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Forums - Nintendo - Nintendo lowers forecast from 55 billion yen profit to 25 billion yen loss

JWeinCom on 17 January 2014
shikamaru317 said:
Looks like Nintendo was expecting much more than what they got. I feel like they can still save the Wii U, but the solution for saving it might not be to their liking. They need to drop the Gamepad bundle and offer it as an option instead, it adds almost $100 to the price of the system, by boxing a Pro controller instead they could cut at least $50 off the Wii U's price. A cheaper bundle with the Pro controller instead of the Gamepad plus Super Smash Bros and Mario Kart could turn the Wii U's sales around this year.


That really just wouldn't help.  Fragmenting your fanbase further is only going to make things worse.  At this point, they're going to have to ride with it.  Hopefully, they have some software in development that makes good use of the hardware.



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DanneSandin on 17 January 2014
JWeinCom said:
DanneSandin said:
Well, 9m Wii U's were never feasible... But How could the beastly 3DS not do more than 13.5m?! THAT'S the big question?! It has Pokémon, Monster Hunter AND Zelda this year alone! Those games alone should pull 15m... wtf?

Something definitely needs to change at Nintendo.


They weren't able to fill the void left by Nintendogs and Brain Age.  I don't think "the casuals have left for smart phones" argument is correct, but casuals will leave if you don't make new IPs for them. 

I think a big shunk of the casual market has gone over to the mobile market, but I think you're correct as well; with the right software more casuals would buy the 3DS. But I still think tihs should have been a bigger year for the 3DS with all the great games that camne out this year (I could add Luigi's Mansion and Animal Crossing on top of my previous list). From here on, sales will only decrease. The 3DS has hit its peak.



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Soundwave on 17 January 2014
kowenicki said:
ZyroXZ2 said:
Hmmm, maybe I don't fully understand the financial jargon from the links, but if they posted a loss rather than a profit, couldn't a large portion of these losses actually be DEVELOPMENT costs?! We all know the 2014 schedule for Wii U is packed with both announced AND unannounced (or at least only acknowledged to exist, nothing has been shown) games being developed straight from Nintendo's pockets. If we know WHAT is causing the loss, it may not be as bad as it seems...

Think about it, what if they're posting a loss because 2014 is about to blow our minds with how much money they've been pouring into development of games during this 2013 fiscal year?!


its rather obvious wahts causing the loss.  The WiiU forecast has been slashed massively.

So they were expecting much higher revenus and profits on the back of the WiiU that is now not going to happen.

There is no way to make this look ok.  Its terrible.  The markets will kick them, although the stock is already poor.

The 3DS hasn't been doing as well as they would have liked particularily in the West. The stock was actually doing fairly prior to this but it will assuredly take a huge hit now. 



Stefan.De.Machtige on 17 January 2014
Soundwave said:
Stefan.De.Machtige said:
Iwata won't be fired. He must have set up a lot of his own people when nearly half off the Nintendo board retired.
Who would replace him anyway?

He will be under a lot pressure though. More then usual.

Beside i doubt Nintendo will suffer a loss anyway. They might be looking to be seen beating their projections at this time. So that even a small profit or somewhat better sales look pretty good.

I'm kinda curious as to what logic translates "we're going to make a 25 billion yen loss" to "well they might make a small profit", lol. 

Better to be seen to be breaking a (small) loss streak, when projected perhaps a continuation off it...

... then projecing normal of big profits, and not breaking your (small) loss streak at all. I would think the first is best if you have to pick anything.



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DanneSandin on 17 January 2014
Soundwave said:
DanneSandin said:

Yup. I've never denied that; the market has shrunk - but I still think there's a place for dedicated handheld consoles. But they might not sell more than 50m LDT.

I'm curious how Nintendo will tackle the mobile market... Making a phone and tablet of their own? Is it is right now, you can't play Nintendo games on smart devices, because those devices sucks too much - but maybe Nintendo will come up with something that will change that?


There's nothing they can do to combat this problem head on. 

What I think may happen though is they will make their own gaming tablet and try to have that coexist with a cheaper 3DS. 

If they can squeeze 10 million units from both product lines annually, that's 20 million portables sold a year ... which suddenly doesn't seem so bad. 

I think that if/when Nintendo releases a gaming tablet it'll work with the WII U, and they'll release a Wii U sku without the gamepad, and you'll be able to use your Nintendo Tablet instead. But this would mean that they'd need to develop games for 3 different kind of platforms, and they can barelt keep up with two consoles...



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Furthermore, I think VGChartz should add a "Like"-button.

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ZyroXZ2 on 17 January 2014
JWeinCom said:
ZyroXZ2 said:
Hmmm, maybe I don't fully understand the financial jargon from the links, but if they posted a loss rather than a profit, couldn't a large portion of these losses actually be DEVELOPMENT costs?! We all know the 2014 schedule for Wii U is packed with both announced AND unannounced (or at least only acknowledged to exist, nothing has been shown) games being developed straight from Nintendo's pockets. If we know WHAT is causing the loss, it may not be as bad as it seems...

Think about it, what if they're posting a loss because 2014 is about to blow our minds with how much money they've been pouring into development of games during this 2013 fiscal year?!


Well, no.  They knew what they were planning for development back when they made their initial predictions, so if these losses are all about development costs, they would have projected low figures and said "profits will be low this year because we're developing tons of shit".  So, since they're cutting forecasts at the end of the year, it pretty much has to be (and they said it is) because sales fell below expectations.

While that does make sense, they could have also made executive decisions DURING the late portion of the fiscal year to pump money into marketing, speeding up development (notice articles about Nintendo's second party developers hiring?), etc. without "believing" (I put that in quotes to indicate that clearly someone guessed wrong on their projections) that the effect would have been so drastic on their projections, right?

I guess what I mean is, just because a prediction is made doesn't mean no executive decisions can be made that would effect it.  Sure, sales fell below expectations, but wouldn't it be entirely possible that, for example, in November, some very important people signed off on increasing manpower or increased budgets?  This would ultimately lower the forecast for the remaining quarter, we just didn't know about it until now...

I'm hoping I'm making sense, because I find it really hard to believe that going from a 55 billion yen profit projection to 25 billion yen loss is PURELY attributed to lower sales...



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Aerys on 17 January 2014

That shows 3rd party are important, even if some fans think otherwise, nintendo cant make profit on home console without 3rd party



Predictions for end of 2014 HW sales:

 PS4: 17m   XB1: 10m    WiiU: 10m   Vita: 10m

 

Soundwave on 17 January 2014
DanneSandin said:
Soundwave said:
DanneSandin said:

Yup. I've never denied that; the market has shrunk - but I still think there's a place for dedicated handheld consoles. But they might not sell more than 50m LDT.

I'm curious how Nintendo will tackle the mobile market... Making a phone and tablet of their own? Is it is right now, you can't play Nintendo games on smart devices, because those devices sucks too much - but maybe Nintendo will come up with something that will change that?


There's nothing they can do to combat this problem head on. 

What I think may happen though is they will make their own gaming tablet and try to have that coexist with a cheaper 3DS. 

If they can squeeze 10 million units from both product lines annually, that's 20 million portables sold a year ... which suddenly doesn't seem so bad. 

I think that if/when Nintendo releases a gaming tablet it'll work with the WII U, and they'll release a Wii U sku without the gamepad, and you'll be able to use your Nintendo Tablet instead. But this would mean that they'd need to develop games for 3 different kind of platforms, and they can barelt keep up with two consoles...


I think honestly at this stage Wii U is almost like small potatoes for Nintendo. They'll ride it out and give it the token Mario Kart + Smash + Zelda + whatever else is in development for it and let that be that. 

What they need is a new bonafied hit product line. Wii U is never going to be the money maker Nintendo wants it to be. 

I suspect a Nintendo tablet that can run 3DS games in HD resolution along with legacy games and even some scaled down Wii U ports (DKC: TF, Mario Kart 8, etc.) could perform well for them (within reasonable expectations, don't expect an iPad killer or something ridiculous) without neccessarily demanding completely new software development. 

Something like that could work. 



Cobretti2 on 17 January 2014
Soundwave said:
Cobretti2 said:
Nintendo would have been better off if they let NOA do its thing like they did in the past. NOJ atm controls Reggie's balls.

They really do need some western talent to sell their systems.


Yes that's one of Iwata's gravest mistakes IMO, was neutering NOA after Arakawa/Lincoln left. Because of them Nintendo was able to get games like DKC (which basically won the 16-bit war for them) and GoldenEye (which kept the N64 alive in that period between Mario 64 and Zelda: Oot), and make deals like the Star Wars games which did very well for Nintendo. 

Indeed I think at one stage did NOA own the mariners? or were they just a stakeholder? i remember when they got angel studios to make Ken Griffey Jr baseball, was and still is one of the best baseball games mechanics wise compared to all the crap EA has released.  

From memory ANgel Studios were also workign on other projects for the gamecube then they got canned when NOJ started to tighten the chains on NOA.



 

 

ZyroXZ2 on 17 January 2014
kowenicki said:
ZyroXZ2 said:
Hmmm, maybe I don't fully understand the financial jargon from the links, but if they posted a loss rather than a profit, couldn't a large portion of these losses actually be DEVELOPMENT costs?! We all know the 2014 schedule for Wii U is packed with both announced AND unannounced (or at least only acknowledged to exist, nothing has been shown) games being developed straight from Nintendo's pockets. If we know WHAT is causing the loss, it may not be as bad as it seems...

Think about it, what if they're posting a loss because 2014 is about to blow our minds with how much money they've been pouring into development of games during this 2013 fiscal year?!


its rather obvious wahts causing the loss.  The WiiU forecast has been slashed massively.

So they were expecting much higher revenus and profits on the back of the WiiU that is now not going to happen.

There is no way to make this look ok.  Its terrible.  The markets will kick them, although the stock is already poor.

The Wii U is still sold at a loss, no?  All the profits would have been made on selling MULTIPLE games per system (not just one), and since most Wii Us sold during the holidays are bundles, I kind of see each Wii U sold in which NO separate game is purchased as being a loss...  Hence, the Wii U selling even MORE, but NOT selling enough separate, unbundled games, would only have resulted in greater operating losses, right?



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