Since I am not familiar with Nintendo products, I am assuming things that may not make sense to Nintendo fans.

If you see any "mistakes" or numbers that does not make any sense, then please let me know - so we can have a better financial model.

Nintendo figures are in Yen, so I will translate it to US$ for easier understanding.

Assumed figures will be indicated with a (*).

The goal of the analysis is:

a) to use it in predicting future Nintendo results

b) to see how breakdowns / profitability of Nintendo's business

ANY QUESTIONS, PLEASE POST REASONABLY.

FY End Mar 2007
in millions of Yen

Revenue = 964,377 = US$8.24(*) Billion
Gross Margin = US$3.395(*) Billion

FY End Mar 2008
Revenue = 1,668,791 = US$14.6(*) Billion
Gross Margin = US$6.12(*) Billion

I have emoved the non gaming portion of Nintendo, with the corresponding "average" gross margin from the numbers.

The average gross margin is 41.2% and 41.9% respective for FY End Mar 07 and FY End Mar 08 respectively.

Gross Margins on Products for FY End Mar 08 - all figures rounded up or down:

See if this makes sense:

Gameboy HW = $21(*)
DS HW = $25(*)

Gamecube HW = $34(*)
Wii HW = $61(*)

Gameboy SW = $6.6(*)
DS SW = $9.7(*)

Gamecube SW = $11.5(*)
Wii SW = $16.3(*)

Note for software, that is the average gross margin. Their is no breakdown between 1st and 3rd party software.
For the Wii though, by deductions - software is approx. 50/50 for 1st and 3rd Party

So if you assume a higher 1st party software gross margin, it is easy to calculate 3rd party software gross margin.

continued...

There are also:

Royalty Income
Others

in Nintendo results. Therefore, these are the gross margin numbers I assumed:

Royalty - 95% gross margin
-makes some sense, since by definition, royalty is basically pure profit

Others - 35%
-makes some sense if I assumed that other consisted mainly of Nintendo accessories

With all these gross margin numbers, along with reported hardware, software sales/shipped numbers in Nintendo financial statements, the numbers work out, with approx. 1% to 5% variance (rounding errors, etc).

All the assumed numbers fit both revenue and gross margin figures to the acceptable variance.

SUMMARY and QUESTIONS:
Gameboy, Gamecube numbers should be next to nothing in FY end Mar 2009

Wii HW = $60(*) gross profit
Wii SW = $16(*) gross profit
DS HW = $25(*) gross profit
DS SW = $10(*) gross profit

Do these numbers make sense?

Please discuss.

I will also make a comparison of Nintendo, Sony, MS gaming profitability once the numbers for Nintendo have been discussed and refined.

BTW, this post was intentionally shorter than the MSFT and Sony posts.

If anyone wants the long version, let me know.

I can post in another thread:

Nintendo - A MORE THOROUGH ANALYSIS.

Cheers.

COMMENTS? QUESTIONS? SUGGESTIONS?

I forgot, the NET profit for Nintendo which is:

Revenue
Less
Cost of Sales
= Gross Margin
Less
Selling, Admin, Expenses
Less
Extraordinary items, taxes

= NET INCOME

This analysis only goes to gross margin.

NET INCOME in US$ - taking into account the average Exchange Rate (as per Nintendo's reports) for the Fiscal Year:

FY End Mar 07
NET income = $1.489 Billion

FY End Mar 08
NET income = $2.252 Billion

I didn't read all of that, I mostly just simply see the front page of the site for figures and go about my way.

But I like these sort of posts, kinda supports what the site offers. Thanks =o

I would be appreciative of a more thorough analysis though I thank you for the the current one just the same.

I'll see if there is enough people wanting the detailed post.

I posted detailed Sony and MSFT stuff, and MSFT especially does not get any views or posts.

I'll wait out and see with this thread.

Thanks for the feedback.