Nintendo Q1 - $221m loss on of revenue $1.08bn. Shipments: 1.86m 3DS, 710k Wii, 540k DS

[gumby_trucker]

Kynes said:

The short term investments have grown a lot the last year, as the table Kowenicki provided in this same thread show, so it's probable that they are doing that. The problem lies in not improving exchange rates, and you need to import that money, then you have to take huge losses. I think the last year huge write off Nintendo had to do was partly/mostly due to this.

I'm not sure that the exchange rates are going to improve, we Spaniards are doing our best to destroy the Euro, and the quantitative easing programs by the Fed are diluting the $ value, so if the Japanese government doesn't do the same, printing tons of yens to decrease it's value, Japanese export companies are screwed. I don't like this type of policies, they are suffering what it's known as a competitive devaluation, but not one of the nineties where some governments declared a huge devaluation on a Saturday, they are doing now without telling us. We're now in a cold currency war.

We can have a situation where 25000 yens cover the break even point, but 300 $/€ don't.

I discussed  these same investments with Kowenicki earlier in the thread. I'm no economist but I too believe they are trying to offset their losses by some kind of off-shore investment, which could also help weaken the yen if they move enough of it (according to the briefing they have already moved  ~1.6 billion dollars of their cash into securities). Another major difference from last year's numbers is that significantly less capital is in the hands of NoA, so that could also be part of Nintendo's attempt to rebalance their finances. 

If the exchange rates continue to get worse for them, how do you think they should price Wii U in each region in order to break even on a global level?

Also, suppose a worst case scenario unfolds where they find themselves sitting on another 3DS during the system's first year? Granted this appears less likely because there is already a 2D Mario confirmed for the launch window, but suppose they have to cut the price, or that they simply aren't able to break even at a reasonable price to begin with?

What kind of doomsday scenario should Nintendo be preparing for?