Financial Q3 always is, even in the years where they end up negative.
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Nintendo Q3 FY15 Results - Beats Market Expectations; Lowers Full-Year Forecast
- Thread starter vinnygambini
- Start date
I edited with the 9 months figures and mpl90 commented too. Exchange gains and holiday quarter didn't help them last year.
Very true but it is still easier to implement change and restructure or take risk when you have profit than loss.
Honestly Nintendo needs to find a better way to market and sell their "smaller" and newer franchises. Or in absence of that they need to fund, publish and release more and more games across a wide spectrum so that they have a better chance of a game becoming the next Mario or Zelda. Why can't a platoon become the next big franchise? They just don't seem willing to fully put their marketing weight behind anything outside of the traditional big games
Who contests that? I said there is no turnaround, not that nintendo hasn't grown top line and started slicing costs (look at the decline in sg&a) and the layoff comment is sort of insulting.
ArchedThunder
Banned
Most people expect this. We'll probably get an announcement in early 2016 with a blowout at E3 of the same year with the system launching that holiday. Rinse and repeat for a new console in 2017.
Hopefully they can have a ton of game announcements for the new handheld like they did for 3DS and then not totally blow it by making the system way to expensive.
Eolz
Member
Ahahahah. I have to admit, this isn't really a surprise. Even if we get only some remasters and some B-tier games from now on, they still have to release/pay for some games for 2016.
We won't get a WiiU replacement before next fall at best, and the more I think about it, the more I think we won't. Let's see if we get some new hints in the Q&A...
lyrick
Member
insulting who?
Companies that have let go of 1/3 (or more) of the workforce in some of their businesses?
I don't think Splatoon will become a big franchise, and I say 1 million LTD for the first game on Wii U can be seen as a good result, but I'd also say that they're not leaving Splatoon without any kind of hype building. It's probably the opposite, at least so far.
Maybe I don't have the proper knowledge of the English terms, but going from several quarters in red to 2 quarters in black (or from 2 years in red to 1 in black) sounds like a turnaround to me.
They did indeed in some ways, worse in others. It's good Q2 and Q3 were profitable, of they can keep Q4 profitable they at least have a small trend going in terms of profitability, which would be a good sign.
Financially they did better.
In pure sales:
- sold 600k more WiiU's and 5m more software units in the same periode.
- sold 4,57m less 3DS units 4,21m less software units
Digital sales increased - I assume that includes tons of DLC, a new revenue source for Nintendo which was (almost) non existing in the previous year, and ofcourse Amiibo's.
ArchedThunder
Banned
If Splatoon can hit 1 million I will be so fucking happy.
I'd say 500k for splatoon is good, 1m would be amazing and almost the top ceiling I can see it at.
To put it in perspective: pikmin 3 hasn't reached 1m yet, and kirby released at 33k in japan last week.
I, for one, am shocked.
That was actually the issue that they identified properly I would say in the Q4 2013 results meeting (and Q&A), that they need to monetize better the existing user base as there is no big growth potential of it.
I don't see how they can grow sales of 3ds and Wii U without putting the profitability in danger (maybe they can afford a price cut for Wii U this year though) so this is the only model they can use for now until they launch the next handheld and next console, good profit on low HW sales. It's not Nintendo back to its prime, but it's Nintendo survivor of the storm for now.
Splatoon was just an easy example but one can easily point to several games over the past decade that Nintendo just pushed out to die. Especially in North America. Or didn't release at all because they don't think thy will sell. And as others have said Splatoon hitting 1 million would effectivley put it in to legitimate franchise level for Nintendo. It's not getting enough push for it to hit 1 million.
One can argue that they are just focusing money on the bigger games/names. However, that just becomes a self fulfilling prophecy. The root issue seems to be that their marketing doesn't know how to sell games that aren't from big franchises, and on top of that it doesn't seem like they want to truly spend the time, money and effort growing a franchise(s).
The last piece to all of that is that they can't really afford to not release everything they possibly can in all regions. They have to get out of that mindset. All of their games need to have global releases and efforts begin them.
They need large diverse software libraries and short of paying 3rd parties to come on board they need to do it themselves. That is the best way to cultivate adoption of hardware, which causes more software adoption, which in turn allows you more potential to find the next big game.
Honestly try could even do this on the cheap by stepping up and funding more indie developers and helping those smaller companies create games in exchange for exclusivity, even if timed. Nintendo isn't in the position to be selective and yet they still maintain the course. People say "desperate Nintendo is the best Nintendo" and I counter that if this is desperate Nintendo then their are more problems with the company than can fixed.
Note I love Nintendo, and have supported then pretty much as best as anyone can outside of not liking the N64. I, just see an ultra conservative company that may not be able I get out of their own way, and the writing is slowly getting worse on the wall.
shinobi602
Member
Don't disagree there. It kind of reflects in the Wii U attachrate which is decent, and I'm sure of those almost-5million mario kart users a big percentage got/will get the DLC.
Same with smash when it's announced.
I'd argue Tomodachi life, Fire Emblem Awakening, Luigi's mansion and kid icarus are recent examples?
WiiU lacks this first party succes with less known franchises, with pikmin as sole semi-exception.
zomgbbqftw
Banned
On a constant currency basis Nintendo would have lost money. That's the key takeaway, the core business is still performing poorly and the current profits are built on the same quicksand as Abenomics.
A couple of updates to things I've been tracking. Apologies if this is repetitive, I have very little time for GAF lately, so I haven't read much of the thread.
The Powerhouse 3DS vs NDS at the same point in their lifespan:
And the Yamauchi buyback:
The Powerhouse 3DS vs NDS at the same point in their lifespan:
Code:
This quarter
TTM after 16 quarters on sale:
3DS Hardware: 7.67
NDS Hardware: 30.69
3DS Software: 63.68 *
NDS Software: 195.14 **
Last Quarter
TTM after 15 quarters on sale:
3DS Hardware: 10.44
NDS Hardware: 30.28
3DS Software: 63.81 *
NDS Software: 187.95 **
* Software sales units and the number of new titles for Nintendo 3DS
are those of Nintendo 3DS card software (packaged and downloadable versions).
** This does not include DSiWareAnd the Yamauchi buyback:
Code:
Buyback price: 12,025 JPY
Yesterday's price: 12,300 JPYshinra-bansho
Member
It's a return to profitability, but I think what's being gotten at is that core operations are weak so whether that constitutes a turnaround ymmv.
Revenues are down a lot.
Gross margin has improved, but from memory from the last quarter thread that may have been in part due to the inventory impairment from last FY? Although SW/HW mix of revenue has shifted towards SW more so it could be that.
SG&A reduction accounts for a third of the y/y operating income delta.
If revenue continues to slide, and given the state of both their systems that seems somewhat likely, can they continue to improve gross margim and/or reduce sg&a costs?
(Also on closer look SG&A went down, but went down less than the reduction in depreciation expense and advertising expense?)
Revenues are down a lot.
Gross margin has improved, but from memory from the last quarter thread that may have been in part due to the inventory impairment from last FY? Although SW/HW mix of revenue has shifted towards SW more so it could be that.
SG&A reduction accounts for a third of the y/y operating income delta.
If revenue continues to slide, and given the state of both their systems that seems somewhat likely, can they continue to improve gross margim and/or reduce sg&a costs?
(Also on closer look SG&A went down, but went down less than the reduction in depreciation expense and advertising expense?)
zomgbbqftw
Banned
Gross margins have improved almost entirely because of weaker yen. Without Nintendo releasing the CC figures like Sony do, it is difficult to say just how much the weaker yen helped them other than it being to a significant degree.
Graphics Horse
Member
Are they really expecting to hit 4.4m Wii U software this quarter? I thought it would be quite quiet compared to the Apr-Sept period last year.
OP, how exactly is Nintendo in a comeback? Last I checked they are still a distant 3rd on home consoles and their handheld(3DS) isn't exactly living put to its older brothers(DS) legacy.
Hardware & Software Guidance for FY15 prior to new forecast:
3DS HW: 12 million
Wii U HW: 3.6 million
3DS SW: 67 million
Wii U SW: 20 million
Hardware & Software Guidance for FY15 with new forecast:
3DS HW: 9 million (↓
Wii U HW: 3.6 million
3DS SW: 61 million (↓
Wii U SW: 25 million (↑
No change to Wii U forecast in terms of HW? Sounds like Nintendo has no idea how long its console will last and considering they are not increasing their forecast, I'm guessing no price cut this year either. But hey, Nintendo is making some money selling Amiibos! Good for them!
Hardware & Software Guidance for FY15 prior to new forecast:
3DS HW: 12 million
Wii U HW: 3.6 million
3DS SW: 67 million
Wii U SW: 20 million
Hardware & Software Guidance for FY15 with new forecast:
3DS HW: 9 million (↓
Wii U HW: 3.6 million
3DS SW: 61 million (↓
Wii U SW: 25 million (↑
No change to Wii U forecast in terms of HW? Sounds like Nintendo has no idea how long its console will last and considering they are not increasing their forecast, I'm guessing no price cut this year either. But hey, Nintendo is making some money selling Amiibos! Good for them!
OP, how exactly is Nintendo in a comeback? Last I checked they are still a distant 3rd on home consoles and their handheld(3DS) isn't exactly living put to its older brothers(DS) legacy.
Hardware & Software Guidance for FY15 prior to new forecast:
3DS HW: 12 million
Wii U HW: 3.6 million
3DS SW: 67 million
Wii U SW: 20 million
Hardware & Software Guidance for FY15 with new forecast:
3DS HW: 9 million (↓
Wii U HW: 3.6 million
3DS SW: 61 million (↓
Wii U SW: 25 million (↑
No change to Wii U forecast in terms of HW? Sounds like Nintendo has no idea how long its console will last and considering they are not increasing their forecast, I'm guessing no price cut this year either. But hey, Nintendo is making some money selling Amiibos! Good for them!
Nintendo's forecasts have been often ridicolously high for several quarters. I think that they are trolling investors.
This one is slighty better.
That forecast is for 2014, and the adjustments are for the last quarter - them not updating it is normal (although I doubt they make a higher forecast for next year). The financial year for nintendo goes from april '15 - march'16. We'll get the forecasts at the beginning of april.
Because they are making some money again, I'd guess
Hardware & Software Guidance for FY15 prior to new forecast:
3DS HW: 12 million
Wii U HW: 3.6 million
3DS SW: 67 million
Wii U SW: 20 million
Hardware & Software Guidance for FY15 with new forecast:
3DS HW: 9 million (↓
Wii U HW: 3.6 million
3DS SW: 61 million (↓
Wii U SW: 25 million (↑
No change to Wii U forecast in terms of HW? Sounds like Nintendo has no idea how long its console will last and considering they are not increasing their forecast, I'm guessing no price cut this year either. But hey, Nintendo is making some money selling Amiibos! Good for them!
You do realize that the updated forecast is for the same financial year (that ends in March 2015), right? Why would they increase the forecast when they sold 3.03 million for 9 months and 0.5 required is quite inline with a non-holiday quarter (like Q1 or Q2 2014)?
This is exactly what I came here to say. Smash on Nintendo handhelds is here to stay
.
Lionel Richie
Member
Yeah, and I'm not sure why the negativity around here on Nintendo announcing more Wii U games, it makes no sense. They are NOT dropping the console so soon, I mean they could but it's not realistic to expect so.
And I'd counter they need that effort across all platforms, and look how they were seemingly caught off guard by FE's success.
Also those examples also exacerbate their ability to support two platforms. It sounds like they are working to fix that.
Also I would strike Luigi's mansion off since that is a sequel to a relatively successful first game if not one that sat dormant too long.
And I wasn't under the impression that Kid Icarus was successful nor got a huge marketing backing.
However I think we are in agreement that they need more variety across the platforms and they need to support all of their software better
Agree
Sales of the sequel were unexpectedly high though. It sold 4 million last time we had numbers.
It did 1.2 million, which is a succes for a game/franchise that was forgotten for 21 years.
Not just their 3rd party support - last year was the best sales year for the console outside pf the launch period and even then, they are only on pace to meat their 3.6 million projection. Let's assu,e they can maintain that for two more years (unlikely, as software support will likely drop severely after this year) - that pits them at 16 million or so heading in 2017 when they are likely releasing new hardware.
They are not currently on pace to hit 20 million. They would need these sales of the last year to maintain in 2015, 2016, and 2017. That's likely not going to happen. This is probably, at least historically, the Wii U's last big year for software. I mean, there will be games in 2016, just not as many as their are now, and all big hitting games are out outside of Metroid. Plus, somehwere in there, development shifts to the new platforms in 2016 eventually. 2017 should be pretty bare outside of the eShop, as we wait for their new hardware to launch.
3DS should hit 60 - 65 million before it's done, which should be next year, unless they extend the life one more year so it releases the same year as the new home console, where handheld releases spring, console releases holiday.
My expectation is that this will mean even fewer N3DS exclusives than might have been anticipated.
TheSlySoul
Member
Pretty much DSi 2.0 which I can see. At least the new handheld should play all the n3DS games fine.
Essentially, yeah. With more success I think more exclusives would have come; I don't think the DSi even had as big of an exclusive as the XB port N3DS is getting (so many acronyms, my head is spinning!). I think we'll see more "N3DS-enhanced" games. I don't expect N3DS to be a massive hit here in the West. Nintendo has to be careful of fragmenting their handheld userbase too much and XB is just niche enough to not upset people over its exclusivity. Now, if MM 3D had been a N3DS exlusive, I think folks would've flipped....
vinnygambini
Why are strippers at the U.N. bad when they're great at strip clubs???
http://www.reuters.com/article/2015/01/28/nintendo-results-idUSL4N0V73AP20150128
Bottom line, margins improved but the business at its core remains shaky; though a small turnaround/comeback as they are no longer bleeding money four years running.
Anxiously waiting for Investors Meeting.
OP, how exactly is Nintendo in a comeback? Last I checked they are still a distant 3rd on home consoles and their handheld(3DS) isn't exactly living put to its older brothers(DS) legacy.
Hardware & Software Guidance for FY15 prior to new forecast:
3DS HW: 12 million
Wii U HW: 3.6 million
3DS SW: 67 million
Wii U SW: 20 million
Hardware & Software Guidance for FY15 with new forecast:
3DS HW: 9 million (↓
Wii U HW: 3.6 million
3DS SW: 61 million (↓
Wii U SW: 25 million (↑
No change to Wii U forecast in terms of HW? Sounds like Nintendo has no idea how long its console will last and considering they are not increasing their forecast, I'm guessing no price cut this year either. But hey, Nintendo is making some money selling Amiibos! Good for them!
It's a comeback in terms of profitabiity.
McHuj
Member
They need a new handheld sooner than many are willing to admit. The new 3DS isn't cutting it. I imagine the FY16 forecast for the 3DS will be even lower than 9M so it would make sense to launch then. You don't want to get into a situation where the sales of the existing hardware completely dry up before launching the new one. My guess we'll see a handheld either this holiday or by March'16 in Japan.
It is currently at 9.2m (to retailers). They expect to be at 9.7 by the end of this fiscal year (for nintendo that's the 31th of march).
Part of this depends on whether the new handheld and console launch simultaneously if they have shared architecture and shared games. If that's the case, it might be better for Nintendo to wait another year and launch them at the same time.
Oh that is good! While not fantastic I'm glad it's going to pass 10 million this year
how much is the DC and Vita currently at?It would be insane for Nintendo to announce a new handheld so close to the N3ds when there are games that are going to support it. But sure, if sales keep declining this year they would probably have to do it.
Captain Smoker
Member
I thought "Cost of sales" is everything that has to do with the production and shipment of their products, since they're produced outside of Japan, wouldn't that increase their cost because of the weak Yen?