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[Aquamarine]

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.

Wonderful post. Thanks so much for this summary. I would give a smiley to this post, but then I realize the predicament I'm in. :-(

 

[Perkel]

Right, and games can be adapted to fit Motion controlled gaming and Kinect gaming and gaming on facebook but i don't support that either.

I mean more like creating different games with controller in mind. No physical buttons = more strategy games, turn based games less action games, less platformers and so on.


Right now i can't even name best game i played on phones because there is none...

 

[fredrancour]

Can't sympathize much. NSMB as a pack in instead of 3D World over the holiday was a complete joke.

Nah, this was one of their few good decisions. 2d mario generally curbstomps 3d mario in sales. On the 3ds, It took NSMB 2 being one of the most disappointing mario games, relegated to a c team for development as a learning experience. going up against ead tokyo's mario 3d land to get 3d mario to tie in sales with 2d mario.

 

[metalslimer]

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:



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.

This sounds pretty insane (as in what is Nintendo doing). I hope you are wrong about Mario Kart not hitting until summer.

 

[Delio]

=Neff;97425635 The Nintendo audience is very old and very diverse and spread across a whole range of demographics and formats.

I'm more concerned if there are a ton sitting and waiting on Sony/MS ecosystems to support them if they went third party.

 

[The Abominable Snowman]

Nor Ubisoft I guess.

That was purely business reasons. Rayman multiplayer coop is too limited and would be a bad business decision because it has no appeal.

I fail to see why SM3DW wouldn't work online. It's the perfect multiplayer game, and not everyone is on stone age 100ms lag connections.

 

[Nekofrog]

Define "well."

Well enough for them to sell millions and have multiple huge communities based around it?

 

[TheGreatMightyPoo]

That was purely business reasons. Rayman multiplayer coop is too limited and would be a bad business decision because it has no appeal.

Link???

 

[Zinthar]

Just because you say these things, does not make it true. You don't think it is at all possible for the Wii U to sell more in 14/15 than 2.8 million (assuming they hit their forecast)? Even with a much stronger software lineup, possibilities in the way of bundles, price cuts, etc?

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 situation is certainly not as dire as RIM, but there are definitely similarities with regard to how management responded to a quickly changing marketplace by simply staying the course because it had been extremely profitable at one time.

Nintendo right now is probably in a similar situation to where RIM was at around 2010. They still have time to adjust their business model and be moderately successful (although it's unlikely they'll ever achieve as much profit as they did during '07-'09), but if they stay the course there's a decent risk that relatively small losses will become large ones as the market for their products continues to erode.

 

[7DollarHagane]

I mean more like creating different games with controller in mind. No physical buttons = more strategy games, turn based games less action games, less platformers and so on.


Right now i can't even name best game i played on phones because there is none...

My favorite was probably GeoDefense way back in 2007 or something. Not really anything special, just a nice looking tower defense game.

I stopped really playing them because I like 3DS/Vita games more and there's more variety and gameplay styles possible with physical controls.

Also when i have 5 minutes to kill with my phone I'm on twitter or gaf or youtube. I don't even think about playing a game with it.

 

[SmokyDave]

I mean more like creating different games with controller in mind. No physical buttons = more strategy games, turn based games less action games, less platformers and so on.


Right now i can't even name best game i played on phones because there is none...

Look harder, there's plenty out there. There were even a couple that received GotY nods here and there.

I must say, it's been weird watching 'core' gamers stubbornly resist adopting a new games platform whilst everyone else just gets on and has fun. Reminds me of the Wii but with decent hardware and more staying power.

 

[Anth0ny]

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.

God damn.

Okay, I'm back on the "drop the gamepad" train. Drop that shit ASAP, sell the Wii U at $250, make a shit load of profit on each console sold (presumably), and hope for the best with Smash and Kart.

13 million units sold by the end of the gen. wooooo.

 

[ash_ag]

Platformers online is a bad idea due to latency.

That's something you would hear in 2009. Since it's 2014, that's not an excuse. Build the infrastructure, and let how well it works up to the user's connection. I can assure you minor problems will exist for people with terrible connections. For average (by today's standards) and up, there theoretically can be minimal difference compared to local multiplayer.

 

[AzaK]

Exactly.

The amount of money in the war chest is not the point here.

The point is that Nintendo is on the verge of heading into a death spiral. If they don't make major changes soon they run the risk of allowing themselves to become irreparably irrelevant to the industry.

It's exactly what happened with Blackberry. They rested on their profitability in the face of overwhelming competition from the iPhone. They didn't think they had to react because they had so much cash. By the time they realized those cash reserves were in danger it was too late: they were so irrelevant, so out-of-touch with the industry that even their GOOD moves were ignored.

It's weird that we could see this happening before Wii U released but Nintendo either couldn't or just refused to change.

Iwata started taking some actions for the future, good ones (R&D reorganisation, NERD being established, even more hiring, some of his actions as NoA COO), but big changes are needed. Nintendo needs to pop out of their fuc*ing bundle and open their eyes and seeing how the world really is. Their culture needs to change (even if without forgetting who they are).

Yup.

Stop living in a conservative bubble, make aggressive strides to expand software development culture on a global scale, listen closer to third parties and the echoes of the market they are competing in as much as they like to think they're not, be attentive to rapidly changing world of technology and economics, and understand that an overwhelming majority of customers do not want to put down US$300 for an unappealing piece of hardware that has scarce releases of Super Mario in between shovelware when for an additional $200+ dollars they can get a system with significantly broader software and genre variety, routine software releases, and a strong promise of continued support into the future.

Nintendo exists on the same planet and in the same market as everybody else mingling in home/portable technology and software. This isn't the 90s, where a dedicated game machine that just does what it does and it's Sony or Sega or Nintendo or whatever is good enough. The way customers perceive and value both software and hardware has changed. The expectations have changed. The risks and rewards have changed. The development environment has changed. The economy has changed. The customer culture of buying hardware has changed. And all of these things have changed rapidly and dramatically over just the last few years.

Despite this Nintendo operates as if nothing has changed and they can keep playing the same game they've been playing for the better part of two decades, despite the competition they seem to deliberately ignore rapidly adapting and growing alongside the rest of the world. People do not want to buy a $300 Mario box. They don't want to buy this, and wait three/four/five months for the next noteworthy game, one that might not even be a franchise or genre they're interested in. Not everybody who likes Mario likes Zelda, or likes The Wonderful 101, or likes Metroid, or F-Zero, or everything else. And that just makes the situation worse, when someone can put that $300 towards another platform that's going to have far more software released far quicker.

It's an investment, for customers and shareholders, and at the moment Nintendo is a bad investment.

Amen brother. They just refuse to do it. They have wonderful principles, like being unique and offering more than other platform holders. But they do it with such myopic fervour that they can't seem to see what's going on around them. I mean, I keep having flashbacks to that recent Dev article where Nintendo people were saying they don't know about XBL or PSN. If that's true, that epitomises their attitude.

 

[Semajer]

This isn't good news, but I hope this ends up providing us with another January Panic Direct.

 

[Neff]

is there any actual documentation of this?

I'd be interested to see such a thing, too.

 

[PopeReal]

I really hope Mario Kart isn't delayed....

 

[User Tron]

They're not going to dump a business that's consistently profitable now simply because it was unprofitable from 2001-06. Newcomers in established markets that rely upon installed customer bases often take significant losses in order to build up their base.

It is unknown if MS has made a single dime with the Xbox-Division.

 

[Vibranium]

Realistically, how long can Iwata stay? They are pretty stubborn in alot of ways.

Iwata would probably step down as CEO when he's told it's time, and then it relieves the board of any outside involvement. If he does I hope he stays at Nintendo in maybe a developer's role, and on Directs.

 

[Zinthar]

It was only unprofitable for 2001-2006? I thought it was more than that.

The Xbox division became profitable sometime in mid-2007 (likely after a hardware revision to the 360) and, to my knowledge, has been ever since.

It's possible that the Xbox One launch was slightly unprofitable, but it's hard to imagine that outweighing the comparatively large per-unit profit they make on the 360, plus software, service fees, and licenses.

 

[7DollarHagane]

Look harder, there's plenty out there. There were even a couple that received GotY nods here and there.

I must say, it's been weird watching 'core' gamers stubbornly resist adopting a new games platform whilst everyone else just gets on and has fun. Reminds me of the Wii but with decent hardware and more staying power.

My thing is I was buying these games, playing them once or twice, and forgetting about them because there's so many other things to do with my phone when i have time to kill.

I just stopped buying them because it was a waste of money. I don't pay anything to browse gaf a little bit, go on twitter, or watch a youtube video.

 

[leatherhat]

I always thought about how the wiiU was failing harder than the dreamcast, but now I realize its actually crashing harder than the Saturn.

 

[Vibranium]

I also think that having games for the 3DS at $40 is ridiculous. Gotta make these games cheaper to compete with the mobile crowd.

Agreed, the $30 pricing for Phoenix Wright Dual Destinies impressed tons of people and convinced some on the fence buyers, especially since it's digital only. Nintendo should follow Capcom's lead.

 

[jmls1121]

Look harder, there's plenty out there. There were even a couple that received GotY nods here and there.

I must say, it's been weird watching 'core' gamers stubbornly resist adopting a new games platform whilst everyone else just gets on and has fun. Reminds me of the Wii but with decent hardware and more staying power.

I would say that the Wii had the better hardware because it had like, you know, halfway-decent input controls.

 

[NingenJanai]

Meanwhile at Sony and Microsoft

 

[cafemomo]

I always thought about how the wiiU was failing harder than the dreamcast, but now I realize its actually crashing harder than the Saturn.

At least it's speeding faster than the Jaguar

 

[JordanN]

This isn't good news, but I hope this ends up providing us with another January Panic Direct.

Curious, what difference would a Direct make?

There's nothing more drastic they can do. Cut the price? Nope. Buy Call of Duty? Nope. More Mario? Umm..

 

[oconnomiyaki]

Nintendo just needs to ditch consoles. There's a future for them on dedicated handhelds, especially if they keep a lock on Japanese titles. There is no future for them in home consoles.

 

[kuroshiki]

The Nintendo audience is very old and very diverse and spread across a whole range of demographics and formats.

...... then nintendo shouldn't have any problem at all.

 

[Panajev2001a]

They also had a bunch of shitty decisions when it came to the 3DS and "saving" the plattform was also very expensive for them. 3DS is a great systm and has a great libary - but after 3DS and WiiU i hope Konno wont design any of their system in the future. They are way to expensive for what they offer, when the same could have been realized for less by using off the shelves hardware. This is a world where proper tablets for kids can be bought for less than 150 bucks.

Proper cheap and realiable hardware + goo games - thats all we want from you Nintendo. Dont over rely on gimmicks all the time, they are not the answer for every problem. Next handheld must launch for less than 150usd and the console for less than 250 - even better would be 200.

You arent Apple, charging 250 for the 3DS at launch and nearly 400 for the WiiU....wtf.

I think Nintendo has a poor supply chain control and expensive components providers, this is made worse by their inability to create the kind of demand with Wii U and 3DS which would assure high enough production volumes to drive costs down further.
$349 for Wii U at launch compared with PS4's and even Xbox One's price feels weird as Nintendo was losing money on that too.

 

[Kintaro]

Well enough for them to sell millions and have multiple huge communities based around it?

Well, I'm not sure how many fighters sold in the millions this past gen but if you are referring to the quality of gameplay online? "Passable" would be the word.

 

[CassidyIzABeast]

I do not intend to declare how many Wii we will be selling today, but Wii will be a failure if it cannot sell far more than GameCube did. In fact, we shouldn't continue this business if our only target is to outsell GameCube. Naturally, we are making efforts so that Wii will show a far greater result than GameCube.

4th question down
http://www.nintendo.co.jp/kessan/060607qa_e/index.html

These numbers must be actual nightmare fuel for Iwata.

 

[SmokyDave]

My thing is I was buying these games, playing them once or twice, and forgetting about them because there's so many other things to do with my phone when i have time to kill.

I just stopped buying them because it was a waste of money. I don't pay anything to browse gaf a little bit, go on twitter, or watch a youtube video.

I feel ya, but then I do that with all my platforms.

I would say that the Wii had the better hardware because it had like, you know, halfway-decent input controls.

I'd say it had shit hardware and that the input controls for my phone are fine as long as you stick to games tailored to the device. Playing a dual analogue shooter on a phone is akin to playing a sim racer on a Wiimote. Just stick to the stuff that works and you're golden.

 

[Anth0ny]

This isn't good news, but I hope this ends up providing us with another January Panic Direct.

Unfortunately, they can't just pull another January 2013 Direct out of their ass. That was a once in a generation kind of thing. If they have a Wii U Nintendo Direct this month, it'll probably just be more footage of previously announced games (mainly Donkey Kong and Mario Kart), rather than megaton announcement after megaton announcement like last year.

 

[Anticitizen One]

This isn't good news, but I hope this ends up providing us with another January Panic Direct.

its too late

 

[ramparter]

Well deserved!

I'm a Ninendo fan since 1993 when I bought a NES, I don't want to see Nintendo going bad but I don't like them right now. It's not even a matter of software any more, 3DS has many games I want to play and SM3DW is enough for me to buy a Wii U but no, I wont buy any of these consoles, it's ridiculous how much behind they are. And what angers me the most is how they always defend every freaking stupid decision as if they are right and know better.

And btw, Wii failed, that's why Wii U failed. Sure it sold tons of consoles but it didn't manage to convert them to customers, most people who got a Wii don't want to buy a Wii U, it's pretty obvious.

I'm happy that at least now they will have to do better unless they want to get out of the industry.

 

[Hyperactivity]

I'm so looking forward to it. Proper account systems, crossbuy, making games in diversified genres yes, yessssss. I just hope they don't change too much and ruin what they're good at.

And then there's the chance we get none of that but instead get Nintendo on ios, crappy dlc, microtransactions, and rushed and buggy games.

 

[tiggerkiddo]

Another panic Nintendo Direct showcasing games that are way too far from releasing? Sounds like a plan!

 

[SolarPowered]

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.

I don't like the Wii U and I'm not the biggest fan of Iwata's Nintendo, but this is the grimmest gaf post I've read in a while (not including the OT which can be straight up depressing).

Changes are surely coming for better or worse.

 

[Nekofrog]

Well, I'm not sure how many fighters sold in the millions this past gen but if you are referring to the quality of gameplay online? "Passable" would be the word.

Even if you set the bar at "passable", it's still not an excuse to not have platforming in an online environment.

 

[Sendou]

As expected really.

Another panic Nintendo Direct showcasing games that are way too far from releasing? Sounds like a plan!

No. Wii U's future is uncertain to say at least and showing off games that very early into the development might blow on your face when these games end up not getting released. They tried that approach last year and I wouldn't exactly say it worked out for them.

 

[Terrell]

The Xbox division became profitable sometime in mid-2007 (likely after a hardware revision to the 360) and, to my knowledge, has been ever since.

It's possible that the Xbox One launch was slightly unprofitable, but it's hard to imagine that outweighing the comparatively large per-unit profit they make on the 360, plus software, service fees, and licenses.

No, it was able to sell at a profit. But no, it wasn't profitable.
Or do you think that the Red Ring of Death didn't cost them every penny they earned for the first 3 years of the 360's lifespan, while they were still digging the division out of a gigantic deficit?

MS has this bad habit of killing its old console just as it starts making them money and taking another financial nosedive on the next console down the pipeline. And the division will never be profitable because of it.

 

[Zinthar]

It is unknown if MS has made a single dime with the Xbox-Division.

On a full fiscal year basis, the Xbox division turned profitable starting with fiscal 2008 -- unless you believe they were lying in their financial statements, in which case you should probably contact the SEC.

The division was later reorganized to incorporate the wildly unprofitable Windows phone division, which has made it hard to discern how profitable the Xbox business is by itself. It would be rather absurd, however, to believe that Microsoft suddenly started losing money later in the generation as the cost of manufacturing the console drops faster than MSRP. That would be a first in this industry.

 

[Phire Phox]

If Smash and Mario Kart don't significantly boost sales.....might as well put a fork in it

 

[The Abominable Snowman]

Link???

There's no Link??? because it's pretty obvious. Rayman struggled by itself. Online coop wouldn't have helped anything. The game was sent to die.

 

[GamerSoul]

Unfortunately, they can't just pull another January 2013 Direct out of their ass. That was a once in a generation kind of thing. If they have a Wii U Nintendo Direct this month, it'll probably just be more footage of previously announced games (mainly Donkey Kong and Mario Kart), rather than megaton announcement after megaton announcement like last year.

If there was another Smash trailer with a good amount of footage and a character reveal then it would be worth it, imo.

That's all they have now. :3

i kid

 

[JordanN]

If Smash and Mario Kart don't significantly boost sales.....might as well put a fork in it

Smash is on 3DS.

Mario Kart is the only thing left.

Also, it's going to take more then games. There's still Wii U confusion Nintendo hasn't fixed.

 

[Mattias]

Nintendo just needs to ditch consoles. There's a future for them on dedicated handhelds, especially if they keep a lock on Japanese titles. There is no future for them in home consoles.

I dont agree. However they do need to get with the times and fix their infrastructure (accounts/online) and build a console that the developers want to create games for. You cant survive on 1st party games only if you want to sell a console.

 

[Anticitizen One]

If Smash and Mario Kart don't significantly boost sales.....might as well put a fork in it

Mario Kart won't do shit just like with 3D Land they have been spamming way too many Mario Kart games in a short period of time. Its just more of the same. Yawn inducing. By the time Smash Bros comes out hopefully most gamers have moved on to bigger and frankly better things. I really hope Nintendo learns a HARSH lesson for resting on their laurels.

 

[Kintaro]

Even if you set the bar at "passable", it's still not an excuse to not have platforming in an online environment.

True enough. One wonders if it would matter at this point though.

And then there's the chance we get none of that but instead get Nintendo on ios...

I stopped you here because this is the only place Nintendo will go as a "3rd party." The userbase would be immediate and astronomical. They wouldn't give consoles a second glance and nor would they have a reason to. Nintendo on PS4 or XB1 would be a pipe dream and Nintendo would just go on to rule the universe on Android and iOS.