Good to see them turn an operating profit for once. Good news.
However the short-term outlook has to be pretty poor, right? Perhaps a sales cut, new games and the fantastic library of existing games will help them hit that Wii U mark, but it still doesn't seem likely, and that forecast is anaemic anyway compared to anything but the Wii U's own history. We've had MK8 and Smash, and that's the biggest boost the Wii U will ever have. The Wii U's miserable sales story is almost fully written at this point. What's left for it other than to limp along until it gets put out of its misery?
On the other side, if the 3DS still declined to that extent despite a hardware refresh and Pokemon ORAS, then surely that thing is about to hit 'the wall', so to speak, and start declining heavily, as has been often predicted. As this was the one part of Nintendo's business functioning reasonably well that makes for a weak upcoming year all around.
I've been saying for 2/3 years that Nintendo should have a new handheld ready for early 2016, late 2016 at a minimum, and every sales info release just reinforces that. It's the one place they still have a reasonable amount of success, so it's the one market they can't afford to let die off between console releases like they did between the Wii and Wii U. They absolutely MUST be ready to go with their new handheld soon (with appropriate software of course), and I'm assuming NX will be it. (Or NX will be a platform that can run on their new handheld - it's all the same so long as a new handheld comes out within the next 16 months). I can't understand why anyone could believe that the NX is a new home console - it makes no sense.
As for the 3rd party argument that has been raging, as always I seem to see it differently to many other Nintendo fans, who are hardcore protective of Nintendo's home hardware. Now, to be honest, I don't know how relevant the idea of Nintendo games on other consoles / PC even is anymore, because between their handhelds and mobile Nintendo has their plate full and that's where their core audience is. That will probably be their focus going forward for a long time.
But the point is that Nintendo's home hardware seems to have hit a brick wall, and it's very hard for me to imagine how they continue in this space after the Wii U. I really don't know what they can do as a next step there, when their software has been best in class and it makes no difference to the sales of the machine. Unless they become a world-class hardware maker (in a ludicrously competitive sector) then we've seen that their software can't make up that gap. And I don't care if the Wii U is currently, at this very moment profitable - the question is how has it fared financially over the entire course of its life? How much money did they spend on R&D, or lose on the first write-down after the price drop? How much potential profit have they 'lost' by making a masterpiece like MK8 available to only 10 million potential customers? If they've lost money (or only broken even or made a small profit) for all this effort, and been fairly completely rejected by the market, the question is why would they do this again? What could possibly be different?
I also believe that if Nintendo were to make 3rd party home console games, that
1. Those games would be massively successful (enough to easily make back the 20% lost in publisher fees) because Nintendo fans would follow them to whatever platform they're on (up to 60% of the Wii U audience, probably), then all the casual parents who buy Nintendo hardware for Mario just buy PS4 instead, and lastly all of the existing PS4/XB1 homes that happen to have kids in them start buying Mario at Christmas and birthdays. That's not an insignificant amount of people, there. Gamers are in their 30s now. PS4 owners have kids, nephews, nieces. Even hardcore gamers can be convinced to pick up Mario Kart for themselves with a good marketing push. The idea that they couldn't sell on PS4 because the likes of Knack don't sell is nonsense to me. They'd bring their own audience of hardcore fans, and the rest would be the gravy on top. I don't see how they'd 'lose' any part of their audience if they did this, no more than the 30-50% they seem to be losing generation-on-generation with the exception of the Wii, anyway.
2. A few high-profile, big budget games a year would help keep mainstream gamer and media eyeballs on Nintendo franchises, which is one of their biggest problems right now (brand stagnation and lack of visibility). Thus the licensing and theme parks and all the rest. I don't see how this hurts them as in this scenario they're not competing with their own handheld or market space.
3. Even at the Wii's peak, 3rd party royalties were a very small part of their revenue. Now they must be nearly non-existant on home consoles. They lose little by ditching that.
4. Nintendo's home consoles have become vehicles for some kind of gimmick peripheral, and Nintendo has always loved peripherals in general. (Not just the Wiimote or Gamepad - look at the Mario Kart Wheel, Zapper and the rest of the plastic tat on the Wii) No reason they can't stay a peripheral maker if that's what they're into and bundle something like that with a big game. Does that cut install base they can sell to? Sure, but it already has - the Wii U gamepad sure as shit cut the potential potential install base of the Wii U as a whole, after all, and Nintendo did it anyway. Whether or not they do this, the rest of the hardware division can focus on the handheld and QoL anyway, and possibly mobile peripherals too. They wouldn't have to slash that entire division, not by a long shot, and claiming they would is asinine.
Again, I think they focus on handheld and mobile and don't go 3rd party within the next 5 years, if ever. But what I wonder as a fan is what's next for them in the home console arena? One of their strengths is magnificent home console software. Should they just ditch that because it's being held back from reaching its audience by shit hardware that the market rejects? Of course not. I say they give it one last try, probably with a super-cheap box that runs the same platform as NX (even if the software library is still distinguished between them). But if that doesn't work, then it's probably a choice of leaving that segment of the market or using their skill at software development for 3rd parties, and I know which one I'd choose.