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[Anticitizen One]

Not since Michael Eisner have I seen a CEO this terrible

 

[airmangataosenai]

Wow, this is the first time Nintendo's ever put out realistic estimates for the 3DS before. They might actually manage to surpass expectations for once. I'm blown away by the Wii U estimate as well, I wouldn't of thought they'd have the guts to revise it by over 50%, let along slash it by MORE THAN 2/3rds,

 

[Raytow]

You know, I see such statements all the time, but owning and using both a PS3 and a Wii U, I really don't see what's supposed to be superior about PSN. Pretty much everything online related is considerably slower, more clunky and just plain worse. Not to mention you have to pay for half-assed implementations of features Nintendo offers for free. PSN's superiority is a myth as far as I'm concerned.

Holy nintendo tinted glasses batman...

 

[Dark_castle]

$250 won't do a thing during holiday 2013.

$250 will do a thing when Smash and Mario Kart, the two biggest games the console has to offer, are released. Combine that with no gamepad, and Nintendo is making a solid profit on every console sold (instead of losing money @ $299 thanks to the gamepad).

Of course $199 is more desirable, but they're losing money like crazy here. they probably would lose money on every console sold. $250 is a sweet price point, especially considering the library will be pretty decent by the time Smash and Kart drop.

Mario Kart is for casual. And clearly the casual crowd from Wii are no longer present in Wii U install base. It's going to underperform more than you think. Especially when their other casual Mario game bombed.

As for Smash, it's not an exclusive for Wii U. It's also available for 3DS, a much more attractive Nintendo's systems for the past, present and (very) likely future.

 

[MBR]

Come think of it, wouldn't Smash IV be a great first game to release as a third party?

Spoiler

jk

Spoiler

?

Since they're losing money on every single Wii U sold right now, and their software can't sell on the platform since nobody owns the console, would it such a bad idea to try a relaunch? I mean, it can't get any worse, right?
Distinct redesign, new name, optional GamePad, added GC BC via optional 4-port USB adapter (Fun extra. Since the Wii channel can play GC games, why not make it easy to do?), $50 lower price, ship it with SM3DW (Renamed, please), a Pro Controller and one WM+Nunchuck combo and you've got a fighting chance.

I can't wait to hear about none of the changes Nintendo makes this year. Until, and at E3, all we'll hear from them is probably the usual "We'll just keep offering the great experiences you can't get anywhere else!"

 

[Mpl90]

Still, I think many here are exaggerating the 3DS "misfortunes". In the sense: in the West, it's still selling well. Under Nintendo expectations, but their forecasts are so high that they inevitably make something successful like 3DS look fare more negatively than what it really is.

However, they need to learn hard lessons from this gen, for sure. Next handheld needs to be at 199.99 at max and to have good phone / tablet like features, in order to stay rightly in the market. I don't think a 99$ handheld would be ideal (it could be seen as too cheap by customers, at least at launch), and a 199.99 pure handheld could be ignored because, just for 100 more, you get phones with much more functions. Such an hybrid would allow Nintendo to sell the device in different ways (directly, through monthly fees with special mobile operators partnerships, etc.etc.) andto be more present also in general electronic stores. Plus, they need to find a way to reduce software prices. I've already said my idea: involve retailers in pushing digital codes, and put them both in stores and on eShop at 10 $ lower than the physical SKUs (that still need to exist). You have software priced lower, you push digital, but you don't lose retailers / mass customers in the process, since they're still directly involved.

As I already said, there are good signs of changes happening inside NCL
1)Home and portable R&D being in the same building, for sharing assets, OS, and other things between consoles = much better productivity and interactivity between platforms
2)NERD ad R&D in Europe, still expanding, and heavily researching in GPGPU tech seemingly
3)Even more people being hired
4)Iwata as COO of NoA making some changes compared to the recent past (the last of them, all games being released on Fridays, no Monday/Tuesday/Sundays releases anymore)

But, again, they need to do much more than that. Much more.

 

[Aeriscloud]

Mario Kart is for casual.

The fuck it is lol.

 

[Tom Nook Sawyer]

Not since Michael Eisner have I seen a CEO this terrible

You realize Michael Eisner is the one that transformed Disney into the multimedia powerhouse they are today, right? Bob Iger has just expanded on the path Eisner set out

 

[Rehynn]

You realize Michael Eisner is the one that transformed Disney into the multimedia powerhouse they are today, right? Bob Iger has just expanded on the path Eisner set out

You realize the post was made by Anticiziten One, right?

 

[jax]

Well yes that is why I would say that Valve working with Nintendo would help them with lot of the areas they struggle with.

In a similar way Nintendo would be a fucking unstoppable name to have backing their steam machines concept for the living room. Valve has almost no familiarity with the console/living room customer, Nintendo could really help them push into the living room.

If Valve and Nintendo merged it would kill console gaming. It would be beautiful.

 

[Darksol]

Finally, some realistic forecasts. This must be a big slice of humble pie that Nintendo is choking on right now. I can only hope that they use this as a source for positive change in the future.

 

[Shenzakai]

IMHO what they need to do to survive would be to get rid of the Wii U and 3DS then starting a new home console with PS4/XBO specs, opening the door to 3rd parties and starting to develop real Nintendo core titles in the manner like SM64, Zelda OoT while stopping to make unwanted bullshit like SM3DW or WWHD. Stop doing waggling, make the real Nintendo magic happen again. In terms of handhelds: focus on Japan-only with 3DS, release Nintendo titles in the rest of the world on smartphones/tablets.

 

[EatChildren]

Sadly this is very much the case for me. Anecdotally, this is the case with pretty much every gamer I know, even those who were ardent Nintendo supporters (I'd go as far as to say fanboys) in the past. There have been plenty of Nintendo games released this year that I am interested in, but I would need to pay $250-300 upfront for outdated hardware in addition to the cost of the games. The fact that big releases outside of Nintendo's own titles are practically non-existent and the fact that I am finding so much value through Steam on hardware I already own makes a Nintendo console a tough sell. Plus there is the matter of finding room for another box by the TV etc. etc.

10 years ago I would roll my eyes at the people saying that Nintendo should go third-party, but I think it would make sense now if they committed to true cross-platform development (having one game launch across all the platforms; not the post-Dreamcast Sega's idea of multiplatform). Their strength is in software and their incredible catalog of IP. If they handled the transition right I'm sure there would be plenty of a market for them.

Also, whether or not it makes business sense, I really don't want to see them putting all their development into mobile and tablet gaming. If there is one interface that is unsuited for the type of games Nintendo makes its the touch-only interface.

Right, this is the rock and a hard place of Nintendo's philosophy. The company's biggest strength, as has been since the beginning, is IP recognition and quality. But not everybody wants to play every single IP they produce, as applies to every publisher under the sun. You can be the world's biggest Super Mario Bros. fan and still not give a shit about The Legend of Zelda. Yet everybody is forced to pay the same entry price for their hardware just to play the IPs they're interested in and not much else.

And it's not really an argument for third party, so much as the harsh reality of the situation, and the necessity for Nintendo (if they continue in the home console space) to provide customers with a product they feel they can confidently invest in, one that will meet their budget and long term requirements.

 

[Tom Nook Sawyer]

You realize the post was made by Anticiziten One.

Touché

 

[PdotMichael]

I hope the new forecasts are realistic now.

 

[JoeM86]

Still, I think many here are exaggerating the 3DS "misfortunes". In the sense: in the West, it's still selling well. Under Nintendo expectations, but their forecasts are so high that they inevitably make something successful like 3DS look fare more negatively than what it really is.

However, they need to learn hard lessons from this gen, for sure. Next handheld needs to be at 199.99 at max and to have good phone / tablet like features, in order to stay rightly in the market. I don't think a 99$ handheld would be ideal (it could be seen as too cheap by customers, at least at launch), and a 199.99 pure handheld could be ignored because, just for 100 more, you get phones with much more functions. Such an hybrid would allow Nintendo to sell the device in different ways (directly, through monthly fees with special mobile operators partnerships, etc.etc.) andto be more present also in general electronic stores. Plus, they need to find a way to reduce software prices. I've already said my idea: involve retailers in pushing digital codes, and put them both in stores and on eShop at 10 $ lower than the physical SKUs (that still need to exist). You have software priced lower, you push digital, but you don't lose retailers / mass customers in the process, since they're still directly involved.

As I already said, there are good signs of changes happening inside NCL
1)Home and portable R&D being in the same building, for sharing assets, OS, and other things between consoles = much better productivity and interactivity between platforms
2)NERD ad R&D in Europe, still expanding, and heavily researching in GPGPU tech seemingly
3)Even more people being hired
4)Iwata as COO of NoA making some changes compared to the recent past (the last of them, all games being released on Fridays, no Monday/Tuesday/Sundays releases anymore)

But, again, they need to do much more than that. Much more.

You have it in one. The way people are acting here, the 3DS is bombing, but it isn't. It is doing well in all regions. Best selling hardware in the US, UK, Japan and probably most other places in 2013. It's just Nintendo had ridiculous expectations for it, as they always do.

Nintendo has, this past year, been putting many plans into action, and we won't see the results of them until the end of this year at the very earliest. You can bet that, if the worst does happen, and Iwata is fired and these actions succeed, his successor would suddenly be loved here despite them being Iwata's plan.

 

[cyberheater]

So is WiiU now deemed a bigger failure then Gamecube?

 

[Ecotic]

Tehrik's post about Nintendo possibly bleeding out their oft-cited war chest within this generation has me worried.

It almost seems unexplainable. The 3DS and WiiU combined should be selling enough to eek out a comparable profit to the GBA and Gamecube days.

 

[JordanN]

So is WiiU now deemed a bigger failure then Gamecube?

Is this a question?

Gamecube had third party support. Wii U has nothing that compares to that.

 

[mrpeabody]

And besides, all I was saying, is that I don't see the comparisons with BlackBerry. If you want to say they are in a bit of trouble with their market at the moment, then sure. But if you want to say they are heading down the same path as RIM, then I disagree. A couple years ago RIM was already laying off thousands of employees was it not? I don't think Nintendo has laid off any body yet (correct me if I'm wrong). Nintendo has revenue streams in the way of 3DS, merchandise, console space, etc. Let's say they just outright decided not to make consoles any more. They could just shift all their focus and resources to the 3DS and its successors to make it even more of a healthy platform. Could RIM just cut their mobile devices and keep going?

The comparison to Blackberry is not about how much money they're losing today. It's about a former market leader in a changing environment which is unable or unwilling to adapt, and gets eaten alive by competitors who understand what the consumer wants.

 

[nhlducks35]

So? There are a lot of people who think Iwata can fix things with a better and more modern approach to the current Nintendo philosophy or simply like Iwata for the things he has done right. There is no reason to insult people like that just because they have a different opinion on how they would like Nintendo to be run going forward.

Iwata says Wii will avoid major droughts that plagued GameCube. (March 2007)

“When we launched GameCube, the initial sales were good, and all the hardware we manufactured at that time were sold through. However, after this period, we could not provide the market with strong software titles in a timely fashion. As a result we could not leverage the initial launch time momentum, and sales of GameCube slowed down. To avoid repeating this with Wii, we have been intensifying the software development, both internally at Nintendo and at developers outside the company, in order to prepare aggressive software lineup for Wii at and after the launch.” says Iwata. He then says, ”We believe it is important to provide the market with strong software without a long interval in order to keep the launch time momentum.”

Iwata promises that 3DS will avoid major droughts that plagued Wii and DS.

“It’s important that you be able to supply software with no pause,” said Iwata. “With the DS and Wii, following the titles that were released at launch, the momentum dropped when there was a gap in software releases. We’re making plans so that this type of thing won’t happen.”

Iwata promises that Wii U will avoid major droughts that plagued 3DS and Wii.

“ As we learned a bitter lesson with the launch of the Nintendo 3DS, we are trying to take every possible measure so that the Wii U will have a successful launch.”
“The company was unable to launch much-anticipated first-party titles for the Wii nor for the Nintendo 3DS in a timely fashion in the first half of the term. In the game platform business, creating momentum is very important, but the momentum was once lost, and it has had a large negative effect on our sales and profits.”

Iwata apologizes for Wii U drought in January and February.

“I apologize to those supporting Wii U about the lack of titles in January and February.”

 

[JoeM86]

Tehrik's post about Nintendo possibly bleeding out their oft-cited war chest within this generation has me worried.

It almost seems unexplainable. The 3DS and WiiU combined should be selling enough to eek out a comparable profit to the GBA and Gamecube days.

I wouldn't say they're bleeding out. They've invested a hell of a lot of money the past year or so in things like their huge new R&D building. These things are a drain in the financials with nothing to show for it just yet due to the nature of it.

 

[Aquamarine]

So is WiiU now deemed a bigger failure then Gamecube?

At this point? Most definitely.

 

[B.O.O.M]

I am going to be one soon too, and I also want Iwata to stay. He is the only CEO who gets gaming. The others are too worried about monetisation. Iwata is truly the CEO gaming needs. Sure, he made some mis-steps with the Wii U and inital 3DS, but he's one who was against microtransacting Animal Crossing and a variety of other things.

I see this through the industry sense, not the "crap, they need to make money" idea, which is ridiculous considering the other two and how they completely haemorrhaged money last gen

I have no clue what this fascination with Iwata is. Only one who gets gaming? You do realize they don't have a proper account system for games in the year 2014 still? No digital discounts, cross buy etc etc. Took a gamble with wiiu and weaker hardware which endangered proper third party support going forward...

So What makes him special? Help me understand because I'm genuinely curious (I'm serious, not being snarky here)

and also you contradicted yourself as shown by this comment

And a small, yet very vocal minority absolutely hate microtransactions and consider them a dealbreaker when buying games, but you're using that as a point in favour of Iwata. Picking and choosing as usual.

 

[A_Gorilla]

Finally, some realistic forecasts. This must be a big slice of humble pie that Nintendo is choking on right now. I can only hope that they use this as a source for positive change in the future.

Considering they have been having the humble pie served to them since the N64 era, I doubt it will.

Call me crazy, but IF Nintendo goes down, we shouldn't blame the Wii U, we should blame the Wii. It is clear now that its success was clearly a fluke, the result being released at the perfect time and with brilliant hype and marketing to back it up. Sadly the success of the Wii seems to have gone to Nintendo's head, and the executives seemed to think they could make lightning strike twice with the Wii U...

 

[Ban Puncher]

 

[Averon]

So is WiiU now deemed a bigger failure then Gamecube?

If Tehrik's post is to be believed...yes. The GC didn't bleed Nintendo money like the Wii U is doing.

 

[Mihael Mello Keehl]

Iwata says Wii will avoid major droughts that plagued GameCube. (March 2007)
“When we launched GameCube, the initial sales were good, and all the hardware we manufactured at that time were sold through. However, after this period, we could not provide the market with strong software titles in a timely fashion. As a result we could not leverage the initial launch time momentum, and sales of GameCube slowed down. To avoid repeating this with Wii, we have been intensifying the software development, both internally at Nintendo and at developers outside the company, in order to prepare aggressive software lineup for Wii at and after the launch.” says Iwata. He then says, ”We believe it is important to provide the market with strong software without a long interval in order to keep the launch time momentum.”

Iwata promises that 3DS will avoid major droughts that plagued Wii and DS.
“It’s important that you be able to supply software with no pause,” said Iwata. “With the DS and Wii, following the titles that were released at launch, the momentum dropped when there was a gap in software releases. We’re making plans so that this type of thing won’t happen.”

Iwata promises that Wii U will avoid major droughts that plagued 3DS and Wii.
“ As we learned a bitter lesson with the launch of the Nintendo 3DS, we are trying to take every possible measure so that the Wii U will have a successful launch.”
“The company was unable to launch much-anticipated first-party titles for the Wii nor for the Nintendo 3DS in a timely fashion in the first half of the term. In the game platform business, creating momentum is very important, but the momentum was once lost, and it has had a large negative effect on our sales and profits.”

Iwata apologizes for Wii U drought in January and February.
“I apologize to those supporting Wii U about the lack of titles in January and February.”

Damn shame

 

[Tom Nook Sawyer]

Iwata says Wii will avoid major droughts that plagued GameCube. (March 2007)
“When we launched GameCube, the initial sales were good, and all the hardware we manufactured at that time were sold through. However, after this period, we could not provide the market with strong software titles in a timely fashion. As a result we could not leverage the initial launch time momentum, and sales of GameCube slowed down. To avoid repeating this with Wii, we have been intensifying the software development, both internally at Nintendo and at developers outside the company, in order to prepare aggressive software lineup for Wii at and after the launch.” says Iwata. He then says, ”We believe it is important to provide the market with strong software without a long interval in order to keep the launch time momentum.”

Iwata promises that 3DS will avoid major droughts that plagued Wii and DS.
“It’s important that you be able to supply software with no pause,” said Iwata. “With the DS and Wii, following the titles that were released at launch, the momentum dropped when there was a gap in software releases. We’re making plans so that this type of thing won’t happen.”

Iwata promises that Wii U will avoid major droughts that plagued 3DS and Wii.
“ As we learned a bitter lesson with the launch of the Nintendo 3DS, we are trying to take every possible measure so that the Wii U will have a successful launch.”
“The company was unable to launch much-anticipated first-party titles for the Wii nor for the Nintendo 3DS in a timely fashion in the first half of the term. In the game platform business, creating momentum is very important, but the momentum was once lost, and it has had a large negative effect on our sales and profits.”

Iwata apologizes for Wii U drought in January and February.
“I apologize to those supporting Wii U about the lack of titles in January and February.”

That really is quite remarkabke

 

[cyberheater]

Is this a question?

Gamecube had third party support. Wii U has nothing that compares to that.

Yes it is a question.

Iwata says Wii will avoid major droughts that plagued GameCube. (March 2007)
“When we launched GameCube, the initial sales were good, and all the hardware we manufactured at that time were sold through. However, after this period, we could not provide the market with strong software titles in a timely fashion. As a result we could not leverage the initial launch time momentum, and sales of GameCube slowed down. To avoid repeating this with Wii, we have been intensifying the software development, both internally at Nintendo and at developers outside the company, in order to prepare aggressive software lineup for Wii at and after the launch.” says Iwata. He then says, ”We believe it is important to provide the market with strong software without a long interval in order to keep the launch time momentum.”

Iwata promises that 3DS will avoid major droughts that plagued Wii and DS.
“It’s important that you be able to supply software with no pause,” said Iwata. “With the DS and Wii, following the titles that were released at launch, the momentum dropped when there was a gap in software releases. We’re making plans so that this type of thing won’t happen.”

Iwata promises that Wii U will avoid major droughts that plagued 3DS and Wii.
“ As we learned a bitter lesson with the launch of the Nintendo 3DS, we are trying to take every possible measure so that the Wii U will have a successful launch.”
“The company was unable to launch much-anticipated first-party titles for the Wii nor for the Nintendo 3DS in a timely fashion in the first half of the term. In the game platform business, creating momentum is very important, but the momentum was once lost, and it has had a large negative effect on our sales and profits.”

Iwata apologizes for Wii U drought in January and February.
“I apologize to those supporting Wii U about the lack of titles in January and February.”

Iwata is either flat out lying when he makes these statements or he is extremely poor at managing release schedules. Either way, it makes him a pretty bad CEO and I can't understand why he isn't fired yet.

 

[Tookay]

Nintendo has, this past year, been putting many plans into action, and we won't see the results of them until the end of this year at the very earliest. You can bet that, if the worst does happen, and Iwata is fired and these actions succeed, his successor would suddenly be loved here despite them being Iwata's plan.

There are always going to be plans. Rest assured, if these plans don't work out, there will be others commissioned. It's not like the planning ever stops - sometimes it happens midway through executing another plan!

When is there a reasonable point for us to evaluate the current management? Is there ever one for you?

 

[Jonnyram]

Tehrik's post about Nintendo possibly bleeding out their oft-cited war chest within this generation has me worried.

It almost seems unexplainable. The 3DS and WiiU combined should be selling enough to eek out a comparable profit to the GBA and Gamecube days.

GBA and Gamecube were both self-contained hardware — no network services were required. They were also comparatively simple, and cheap to build, so it was way easier to make a profit on them.

 

[BGBW]

A CEO that understands the US market, US businesses and third parties.

What about the rest of the world? Surly someone who understands the European (especially with hotel bad UK performance is) market is more needed at this point.

 

[Averon]

I have no clue what this fascination with Iwata is. Only one who gets gaming? You do realize they don't have a proper account system for games in the year 2014 still? No digital discounts, cross buy etc etc. Took a gamble with wiiu and weaker hardware which endangered proper third party support going forward...

So What makes him special? Help me understand because I'm genuinely curious (I'm serious, not being snarky here)

and also you contradicted yourself as shown by this comment

Me neither. I don't understand why Iwata gets so much slack from some. He performance has been terrible over the last few years. What did he do to earn so much loyalty? Is to because he's a fun guy to watch on the Nintendo Directs? Is to because his background in game development? I don't get it.

 

[liger05]

Iwata says Wii will avoid major droughts that plagued GameCube. (March 2007)
“When we launched GameCube, the initial sales were good, and all the hardware we manufactured at that time were sold through. However, after this period, we could not provide the market with strong software titles in a timely fashion. As a result we could not leverage the initial launch time momentum, and sales of GameCube slowed down. To avoid repeating this with Wii, we have been intensifying the software development, both internally at Nintendo and at developers outside the company, in order to prepare aggressive software lineup for Wii at and after the launch.” says Iwata. He then says, ”We believe it is important to provide the market with strong software without a long interval in order to keep the launch time momentum.”

Iwata promises that 3DS will avoid major droughts that plagued Wii and DS.
“It’s important that you be able to supply software with no pause,” said Iwata. “With the DS and Wii, following the titles that were released at launch, the momentum dropped when there was a gap in software releases. We’re making plans so that this type of thing won’t happen.”

Iwata promises that Wii U will avoid major droughts that plagued 3DS and Wii.
“ As we learned a bitter lesson with the launch of the Nintendo 3DS, we are trying to take every possible measure so that the Wii U will have a successful launch.”
“The company was unable to launch much-anticipated first-party titles for the Wii nor for the Nintendo 3DS in a timely fashion in the first half of the term. In the game platform business, creating momentum is very important, but the momentum was once lost, and it has had a large negative effect on our sales and profits.”

Iwata apologizes for Wii U drought in January and February.
“I apologize to those supporting Wii U about the lack of titles in January and February.”

Simply laughable how a CEO can keep repeating the same thing over and over again.

I know Nintendo have to ride the Wii U out but how long can they allow the Wii U to bleed money out of the company?

You have it in one. The way people are acting here, the 3DS is bombing, but it isn't. It is doing well in all regions. Best selling hardware in the US, UK, Japan and probably most other places in 2013. It's just Nintendo had ridiculous expectations for it, as they always do.

Who said the 3DS was bombing? It is underperforming and that cannot be denied. Its less than 3 years old and is not growing. They have already released the big hitters so where does the platform go from here?

 

[Tookay]

What about the rest of the world? Surly someone who understands the European (especially with hotel bad UK performance is) market is more needed at this point.

Not when the US market makes up a greater proportion of global sales than Europe ever will...

 

[Aquamarine]

Yes it is a question.



Iwata is either flat out lying when he makes these statements or he is extremely poor at managing release schedules. Either way, it makes him a pretty bad CEO and I can't understand why he isn't fired yet.

He was going to be fired after the GameCube, but the Wii and DS were such incredible successes that we all gained confidence in his abilities.

Now, however, it's a different story. The black hole of the Wii U raises a mountain of skepticism and doubt. This latest story is just fanning the flames.

 

[JoeM86]

There are always going to be plans. Rest assured, if these plans don't work out, there will be others commissioned. It's not like the planning ever stops - sometimes it happens midway through executing another plan!

When is there a reasonable point for us to evaluate the current management? Is there ever one for you?

Yeah, but these ones are being enacted, they aren't just sitting as ideas. The R&D building, for example. NERD as well and a variety of other things.

 

[Sandfox]

Iwata is either flat out lying when he makes these statements or he is extremely poor at managing release schedules. Either way, it makes him a pretty bad CEO and I can't understand why he isn't fired yet.

Nintendo is/was trying to do too much with the amount of employees they have/had. I'm curious to see what their hirings and development between consoles and handhelds getting closer will have on this when the next devices eventually come out.

Incredible. I've been thinking about what Nintendo can do to survive this but my outlook for them is extremely pessimistic. I believe WiiU is a fatal shot. I really can't see them making another home console after that.

They probably aren't going to lose THAT much money.

 

[cyberheater]

If Tehrik's post is to be believed...yes. The GC didn't bleed Nintendo money like the Wii U is doing.

Incredible. I've been thinking about what Nintendo can do to survive this but my outlook for them is extremely pessimistic. I believe WiiU is a fatal shot. I really can't see them making another home console after that.

 

[Anth0ny]

Mario Kart is for casual. And clearly the casual crowd from Wii are no longer present in Wii U install base. It's going to underperform more than you think. Especially when their other casual Mario game bombed.

Of course. that much is obvious at this point. Which is why I'm suggesting a cheaper Wii U to coincide with the game's release. A cheaper Wii U that also gets Nintendo profiting on each unit sold.

As for Smash, it's not an exclusive for Wii U. It's also available for 3DS, a much more attractive Nintendo's systems for the past, present and (very) likely future.

Smash 3DS and Smash U are completely different games.

With this logic, 3D Mario, 2D Mario, Zelda and Mario Kart are all available on 3DS as well.

To be fair, I think the 3DS is definitely hurting Wii U. Jane Walmart asks: Why spend $300+ on a Wii U for 3D World and Mario Kart 8 when I can get little Jimmy a 2DS for $130 with 3D Land and Mario Kart 7?

Spoiler

and then she says wait i can just give him my iphone and he can play fruit ninja for free

 

[AniHawk]

Hawk, I think the idea of the more powerful handheld just wouldn't work in practice. I don't think the technology is there for a handheld with Wii U-like specs that hooks up to your TV. I don't see it catching on. The battery life would probably be horrendous. And I just don't get the point. Why would they have two handhelds? Theoretically, wouldn't having two handhelds reduce the market for the more powerful one?

Maybe I'm just not understanding your idea, I don't want to come across as abrasive here, but I just really don't understand your logic.

the idea is to separate the type of software that comes to both systems. there are a lot of console-like games on the 3ds already, so theoretically, the next handheld will probably be slightly more powerful than the vita, and graphically resemble a wii u. so my idea is that they take their successful handheld line and basically give it a tv out.

the other handheld would be for an extreme lower end part of the market and feature more mainstream games. it would basically be a brand new line of hardware meant to be inexpensive and push towards a larger market.

or in short:
wii u -> no follow-up
3ds -> 'hybrid' high end handheld (similar to the current 3ds line) targeting a traditional enthusiast market
no current predecessor -> mass-market handheld

i just think chasing the microsoft/sony market is a recipe for disaster, and they lost their chance at consoles unless they do something incredibly drastic with the next one like have oculus rift in every box. this would also help keep risk minimal by requiring less manpower per project. if they do bigger power increases next gen, they're going to have to be at a wii u/vita level for the handheld and beyond that for the console.

 

[redcrayon]

They need to skip the handheld next time...

Seeing as it's the handheld side of the business that has been propping them up every time the consoles haven't quite worked out for the last twenty years, and at the very least turning around the 3DS has proven far easier than the same job for its bigger brother is going to be, I don't think that would be a good move. The handhelds might only get Japanese third party support (and historically have rarely had decent western support anyway), but that's better than no support at all.

The idea that the home console is their core business while the handhelds are a side project that suck resources away from it isn't really how it works, and at the moment I'm not seeing anything that shows a Nintendo home console as their single project next gen is a better option than a portable with TV-out that you can flog multiple times to the same family. That concept works for tablets, anyway.

Lots of good info in the OP, cheers guys.

Originally Posted by tehrik-e-insaaf

Good posts in the last couple of Nintendo threads, food for thought.

 

[oti]

Only the ELITE BEAT AGENTS can save the Wii U now.

AGENTS ARE GOOOOOO!

(Someone needs to draw an ELITE BEAT AGENTS song opening crisis scene with Iwata and the Wii U at Nintendo HQ ASAP)

 

[cyberheater]

Nintendo is/was trying to do too much with the amount of employees they have/had. I'm curious to see what their hirings and development between consoles and handhelds getting closer will have on this when the next devices eventually come out.

I keep hearing that they have a lot of employees but they act like a company staffed by 4 people. They don't seem to have enough internal development studios to develop the content they need in the time frames required.

I don't know why they don't use more 3rd party studios to develop their content.

 

[liger05]

To be fair, I think the 3DS is definitely hurting Wii U. Jane Walmart asks: Why spend $300+ on a Wii U for 3D World and Mario Kart 8 when I can get little Jimmy a 2DS for $130 with 3D Land and Mario Kart 7?

No doubt. If one wants a Nintendo experience why get the Wii U?

 

[Anth0ny]

the idea is to separate the type of software that comes to both systems. there are a lot of console-like games on the 3ds already, so theoretically, the next handheld will probably be slightly more powerful than the vita, and graphically resemble a wii u. so my idea is that they take their successful handheld line and basically give it a tv out.

the other handheld would be for an extreme lower end part of the market and feature more mainstream games. it would basically be a brand new line of hardware meant to be inexpensive and push towards a larger market.

or in short:
wii u -> no follow-up
3ds -> 'hybrid' high end handheld (similar to the current 3ds line) targeting a traditional enthusiast market
no current predecessor -> mass-market handheld

i just think chasing the microsoft/sony market is a recipe for disaster, and they lost their chance at consoles unless they do something incredibly drastic with the next one like have oculus rift in every box. this would also help keep risk minimal by requiring less manpower per project. if they do bigger power increases next gen, they're going to have to be at a wii u/vita level for the handheld and beyond that for the console.

So... Gameboy Micro 2?

I'm down.

 

[The Dutch Slayer]

Horrible numbers. Simply horrible. This misses everyone's most pessimistic expectations for operating income expectations by $400M+ USD and baseline estimates by over $650M+ USD. No one seriously thought they were going to hit $1 B USD in operating profits. Most people were seeing Nintendo hitting 30% of the target as a baseline. That they are expecting a loss for the year of $350M USD is mind-boggling.

Only four things can explain these losses IMHO:

1. Nintendo's gross margins on software must have shrunk dramatically. Meaning that they are barely making any money on their own software much less third party software which has all dramatically dried up on both of their platforms globally. This bodes very badly for Nintendo in general - even if they were able to go third-party and hypothetically sell 2-3X the number of games (which I very much doubt) - what this shows is that Nintendo has lost its pricing power at retail - people aren't ready and willing to pay the Nintendo premium.

2. Nintendo bled money at retail trying to push hardware - far more than anyone expected - they must be eating close to a $100+ loss per Wii U sold right now or more - not just because of manufacturing cost - but because they are literally having to compensate retailers to provide them with shelf space and having to eat the price drop at the same time. This is horrible - because even if they take that much of a loss - the low gross margins on their own first-party games isn't sufficient to help them break even.

3. Nintendo isn't going to get Mario Kart or Smash out by early April - otherwise they would have been able to book orders under the current fiscal year. It looks like both games are going to be delayed well into the summer or into the Fall now. I am almost 100% positive that if it were even possible to get the games out by April or May - Nintendo would have done everything in their power to do so. It looks like Nintendo still hasn't effectively transitioned to HD development - not because of capability - but because they want to preserve gross margin based on their lower expected revenue numbers - and it's compromising their ability to get projects out the door on-time.

4. Nintendo is playing shell games with their accounting - booking contractual payments to Intelligent Systems and their other closely related entities as operating losses for tax purposes but which are effectively asset purchases - it means that they are dramatically restructuring their teams and it's going to be far more expensive than we thought.

If these estimates hold up - Nintendo will have generated a $1 B+ operating loss over the past three years. Here's the kicker though: Nintendo is still sitting on over $1 B+ in inventory that they haven't impaired yet (the IR report makes no mention of it). There is a good chance that over 80% of that is Wii U hardware which means that it's going to continue to be a drag on earnings over the next twelve months.

In any case, I don't foresee any major changes for Q3 happening. Nintendo is still going to engage in a buyback of 5% - which is going to drain their cash by another $1 B USD.

That means in three years Nintendo's war chest will have been depleted close to $2.5 billion USD from inventory impairment, operating losses, and share repurchases. Another $500M USD is going to be gone for asset / real estate purchases and capital investments. Their next hardware projects are going to require about ~$1.5 B USD in capital reserves at a minimum that are going to be tied up in the next two years as they wind down their existing platforms, and I don't see third-party licensing revenue coming back in a big way to offset declining gross margins on their first-party software.

Basically that means Nintendo could burn through ~$4 B in cash throughout this entire cycle and in anticipation of the next, with a very high cost structure intact. Like Sony, they will have effectively wiped out cumulative years of profit.

If we assume that Nintendo keeps building up human resources this coming year to meet their hiring targets, they are probably going to break-even in terms of operating profit for the next fiscal year or make a slight profit - but I'm even second guessing my own ability to understand Nintendo's gross margins now - someone at NOA or NOE is effectively writing giant checks to retailers to keep the channel alive - and that's really not good at all - Apple was in this same position in the late 90s and had to create their own retail stores to stop bleeding money to major retailers. Nintendo isn't going to have the investor support to launch a giant retail project in the US and EU, particularly when they no longer have proven pricing power which would be the primary argument to go that route.

Difficult time to be a Nintendo shareholder.

Thanks for the large but insightful post.

Man that really puts me down today seriously I always thought that the "war chest" was about 10 Billion USD and Nintendo would be fine but its really down to 2.5?
That is really bad news for a future nintendo console that would be developed and would even cost more for R&D because it has to be more powerful and more features etc.

I keep hearing that they have a lot of employees but they act like a company staffed by 4 people. They don't seem to have enough internal development studios to develop the content they need in the time frames required.

I don't know why they don't use more 3rd party studios to develop their content.

Because they are terrified that games would turn out bad and they want QUALITY over EVERYTHING.
Even though if they want to just use a studio that can and will put out quality.

 

[Albo]

Iwata says Wii will avoid major droughts that plagued GameCube. (March 2007)


Iwata promises that 3DS will avoid major droughts that plagued Wii and DS.

Iwata promises that Wii U will avoid major droughts that plagued 3DS and Wii.


Iwata apologizes for Wii U drought in January and February.

Good post. They've had over ten years to expand their workforce and resolve this issue. Maybe the new R&D building is an indication but still way too late.

edit: damn, new page

 

[BGBW]

Not when the US market makes up a greater proportion of global sales than Europe ever will...

But surely someone who understands the global market rather than one segment is more suited for the top role?