Nintendo Stops Selling 3DS at a Loss - Starts Again with Wii U
Invents the term "Nintendo-like Profits"
Nintendo's figures from earlier this week made interesting reading if you want a healthy and competitive hardware market. The figures were followed up by a presentation. The presentation contained the phrase, we will achieve Nintendo-like profits within this fiscal year". It was presented by Mr Iwata, the gosh darned president of the company.
Exactly what 'Nintendo-like profit' actually means is, unhelpfully, not clarified. We expect that it means "Metric" (or even Imperial) shack-loads of money. However, based in recent performance it could mean "10 Yen in the black". Also mentioned was the fact that the company is no longer selling the 3DS at a loss. However...
"...as we are in the phase of concentrating our development resources on software for the Nintendo 3DS system, which is still in an earlier stage of penetration than that of Nintendo DS, and as we have not yet launched the Wii U system, it is difficult to increase the total sales of software, which is generally profitable.
"In addition to the yen’s continuous appreciation, the Wii U hardware will have a negative impact on Nintendo’s profits early after the launch because rather than determining a price based on its manufacturing cost, we selected one that consumers would consider to be reasonable. In this first half of the term before the launch of the Wii U, we were not able to make a profit on software for the system while we had to book a loss on the hardware, which is currently in production and will be sold below cost. Our loss has therefore widened during the second quarter in spite of bringing the Nintendo 3DS hardware back to profitability. Although we expect our financial performance to be revitalized, under these circumstances, unfortunately we cannot say that we will achieve "Nintendo-like" profits within this fiscal year."
In terms of those profits, we're told that, We will make best efforts to retrieve "Nintendo-like" profits by:
boosting sales of the Nintendo 3DS system as a sound successor to Nintendo DS both in Japan and overseas during the year-end sales season, launching the Wii U system successfully in each part of the world in the year-end and maintaining the sales momentum next year, and, transforming our business structure in line with the times, including the expansion of our digital business to increase our business efficiency and profitability."
Source: Nintendo
Exactly what 'Nintendo-like profit' actually means is, unhelpfully, not clarified. We expect that it means "Metric" (or even Imperial) shack-loads of money. However, based in recent performance it could mean "10 Yen in the black". Also mentioned was the fact that the company is no longer selling the 3DS at a loss. However...
"...as we are in the phase of concentrating our development resources on software for the Nintendo 3DS system, which is still in an earlier stage of penetration than that of Nintendo DS, and as we have not yet launched the Wii U system, it is difficult to increase the total sales of software, which is generally profitable.
"In addition to the yen’s continuous appreciation, the Wii U hardware will have a negative impact on Nintendo’s profits early after the launch because rather than determining a price based on its manufacturing cost, we selected one that consumers would consider to be reasonable. In this first half of the term before the launch of the Wii U, we were not able to make a profit on software for the system while we had to book a loss on the hardware, which is currently in production and will be sold below cost. Our loss has therefore widened during the second quarter in spite of bringing the Nintendo 3DS hardware back to profitability. Although we expect our financial performance to be revitalized, under these circumstances, unfortunately we cannot say that we will achieve "Nintendo-like" profits within this fiscal year."
In terms of those profits, we're told that, We will make best efforts to retrieve "Nintendo-like" profits by:
boosting sales of the Nintendo 3DS system as a sound successor to Nintendo DS both in Japan and overseas during the year-end sales season, launching the Wii U system successfully in each part of the world in the year-end and maintaining the sales momentum next year, and, transforming our business structure in line with the times, including the expansion of our digital business to increase our business efficiency and profitability."
Source: Nintendo
Companies:
Nintendo
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