Nintendo Q1 Earnings July 31st (Results Inside - Profit)

[Mythmaker1]

firelink said:

Mythmaker1 said:

firelink said:
I don't think Nintendo will post a loss.

The Wii U selling awful actually works in their favor, as they take a loss on the console. So the less they ship ~= the less they lose. While the 3DS selling greatly works heavily in their favor, as it is now profitable.

Unfortunately, that's not how it works.

Selling at a loss just means they get less by selling it than it cost to make it. So if it cost $300 to make, and they sell it for $250, they spent $50 to sell it. On the other hand, if it costs $300 to make, and they don't sell it, that meant it cost $300 to not sell it. Not selling it doesn't keep them from losing money, it keeps them from recouping money.

But since they are selling so low, I highly doubt they are producing as many.

 

You don't manufacture units if the units already out there aren't selling. If they have not manufactured many this quarter, then the loss they received from unsold units would be on last quarters - not this one.

You would think, but back in April, Nintendo estimated that they would sell 9 million WiiU systems this year (not total, just this year). And if that's what they're hoping to sell, then they have to have manufactured at least that many. Accounting for what they've probably already produced (est 5.5 million so ~6 million), that's at least 6 million units by the end of the year.

Producing all of those units takes time, however, and estimates that I've heard peg their production ceiling at around 750k. Assuming that hasn't changed, it will take them around 9 months to produce that many units, or from April until December.

Granted, there are quite a few estimates there, but even if they're off, it's a good bet they were pretty much required to keep producing at the same rate if they wanted the stock they think they're going to sell ready in time for the games they think will start selling them. Now, part of that's based on what Nintendo has previously said, and they might have changed their minds (we'll find out tomorrow), but even if we throw out all of that, they wouldn't have suspended production yet. They might have cut their rate, but they were probably still producing a few hundred thousand units each month.