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Forums - Nintendo - Nintendo Q1 Earnings July 31st (Results Inside - Profit)

This thread really went down the other direction. Goodness gracious...

Anyway. The restults will indeed be interesting. Hopefully by 3 AM I'll be asleep though!



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Soleron said:
Soundwave said:
Soleron said:
If this is also a loss, they need to start bringing individual game costs down. Miyamoto said Wii U games cost twice as much to make - that's not acceptable if they don't sell more for that investment. Lower the graphical quality to Wii level.


LOL, things like NSMBU and even DKC: TF are pretty close to that ... they look like Wii games in 720p.

You can't water down graphics much further.

Then which games were Miyamoto talking about for the doubled costs? 3D World doesn't look better than Galaxy, same with SSB and Kart..

The worst case is those games did cost more, but their art style is so bland it looks bad anyway.

Oh come on.  Give me a break.  They do in fact look better, even if you don't like Nintendo.

HD games are very expensive to make.  They take longer to make, and you have to have almost double the amount of staff to create assets and textures, etc in HD quality.  Budgets from Wii to Wii U software have, at the very least, doubled.  Hence the numerous software delays, as well as Nintendo constantly hiring on more and more staff all the time. 

Couple that with the fact that many 3DS titles cost nearly as much to make as Wii games, and we have the current situation Nintendo finds themselves in.  Bitten off a little more than they can chew, but working diligently to work through the situation.



The Screamapillar is easily identified by its constant screaming—it even screams in its sleep. The Screamapillar is the favorite food of everything, is sexually attracted to fire, and needs constant reassurance or it will die.

firelink said:
I don't think Nintendo will post a loss.

The Wii U selling awful actually works in their favor, as they take a loss on the console. So the less they ship ~= the less they lose. While the 3DS selling greatly works heavily in their favor, as it is now profitable.

Unfortunately, that's not how it works.

Selling at a loss just means they get less by selling it than it cost to make it. So if it cost $300 to make, and they sell it for $250, they spent $50 to sell it. On the other hand, if it costs $300 to make, and they don't sell it, that meant it cost $300 to not sell it. Not selling it doesn't keep them from losing money, it keeps them from recouping money.



I believe in honesty, civility, generosity, practicality, and impartiality.

Will we find out the total hardware and software sales of the 3ds and wii u like in march?



Mythmaker1 said:
firelink said:
I don't think Nintendo will post a loss.

The Wii U selling awful actually works in their favor, as they take a loss on the console. So the less they ship ~= the less they lose. While the 3DS selling greatly works heavily in their favor, as it is now profitable.

Unfortunately, that's not how it works.

Selling at a loss just means they get less by selling it than it cost to make it. So if it cost $300 to make, and they sell it for $250, they spent $50 to sell it. On the other hand, if it costs $300 to make, and they don't sell it, that meant it cost $300 to not sell it. Not selling it doesn't keep them from losing money, it keeps them from recouping money.


But since they are selling so low, I highly doubt they are producing as many.

 

You don't manufacture units if the units already out there aren't selling. If they have not manufactured many this quarter, then the loss they received from unsold units would be on last quarters - not this one.



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firelink said:
Mythmaker1 said:
firelink said:
I don't think Nintendo will post a loss.

The Wii U selling awful actually works in their favor, as they take a loss on the console. So the less they ship ~= the less they lose. While the 3DS selling greatly works heavily in their favor, as it is now profitable.

Unfortunately, that's not how it works.

Selling at a loss just means they get less by selling it than it cost to make it. So if it cost $300 to make, and they sell it for $250, they spent $50 to sell it. On the other hand, if it costs $300 to make, and they don't sell it, that meant it cost $300 to not sell it. Not selling it doesn't keep them from losing money, it keeps them from recouping money.


But since they are selling so low, I highly doubt they are producing as many.

 

You don't manufacture units if the units already out there aren't selling. If they have not manufactured many this quarter, then the loss they received from unsold units would be on last quarters - not this one.

You would think, but back in April, Nintendo estimated that they would sell 9 million WiiU systems this year (not total, just this year). And if that's what they're hoping to sell, then they have to have manufactured at least that many. Accounting for what they've probably already produced (est 5.5 million so ~6 million), that's at least 6 million units by the end of the year.

Producing all of those units takes time, however, and estimates that I've heard peg their production ceiling at around 750k. Assuming that hasn't changed, it will take them around 9 months to produce that many units, or from April until December.

Granted, there are quite a few estimates there, but even if they're off, it's a good bet they were pretty much required to keep producing at the same rate if they wanted the stock they think they're going to sell ready in time for the games they think will start selling them. Now, part of that's based on what Nintendo has previously said, and they might have changed their minds (we'll find out tomorrow), but even if we throw out all of that, they wouldn't have suspended production yet. They might have cut their rate, but they were probably still producing a few hundred thousand units each month.



I believe in honesty, civility, generosity, practicality, and impartiality.

firelink said:
Mythmaker1 said:
firelink said:
I don't think Nintendo will post a loss.

The Wii U selling awful actually works in their favor, as they take a loss on the console. So the less they ship ~= the less they lose. While the 3DS selling greatly works heavily in their favor, as it is now profitable.

Unfortunately, that's not how it works.

Selling at a loss just means they get less by selling it than it cost to make it. So if it cost $300 to make, and they sell it for $250, they spent $50 to sell it. On the other hand, if it costs $300 to make, and they don't sell it, that meant it cost $300 to not sell it. Not selling it doesn't keep them from losing money, it keeps them from recouping money.


But since they are selling so low, I highly doubt they are producing as many.

 

You don't manufacture units if the units already out there aren't selling. If they have not manufactured many this quarter, then the loss they received from unsold units would be on last quarters - not this one.

You're both forgetting the main point for a hardware maker : software. That is their main source for profit, and low hadware sales = low software sales.



Screamapillar said:
...

Oh come on.  Give me a break.  They do in fact look better, even if you don't like Nintendo.

HD games are very expensive to make.  They take longer to make, and you have to have almost double the amount of staff to create assets and textures, etc in HD quality.  Budgets from Wii to Wii U software have, at the very least, doubled.  Hence the numerous software delays, as well as Nintendo constantly hiring on more and more staff all the time. 

Couple that with the fact that many 3DS titles cost nearly as much to make as Wii games, and we have the current situation Nintendo finds themselves in.  Bitten off a little more than they can chew, but working diligently to work through the situation.

I'm saying they don't look better from the videos I've seen. I don't care if the pixel count is eleven times more or something, it doesn't look like an improvement.



Tagged but I will be sleeping at that time.



I think the pressure to get to short term profitability is one of the big challenges Nintendo has had lately- When you launch new consoles (3DS, then Wii U) , those consoles need huge investment- not just for the console alone but for marketing and for games- until the wii U has been successfully launched, Nintendo needs to be spending money making games and buying games (among other things) for the Wii U-

Gaming is a cylycle business if there ever was one- but Nintendo was able to go many years w out a losing Quarter - so the losses of recent years are not sitting well w its investors- but todays market is different than it was in past console generations- I don t think any of the Big 3 can expect to launch a console w out losing money over the relative short term in order to make it long term-

If Nintendo had the resources to continue supporting the Wii (at least to some extent) over the last 2+ years they would still be selling almost as much software as the X360 and PS3 are today- after all the Wii has sold 100 million +/- consoles - instead of continued support for a 100 million consoles via making more games for it ( I am sure they are much cheaper to make for the wii aslo) they put those resources into making games for the wii U- which has less than 3.5 million consoles - not only that - they did not get those games out quick enough for the launch window-

my point is- Nintendo has been trying very hard to turn a profit Q to Q at a time they should be investing $$ s like crazy for at least 3 platforms (3DS, Wii and WII-U) - short term their losses would have been greater but longer term they would have made more money and been able to maintain a more diverse revenue stream

Nintendo makes money selling their own games- IMO it would be hard for them to make TOO MANY so long as they continued to be of similar quality as they typically produce-

If NSMU and Nintendoland were released on the wii (among others) in 2011/2012 and Metroid and Mario Galaxy 3 (among others) were released on the wii U in 2013 they would be hitting on all cylynders as soon as 2nd half 2013 - if they continued to support the Wii over the last 2 -3 years the profits from those software sales could be funding a large % of the extra resources spent on the Wii U to get more games out-

Nintendo, its board and shareholders are not used to losing money AT ALL - so I think it is difficult for them to get "the green light" to take the short term losses needed to get their various consoles launched and maintain their existing consoles- getting 3rd party support would help them too but that takes money as well