Vinniegambini said:
I'm slightly confused by this statement as it is not valid. Firstly, Nintendo posted a net loss of over 500 million due to 3DS hardware sales being sold at a loss and software sales were not sufficient to negate the loss during Nintendo's last fiscal year, ending March 2012. Secondly, this fiscal year, Nintendo has thus far posted an operating loss of 50 million but a net profit of 150 million; consequently, they are a profitable company as of late. In essence, your statement of Nintendo posting a loss because of the Wii U is invalid as during Nintendo's last fiscal year, it was not released. This fiscal year, they are profitable largely because of exchange gains. Hence, I fail to see as to how you were able to deduct that...
Nintendo would not be profitable it if were a software only company; Sega is a prime example of how the transition from hardware to software only is a difficult one and hardly profitable endeavor.
Nintendo have stated on numerous occassions that if one day, if such is the only choice (software company), Nintendo would take their IP's with them to the grave.
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My apologies then, i was missinformed. Though if the loss was because off a price drop on the 3DS it was essentialy still hardware that caused it.
Sega is not a good comparison because it's IP's aren't nearly as big as Nintendo's. Games like Mario kart etc. would sell 10m/20m/30m regarding what system they are sold on. The thing is that the hardware market has simply become much harder to compete on in the last two generations. Back in the N64/Gamecube day they we're able to launch a competing system at $199 with room for a price cut. If they hade try to do the same thing with Wii they would not have been able to, so they played it right and launched something entirely different(motion controls) at a very profitable $250 and it sold very well. With Wii-U they kind of tried to compete again but didn't go all the way, and now are stuck with an $300 system wich has no change against PS4 on the hardware front, and with an innovation in the tablet controller that doesn't seem to appeal to anyone. And still at $300 with a game included it doesn't make them a profit directly. Basically i don't think Nintendo will ever be able to sell the Wii-U at a profit because everytime they will get close they will have to cut the price because off sells slowing down.
The bottom line is Nintendo's franchises could easily sell 100m+ pieces of software each generation, and the Wii with games like Mario Kart has showed that these sales can go up much higher depending on install base. Basically i think they would make more money selling their games on other platforms with a much larger combined install base than selling on the Wii-U alone, and since that console itself costs them money there is simply no sense any more continuing in the hardware bussiness from a bussiness perspective atleast.