RolStoppable said:
sad.man.loves.vgc said:
Nintendo confirms that it's selling 3DS at a loss, expects that to change
Ever since Nintendo slashed the price of the 3DS, there's been plenty of speculation that the gaming giant has been selling the portable console at a loss. The company acknowledged that fact during its disappointing earnings report, stating, "its hardware has been sold below cost because of its significant price cut in the fiscal year ended March 31, 2012," something that's uncharacteristic of the company's past operations. But as with its fairly unfortunate financials, the company plans to turn things around, adding, "Nintendo expects to cease selling it below cost by the middle of the fiscal year ending March 31, 2013."
http://www.engadget.com/2012/04/26/nintendo-confirms-that-its-selling-3ds-at-a-loss-expects-that/
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Just how dumb are journalists? When Iwata announced the 3DS price cut he also said that it will mean that Nintendo will be selling it at a loss. That's clear as day, yet this journalist talks about speculation.
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That's what i'm wondering. We've known this thing for a long time.
As for this whole matter, the issue is simply one of internal developer capacity for Nintendo. The example of the Wii should teach them that while they need to reach out to third parties better (which the Wii U and, as far as Japan goes, 3DS seem to be doing), they should also be able to shoulder the burden of console sales entirely endogenously, and for that they need expansions of their first party capacity, which is where you really see lagging Wii sales come in, since 3rd parties never cared and Nintendo's first parties are (rightfully) looking towards the future. The issue is they need groups that can not only build strong next-gen lineups, but keep the current gen alive too. I feel that Nintendo is working to correct the problems that made this year as bad as it was (with New Super Mario Bros 2 scheduled to land right around when the 3DS starts to break even, as well as the Brain Training game in Japan), rumors of 2D Mario for launch with Wii U, and more cooperation on Nintendo's part with 2nd-party development to increase their catalogue.
The rest of it comes down to currency vulnerability, and there's precious little Nintendo can do about that. The Japanese government should be helping there, with their commitment to 1% inflation targets to weaken the Yen and the (admittedly tenuous) economic recovery in America, plus signaling from the Fed that interest rates are going to increase. Europe seems to be shot, however, but seeing from these reports how weak Nintendo's performance in Europe is anyway, it would be less of an issue.
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