thismeintiel said:
ICStats said:
thismeintiel said:
ICStats said:
You're completely wrong.
1st party games cost money to develop and market. When they sell they could make a loss, break even or make some profit depending on sales. Never 100% profit when you subtract the costs.
3rd party is almost pure profit, and they make up ~90% of Sony's sales.
You think Nintendo is happy that SM3DW outsold Killzone, but Wii U sales are still languishing? Woot, Nintendo made sales of $30~40 mil or something. That ought to keep a company that costs $1.6 billion to operate going. Not!
Getting the user base up to 10s of millions, and getting far more titles out than a few 1st party titles a year is needed.
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This. Plus, I think Sony is going to enjoy when the PS4 is actually being sold for decent profit and they are selling 10's of millions fo them. And like you said, they have all that profit rolling in from 3rd party games on their system, which for the most part are outselling their One counterparts due to higher install base and having the superior versions of those game. If things continue the way they are with sales, 3rd parties are also going to be more likely to develop exclusives for the PS4 (without incentives from Sony), as it will cut down on costs, allow them time to exploit the HW to its full potential, and get an extra hype push from being an exclusive.
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I hate being right all the time  .
Nintendo's revision of around a $200 million loss this FY is I think a sign of what I was saying. Even with the 3DS doing well, the Wii & DS revenues are dropping and Wii U is not able to fill that void. This will result in the need for Nintendo to scale back their console development, possibly retarget those teams to other platforms like smart phones. Although TBH they could probably port their in development Wii U titles to PS360 & PS4ONE and recoup their costs, as well as make a lot of fans happy who would otherwise not play their games.
Realistically, Sony and MS will also be going through some similar losses as the PS360 businesses shrink and PS4ONE take some time to ramp up, but at least they likely have a future to new revenues in the next few years.
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Like I said in the other thread, it makes me wonder what kind of crappy prices Nintendo is paying for the Wii U HW. 3DS is being sold for a profit, I believe, and SW sales are doing pretty well on it. So, it must be the Wii U that is blowing through that money, and then some.
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It's not necessarily due to the Wii U HW cost. They haven't sold enough Wii U for that to be a big factor.
In their announcement they call out the lack of software sales. As a result SG&A costs are surpassing gross profit.
In the year-end sales season which constitutes the highest proportion of the annual sales volume, software sales
with a relatively high margin were significantly lower than our original forecasts mainly due to the fact that
hardware sales did not reach their expected level. As a result, the total of selling, general and administrative
expenses will surpass gross profit, which leads to an operating loss.
SG&A don't include the HW cost, but things like development & administration.
Also here: http://www.nintendo.co.jp/ir/en/library/earnings/140117/index.html
We therefore modified our unit sales estimates in accordance with our performance in the year-end
sales season and after the turn of the year, and the drop in software sales had the largest negative
effect on our profit forecasts.
You can see the detailed forecasts by platform:
- DS HW forecast: 0 (down from 2,350,000 last year)
- DS SW forecast: 10,000,000 (down from 33,380,000 last year)
- 3DS HW forecast: 13,500,000 (down from 13,950,000 last year)
- 3DS SW forecast: 66,000,000 (up from 49,610,000 last year)
- Wii HW forecast: 1,200,000 (down from 3,980,000 last year)
- Wii SW forecast: 26,000,000 (down from 50,610,000 last year)
- Wii U HW forecast: 2,800,000 (down from 3,450,000 last year)
- Wii U SW forecast: 19,000,000 (up from 13,420,000 last year)
Observations
- Hardware is down across the board by 6,230,000 pieces.
- SW dropped by 47,990,000 pieces for DS & Wii
- SW increased by 21,970,000 pieces for 3DS & Wii U, as their user bases are growing.
- So SW is down overall by 26,020,000 pieces.
I think they're losing because all the sales are down overall while they are still spending on developing a lot of 1st party content.
Nintendo stock is down 17.04% today.
