Forums - Nintendo Discussion - Wii U Apparently Still Being Sold At A Loss

generic-user-1 said:
you just cant trust jpm---


The great relativity... know your source.

 



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Soundwave said:

Thought this warranted it's own thread since there's a lot of confusion/misinformation about this, I see the "well at least Wii U is profitable" being thrown, but it sounds like it actually isn't, though I hope Iwata will clarify 100%

http://www.bloomberg.com/news/articles/2015-01-28/nintendo-s-outlook-disappoints-and-mario-can-t-save-wii-u

Wii U consoles will probably return to losing money and 3DS earnings will fall next fiscal year, Haruka Mori, a Tokyo-based analyst at JPMorgan & Chase Co., wrote in a Jan. 21 report.

http://blogs.wsj.com/digits/2015/01/27/nintendo-earnings-what-to-watch-7/

Analysts also say that costs may rise from resuming Wii U production. The manufacturing cost for much of the Wii Us sold so far this business year was already booked, making this year’s sales of Wii U exceptionally profitable on its books.

Basically Nintendo didn't incur losses from the Wii U because they were selling unsold inventory from last fiscal year, meaning the manufacturing costs for the Wii Us they were selling were all on the previous fiscal year's books. 

Now that they've presumably sold through that inventory, they are going to have to go back to manufacturing new Wii U units ... which apparently still are hitting Nintendo at a loss. My guess is the highly customized nature of the hardware (ancient IBM PowerPC CPU that no one uses) is preventing Nintendo from being able to die-shrink the chipset and the controller can only be brought down in price so much. With such low sales, their supply vendors are probably also unwilling to give them a reduction on component prices. 

The other thing that strong hints at this is Nintendo's own forecast numbers. They expect their full year net profit to drop from where it was at the end of December to where it will be at the end of March 2015. This doesn't make any sense, unless there is some new element from after Dec 2014 that is causing them to lose money -- my guess is that's a clear indicator of Wii U hardware production starting up again and eating away some of their YTD net profit. 

Nah i dont think they will be sold at a loss, nintendo think one step further mostly then analysts do. Also nintendo has lost stocks, doesnt matter. Many people are gonna buy nintendo stocks when the big AAA titles like zelda and star fox are gonna be released.! In the end, aslong as we get quality nintendo games with alot of content and no bullshitting around. We will be all fine right!



slab_of_bacon said:
generic-user-1 said:
you just cant trust jpm---


The great relativity... know your source.

 



jpm gives out bad information thats nothing new, they make the most money by crushing muppets...

97alexk said:

Nah i dont think they will be sold at a loss, nintendo think one step further mostly then analysts do. Also nintendo has lost stocks, doesnt matter. Many people are gonna buy nintendo stocks when the big AAA titles like zelda and star fox are gonna be released.! In the end, aslong as we get quality nintendo games with alot of content and no bullshitting around. We will be all fine right!


What were you hoping to express here? You clearly don't actually understand what you are talking about.



In my opinion, and how I have interpreted things, the Wii U is not being sold at a loss. If you remember when the Wii U first came out, it took the sale of only 1 piece of software with the system for it to be profitable. It has been 2 years since then, manufacturing has been smoothed = lower costs, and hardware is now mainstream = lower costs. The Wii U is probably selling at a not-so-amazing profit line because of the price cut, but there is almost no way that it is still selling at a loss. I know a lot of people are down on the Wii U, but that is no reason to assume that it is still selling at a loss, Nintendo is very smart with their profit margin.



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Mr.GameCrazy said:
SubiyaCryolite said:
Just how much does the gamepad cost anyway? Is this why it still isn't sold separately?


I believe it costs over $100. I don't know the exact amount.


Nintendo would be crazy really.



OP is most probably right and WiiU is still produced at a loss. Which is a catastrophe considering its price points and its time on the market.

However, the improbable best case szenario could be that the predicted loss in Q1 comes from production cost of a redesigned WiiU. In the end I came to the conclusion that it would be best to drop the gamepad and lower the price point significantly. (get rid of the expensive low latency technique!)



US bussines sites what you except, their reports are biased against any none-us company. Often times it turns out to be lies



Ruler said:
US bussines sites what you except, their reports are biased against any none-us company. Often times it turns out to be lies


The analysts cited in the article are all Japanese, lol.