I gave then a cool idea to get away with releasing craptastic consoles specs wise. The idea is not perfect but interesting at least.
That would be hard to do with a portable that would be expected to "compete" with consoles.
I gave then a cool idea to get away with releasing craptastic consoles specs wise. The idea is not perfect but interesting at least.
You're acting like Pach is an oracle
So he used the wrong wording. His point still stands that the 3DS is competing with smart phones, tablets, ipod touches, etc.
the gamecube?
You forget the virtual boy
Good stuff
Very few games do it well, Fire Emblem does.
Yeah, just pointing out the statement is amateurish and wouldn't even pass in marketing 101.
To elaborate, if the Wii U is not generating profits, and if the 3DS is not generating profits, the only thing that will generate profits is software.
You're arguing semantics dude. Pachter doesn't actively wish for Nintendo to do badly, don't take it personally when he suggests that Nintendo is in a rough spot.
Sounds like your backtracking , you stated Nintendo would "probably never recover" , thats just sensationalist bullshit. You talk of profit and losses whilst failing to address the currency conversion issues Japan has faced nor hold Sony nor Microsoft to the same profit expectations.
Patcher being born is a mistake that we will never recover from.
First, I must apologize for calling two thirds of you assholes. It's probably more like 5%, so I was overly sensitive in my generalization.
Second, and to the point, there is actually some reasoning behind my comments that the Wii U is a mistake from which Nintendo may not recover, and I threw the 3DS' cannibalization from smart phones and tablets in there to make a point.
Nintendo has historically made money, and a lot of money, on each hardware unit sold. The DS at $99 US is more profitable for them than the 3DS at $169 (see many quotes from Nintendo in Kyoto about losing money, or being barely profitable). The DS sold 23.5 million units in FY:07 (ended March 31), 30.3 million in FY:08, 31.1 million in FY:09, and 27.1 million in FY:10. Nintendo made money, and a lot of money, in each of those years.
I think it is instructive to use operating income in Yen as a guide, since Iwata said he would consider resigning if Nintendo did not earn ¥100 billion in FY:14. Nintendo made ¥90 billion in FY:06, ¥226 billion in FY:07, ¥487 billion in FY:08, ¥555 billion in FY:09, and ¥356 billion in FY:10. In FY:11, DS sales dropped to 17.5 million units, and operating income fell to ¥171 billion; in FY:12, combined DS and 3DS sales were 18.6 million units, but operating income disappeared, and Nintendo generated a LOSS of ¥37 billion. Obviously, the loss was impacted by lower Wii sales and lower software sales, but the point here is that the 3DS doesn't generate much of a profit per unit, if any, and the DS did.
Over the same period, Wii hardware sales were 0, 5.8 million, 18.6 million, 25.9 million, 20.5 million, 15.0 million, and 9.8 million. We have been repeatedly assured by Nintendo that the company makes a profit on every Wii sold, but as sales leveled off at 10 million, the company printed its first loss ever.
In FY:13 (the current year, ending next month), Nintendo is projected to sell 17.3 million DS and 3DS units combined, and to sell 8 million Wii and Wii U units combined, and is projected to generate an operating loss of ¥20 billion. That means that current levels of sales keep the company at roughly breakeven.
My comment about the Wii U being a "mistake" from which the company "may not recover" was intended to say that if Wii U sales don't materially improve, Nintendo is unlikely to be profitable. They have around ¥1 trillion (around $11 billion) in cash, so they aren't in danger of going out of business for decades. However, if they aren't profitable, they aren't doing a good job for shareholders.
To elaborate, if the Wii U is not generating profits, and if the 3DS is not generating profits, the only thing that will generate profits is software. Nintendo is ensured high sales of its proprietary software, but it makes the most money on its royalty business, collecting fees from third parties for the privilege of letting them put out games on Nintendo platforms. Publishing (software) revenues peaked at ¥675 billion in FY:09, and are on track to come in around ¥235 billion this year; my call is that if hardware sales don't materially improve above current combined levels, software sales are unlikely to materially grow. If software sales don't materially improve, losses or break even will become the norm. Nintendo will not "recover" to its formal highly profitable glory.
The poor sales of the Wii U in January are likely to impact third party publisher plans to support the console. Notice that GTAV is not on the Wii U; that wasn't a typo, they don't see enough promise in sales to cause them to spend extra development dollars on a Wii U version. I have spoken to several publishers who are skeptical, and I think that the Wii U will see a lower level of third party support than the Wii did, unless sales materially improve. If I'm wrong, I'll admit it, but without third party titles, Nintendo will not generate its customary levels of royalties, and losses or break even could become the norm.
Many of you point out that the 3DS is selling better than the DS at a similar point. That's true, but the DS was always profitable, and the 3DS is not. Also, the DS saw sales go from 8.8 million units in its first four quarters to 18.0 million its next four, to 20.2 million in its third full year; I'm pretty confident that the 3DS will not get to 20 million units, but even if it did, it would generate little profit from hardware. Keep in mind that the DS redesign to a lite version boosted sales, and there was little competition for 12 year-old and older from smart phones and tablets. Now, parents who can afford it are opting for Kindles, iPads, and smart phones for their teenagers, and the more casual of those are perfectly happy playing Angry Birds and putting their DS or 3DS into a drawer.
The important point is that if 3DS sales level off at 15 million and Wii U sales level off at 8 - 10 million, software sales will be much lower than they were in the past. If Nintendo doesn't make a profit on hardware, they can't afford to cut prices further. If they do cut price, it will likely occur as their manufacturing costs come down, but I don't expect big hardware profits in the foreseeable future. They are stuck with software profits, and at current sales levels, they are unlikely to make an overall profit from software.
That's it, not trolling, but that is my reasoning.
To the 5% of you who ARE assholes, bring it on ;-)
My only problem with Nintendo is that they can sustain a Wii U not being a success and the 3DS being a modest success but I feel like they keep shooting for something "new" and I wish they'd just release a traditional console with the Pro Pad. I don't need a gimmick.
That, or they need to release an uber handheld that streams to the TV in away that the Wii U is a console that streams to a "portable". I'd rather have it go the other way.
If you talk about profits I would be more worried for Sony and Microsoft, especially Sony. But people don't care because they have a false sense than Sony and Microsoft are resourcing from other areas, and Nintendo don't.
He said that's where they make the most money. And it's where they're not making enough money, and the fact that the hardware isn't selling is exacerbating the problem.
Yeah but how many of those 30 million bought a Wii BECAUSE of MKWii? MKWii sold well because the install base was already there. It also had the wheel and online play. MKWiiU wont have any of those distinctions or advantages, not to mention there is now some great alternatives on the market such as SASRT, Modnation, even LBP Karting. I might be wrong, but I don't think MKWiiU will do as well as the 2 MK games before it.
My only problem with Nintendo is that they can sustain a Wii U not being a success and the 3DS being a modest success but I feel like they keep shooting for something "new" and I wish they'd just release a traditional console with the Pro Pad. I don't need a gimmick.
That, or they need to release an uber handheld that streams to the TV in away that the Wii U is a console that streams to a "portable". I'd rather have it go the other way.
That post where pachter finally elaborates on some of his thought process, whether I agree with him or not in his assessment, completely restores my respect for him, even if not particularly for his predictive skills.
It was reasoned, articulated his position well and even made attempts to amend some of the bad blood. I really enjoyed it reading it. Good shit, Michael.
If you talk about profits I would be more worried for Sony and Microsoft, especially Sony. But people don't care because they have a false sense than Sony and Microsoft are resourcing from other areas, and Nintendo don't.
Now if he only ever did this for the rest of his quotes I see flung around here..
Good to see my WiiU purchase wasn't in vain
Now if he only ever did this for the rest of his quotes I see flung around here..
Good analysis, but it doesn't stop the original statement from being outlandish to get attention.
It should be. Personal attacks are personal attacks. GAF's code of conduct has a specific clause written into it for just that scenario.How is this shit not bannable?
You guys shouldn't be laying into Pachter so much for employing hyperbole to get his point across. Saying "a mistake Nintendo may never recover from" makes for a much tastier sound byte and generates a lot more interest than that big lengthy diatribe he provided us with in the last page where he breaks his logic down. We appreciate that level of detail but that's not what the media is looking for. We're completely different audiences.I honestly believe he does it on purpose .
Gimmicks drive sales with any product and Nintendo went with a long shot in both the DS(to counter the PSP) and the Wii(attract new gamers after the Gamecube). The Wii U just doesn't seem to be catching on and it probably has a lot to do with the tablet boom that they didn't see coming when developing the controller.
Patcher being born is a mistake that we will never recover from.
It should be. Personal attacks are personal attacks. GAF's code of conduct has a specific clause written into it for just that scenario.
You guys shouldn't be laying into Pachter so much for employing hyperbole to get his point across. Saying "a mistake Nintendo may never recover from" makes for a much tastier sound byte and generates a lot more interest than that big lengthy diatribe he provided us with in the last page where he breaks his logic down. We appreciate that level of detail but that's not what the media is looking for. We're completely different audiences.
Employing hyperbole is a common tactic to grab someone's interest and generate a reaction to what you have to say. I do it here myself... if I'm speaking in extremes on GAF, chances are I don't believe 90% of what I'm saying. But I'm taking an extreme stance to make a point.
When he says "not recover from", he obviously doesn't mean go out of business
You act as if it's his fault that you only read quotes taken out of context. As Ami pointed out, Michael's predictive skills are questionable at best, but his analysis of current situations is usually spot-on. If I had a question for him it would be: Where did the prediction of Wii U selling out worldwide for months come from? Extrapolation from the Wii's success or blind acceptance of Nintendo's own predictions?
But what I don't get is that let's say that Nintendo operates at a breakeven level for the entire next generation of consoles (~5 years). They still have $11 billion in the bank. Even if it goes down to $7 or 8 billion they could still come up with a hit product and become profitable again. I mean the Gamecube was a relative bomb and then they came up with the Wii. Same thing could happen again.
I assume Pachter is talking about this from a shareholder perspective. If the company is treading water or losing a little money each year the stock is not going to go up and the shareholders won't make any money. But the company itself could still recover.
Pachter just shitted on his haters. That's my dawg.
or his analysis that the 3DS would sell out for months at 250 only to promptly switch analysis and say Nintendo was dumb for doing that.
Nah, he just stated the obvious and people are acting like that makes his crazy one liners any less annoying.
Kudos to Pachter for coming here in the spotlight to explain himself. But like always, why choose such a hyperbole headline just to explain it later with a few more elaborate sentences?
Apparently not seeing as a lot of Nintendo fanboys think the WiiU is doing "fine".Nah, he just stated the obvious and people are acting like that makes his crazy one liners any less annoying.
Nah, he just stated the obvious and people are acting like that makes his crazy one liners any less annoying.
You think Pachter chooses the headlines that publications run with? Come on now.
Apparently not seeing as a lot of Nintendo fanboys think the WiiU is doing "fine".