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Print 27 comment(s) - last by siberus.. on Oct 25 at 6:28 PM

Nintendo hopes the Wii U will help with profits

Nintendo cut its fiscal-year profit outlook by over 50 percent in its latest earnings report -- and some of the other financial numbers aren't looking too swift, either.
 
For the six months ended September 30, Nintendo reported a net loss of Y27.99 ($350 million USD), which isn't as bad as the Y70.27 billion ($876 million USD) net loss the video game company reported a year ago. However, revenue took a tumble by 6.8 percent to Y200.9 billion ($2.6 billion USD) during the first half of the fiscal year. 
 
Nintendo doesn't report its earnings on a quarterly basis. 
 
For the 2013 fiscal year, Nintendo has significantly cut its profit outlook from Y20 billion ($250 million USD) to Y6 billion ($75 million USD). 
 
Nintendo cited weak 3DS sales for the slash in profit outlook for the fiscal year 2013. The company expected to sell 17.5 million 3DS units and have only sold 5.06 million in the first half, which makes the 17 million look a bit out of reach.
 
Other Nintendo hardware has declined as well, such as the Wii (1.32 million units sold in the first half of 2012) and the original DS (980,000 unit sales during the same time period). However, software sales seem to be doing well -- it reached 64.45 million sales during the first half. Wii sales may pick up too, since Nintendo just cut the price down to $129.99.
 
Nintendo CEO Satoru Iwata recognized that cheap gaming on mobile devices like smartphones and tablets has put the company in a difficult place. While devices like the Nintendo 3DS are also mobile, it's much more convenient to carry one device that makes calls, sends texts, accesses the Internet and offers games instead of just one gadget that only offers games. Despite this challenge, Iwata said that Nintendo is sticking with its traditional gaming machines and titles instead of shifting to other methods.
 
"Certainly, a new competitive environment has been born," said Iwata. "But we have no plans to use our valuable resources for smart devices." 
 
 
A lot of Nintendo's gaming future depends on the launch of the Wii U right now, which is the successor to the original Wii console. The Wii U, which is only weeks from release, offers a new gaming experience that Nintendo hopes will draw customers in a different way from smart devices.
 
The Wii U features a 6.2-inch GamePad controller, 1080p high-definition graphics and 2GB of memory. Nintendo hopes to 5.5 million Wii Us and 24 million Wii U software titles by the end of March 2013. 
 
The Wii U will be released on November 18 in the U.S., and customers can choose the basic model for $299.99 USD or the premium model for $349.99 USD. 

Source: Nintendo [PDF]



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Can the hardware business continue?
By epobirs on 10/24/2012 6:03:02 PM , Rating: 2
I've no doubt that Nintendo can do well as a prosperous smaller company by shifting over to producing software for other company's hardware. The question is who will make that hardware. Things are getting very tough in the dedicated gaming device business and many of the advantages of the pure console are in danger of being lost.

Increasingly, the market is offering fewer platforms with a huge installed base that are all functionally identical and can be fully exploited. Abstraction of the hardware is becoming the rule and it becomes more work to fully support the latest hardware with the most enthusiastic shoppers while not giving up the far more numerous older models that are considered the same platform.

But if it was easy everyone would be doing it.




RE: Can the hardware business continue?
By andrewaggb on 10/24/2012 6:19:03 PM , Rating: 2
They have some good gaming assets, they'd probably make more money selling their games on other platforms than continuing to make their own.


By augiem on 10/25/2012 4:42:20 AM , Rating: 2
Direct software sales cannot possibly make as much money as direct software + licensing fees + royalties on games sold by your licensees. Nintendo's 2009 revenue was $17.7 billion. Activision, the world's biggest game company, only has revenue of $4.7 billion. It's pretty clear where the bigger money is.


By TakinYourPoints on 10/25/2012 3:47:05 AM , Rating: 2
Nintendo not producing hardware would be a huge loss for the entire game industry. Even if you don't play their games you would still be indirectly affected.

Before things like motion they were the first with the d-pad, shoulder buttons, trigger buttons, analog sticks, rumble, touchscreens, etc etc.

Their software and hardware development go hand-in-hand, just look at a game as important as Super Mario 64. Analog control and the conventions of movement established by it (tilt slightly to walk, tilt more to run) were enabled by software development and hardware development to happen under the same roof. Other game companies and developers benefit from that.

Again, Nintendo being limited to making only software would be almost pointless. Their software and hardware go together, and it influences everyone else in the process.


By siberus on 10/25/2012 6:28:58 PM , Rating: 2
quote:
Things are getting very tough in the dedicated gaming device business and many of the advantages of the pure console are in danger of being lost.


I don't think we'll see the demise of console gaming any time soon. We're more likely to see the end of pc gaming to be honest not that that's going to occur any time soon either. Even when tablets/smartphones begin to out power the current generation of consoles they are still not nearly as efficient as the consoles at playing games. All console games are so highly optimized for their platform that it would probably be impossible for similarly specced pc's to run their games.

**side thought** The Wii U might be the undoing of Nintendo for another reason. Lets for the sake of argument assume the Wii U is a shinning success. They champion a new age of gaming focused on reality augmentation. They are the first to market so this gives plenty of time for Microsoft and Sony to engineer a more sophisticated version of Nintendo's ideas.

Instead of building a screen into a controller what if Sony/Microsoft allowed us to pair actual tablets with their devices. This to a certain extent would be easy to do and would give most of the abilities that the Wii U controller has built in and at the same time prevent tablets from wiping out consoles in the living room as it would have a synergistic relation to the consoles.

***side side thought***
To a certain extent the Wii U controllers will be the first tablet like thing many families will encounter.Could this be a gateway product for Nintendo to go beyond gaming? So with the introduction of the Wii U, Nintendo could be shooting for something that the rest of us just cant quite grasp yet.


"Let's face it, we're not changing the world. We're building a product that helps people buy more crap - and watch porn." -- Seagate CEO Bill Watkins














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