| daredevil.shark said: The 3DS, in terms of pure numbers, also underperformed this fiscal year close to the same total numbers as the Wii U, except the 3DS did have a lot of games released in 2013. In fact, 2013 had a 45% increase in game sales compared to 2012. All of this sounds good on paper. Nintendo actually released 3 times as many games in 2013 on the 3DS than it did in 2012. Knowing all of that, a 45% increase isn't actually a good number after all, because Nintendo released significantly more games, but didn't even double the sales over the previous year which had a third of the games. They likely expected at least a 200% increase in software sales, if not more. ...My points about the 3DS are mostly to point out that despite the success sales wise, it's actually not that profitable to begin with, and is the larger cause of Nintendo not reaching their desired profitability numbers. The hardware is not traditionally profitable compared to Nintendo's past and the software is selling at sigificantly lower rates than Nintendo is accustomed to. Just think, that is on the platform Nintendo is having the most success with. The Wii U is obviously still a large factor, but given they have barely manufactured many this year, combined with the lack of game releases, it likely plays a much smaller role in why Nintendo is in the red than we really think. It's not helping, but Nintendo's projections clearly showed that it was the 3DS that was supposed to drive them this fiscal year, and it didn't. Whether it can moving forward is unknown, but hardware sales have actually decreased in 2013 compared to 2012 overall, and there are no signs pointing to that trend changing in the near future, let alone any suggestions that the profitability of the hardware is going to significantly increase. |
http://www.nintendo.co.jp/ir/pdf/2014/140117e.pdf
Nintendo's adjusted forecast doesn't quite agree with the points here. They did not "likely expect at least a 200% increase in software sales" for 3DS, since they only missed 3DS software targets by 17.5% (14,000,000 units).
They missed Wii U software targets by 50% (19,000,000 units), and I believe Wii U software is more valuable per unit, so if anything the Wii U software miss is a bigger surprise (50% vs 17.5%) and a bigger impact (19M*$60 vs 14M*$40) than the 3DS software miss.
In fact to take it further, Nintendo is missing it's initial expectations by about $1 Billion profit. If you assume gross profits of $30 per Wii U game, and $25 per 3DS game you have a miss of 19M*30 + 14M*25 = $0.92 Billion which is uncannily close to the $1 Billion miss (some more would be from 3rd party under performing too). So to quantify I'd say the blame for the miss is about 60% Wii U, 40% 3DS.
