2, and now posted a small profit for this quarter due to the weaker yen. Due to slower than anticipated sales and software delays, they are forecasting a net loss for the year. It really shouldn't surprise anyone. Hell, Microsoft and Sony are still bleeding money, but nobody notices that either.

 

[Diablos54]

I guess it did because Twilight Princess sold great.

What has that got to do with WW being rushed though? Rushing software to try and bump sales is a very short sighted thing to do, especially for a system which isn't exactly resonating with the core, for who quality would matter the most.

 

[Hanmik]

has Pachter´s words been posted here..?

Industry analyst Michael Pachter believes Nintendo 'got it wrong' and will have to cut the price of the Wii U to keep hardware sales up.

Nintendo’s third quarter financial results and Wii U sales forecast cutting is evidence that the Wii U ‘doesn’t capture the imagination’ of the Wii, according to analyst Michael Pachter.

As Nintendo releases its third quarter financial results for 2012-2013, it has had to cut its Wii U sales forecast and industry analyst Michael Pachter believes this is evidence that Nintendo has miscalculated with its new console.

“I always thought Nintendo’s Wii U software forecast made no sense,” explains the Wedbush Securities analyst of Nintendo’s financial results.

“They initially guided 24 million, are taking that down to 16 million, which is a 4:1 software attach rate. That’s reasonable, especially given that the installed base is 3 million hardware units now and the guidance implies they need to ship only 4.31 million more software units.”

But Pachter goes as far to say that the disappointing hardware sales won’t be relieved unless Nintendo cuts the price of the Wii U.

“The hardware guidance is disappointing, and there isn’t really anything that will get hardware moving other than a price cut. I think they got it wrong with this console, it just doesn’t capture the imagination the way that the Wii did.”

Unsurprisingly, Pachter’s not optimistic when it comes to the future of Nintendo’s Wii U, especially when Microsoft and Sony’s new consoles arrive on the scene, and he paints a bleak picture.

“The Wii U is not going to be very competitive if Sony and Microsoft launch comparable consoles at comparable prices,” explained Pachter.
“The early weakness will cause many third party publishers to re-think support for the Wii U, and we might not see much support at holiday 2013.”

http://www.nowgamer.com/news/1789047/wii_u_nintendo_got_it_wrong_with_this_console_pachter.html

 

[Schnozberry]

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.

If that's the case, put it on a pike right next to Kaz Hirai and Steve Ballmer.

 

[nikatapi]

By the way...

I suspect the $60 MSRP on Wii U games is the biggest thing holding back sales. That is a lot of &^$%# money for a plastic disc. It may fly for the enthusiast, hardcore, crowd... but that is not Nintendo's base and I think the higher game prices are discouraging Nintendo's people from throwing in with Wii U.

Τhat is a fair amount of money if the game seems to have the value to support it.
An upscaled version of NSMBWii with some new courses does not seem to be worth it, as NSMB2 wasn't worth my 50euro.

 

[noffles]

What has that got to do with WW being rushed though?

I think it's a silly dig at TP.

 

[zomgbbqftw]

Fair enough, though I'd argue the sustainability of PlayStation is also an open question these days going by their previous two transitions (PS2 -> PS3, PSP -> PSV).

The PlayStation division exists to push Sony's other devices and brands. PlayStation will always be viable for Sony, and with Kaz in charge there will be no repeat of PS3 scale losses.

 

[Gahiggidy]

...also, my prediction that having NSMB U for launch was a mistake turned out to be true. That kind of game drives casuals to the console... not early adopters. They should have had a Flagship title that appears to Xbox customers, such as Mario 3d, and held the 2D version off for when the console was cheaper for casuals to pick up.

 

[Miles X]

...also, my prediction that having NSMB U for launch was a mistake turned out to be true. That kind of game drives casuals to the console... not early adopters. They should have had a Flagship title that appears to Xbox customers, such as Mario 3d, and held the 2D version off for when the console was cheaper for casuals to pick up.

Always a mistake to have such a huge franchise at launch, there is no userbase and the game gets lost in the long run.

 

[G-Unit]

hahahahaha man this doom and gloom nerver ends.

Never change gaf, never change

 

[noffles]

Always a mistake to have such a huge franchise at launch, there is no userbase and the game gets lost in the long run.

Bullshit. Twilight Princess was the driving force of the Wii launch.

 

[Road]

Nintendo's game business actually made money this past holiday quarter (¥23.3 billion) but they are still in the red (-¥5.9 billion) for the 9 months in the current fiscal year.

 

[Schnozberry]

The PlayStation division exists to push Sony's other devices and brands. PlayStation will always be viable for Sony, and with Kaz in charge there will be no repeat of PS3 scale losses.

All of Sony's divisions are losing money. Sony may not be viable much longer as a company if they have nother PS3 situation.

 

[Steve Youngblood]

hahahahaha man this doom and gloom nerver ends.

Never change gaf, never change

What's your take on these results?

 

[Diablos54]

Always a mistake to have such a huge franchise at launch, there is no userbase and the game gets lost in the long run.

What? No way, having a huge title at launch is essential. And with it being an evergreen title like NSMB, the lack of userbase won't be that much of a problem as it would be with a front loaded title. I think it was a good choice, but having NSMB2 so close was stupid. They should have swapped NSMB2 and 3DL around instead of release the 2 NSMB titles so close to each other.

 

[Bruno MB]

Τhat is a fair amount of money if the game seems to have the value to support it.
An upscaled version of NSMBWii with some new courses does not seem to be worth it, as NSMB2 wasn't worth my 50euro.

New Super Mario Bros. U is one of the few games I would gladly pay 60 € for.

 

[Schnozberry]

What's your take on these results?

They lost less money than Sony and Microsoft did? Not a whole lot of good news to glean from it, other than they were able to post a profit for the quarter by reassesing the value of foreign assets. I'm not sure why people are so convinced that Microsoft and Sony will be immune to this come the same time next year.

 

[Miles X]

What? No way, having a huge title at launch is essential. And with it being an evergreen title like NSMB, the lack of userbase won't be that much of a problem as it would be with a front loaded title. I think it was a good choice, but having NSMB2 so close was stupid. They should have swapped NSMB2 and 3DL around instead of release the 2 NSMB titles so close to each other.

Essential?! No way. It's done nothing for WiiU and PS3 and 360 never had a huge franchise and they've done a lot better.

MS and Sony seem to get it anyway, hence why they wait years to release the big guns so the userbase can build up.

Nintendo seem to be using all their aces so quickly in a bid to get traction, in the end they're not gonna have any cards left to play.

 

[zomgbbqftw]

All of Sony's divisions are losing money. Sony may not be viable much longer as a company if they have nother PS3 situation.

That's why Kaz is keeping a tight control on costs and PS4 is using off the shelf parts.

 

[G-Unit]

What's your take on these results?

That it is just launch windows and that anything can happen. If ps3 recovered from that stupid $600 price, then im sure as hell things will improve for wii U. Im not even calling the current numbers bad, just below expectations

 

[nikatapi]

New Super Mario Bros. U is one of the few games I would gladly pay 60 € for.

I didn't argue it is a bad game because i haven't played it, but the fact is that if Nintendo wanted to make it a system seller game they should have thought about changing the look of the game to seem like something new, instead it looks like an upscaled Wii game with better lighting and some of the same recycled music.

That doesn't seem like a great product for a so called "hardcore" Nintendo fan, just more of the same, nothing that couldn't be done on the Wii.

 

[Cyrano]

Whether they're doing good or bad mostly has to do with their current projections, and while they may have public announcements to shareholders at different points in the year, it's likely impossible to know what their current projections are and whether or not their current stockholders are happy with them.

That said, if you want bleak: http://www.nasdaq.com/article/nintendos-value-declined-77-in-five-years-cm192051#.UQlFMGeAfaQ

Despite this, Sony and Microsoft have much larger pockets than Nintendo, comparably, because they are in more businesses than Nintendo, and thus can likely afford even an operating loss if their other businesses are pulling in better numbers (which isn't entirely unlikely, due to how much advertising both companies do for their software and hardware, rather than their videogames - yes, I'm aware videogames are software, it's simply a comparison of their other businesses, which also involve hardware and software).

 

[KillerMan91]

Yeah, they lost a substantial amount of money in Q1 and Q2, and now posted a small profit for this quarter due to the weaker yen. Due to slower than anticipated sales and software delays, they are forecasting a net loss for the year. It really shouldn't surprise anyone. Hell, Microsoft and Sony are still bleeding money, but nobody notices that either.

Gaming divisions of both MS and Sony are profitable. Well Sony's gaming division made slight loss during last two quarters but this holiday quarter should easily make whole year profitable.

 

[Schnozberry]

That's why Kaz is keeping a tight control on costs and PS4 is using off the shelf parts.

So you expect they will sell it at a profit? How much do you think it will cost at retail then?

 

[Neo C.]

I'm not sure Nintendo has hit a single sales projection for the 3DS or Wii U... ever.

I feel they really need to have a reality check at some point.

They do, that's why the projection keeps corrected. The whole industry (outside of iOS) is shrinking like never before.

 

[Steve Youngblood]

That it is just launch windows and that anything can happen. If ps3 recovered from that stupid $600 price, then im sure as hell things will improve for wii U. Im not even calling the current numbers bad, just below expectations

Yes, anything can happen. But I don't know why that precludes analysis on how things are going now. It's not unreasonable to assess the current situation and surmise that things aren't looking good. Such an assessment doesn't tether you completely to a conclusion that we should stick a fork in this thing.

 

[Schnozberry]

Gaming divisions of both MS and Sony are profitable.

No, they aren't. Microsoft has lost 3 billion on their gaming division since the launch of the of the 360, and Sony has lost close to 5 billion. They've been profitable over the last few years since they've lowered manufacturing costs, but they are in no way profitable over the long term.

 

[KillerMan91]

No, they aren't. Microsoft has lost 3 billion on their gaming division since the launch of the of the 360, and Sony has lost close to 5 billion. They've been profitable over the last few years since they've lowered manufacturing costs, but they are in no way profitable over the long term.

You said that they are still bleeding money and that is not true. At the moment Nintendo is the only one making losses.

 

[Miles X]

No, they aren't. Microsoft has lost 3 billion on their gaming division since the launch of the of the 360, and Sony has lost close to 5 billion. They've been profitable over the last few years since they've lowered manufacturing costs, but they are in no way profitable over the long term.

No, they have made profit since the 360 was launched, get your facts straight.

And since it started profiting, $3.7B?

They lost $3.3b~ in the first years. (With RROD)

 

[zomgbbqftw]

So you expect they will sell it at a profit? How much do you think it will cost at retail then?

Not a profit, but certainly not a $300 loss. Maybe $299 losing $50 up front.

 

[Diablos54]

Not a profit, but certainly not a $300 loss. Maybe $299 losing $50 up front.

$300? No way it's gonna be that cheap at launch, no way in hell. $350 min IMO, and that would be for the 'tard pack'.

No, they have made profit since the 360 was launched, get your facts straight.

And since it started profiting, $3.7B?

They lost $3.3b~ in the first years. (With RROD)

I think the dude meant overall, so while the 360 is finally profitable, you add the OG Xbox losses and the division as a whole is still in the red.

Microsoft's Entertainment division just posted a lost last week, despite the Holiday, making them loss leaders in the corporation for the year. I haven't seen Sony's numbers yet.

MS's Entertainment Division is more than just the Xbox though.

 

[harbingeru]

So you expect they will sell it at a profit? How much do you think it will cost at retail then?

Just admit that Nintendo is doing bad, there's no need to point out MS or Sony.

 

[Schnozberry]

You said that they are still bleeding money and that is not true. At the moment Nintendo is the only one making losses.

Microsoft's Entertainment division just posted a lost last week, despite the Holiday, making them loss leaders in the corporation for the year. I haven't seen Sony's numbers yet.