Forums - Nintendo Discussion - What Nintendo's Financials Actually ACTUALLY Mean... Probably...

So Nintendo posted a loss.  Nintendo hasn't been advertising the Wii U.  Nintendo has been taking it slow and laid back.  But was there a bigger plan here from the start?  Remember that statement Microsoft made that this generation is a marathon and not a sprint?  Perhaps Nintendo was onto something...

Nintendo released their financial report, and part of that report was that the Wii U IS NO LONGER SELLING AT A LOSS.  Why is that important?  Because up until now, every console sold meant money lost for Nintendo.  And that's the thing: what if Nintendo has been holding back advertising and marketing for that very reason?  Wait, hear me out.

Nintendo has stated in the past that Nintendo system owners don't buy very many games for their system.  In fact, if my memory serves correctly, Wii owners only purchased 3.7 games per year on average!  Think about it, if the Wii U is sold at a loss, the profit then has to be made on the games.  But what if Wii U owners, like Wii owners, don't buy a lot of games?  That's right, that's purely a loss for every console sold because not enough games are being sold to make up for it (in fact, I remember that the statement that the Wii U becomes profitable after one game sale being not true!).  Now you MIGHT try to say "but that's because there weren't a lot of games to buy!".  That's a "catch 22", because if Nintendo released a bunch of games (just look at the Wii, it had TONS of games until its late-cycle life), that doesn't mean people will buy them up.  Release a bunch of games, and no one buys them = even bigger losses;  or don't release a bunch of games, no games to buy = losses.  However, by not releasing the games, there are less sales of Wii U consoles, meaning less losses from the system itself.

So what am I getting at here?  I'm getting at the idea that Nintendo has been PURPOSELY holding back marketing and advertising on the Wii U.  Nintendo has willingly kept the sales of the Wii U low in an attempt to minimize their losses UNTIL the Wii U itself could become profitable sold as hardware.  Did anyone else notice the absolutely crazy ramp-up in marketing and advertising for Mario Kart 8?  Is it coincidence that the system is no longer being sold at a loss, either?  Think about all of this, it DOES make sense, and I know that it does!  If the only source of profit for the Wii U up until now was software sales, and they based their plans off the performance of the Wii's software sales ratio against its install base, then they might have chosen to push all of their games back until the Wii U could be sold without losses.

While Nintendo hasn't met the goals they set forth, and ended up selling WAY below initial projections, and even still barely below their revised projections, there's also the chance that the people running Nintendo are long-term strategists.  These aren't amateurs running the company like many armchair CEOs might believe, they might not have cared about the losses for the short-term because they were looking at a longer-term plan to begin with.  Perhaps Nintendo is smarter than all of us at running a business... Oh wait, that's right, because they ARE running a business, and one of the most renowned in the world at that!



Check out my talk show on YouTube, the Wii U "Five"!

www.youtube.com/ZyroXZ2

^^/

Around the Network
And THAT's why Nintendo only forecasts shipping 3.6 million WiiU's the next 11 months! Because they... have a secret plan to sell a lot more?
Uh...

Do you really believe any of that or were you just bored?
There's so much wrong with it that I don't even have the time to pick on every detail.

 I don't think that way, I just type that way.

My first bet.

No. I'm trying to look at this from outside of the box, but it just doesn't make sense.

I believe in honesty, civility, generosity, practicality, and impartiality.

"Nintendo has willingly kept the sales of the Wii U low in an attempt to minimize their losses UNTIL the Wii U itself could become profitable sold as hardware. "

I'm not sure what to say to this. Or the part about Iwata knowing how to run a business. Clearly he's not doing a very good job.

Around the Network
I don't think Nintendo really knows how to fix it's problems. Look at 3DS it is falling hard so they can't cross subsidise like they did with game boy during the N64 and GC years. But good luck to them, they need it.

“The fundamental cause of the trouble is that in the modern world the stupid are cocksure while the intelligent are full of doubt.” - Bertrand Russell

"When the power of love overcomes the love of power, the world will know peace."

Jimi Hendrix

 

Pretty sure Nintendo's marketing budget is slightly lower for the coming year (I thought I caught that skimming through their financials) than last year actually. So it looks like they're cutting back on the advertising some what. 

Nintendo fans just need to stop complaining about the advertising. Wii U is what it is, nothing is going to massively change that, just enjoy it for what it is and let that be that. A marketing campaign is not going to change the fact that the Wii U controller is not as interesting as the Wiimote was in 2006, nor is it going to change the fact that with a Nintendo console you're really looking at maybe 4-6 good Nintendo games per year and a whole lot of nothing outside that. Those are their main issues and there's no changing that this generation. 

The market for people willing to pay for a an entirely seperate platform with the above noted issues is just going to be inherintly small. No TV ad is changing that. 


Even Nintendo is I think starting to accept that this is going to be a sub-GameCube level userbase for them judging by their own sales forecasts.

Nintendo's focus now needs to be to ride out this stormy season by getting back to profitibility or at least limiting losses. 



Soundwave said:

Pretty sure Nintendo's marketing budget is slightly lower this year (I thought I caught that skimming through their financials) than last year actually.

Nintendo fans just need to stop complaining about the advertising. Wii U is what it is, nothing is going to massively change that, just enjoy it for what it is and let that be that. A marketing campaign is not going to change the fact that the Wii U controller is not as interesting as the Wiimote was in 2006, nor is it going to change the fact that with a Nintendo console you're really looking at maybe 4-6 good Nintendo games per year and a whole lot of nothing outside that. Those are their main issues and there's no changing that this generation. 

Even Nintendo is I think starting to accept that this is going to be a sub-GameCube level userbase for them judging by their own sales forecasts.

Nintendo's focus now needs to be to ride out this stormy season by getting back to profitibility or at least limiting losses. 

Yes, it was 70.264 billion Yen this past fiscal year, they are forecasting 62 billion Yen this fiscal year.  Their forecast had been 70 billion, so it was pretty much exactly what they planned last year.



Half of me want to explain how little sense this all makes but... i don't think i have the willpower @_@

Around the Network
Skidonti said:
And THAT's why Nintendo only forecasts shipping 3.6 million WiiU's the next 11 months! Because they... have a secret plan to sell a lot more?
Uh...