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Forums - Nintendo Discussion - The Switch could be make-or-break for Nintendo.

They can't afford to mess this up, so yes this will be a very important time for Nintendo



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"The Switch is probably make-or-break for Nintendo."

Nonsense. Nintendo can sell 0 units of the Switch for 5 years and still have enough money to release a next generation console. They have almost 10 billion of cash. Another way of looking at this console is Nintendo can lose $3-4 billion dollars over the next 5 years (aka pull the original Xbox or Xbox 360) and still survive. We know for a fact that this console will not sell 0 units. So please stop with the doom and gloom rhetoric and sensationalist exaggerations that the Switch is a "make or break" console for Nintendo. That's something one would say if they don't know anything about finance.

 

Soundwave said:
It has to sell at least 40 million. 

Less than that would be crushingly embarrassing to Nintendo's hardware division, that would be a monstrous decline even from the 3DS + Wii U era which already wasn't a great generation.

No offense but the only thing embrassasing are random console gamers on VGChartz and Neo-GAF trying to predict the demise of Nintendo (or AMD, etc.) without having opened a single accounting or finance book in their life. 

Nintendo has 1.02 Trillion of Current Assets after already spending the R&D money developing the Switch. Converted to USD, Nintendo's current assets are ~ $9.8 billion USD. 

http://www.marketwatch.com/investing/stock/ntdoy/financials/balance-sheet

Nintendo can easily pay off ALL of its Total Liabilities with less than 1/4 of its Cash balance.  That means theoretically Nintendo doesn't need to sell even a single Switch console to survive for the next console generation.



wombat123 said:
pokoko said:
I think that if the Switch flounders, we'll get a 3DS successor. We might even get one, anyway. I'm not sold on the Swii doing well against mobile devices. As a portable, it's going to be expensive and inconvenient, both of which are negatives in that space.

Man, I already consider the NS the 3DS's successor.  It's basically a Nvidia Shield with video-out capabilities regardless of how much Nintendo insists that it's primarily a home console.

The thing is, as a handheld, it's basically the anti-DS.  The DS line was inexpensive (except that time when it wasn't and Nintendo had to slash the price), it was convenient, and it was rugged.  It was kind of cute and a great device for small children.

The Switch doesn't really fill that space very well.



guys- its a great value if priced at a standard console, a home console AND a mobile console combined. Its unprecedented and doesn't have an equal comparison from that past to really base any expectations on

I think Nintendo will be fine regardless though.

Nintendo has like 10 billion in the bank, to suggest that this system is a make or break for them is sort of silly.  Regardless the reaction to this system currently is huge and wayyyyy more positive than the Wii U. Its a much better idea after all, a more complete thought with concise marketing

 

I'm not sure how this could be a failure though, Nintendo had a mediocre last generation yet still sold like 70 million consoles combined and all of those NIntendo fans aren't going to magically disappear. if anything they're just going to be going up



Ka-pi96 said:
BlueFalcon said:

"The Switch is probably make-or-break for Nintendo."

Nonsense. Nintendo can sell 0 units of the Switch for 5 years and still have enough money to release a next generation console. They have almost 10 billion of cash. Another way of looking at this console is Nintendo can lose $3-4 billion dollars over the next 5 years (aka pull the original Xbox or Xbox 360) and still survive. We know for a fact that this console will not sell 0 units. So please stop with the doom and gloom rhetoric and sensationalist exaggerations that the Switch is a "make or break" console for Nintendo. That's something one would say if they don't know anything about finance.

I dunno, I think saying they can take a $3-4b loss over the next 5 years and still continue what they`re doing is what somebody who knows nothing about finance would say

For starters their cash reserves are only about $5b. They may have about $10b in assets, but unless you want them to start selling buildings and stuff...

But more importantly... they have to answer to shareholders. If they`re consistently making losses (especially losses adding up to billions) then their shareholders would be putting a huge amount of pressure on them to change something asap.

I'm pretty sure Nintendo has like 10billion liquid assets, meaning assets that can be moved extremely quickly.

The suggestion Nintendo will lose billions is just absurd. even the worst case scenario that would never happen, you would have to release a console generation and have like ZERO sales for that to be a possibility.

Not sure where some of you are getting your numbers from 

Also this thread is just silly. Nintendo just had a fairly shit generation and the max they lost in a particular year was like a few hundred million. Control yourselves.



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Nintendo has a very lucrative fall back if the Switch fails. Its called MOBILE.



   

Hey! They got SONY on my amiibo! Wait a minute. Two great gaming tastes that game great together!

Switch FC: SW-0398-8858-1969

mountaindewslave said:

I'm pretty sure Nintendo has like 10billion liquid assets, meaning assets that can be moved extremely quickly.

The suggestion Nintendo will lose billions is just absurd. even the worst case scenario that would never happen, you would have to release a console generation and have like ZERO sales for that to be a possibility.

Not sure where some of you are getting your numbers from 

Also this thread is just silly. Nintendo just had a fairly shit generation and the max they lost in a particular year was like a few hundred million. Control yourselves.

I never said they will lose $3-4b in cash flow over the next 5 years. It's a hypothetical scenario which I outlined to explain to the doom and gloom posters what could happen under a stress testing scenario. Even under my completely made-up and absurd scenario, Nintendo would continue to be a going concern. Thus, there is no need to panic and make headlines such as The Switch is a make-or-break for the firm. If you read my post carefully, I am not suggesting that Nintendo will proceed to lose billions of dollars on this console. I am simply voicing my disagreement to the idea that Nintendo needs to sell XYZ consoles to remain a viable console maker. From a business point-of-view, given the peculiar launch timing of the Switch (i.e., roughly 3 1/2 years into the current generation), it seems Nintendo decided to strategically take a risk with its hardware choices. Since the PS Vita flopped, it implies that Nintendo would generate guaranteed sales from anyone who is interested in non-casual smartphone/tablet mobile gaming. The success of 3DS and New 3DS suggests that there is still a healthy market for these consumers. On paper/marketing alone, the Switch seems to be a more focused, and better executed concept of the original Wii U. Therefore, it's reasonable to believe that it should outsell the Wii U at the very least.

The Switch doesn't need to sell 100-150 million units for it to be a good console imo. For example, I have no interest in Xbox One because my 6700K and GTX 1070 SLI on a 2560x1440 monitor provides a superior gaming experience to the cross-platform XB1 games. Therefore, for me, XB1 is not a desirable console. At the same time I acknowledge that not everyone has a powerful PC and XB1 appeals to them. For that reason we should be more open-minded that Nintendo is actually offering a different console experience to the other big 2 competitors. Had Nintendo tried to approach the horsepower of PS4 Pro or Xbox Scorpio, that in itself would not guarantee 3rd party support or sales. Such a console would have impressive hardware but not look as appealing against the already large gaming libraries of existing XB1/PS4 consoles. OTOH, with the Switch, they are offering selling features which are unique to Nintendo's console, in a way not even directly competing with the traditional home consoles. To the traditional console gamer who desires a powerful home console, the Switch may be disappointing, but nonetheless it makes sense why Nintendo decided to approach this console generation the way it has. The GameCube or N64 have already proven that having powerful console hardware alone isn't enough to elevate a Nintendo console to sales success. 



Mar1217 said:
zorg1000 said:
of course Nintendo has something to fall back on, mobile, movies, theme parks, various licensing deals. Nintendo in the last couple years has been making alot of moves to increase the number of revenue streams they have.

It would be weird if I was more hype for a movie starring Nintendo IP's than their games no ? 

not necessarily, you can enjoy a movie without having to care about the game its based on.

a ton of movies are based on books/comics/toys. A lot of people who watched the Lord of the Rings & Marvel movies never read the books/comics, just because you like the Transformers/Ninja Turtles movies doesnt mean you like the cartoon series of them.



When the herd loses its way, the shepard must kill the bull that leads them astray.

pokoko said:
wombat123 said:

Man, I already consider the NS the 3DS's successor.  It's basically a Nvidia Shield with video-out capabilities regardless of how much Nintendo insists that it's primarily a home console.

The thing is, as a handheld, it's basically the anti-DS.  The DS line was inexpensive (except that time when it wasn't and Nintendo had to slash the price), it was convenient, and it was rugged.  It was kind of cute and a great device for small children.

The Switch doesn't really fill that space very well.

I'm sure after a year or two they can release a Switch Lite which shrinks the overall console to one that can actually fit in your pocket.  Shares the same library as the Switch but with a smaller form factor to emphasize on mobile more.



I would like to know...what are we getting at in terms of Switch's success or failure? How much does it need to sell and can it profit out of it? Does it necessarily need to sell like gangbusters in order to profit? For example, the GameCube had mediocre sales but was able to build a profit because of its first party games (and the GBA). Nintendo's goal is not necessarily Wii/DS sales, but profits. This will be combined with everything else Nintendo has been undertaking through its new strategy of creating exposure for its IPs.