Soundwave said:
Train wreck said:
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Popular opinion is that a company dealing in consumer electronics should post a profit during the biggest retail season of the year. Nintendo was only able to make 250 million with high 3DS, DS and Wii shipments and high software shipments.
This holiday season, the DS was heavily discounted and Wii had a price cut and total shipments are down 50-60%, along with ds and wii software. 3DS is flat year on year and no major releases in the west (and the 3DS and XL were heavily discounted) and the Wii U has been a debacle. I will be surprised if Nintendo post any operating income this quarter (and that would only come because of favorable exchange rates, which I think will be a small catalyst)
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Seems my skepticism was justified as Nintendo did post an operating loss for the quarter and its net income gains came from tax changes, currency flucations and lower expenses (no growth in actually selling videogame hardware and software)
Despite the wii u being on the market last quarter, total sales are down from the same 9 months last year which is mind boggling.
Europe, which was their largest market for most of the Wii era, has now be regulated to 3rd which is alarming. And their future forcast still paints a picture of no growth (cuts in 3DS, Wii U and DS) and just alterations to its bottom line (tax changes, yen depreciation, probably more expense cutting)
The US market really, REALLY helped out numbers this past quarter but with fiscal and job worries starting to overhang our economy, ill find it hard for nintendo to have the same repeat success going forward, especially in the slow months.
edit higher operating income but still overall operating loss
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Err, yeah this was not very good news all around it seems. I think the stock will take a pounding tomorrow.
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I think the stock will go down because of the forecast. Most companies do not operate in the past and the prior 3 months for Nintendo is ancient history. From this quarter going forward you are going to have two camps:
You are going to have Nintendo Pollyanna folks who will point to this quarter and say "hey Nintendo made 450 million suck it haters" and will continue to sell promise and hope of future 3rd party support, Nintendo directs, E3, the Yen, etc as the fundamentals of the company in terms of its once dominance position have clearly waned.
Then you are going to have the people that are critical of Nintendo point out multiple things. I think (i have to do some more research) this is the 9th or 10th quarter (2+ years) in a row where Nintendo has lowered guidance on one of its products. Future sales of the Wii U, any price cut will be detrimental. They are cutting projections on current products (the 3DS more so with its price cut and library). You have future competition from Sony and Microsoft and Smartphones. Europe’s rapid decline, just a myriad of things
