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Forums - Nintendo Discussion - Nintendo 3rd Quarter Results (Oct-Dec) - Profit of over 450 million US

Pavolink on 28 January 2013

I expect good news on the software area (DS/3DS/Wii) but bad news on hardware (3DS/WiiU).
Forecast cut by 1M to 3DS and Wii U. Wii U one will not be matched at the end of the FY.



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ethomaz on 28 January 2013

Predictions...

Wii U: 2.8 million (waiting doom gifs for WiiU)
3DS: 7.1 million



happydolphin on 28 January 2013
fedfed said:

I am talking about 3ds been the best selling console and Wii u having a decent start (oct/dec).

If we are thinking that Nintendo is not profittable and knowing the massive profit made by Call of Duty - I think that there is no hope for the console making company in all gaming industry.

Again, there is more to the industry than COD and Nintendo. If Activision does well thanks to CoD, and Nintendo doesn't make profit due to its console strategy, that really means nothing you know. Not only are there so many other publishers than Nintendo and Acti out there, but Nintendo losing money doesn't mean the industry is dead, it just means Nintendo is losing money.

If they are, it could be due to currency, bad platform strategy, loss leading, mobile gaming and so many other things. It doesn't mean Nintendo is not good, it just means they might be losing money.

With the U loss-leading and the 3DS making a small margin afaik, it's not completely out of question either.

@asriel. Imho they need to lower MSRPs across the board.



Kynes on 28 January 2013
Asriel said:
How big is the shift in the yen?




TruckOSaurus on 28 January 2013

This is going to be very interesting to follow!



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cunger on 28 January 2013

If Nintendo is profiting already it's a very good sign. They'll only be more and more profitable over the next 5 years as their hardware becomes cheaper to manufacture and the console games they are investing heavily in hit the market.



Tarumon on 28 January 2013
Mr Khan said:
Tarumon said:
Just for those of you who actually follows Nintendo as a company (I have lost any interest in reading most comments on this site after seeing so little knowledge but so strong of opinion just maybe one too many times). The way Nintendo keeps its books, if they have a profit, they book the profit when sold. But if they have a loss, they book the loss when the product is made.

So the actual shipment, retail sales of Wii Us will likely have no impact 9/12-12/12 due to the fact that Nintendo was producing units at full capacity. However many they could manafacture, they did, and the loss was anticipated as they were made, even back in 6/12-8/12 quarter. Nintendo forecast a motherload of Wii Us, so they estimated more losses on the hardware for the full year than they are on pace to achieve. Software on the other hand, most likely did have some profit built in, but because they expense any R&D, the software variable cost component is more manageable so maybe they could have slowed down as it became evident that they weren't selling as many.

Fiscal 3 quarter is almost guaranteed to be profitable. Fiscal 4th almost guaranteed to be ugly, but since Yen has potential to hit 100, Abenomics might just turn that quarter into profits from exchange rates alone. I personally expect bette than forecast buttomlines with a dampened top line outlook, with some serius drum beating for 2013 as the year company fires on all cylinders.

This sounds like a sound outlook. Good Q3, nasty Q4 that will be kept from being an unmitigated disaster by the Yen, and then a "desperate" Nintendo who will be all the more determined to play hardball, and we get some good shit when Nintendo plays hardball


Yeah I'm hoping to see the same 3DS panic mode.  



Mnementh on 28 January 2013
Train wreck said:
Mnementh said:
Train wreck said:
 

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)

Your senseless Nintenod-aversion blinds you in making an objective look at the state.

Heavily discounted - yes (as not all consumer-devices are heavily discounted around the holidays). But the discounts are made by retailers, so they don't affect Nintendo. Only official price-cuts have effect, and I don't think Nintendo has any incentive to sell old-gen-devices (DS and Wii) at a loss and 3DS is profitable since fall.

And WiiU has been a debacle? Not in the timeframe we look at. It sold around 80% Wii-launch in Nov-Dec. Hardly a debacle. After christmas it started dropping. Last week of december was only decent and starting January it dropped below what PS3 and X360 sold in the comparable timeframe (look here: http://gamrconnect.vgchartz.com/thread.php?id=152379&page=1# ). But we talk about the quarter Oct-Dec, so this bad numbers are not included in that (they will in next quarter). That said - the good initial sales of the WiiU could be a problem for the profit, because it was sold at a loss.

It seems with Nintendo doing as bad as it has been doing lately, it has clouded the logic of many people here, which is understandable.

Ill keep it simple to a series of yes or no questions so you can get a better idea of where im coming from.  Nintendo still gets a majority of its operating income from the DS and the Wii so lets break down last year and see if you think this year is going to be different. Note that nintendo officially dropped the price of the DSi and DSi XL on may 10 and the wii on October 15 (the Wii from 149 to 129 the DSi from 149 to 99 and the XL from 169 to 129), so less money from each sale.

These are from October 1 to December 31:

Wii shipped 5.61m units last year, do you think they shipped more this year?

DS shippments were 4.64m, do you think they shipped more this year?

Wii software shipped 53m units last year, do you think they shipped more this year?

DS software shipment totaled 23m last year, do you think they shipped more this year?

3DS shipped 8.36m in Q3 last year, do you think they shipped more this year?

3DS shipped 28m units of software, do you think they shipped more this year?

Nintendo mention that the Wii U will be sold at a loss in all territories (which is a contrast to the Wii which was profitable out the gate in all three major territories) and was on sale for 6 of the 13 weeks in the quarter, for the US at least, which is Nintendo biggest market.

250 million dollars is not that much for a company selling as much as it did last year and I'm sure you are finding yourself saying "NO" to the questions above more so than "YES".

Sorry, I never said Nintendo would post a profit (although they probably do, because of 3DS + games). But in any case, even if they profit, it will not be very big. That I never doubted. But the arguments in your first post were illogical. Now you bring completely different arguments. Your arguments in the previous post included bad sales of the WiiU (the sales were not bad in the quarter we look at and  as it is sold at a loss, the more WiiU are sold, the higher the loss). And you argumented, that the discounts given by retailers would influence the profit of Nintendo.. Nice that my post was able to bring you to reason.



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blackstarr on 28 January 2013

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Train wreck on 28 January 2013
Mnementh said:
Train wreck said:
Mnementh said:
Train wreck said:
 

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)

Your senseless Nintenod-aversion blinds you in making an objective look at the state.

Heavily discounted - yes (as not all consumer-devices are heavily discounted around the holidays). But the discounts are made by retailers, so they don't affect Nintendo. Only official price-cuts have effect, and I don't think Nintendo has any incentive to sell old-gen-devices (DS and Wii) at a loss and 3DS is profitable since fall.

And WiiU has been a debacle? Not in the timeframe we look at. It sold around 80% Wii-launch in Nov-Dec. Hardly a debacle. After christmas it started dropping. Last week of december was only decent and starting January it dropped below what PS3 and X360 sold in the comparable timeframe (look here: http://gamrconnect.vgchartz.com/thread.php?id=152379&page=1# ). But we talk about the quarter Oct-Dec, so this bad numbers are not included in that (they will in next quarter). That said - the good initial sales of the WiiU could be a problem for the profit, because it was sold at a loss.

It seems with Nintendo doing as bad as it has been doing lately, it has clouded the logic of many people here, which is understandable.

Ill keep it simple to a series of yes or no questions so you can get a better idea of where im coming from.  Nintendo still gets a majority of its operating income from the DS and the Wii so lets break down last year and see if you think this year is going to be different. Note that nintendo officially dropped the price of the DSi and DSi XL on may 10 and the wii on October 15 (the Wii from 149 to 129 the DSi from 149 to 99 and the XL from 169 to 129), so less money from each sale.

These are from October 1 to December 31:

Wii shipped 5.61m units last year, do you think they shipped more this year?

DS shippments were 4.64m, do you think they shipped more this year?

Wii software shipped 53m units last year, do you think they shipped more this year?

DS software shipment totaled 23m last year, do you think they shipped more this year?

3DS shipped 8.36m in Q3 last year, do you think they shipped more this year?

3DS shipped 28m units of software, do you think they shipped more this year?

Nintendo mention that the Wii U will be sold at a loss in all territories (which is a contrast to the Wii which was profitable out the gate in all three major territories) and was on sale for 6 of the 13 weeks in the quarter, for the US at least, which is Nintendo biggest market.

250 million dollars is not that much for a company selling as much as it did last year and I'm sure you are finding yourself saying "NO" to the questions above more so than "YES".

Sorry, I never said Nintendo would post a profit (although they probably do, because of 3DS + games). But in any case, even if they profit, it will not be very big. That I never doubted. But the arguments in your first post were illogical. Now you bring completely different arguments. Your arguments in the previous post included bad sales of the WiiU (the sales were not bad in the quarter we look at and  as it is sold at a loss, the more WiiU are sold, the higher the loss). And you argumented, that the discounts given by retailers would influence the profit of Nintendo.. Nice that my post was able to bring you to reason.

I never changed my stance on the Wii U having a bad quarter, it did, and will only benefit Nintendo on the revenue line, it will do nothing about profitability which is the original premise of this thread and my original comment.  And I still believe that heavy retail discounting will effect Nintendo's results in a negative way.  But ill wait two days for Nintendo to confirm my suspicions.