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This comes after revisions to its sales and profit through March 2014

Nintendo's new year hasn't been too forgiving, as the company was forced to revise its sales and profit expectations through March. With hard times ahead, the company is realizing that it needs to hop on the mobile bandwagon if it wants to stay alive.
 
According to Bloomberg, Nintendo is considering a new business structure that includes launching games on smart devices such as tablets and smartphones.
 
“We are thinking about a new business structure,” said Satoru Iwata, Nintendo CEO. “Given the expansion of smart devices, we are naturally studying how smart devices can be used to grow the game-player business. It’s not as simple as enabling Mario to move on a smartphone.”
 
This could be a good move for Nintendo, considering hardcore console gamers tend to stick with Sony's PlayStation or Microsoft's Xbox consoles while more casual gamers have flocked to mobile devices -- not to mention that almost everyone now carries at least a smartphone on their person. 
 
Nintendo has also been pretty stubborn about offering its characters to online mobile games, which the company could profit off of. 
 
But times are getting tight for Nintendo, and it's realizing that if it doesn't make some big changes, it'll sink.
 
Earlier this month, a statement from Nintendo announced that its anticipated Wii U units sold from April 2013 to March 2014 was changed from a previous 9 million to just 2.8 million. This represents a staggering 69 percent drop. 
 
Wii U software doesn't look any better, with sales expectations falling from a previously reported 38 million to just 19 million. 
 
The company also had to revise 3DS sales expectations, dropping from 18 million to just 13.5 million units sold. As for the original Wiis, Nintendo is cutting their sales expectations from a previous 2 million to 1.2 million. 
 
With so many sales revisions, Nintendo is also decreasing its financial forecast, which includes a loss of 25 billion yen ($240 million USD) -- down from a previously reported 55 billion yen profit. 
 
Iwata said the company was unable to take advantage of the weaker yen. Nintendo decreased its planned dividend for the fiscal year from 260 yen to 100 yen. Nintendo revised its foreign-exchange predictions from 90 yen to the dollar to 100 yen, and from 120 yen per euro to 140 yen.

Source: Bloomberg



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nintendo has to be careful.
By hpglow on 1/20/2014 10:36:40 PM , Rating: 3
Nintendo should revamp some older games with newer graphics like super metroid. Then they could make money without scavenging their newer exclusive titles. Or bring the Virtual Console over to the PC and other mobile devices and lower the prices so they make sense. Yeh there are free emulators but people will pay for stuff when given a good inexpensive alturnative.




RE: nintendo has to be careful.
By euler007 on 1/21/2014 10:44:00 AM , Rating: 2
I'm sure they could gross 250M+ just by releasing Ocarina of time HD on ps4/Xb1/ps3/X360.


APPLE SHOULD BUY NINTENDO
By Da W on 1/21/2014 8:37:01 AM , Rating: 2
After all this makes sence.
Both companies like to have slick design, proprietary ecosystem and keep control over it. Both buck the trend and do whatever the hell they want. Both made mistakes, both made blockbusters than changed the market.

And nintendo is what Apple is missing to enter the living room. Forget an i-TV with an integrated ARM processor, with the speed those processor are evolving, you'll have to throw your TV in the garbage every 3 years.




RE: APPLE SHOULD BUY NINTENDO
By troysavary on 1/21/2014 9:42:32 AM , Rating: 3
Please no.


Nintendo is fine
By Labotomizer on 1/21/2014 9:30:45 AM , Rating: 3
These posts are no better than the "PC is dead" posts we read all the time. Nintendo has a ridiculous amount of money in cash and bonds. They own the Pokémon franchise, they own Mario and Zelda. This console and the next could fail and they'd be just fine. The 3DS is doing great and has great games, 1st and 3rd party.

Such a limited view.




RE: Nintendo is fine
By TheJian on 1/21/2014 9:50:34 PM , Rating: 1
You're kidding right? You go from expecting a 550mil PROFIT to a 250mil loss and 70% off of hardware sales after only a year? You call this doing fine? Stop making me laugh :) Not it was off 50% last time they spoke about the numbers. This is just getting worse. Will it be an 80% revision next time? 90%? You can't really call that insane with it going from 50-70% in just 6 months. The 50% drop just after xmas was bad enough. Jeez. Mobile is killing them because they are not even xbox360 and they have been caught. xbox1/ps4 are next as they get caught the same will happen. Love consoles or hate them reality isn't going to change here. If they had shot higher with the hardware maybe they would have had a better chance. But upscaling already, etc isn't helping the picture here. MS keyed so much on TV experience they seem to have forgotten you sell GAMES. Worse. They have done everything they could to bury their recent devices. Surface RT1 used 1.4ghz when 1.7 T3 was out in a phone already, why so high price and so low perf? These socs go for $20-25 so how much more expensive was the faster version? $3? Stupid to get reviews saying it's sluggish over a few dollars. Xbox1 will have the same issues, which is why PS4 is outselling it (if not because they are just more gaming oriented it seems where MS believes it's a TV box not a GAME box).

Mobile will kill consoles in 3yrs. Intel will have a 10nm soc in 2015, or 2016 at worst. Krzanich says 2015, but I think he means themselves shipping a chip, not a device we can buy, which is why I say 2016. The 14nm is supposed to up gpu side 15x, so what is the 10nm expected to do. It's clear Intel has no fear of AMD now, so will go total gpu for die shrinks now (which is why we get 5-10% on cpu now). If every tablet and phone has a xbox1/ps4 in them 2-3yrs into the brand new consoles lives, how will they sell with 1000's more games and all game dev attention on mobile? How do you decide as a dev to concentrate on 10-15mil consoles each (if they get to that each this year, xmas was good but watch for wiiu like declines this year) when you can instead concentrate on 1.2B units YEARLY sold and every year getting faster on mobile. With 100x the size of the audience even next xmas (you have to program for both consoles), why wouldn't you just make an opengl game on pc that scales down to android's power now that it's running a desktop gpu with K1 soon?

All PC games and PS3/PS4 games that are OpenGL (pretty much all unreal engine games etc can go OpenGL) can now be ported easily. Unreal 3 engine, ported in 4 days. Trine2 and Serious Sam 3 ported to K1 in 2 weeks with most of that according to anandtech going to mapping functions not the programming itself so clearly porting is a piece of cake now as long as you aren't coming from directx.

Devs showing 60% making mobile games, less than 12% for next gen consoles. Now factor in the 1.2B becoming 2.5Bil by 2016 and you get an even worse number. Consoles are dead this gen, and I'll be shocked if they get through the next year without showing signs of weakness. It's not going to be xmas for the next 4 quarters in a row. They had big pent up demand from hardcore people, but the pre-orders are over. GDC2014 in march will show numbers shifting even more to mobile. Epic has said they made more dollars per man hour spent on Infinity Blade (just for iOS mind you, no android) than they did for the gears of war series...

How small is Apples ios market compared to android? You can charge $10-20 for these games and dwarf console sales. Get the hardcore users with a pc version for $40 and the rest at $20 on mobile and laugh your way to the bank while consoles die. Devs don't care who wins, they go where the people are. We go where the devs went with games. Consoles are chicken egg syndrome for the first 2yrs. You have to sell enough hardware or nobody wants to right software for it (see wiiu sales, vita sales). Mobile on the other hand, sells 1.2B units already every single year! 950mil phones now, and 300mil tablets (1.25B units I guess). K1 this year, M1 next year, and V1 2016 (volta, on die mem etc). By then consoles are caught even if it isn't Intel's process that does it. So consoles MIGHT have 20-30mil each in the bag, while mobile will ship 2.5B units that are either equal or "GOOD ENOUGH" for most people and all have hdmi out by then (most do now). We already have 4GB samsung modules coming for mobile this year probably, and by 2016 I'm sure that will be 8GB and 64bit coming this year too. How do you compete with even todays 1.2B units shipped yearly? K1 is already basically xbox360/ps3 power shortly.

Google/Nvidia/Samsung should just band together and pay for the porting of any PS3/PS4 or PC game they can to mobile/gamepads. Pay the porting and tell them they can have all the profits. Do it for a year or two (google/samsung/NV all push in 500mil each or something) to get the ball further in your court before consoles get enough out the door to even be worth pondering a game for them. They can easily speed up the train. You seem to be ignoring reality. Nintendo isn't looking at mobile because consoles are awesome. They are looking because consoles (for them anyway) are about to be killed. $250mil losses are not a way to stay in business. Go mobile/PC or die. Nintendo doesn't have to sell hardware to be a great company. Their franchises will sell on any platform.

Think about the next Zelda only being on mobile/pc...LOL. $20 x 5% of the market would net you 1B on a single game which probably wouldn't cost more than 20mil to make. Not doing this is stupid. A stupid game like angry birds has made Rovio a few hundred million already. Now multiply that by all their great next titles if they did this. I'd rather make a Billion or two instead of a $250mil loss. Clearly they think the same to some extent. Hard to just ditch your hardware, but logic says they should.


Going Mobile woud be a BAD idea.
By OnyxNite on 1/21/2014 11:42:38 AM , Rating: 2
The ONLY thing Nintendo has right now is good 3DS sales. I know they missed estimates on them but they're still selling pretty well. Releasing Mario, Zelda, Metroid, etc. on mobile would kill the 3DS then they may as well just go software only like Sega because they've got NOTHING left in hardware.

Instead they should ride what success they are having with the 3DS as long as they can while they build a new console. Name is something that can't be confused with Wii at all and have it have better specs then the PS4 (because it comes out in 2015 or 2016) Then they'll get the PS4/Xbone cross-platform games plus Nintendo exclusives and be able to claim better tech (because they came out years later... but still well before the PS4 or Xbone sequels)




It will be over
By Motoman on 1/20/14, Rating: -1
RE: It will be over
By amanojaku on 1/20/2014 9:45:16 PM , Rating: 4
I have to disagree with a few statements. First of all, claiming that the Wii U doesn't do anything the Wii didn't due is unfair. The Xbox One and the PS4 don't bring anything new to the table that the Xbox 360 and PS3 couldn't do, other than performance enhancements. Don't talk about software; you can write that for the 360 and PS3.

The Wii didn't start or end the casual gaming market. That market existed before the Wii, and arguably started with arcade consoles in the 70s, which ended in a few minutes so that you had to put in another quarter. The first home video games, ported from arcades, were completed in less than 10 minutes. Pitfall was notable for taking up to 20 minutes, starting the trend towards longer games. It's actually the hardcore market that's new. The Wii didn't end the casual market, either. Instead, it's shifted towards mobile devices, since you can take the games anywhere.

And if you thinks it's a bad idea to port Mario and other classics to Android, iOS, Windows, and even desktop PCs, then you're being shortsighted. Nintendo is selling less of everything, because everything is dependent upon falling hardware sales. It's like Microsoft trying to sell Office licenses for a declining PC base and refusing to port Office to Android and iOS. There are already concerns that Office revenue is being impacted by a lack of mobile offerings, and games are even more susceptible to this.

I agree that Nintendo needs to make a go at the hardcore market if it wants to continue with consoles. And the Wii U isn't a bad step in that direction. It will be easier making a replacement for that than replacing the Xbox One r PS4, giving Nintendo an opportunity to address the shortcomings of its competitors (e.g. not truly HD and no 4K support). Nintendo also needs to simplify its SDK. From what I remember, the hardware is only part of the problem. It is more difficult to program games for the Wii U than for the One and the PS4. This is why there aren't any decent games for the Wii and Wii U.


RE: It will be over
By Motoman on 1/20/2014 9:59:45 PM , Rating: 2
quote:
I have to disagree with a few statements. First of all, claiming that the Wii U doesn't do anything the Wii didn't due is unfair.


I didn't say the Wii U doesn't do anything the Wii didn't do. I'm saying it offers no compelling reason for the Wii owner to upgrade. Which, frankly, is evident in it's lack of sales.

quote:
The Wii didn't start or end the casual gaming market. That market existed before the Wii, and arguably started with arcade consoles in the 70s...


No, the Wii was utterly new and different. In a market dominated in an established norm for what a console was, and who owned one, the Wii showed up and was wildly off-center from the MS and Sony consoles, and sold to people who never had the slightest interest in participating in the very mature console market before.

And now that the Wii created and saturated that market, and apparently satisfied it...it's over.

quote:
And if you thinks it's a bad idea to port Mario and other classics to Android, iOS, Windows, and even desktop PCs, then you're being shortsighted...


I noted that it would be profitable. And I'm sure that Nintendo could ride along on it's games for, well, maybe ever. Like Sega. And Atari. The point I made is that what remains won't be Nintendo anymore. Just like Sega isn't Sega anymore, and Atari isn't Atari anymore.

I actually don't think Nintendo should try to re-enter the hardcore market. I think they'd blow all the money they have left and fail.

I'm not even saying I have an answer. I guess that probably all I'm saying is that it really sucks to be Nintendo right about now. They're all but f%cked.


RE: It will be over
By barleyguy on 1/21/2014 2:07:59 AM , Rating: 4
Oh, yeah, they are f*cked. At their current burn rate they can only survive another 38 years.

I agree that Nintendo needs to make some adjustments, but you need to consider that have over $9 billion in cash on their balance sheet. A $240 million loss is less than 3% of their nest egg.


RE: It will be over
By Motoman on 1/21/2014 12:56:46 PM , Rating: 1
quote:
but you need to consider that have over $9 billion in cash on their balance sheet.


If you'll notice, I mentioned that they'd have to burn billions of dollars to try to even start to compete with MS and Sony for the hardcore console market...

How many billions you ask? Well, apparently MS is losing about $2 billion on XBox per year:

http://www.destructoid.com/analyst-microsoft-losin...

...and this is during the time when MS owns a massive chunk of the very-mature hardcore console market. Nintendo would basically be starting from zero.

...so how long do you reckon that $9 billion would last them?


RE: It will be over
By nikon133 on 1/21/2014 3:02:50 PM , Rating: 2
Does this $2 billion a year considers only consoles themselves, or is everything else included in the picture - MS's piece of games sales, Xbox Live subscription, renting/streaming media..?


RE: It will be over
By Motoman on 1/21/2014 3:48:46 PM , Rating: 2
quote:
"If we start with the overall traditional [Entertainment and Devices Division] business that actually loses money before corporate allocations and back out the nearly $2 billion 95 percent gross margin Android phone royalties, we conclude that Xbox platform plus Windows phone and Skype lose about $2.5 billion per year, and we estimate that the Xbox platform may account for roughly $2 billion of this," Sherlund said. "This is contrary to conventional wisdom, we think investors do not realize how extensive the operating costs are for this business and it is concealed by the hugely profitable Android royalties."


MS reports all their "entertainment and devices" as a single number...which is probably a deft move on their part, as this Nomura analyst has looked behind the curtain and figures that after you take out the wildly profitable Android licensing revenue (which is essentially pure profit), the rest of the stack (XBox, Skype, and Windows Phone) are losing about $2.5B.

The analyst, Rick Sherlund, is a former Goldman-Sachs player and is the head of US Technology Equity Research for Nomura Holdings now. Which is to say, not just some crackpot.

So, while I don't have access to his complete report to see exactly how he came to his decisions, it's rather obvious that the guy has the credentials to back up his assertion. Which is that, as a whole, the XBox platform as a whole is losing about $2B a year for Microsoft.


RE: It will be over
By someguy123 on 1/21/2014 8:42:43 PM , Rating: 2
That is not the "necessary" cost of competition. That is microsoft's own cost of competition. They always pour obscene amounts of money into projects thanks to their losses being offset by windows/office/android license fees.

Notice that it cost them 100 million dollars to design a controller that is almost identical to the 360 controller. They clearly do not have proper oversight.


RE: It will be over
By Da W on 1/21/2014 8:31:11 AM , Rating: 2
NINTENDO CAN KEEP MAKING NINTENDO CONSOLES.

They survived the N64 and the Gamecube. They've been around for more than a century. They can roll around just with their Mario and pokemon derivative products. Fuck just make a pokemon game like Skylander and they will drown in cash.

Their mistake this time was to make an underpowered machine in order to keep it small and silent, and they lost all third party developpers. Sure this company can be bone head.

Imagine the Wii-U with a PS4 heart, keep the Wii-U gamepad, Wii-motes, classic controller (nobody's talking about this one) and Nintendo's exclusive lineup: Microsoft and Sony wouldn't stand a chance. Now that Wii-U is clinicly dead and Xbone/PS4 are in their infancy, who's to say Nintendo can't come back with more powerful (x86) hardware in 2 years?


RE: It will be over
By troysavary on 1/21/2014 9:50:31 AM , Rating: 2
It's not really underpowered. It is a huge step up from the Wii, which was pretty much a Gamecube internally. The WiiU is more powerful than the Xbox 360 and the PS3, and third party devs managed just fine on those systems. Nintendo didn't want a system as expensive as the new gen of Sony and MS consoles.

It is missing some of the iconic games that sold systems in the past for Nintendo. Not sure why they launched with no Smash Bro or MarioKart near ready for release. But they do have games that keep my kids amused, and that is why we bought it. Nintendoland offers them way more than Shooter of the Month 37 would. When I want more "serious" gaming, I have the PC.


RE: It will be over
By Da W on 1/21/2014 11:30:33 AM , Rating: 2
I have both Marios and love it.

But it seems Mario ain't selling consoles anymore. CoD does. Battlefield 4 does.

Mario/Zelda/Pokemon would make the difference if the Wii-U had all the same third party games that XB1/PS4 have.

But Nintendo arrived with an underpowered PowerPC CPU, a decent GPU (AMD 4850 class) angainst both octo-core x86 Jaguar CPU and AMD 7850 class GPU. Now you're a game developper, where will you spend your ressources? I would do XB1, PS4 and a port to PC using over 80% of the same code, and the hell with nintendo. Now, i do like the gamepad, but hey, can't have everything.


RE: It will be over
By nikon133 on 1/21/2014 3:11:14 PM , Rating: 2
But it is.

Hardware is fine for next version of Mario & Co., but with gaming (in general) moving toward more interactive, dynamic-context online games (and MMOs), system with 1GB of RAM to share between CPU and GPU, and extremely limited dynamic storage is severely handicapped.


RE: It will be over
By inperfectdarkness on 1/21/2014 12:48:51 AM , Rating: 1
The last time Nintendo "sold out" we got those god-awful dreamcast Zelda games. No thanks. And the mobile market doesn't hold the answer. Smartphone gamers want cheap $1 thrills. They do not want to shell out $30 for something quality.

I believe there is still a mobile market--although it has shrunk. Parents will still be buying handhelds for their young children...and it's to that market that Nintendo should largely focus on for mobile gaming.

In both the mobile and home console markets, Nintendo can't provide what Nintendo is best renown for...if it can't dictate the hardware (namely peripherals and interfaces). Even trying to market a $50 game on PS or Xbox that requires a proprietary controller (at extra cost) is not going to be a successful business model; and even if Nintendo was able to sell it, it is likely that those interface devices would be poorly implemented into the console itself.

It's a crying shame that the entirety of the market seems to be preoccupied in a dick-measuring contest between PS4 and Xbone, rather than asking the most important question--which of the 3 consoles offers the most POTENTIAL for innovation and gaming progress--the 2 PC clones, or the "underpowered" (not really) standalone?

Tell me again how your gaming enjoyment is somehow hampered by the WiiU's supposed inability to natively render in 1080p?


RE: It will be over
By astralsolace on 1/21/2014 11:00:50 AM , Rating: 2
Except nobody's suggesting that they sell or license out their properties. Only that they develop games for other hardware manufacturers' consoles.

Nobody wants to pay $250 for a Nintendo machine just to play Nintendo's first-party games, and then go back to their PS4/XB1 to play multiplatform games. A lot of us have been doing just that over Nintendo's last few generations, except there are even fewer first-party games out for Wii U than there were for Gamecube and Wii now.


RE: It will be over
By inperfectdarkness on 1/22/2014 5:19:42 AM , Rating: 2
Except that I don't go back to PS or Xbox when I want to play "multiplatform" games. I either fire up steam, or I shrug and walk away.

And why develop for other consoles? Why water-down their offerings so they'll fit in the unimaginative, uninnovative molds that PS and Xbox have?


"Spreading the rumors, it's very easy because the people who write about Apple want that story, and you can claim its credible because you spoke to someone at Apple." -- Investment guru Jim Cramer

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