Nintendo Sees Repeat Profit Slump – DS and GameCube Sales Forecasts Adjusted
Slow home console movements hit business.
Nintendo Company Limited has again seen a profit slump, resulting in further cuts to predicted sales of its GameCube home console and snazzy DS touch-screen portable.
NCL cut 21% from its expected winnings this fiscal half, blaming sluggish GameCube demand across both hardware and software, and the escalating cost of research and development for the upcoming Revolution console, again across hardware and software divisions.
Sales dropped 6.2% to 176.4 billion yen for the first half. Operating profit, or sales minus the cost of goods sold and administrative expenses, fell 51% to 19.6 billion yen, according to the report. For the full year, Nintendo still expects net income of around 75 billion yen on sales of 500 billion yen; forecasts were unchanged from Nintendo’s last profit warning issued on October 7 this year.
Of course, it should be pointed out that Nintendo's books over the past few years remain unchanged, in spite of the month-on-month figure fluctuations. This probably comes from having an accountant running the company, rather than a lunatic.
Nintendo went on to cut its predicted GameCube sales by 400,000 units, the same figure snipped from its global sell-through expectation for the DS.
NCL cut 21% from its expected winnings this fiscal half, blaming sluggish GameCube demand across both hardware and software, and the escalating cost of research and development for the upcoming Revolution console, again across hardware and software divisions.
Sales dropped 6.2% to 176.4 billion yen for the first half. Operating profit, or sales minus the cost of goods sold and administrative expenses, fell 51% to 19.6 billion yen, according to the report. For the full year, Nintendo still expects net income of around 75 billion yen on sales of 500 billion yen; forecasts were unchanged from Nintendo’s last profit warning issued on October 7 this year.
Of course, it should be pointed out that Nintendo's books over the past few years remain unchanged, in spite of the month-on-month figure fluctuations. This probably comes from having an accountant running the company, rather than a lunatic.
Nintendo went on to cut its predicted GameCube sales by 400,000 units, the same figure snipped from its global sell-through expectation for the DS.
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Comments
realvictory 25 Nov 2005 14:28
1/8
From the UK, it seems like Nintendo is a total disaster at the moment. All I can say is, there just aren't enough games coming out for the GC or DS. Every so often you get the occasional release, and it tends to be good, but it's totally different to the XBox and PS2, where there are games constantly coming out. Even if they have rubbish games to fill in the gaps, it still fills up shelves and gets publicity.
Therefore, all I can say is, Nintendo decide to operate the way they do, so where it gets them is their own fault.
It's not nice, because if people don't buy Nintendo games, then there's some amazing stuff they're going to miss out on. But most consumers don't even know about Nintendo's most amazing games, so bringing out one good innovative game per month does no good.
So I think Nintendo should put the "revolutionary" and family crap on hold until the Revolution comes out, and focus getting the gamecube selling at its full potential. S**t, unoriginal games can do no harm at this stage - people know Nintendo can make original fun games - but what they NEED is realistic sports games, more movie licenses, etc, and basically, what sells.
EA are renowned for having unoriginal, licensed games, but look at how successful they are! People can say what they like about the quality of their games, but at the end of the day, they don't have to care, because they're rich! There's no point making quirky games - or even good games - if people don't buy them!
Therefore, all I can say is, Nintendo decide to operate the way they do, so where it gets them is their own fault.
It's not nice, because if people don't buy Nintendo games, then there's some amazing stuff they're going to miss out on. But most consumers don't even know about Nintendo's most amazing games, so bringing out one good innovative game per month does no good.
So I think Nintendo should put the "revolutionary" and family crap on hold until the Revolution comes out, and focus getting the gamecube selling at its full potential. S**t, unoriginal games can do no harm at this stage - people know Nintendo can make original fun games - but what they NEED is realistic sports games, more movie licenses, etc, and basically, what sells.
EA are renowned for having unoriginal, licensed games, but look at how successful they are! People can say what they like about the quality of their games, but at the end of the day, they don't have to care, because they're rich! There's no point making quirky games - or even good games - if people don't buy them!
OptimusP 25 Nov 2005 16:58
2/8
You're asking Nintendo to be like EA? Are you really asking Nintendo to be like EA? You are asking Nintendo to step down from it very philosophy of gaming and just release genereic sequel after generic sequel... you how the game-industry crashed in the 80's? It crashed because Atari was releasing generic sequel after generic sequel trash over and over and over again... and now you want Nintendo... the world innovator of gaming, the sole reason why there is a gaming industry right now to do what EA does today and Atari did 25 years ago...nice, just nice, really...
The thing is... Nintendo has to do deal with crazy third parties who do absolutly stupid things (Sega releasing the most exclusives on the Xbox while they all BOMBED on it and their GC-games actually sold the best, or Namco making Soul Calibur 3 a PS2-exclusive while the GC-version of the 2 sold the best, or Capcom annoucing the PS2 version of RE4 before the GC-version is released and then releasing a movie about RE5 before the PS2 version of RE4 comes out... who runs marketing over there) and has to deal with stupid-ass retailers, example, i know a dvd-store that also sells games... while the DS actually outsells the PSP by 4 to 1 (for every PSP sold 4 DS's are sold...and i mean this) in Europe they have the PSP but not the DS... i mean...they don't read papers or something...
For a big part it's not Nintendo's fault however NOE's structure isn't the most efficient on the planet either and Nintendo is weak at marketing. They try filling the holes themselve but their resources aren't infinite you know. Still it's recommandable that Nintendo manages to sell almost as much as the Xbox solely on the fact that the GameCube has Nintendo-games on it and the other 2 don't.
The thing is... Nintendo has to do deal with crazy third parties who do absolutly stupid things (Sega releasing the most exclusives on the Xbox while they all BOMBED on it and their GC-games actually sold the best, or Namco making Soul Calibur 3 a PS2-exclusive while the GC-version of the 2 sold the best, or Capcom annoucing the PS2 version of RE4 before the GC-version is released and then releasing a movie about RE5 before the PS2 version of RE4 comes out... who runs marketing over there) and has to deal with stupid-ass retailers, example, i know a dvd-store that also sells games... while the DS actually outsells the PSP by 4 to 1 (for every PSP sold 4 DS's are sold...and i mean this) in Europe they have the PSP but not the DS... i mean...they don't read papers or something...
For a big part it's not Nintendo's fault however NOE's structure isn't the most efficient on the planet either and Nintendo is weak at marketing. They try filling the holes themselve but their resources aren't infinite you know. Still it's recommandable that Nintendo manages to sell almost as much as the Xbox solely on the fact that the GameCube has Nintendo-games on it and the other 2 don't.
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realvictory 25 Nov 2005 18:38
3/8
What I'm talking about is, it's no good continuing a strategy if it's unsuccessful. And that doesn't mean stopping making the games it makes best.
In my opinion, Nintendo are being quite hypocritical - they say games should be aimed at everybody, but their games are in general, oriented at children. OK, so you and I will know that just because a game has bright colours doesn't mean it's for children. But most poeple don't know, and they will buy the game that looks best, not the most fun or original.
In turn these people are who drive the sales of computer games, and in turn, this affects the perceptions of delvelopers, shops and other potential customers.
If there is a games console with a crap football game that is realistic, I think that makes it a better target for a less-crap realistic football game, because it's the same audience. If a console has a non-serious cartoon football game on it, then it's less likely to be a target for the next best realistic football game. Who buys football games? Football fans. What do they want? They want a realistic football game, the way they like to play it. If Nintendo stopped specialising (I'm not saying stop making them completely) in childish (looking) games, they would make more money, I believe.
This problem was originally caused by Nintendo. I'm not talking about the future, I'm talking about the present, which is just as important. The trend has been, as far as I remember, games which look "cute" don't sell; games which look "cool" sell.
I'm not saying Nintendo should try to be exactly the same as EA, but there are some things EA does that Nintendo could learn from. They're both simply trying to make money, after all.
In my opinion, Nintendo are being quite hypocritical - they say games should be aimed at everybody, but their games are in general, oriented at children. OK, so you and I will know that just because a game has bright colours doesn't mean it's for children. But most poeple don't know, and they will buy the game that looks best, not the most fun or original.
In turn these people are who drive the sales of computer games, and in turn, this affects the perceptions of delvelopers, shops and other potential customers.
If there is a games console with a crap football game that is realistic, I think that makes it a better target for a less-crap realistic football game, because it's the same audience. If a console has a non-serious cartoon football game on it, then it's less likely to be a target for the next best realistic football game. Who buys football games? Football fans. What do they want? They want a realistic football game, the way they like to play it. If Nintendo stopped specialising (I'm not saying stop making them completely) in childish (looking) games, they would make more money, I believe.
This problem was originally caused by Nintendo. I'm not talking about the future, I'm talking about the present, which is just as important. The trend has been, as far as I remember, games which look "cute" don't sell; games which look "cool" sell.
I'm not saying Nintendo should try to be exactly the same as EA, but there are some things EA does that Nintendo could learn from. They're both simply trying to make money, after all.
OptimusP 25 Nov 2005 19:29
4/8
So...Nintendo is making a annual profit while it has the graphical less powerfull handheld and a more powerfull one is on the market... while it is developing a completly new homeconsole and prepping games for it... while it sold almost as much GameCubes as there are Xboxes soly on the fact GameCube have Nintendo's first-party games on it (i hope you're realising how many arguments of you i'm negating just by stating clear facts) while allmighty Microsoft is losing a billion dollars a year and Sony has not so recently stated it lost more money then planned because of PS3 R&D.
Personally i would say Nintendo has a very good strategy, they have Mario Party (note: every Mario Party sold over a million worldwide) for the familyfun, Metroid for the serious gamer who appreciates games as art, Zelda to whoop-ass every other game on the planet to show that Big N is gameplayking and no one else.
Sure they have (very) doubtfull strategies at times but Nintendo has to be Nintendo to stay Nintendo or in other words, the company that receives a third of all income derived from gaming, you heard me a third!! Nintendo's complete annual income (the money they made without deducting costs) is close to that of Sony, and i don't mean the gamecompany Sony, i mean the whole huge company Sony, and they do it by only being in the gamingbussiness. That's some solid money shoveling if you ask me.
And that "nobody's buys stuff that looks like it's meant for kids" b******s. What gamefranchise made the most money of any gamefranchises and by such can be seen as the only gamefranchise that can compete with the income that big moviefranchises make...POKEMON!! Nintendo made 4 billion dollars PROFIT on the pokemonfranchise alone. The PSOne didn't even made Sony that much profit.
Can Nintendo learn something from EA? Better question, can Nintendo learn something good from EA? The only thing Nintendo can learn from EA is to do some solid marketing and make generic ripp-off games. EA can learn tons from Nintendo... tons upon tons upon tons.
Personally i would say Nintendo has a very good strategy, they have Mario Party (note: every Mario Party sold over a million worldwide) for the familyfun, Metroid for the serious gamer who appreciates games as art, Zelda to whoop-ass every other game on the planet to show that Big N is gameplayking and no one else.
Sure they have (very) doubtfull strategies at times but Nintendo has to be Nintendo to stay Nintendo or in other words, the company that receives a third of all income derived from gaming, you heard me a third!! Nintendo's complete annual income (the money they made without deducting costs) is close to that of Sony, and i don't mean the gamecompany Sony, i mean the whole huge company Sony, and they do it by only being in the gamingbussiness. That's some solid money shoveling if you ask me.
And that "nobody's buys stuff that looks like it's meant for kids" b******s. What gamefranchise made the most money of any gamefranchises and by such can be seen as the only gamefranchise that can compete with the income that big moviefranchises make...POKEMON!! Nintendo made 4 billion dollars PROFIT on the pokemonfranchise alone. The PSOne didn't even made Sony that much profit.
Can Nintendo learn something from EA? Better question, can Nintendo learn something good from EA? The only thing Nintendo can learn from EA is to do some solid marketing and make generic ripp-off games. EA can learn tons from Nintendo... tons upon tons upon tons.
Ditto 25 Nov 2005 20:51
5/8
Nintendo has lost home console market share nearly year-on-year for almost 17 years.
Their current strategy works at the moment but is unsustainable.
Business HND will tell you the four Ps:
Product
Price
Place
Promotion
Nintendo have product, price but have rubbish place and promotion. They don't promote their products effectively, they don't release them quick enough thus isolating consumers and it's hard to obtain the products. Sony have the kudos, which adds to the promoton aspect in that they tend to have 3 times as much shelf space as the DS.
They are a good business in some ways (always make a profit), rubbish in others (they still don't seem to have grasped the idea of actually polling what consumers want and what would make them buy a product in the different world markets - they're too focused on Japan - if they'd made the DS near PSP power it would be be selling much stronger in the US, and probably the UK).
Incidently, these figures were only just outside Nintendos forecasts, in fact, Nintendo's forecasts were more accurate than probably 90% of companies - don't worry about these figures at all. They were expected by the company and are nothing to be concerned about.
Their current strategy works at the moment but is unsustainable.
Business HND will tell you the four Ps:
Product
Price
Place
Promotion
Nintendo have product, price but have rubbish place and promotion. They don't promote their products effectively, they don't release them quick enough thus isolating consumers and it's hard to obtain the products. Sony have the kudos, which adds to the promoton aspect in that they tend to have 3 times as much shelf space as the DS.
They are a good business in some ways (always make a profit), rubbish in others (they still don't seem to have grasped the idea of actually polling what consumers want and what would make them buy a product in the different world markets - they're too focused on Japan - if they'd made the DS near PSP power it would be be selling much stronger in the US, and probably the UK).
Incidently, these figures were only just outside Nintendos forecasts, in fact, Nintendo's forecasts were more accurate than probably 90% of companies - don't worry about these figures at all. They were expected by the company and are nothing to be concerned about.
codeninja 25 Nov 2005 23:07
6/8
I should point out that Nintendo is the ONLY hardware maker at the moment that makes money doing gaming business. Sony can have 99.9% market share, but what good is it if they cannot make profit out of it? Their gaming division lost money in the last quarter and barely made some profit this quarter. Not to mention XBox which looks more like Microsoft way of profit sharing with random game playing kids.
realvictory 26 Nov 2005 00:09
7/8
Well, the headline of this story shows that Nintendo are becoming less successful, and retrospectively, we see that Nintendo has gradually been losing market share, which says something about their strategy.
Like I said, their few games that they have usually are good, but it's not enough to aim purely at Nintendo fans. I wouldn't say that that the Pokemon franchise wasn't "cool," either. But I'm sure sales aren't what they used to be - even if it makes a profit ;)
Which Zelda sold best, Ocarina of time, or the cartoony Wind Waker? That's why they're making Twighlight Princess less cartoony, because it's what the people who are going to buy it want.
Listen, I agree with you - I like Nintendo as they are - but the truth is, lots of people prefer non-Nintendo games.
People seem to think that EA are irrelevant, because they don't like their games. It would be nice to think that did happen, but the truth is that their games sell and they are rich, even if their games are s**t. The Sims 2, for exmaple - in my personal opinion: generic, a waste of time, etc... but it's been in the top 20 in the UK for ages. Pokemon Emerald is Nintendo's nearest game to the top 20, but it's not even in the top 20, and unlike The Sims 2, it's been consistenly going down in the charts. EA's game is selling better than Nintendo's most successful franchise. And EA have other games in the chart.
Nintendo can do better than it's doing at the moment. Pokemon is only one game, which might do for now, but it's losing popularity.
Like I said, their few games that they have usually are good, but it's not enough to aim purely at Nintendo fans. I wouldn't say that that the Pokemon franchise wasn't "cool," either. But I'm sure sales aren't what they used to be - even if it makes a profit ;)
Which Zelda sold best, Ocarina of time, or the cartoony Wind Waker? That's why they're making Twighlight Princess less cartoony, because it's what the people who are going to buy it want.
Listen, I agree with you - I like Nintendo as they are - but the truth is, lots of people prefer non-Nintendo games.
People seem to think that EA are irrelevant, because they don't like their games. It would be nice to think that did happen, but the truth is that their games sell and they are rich, even if their games are s**t. The Sims 2, for exmaple - in my personal opinion: generic, a waste of time, etc... but it's been in the top 20 in the UK for ages. Pokemon Emerald is Nintendo's nearest game to the top 20, but it's not even in the top 20, and unlike The Sims 2, it's been consistenly going down in the charts. EA's game is selling better than Nintendo's most successful franchise. And EA have other games in the chart.
Nintendo can do better than it's doing at the moment. Pokemon is only one game, which might do for now, but it's losing popularity.
vault 13 28 Nov 2005 04:28
8/8
OptimusP wrote:
You're asking Nintendo to be like EA? Are you really asking Nintendo to be like EA? You are asking Nintendo to step down from it very philosophy of gaming and just release genereic sequel after generic sequel... you how the game-industry crashed in the 80's? It crashed because Atari was releasing generic sequel after generic sequel trash over and over and over again... and now you want Nintendo... the world innovator of gaming, the sole reason why there is a gaming industry right now to do what EA does today and Atari did 25 years ago...nice, just nice, really...
Atari actually failed because of unmanaged rights. Their was no license for game developers to purchase and so Atari only made money on the systems and their first party titles (if their were any). And also the sea of copycat and bigger, better systems (*ahem, ColecoVision) didn't help either. Look it up. I had a really good video game archive site but I can't seem to find it now.
Anyways, this conversation is the best I've read in a LONG time. In my opinion Nintendo has done made of bad moves:
1) Lack of online support/having confrences calling online gameplay NOT a place Nintendo really wants to get into.
2) Lack of third party support by way of Nintendo not helping/caring/doing anything about marketing and getting third parties involved.
3) Nintendo's branding and promotion.
It is funny though, for a market comprised of mostly kids, it seems Nintendo would have a HUGE leg up on the competition. You don't get much kiddier than Nintendo. Some may say Sony, but their kid games are too Japanesey.
Although, kids now want more violent games, adult style games. Or at least games where you do things you can't do in real life like drive under horribly awful physics conditions, shoot incredibly unrealistic firearms, and preform superhuman feats like taking a thousand bullets before dying. Is it real? No. But kids do want it for whatever psychological forces posseses them.
But back to the point, I do have to commend Nintendo on making games that are accesible and easy to play for everyone while maintaining the interest of adults (Mario, Zelda, Mario Kart, etc.) They have also made Strides in making more adult style games (Metroid, Eternal Darkness, etc.). So I don't think it's Nintendo's game development but more so their product placement. They do need to push the more hip and you want it feel of Sony and tries so hard Microsoft. What they do is good, they don't need to sell out, just need to market themselves better. I believe that third party EA support would be an amazing help and I don't think it's selling out. If their concerned with their seal of quality, then restrict the half assed games they create. Put only QUALITY third party titles on the shelves. That maintans their respectability without selling out and makes them a profit, There HAS to be a happy medium.
One more thing, with the amount of crap that gets put on the shelves, I really wonder what's bad enough NOT to be put out. That has to be some awesome stuff indeed.