| Slimebeast said: I just can't understand how they can lose so much money. $220 million loss on 1.86 million 3DS shipped would suggest over $100 lost on each unit, which we know is not the case. So that's not the explanation. Where do these losses come from? From Wii U R&D costs? Shouldn't be that high. Mario and other SW sales should give hundreds of millions in profits. |
If you look at their report, it becomes much more obvious.
Their operating loss, which is net sales minus cost of sales and general expenses (actually, that's operating income, but they had a loss), was 10.33 billion yen. Their losses due to the foreign exchange rate was 21.1 billion yen.
To put those numbers into perspective, 10.33 billion yen is US$132 million and 21.1 billion yen is US$270 million. The total loss works out to $220 million because apparently, Japan's income taxes also work in reverse, or something, because they had negative income tax that reduced their loss. I'm not going to pretend to understand it.
But just to use the relative numbers, a little over two thirds of their pre-tax loss was due to exchange rates. Translating that to the net loss, and one would estimate somewhere around $30 lost per 3DS. And that sounds rather reasonable, to me. The 3DS in America costs $170, so the break-even price would be $200, by this approximation.
Of course, it's not factoring in things like Wii U development and manufacturing costs, lack of new games released (meaning, most of their games from the last year are still in development), or any extra expenses in terms of getting third parties on board for the Wii U (dev kit costs, support, etc).
