The Wii U May be a Flop, but the 3DS is to Blame for Net Loss

[ICStats]

magoghm said:

ICStats said:
Yes, well they haven't been making great margins like the Wii/DS years.

http://www.marketwatch.com/investing/stock/ntdoy/financials

You can see from looking at the Gross Income versus the Sales/Revenue. In 2009 Nintendo had a 43% gross margin on over $17B of sales. Since then not only sales have dropped year by year to around $6B but margins have also steadily shrunk to 21% in FY ending 2013.

The revised forecast for FY ending 2014 is below that of 2013, and it would't be too surprising if margins continued to shrink, since the cash-cow Wii/DS businesses continued to shrink, and 3DS/Wii U had more bundling and price cuts.

Interesting. I see that since 2009 they have significantly increased their R&D expenses, it seems like they have been increasing their capacity to produce new games (their new building for R&D seems to indicate that that plan on even more expansion).

This is when 3DS & Wii U were in development, so we would have to look further back at when DS & Wii were in development to compare.

I think also Wii U games are more costly to develop than DS/3DS/Wii.  Wii U is Nintendo's first dive into HD and modern graphics shaders.  I remember hearing that Nintendo actually had a hard time adapting and getting their art to look the way they want on Wii U.