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Forums - Nintendo Discussion - Labo family at 1,8 M sales here, probably >2 M shipped

VAMatt said:
Mar1217 said:

i don't think subjective calculus with arbitrary numbers make for a great compelling argument.

I agree that subjective calculus with arbitrary numbers ain't the greatest. But, were on a forum about sales where we deal with estimated or outright made up numbers all the time.  So, let's play it out a bit more anyway.....

$10m R&D
 2 million fancy boxes, at several dollars each, let's call it $5 each, so that's another $10m
Shipping from China to ports around the world, then shipping from ports to distribution centers, then shipping from distribution centers to stores has to be another $15or so per unit (they're not small), gives us another $30m.  That's $50m of baked in costs, by the time the thing is sitting on a retailer's shelf

Now, we have a larger box that takes up a lot of shelf space.  Retailers take smallish margins (typically 25%) on games because they're easy inventory to handle.  But, Labo is not a game in that way.  It takes up about 30 times the shelf/warehouse space.  It also isn't something that drives accessory sales.  So, the retailer has to get paid for that space.  My retail experience tells me they want a 40% margin.   That's $64m of the total revenue that went to retailers. 

So, we have $64m of retailer margin, $50m of costs to design, produce, package, and distribute.  That's a total of $114m, out of the $160m revenue.  That leaves $46mm for Nintendo.  The problem is though, we haven't yet accounted for any marketing other than packaging.  Nobody buys the thing without some advertising, and/or other marketing expense.  Millions more were spent there (though, arguably, they didn't spend enough in this area).  So, while my (admittedly, very rough) estimates lead me to believe that Labo has been profitable for Nintendo, they also lead me to believe that profit was not huge, and probably not large enough to justify a company taking its eye off of its core business.  

I still think if you put in $10m and get back $100m+ in profits, thats huge.



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Just wait for the Labo comeback, its about to hit its stride!

poor labo :(

I was banking on it being a holiday season type of item before it took off, obviously i was wrong lol



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I'm glad LABO performed badly in comparison to other core titles like Smash Ultimate, Zelda BOTW, MK8D, and SMO.
It's very clear the messages sent by the Switch users, they wanted more core titles on the switch. Stop wasting development and marketing budget resources on that experimental software and focusing more on the next 3d/2d Mario, 3d/2d Zelda, 3d/2d Metroid, big open world from Monolith, and etc.



VAMatt said:
Mar1217 said:

i don't think subjective calculus with arbitrary numbers make for a great compelling argument.

I agree that subjective calculus with arbitrary numbers ain't the greatest. But, were on a forum about sales where we deal with estimated or outright made up numbers all the time.  So, let's play it out a bit more anyway.....

$10m R&D
 2 million fancy boxes, at several dollars each, let's call it $5 each, so that's another $10m
Shipping from China to ports around the world, then shipping from ports to distribution centers, then shipping from distribution centers to stores has to be another $15or so per unit (they're not small), gives us another $30m.  That's $50m of baked in costs, by the time the thing is sitting on a retailer's shelf

Now, we have a larger box that takes up a lot of shelf space.  Retailers take smallish margins (typically 25%) on games because they're easy inventory to handle.  But, Labo is not a game in that way.  It takes up about 30 times the shelf/warehouse space.  It also isn't something that drives accessory sales.  So, the retailer has to get paid for that space.  My retail experience tells me they want a 40% margin.   That's $64m of the total revenue that went to retailers. 

So, we have $64m of retailer margin, $50m of costs to design, produce, package, and distribute.  That's a total of $114m, out of the $160m revenue.  That leaves $46mm for Nintendo.  The problem is though, we haven't yet accounted for any marketing other than packaging.  Nobody buys the thing without some advertising, and/or other marketing expense.  Millions more were spent there (though, arguably, they didn't spend enough in this area).  So, while my (admittedly, very rough) estimates lead me to believe that Labo has been profitable for Nintendo, they also lead me to believe that profit was not huge, and probably not large enough to justify a company taking its eye off of its core business.  

Sounds about right.  I doubt Nintendo lost money on Labo, but it didn't make enough money for them to push it much anymore or create many more kits (I believe there has only been one new one since its release.)

JRPGfan said:

I still think if you put in $10m and get back $100m+ in profits, thats huge.

You have to just be messing around, now, I'm guessing.  Nintendo isn't making anywhere near $100M in profits off of Labo.  If they had made that much money off of Labo in less than a year, you can bet they would be advertising it even more and putting out a new kit every couple of months.

LGBTDBZBBQ said:
I'm glad LABO performed badly in comparison to other core titles like Smash Ultimate, Zelda BOTW, MK8D, and SMO.
It's very clear the messages sent by the Switch users, they wanted more core titles on the switch. Stop wasting development and marketing budget resources on that experimental software and focusing more on the next 3d/2d Mario, 3d/2d Zelda, 3d/2d Metroid, big open world from Monolith, and etc.

They keep chasing that Wii dragon.  Looking for the casual market that has moved on to mobile.  The fact that they are portable and some of their games are more accessible/appealing to the casual crowd is really all they need to bring in some casual gamers.  I think instead of focusing on making Labo, they really should have been focusing on that Metroid game.  Cause, now, it seems it isn't hitting shelves until 2021 at the earliest.



I always thought if it ends up selling over 2 million thats a big success for such a niche product. Obviously it is going to do that. I have no idea what Nintendo's expectations were, but at this point I'd call it a success since it was always gonna be a niche product. Usually niche product video games don't sell anywhere near 2 million!



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LABO was supposed to be the next WiiFit but missed the mark by quite a bit.

From the amount of advertising that originally supported LABO and the shelf space required to stock LABO I'd say Nintendo were aiming for 10 mil in sales in it's first year on market. 



I think a lot of people badly underestimate the cost of initializing production of a unique physical product. It goes beyond labor x materials. This isn't like the video-game industry where the physical aspect is next to nothing because it utilizes existing production. They most likely had to go to a cardboard manufacturer and pay them to reconfigure their facility to produce something a lot more complex than normal. I'm betting early run waste was pretty high, too. It supposedly is manufactured in Japan, as well, which means it's more overhead from the start.

Total cost of start up had to be relatively expensive. Usually you count on volume to mitigate that.



LGBTDBZBBQ said:
I'm glad LABO performed badly in comparison to other core titles like Smash Ultimate, Zelda BOTW, MK8D, and SMO.
It's very clear the messages sent by the Switch users, they wanted more core titles on the switch. Stop wasting development and marketing budget resources on that experimental software and focusing more on the next 3d/2d Mario, 3d/2d Zelda, 3d/2d Metroid, big open world from Monolith, and etc.

I say, let them be.

C'mon, we just got a video yesterday proving how much Nintendo is ready to pour effort into making the next Metroid game, one of the core title.

These endeavors do nothing to interrupt the developpement of their core software.



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JRPGfan said:
thismeintiel said:
I think you people are ignoring R&D costs. Who knows how much Nintendo spent on getting Labo working and out onto the market. Either way, it is definitely not a success in Nintendo's eyes. Given their 20M prediction, they were obviously looking for it to push HW sales early/mid 2018. That didn't happen. And it probably won't ship much more than 2M-3M in its lifetime, so poor results all around.

My guess is little to nothing spent on R&D.
This isnt a AAA game, and I doubt it cost anywhere near that, even a AA game would come more to develope than each of these kits.

This a "A" level devepement cost, at most, and sold at like 80$ for a kit.
And the cardboard obviously doesnt cost that much either, in short nintendo makes huge profits on them.

On the programming itself, probably not very much, true.

However, after coming up with the idea, coming up with so many ways to use joycons and tablet is something that takes quite a lot manhours - and a lot of trial and error in implementing those ideas.

Last edited by Bofferbrauer2 - on 27 January 2019

Wait. What? It only shipped 2m? I thought this was gonna outsell god of war. There was a thread about it