By using this site, you agree to our Privacy Policy and our Terms of Use. Close

Forums - Sales - A look at whether or not Nintendo will beat its profit estimates...

naznatips on 17 September 2007
leo-j said:
Those pics are offensive to nintendo in many ways.

How?  It's offensive to them that they... make money?



Around the Network
FishyJoe on 17 September 2007

Because it's in dollars not yen?



shams on 17 September 2007

They tend to underestimate financials, and for that reason alone I think they will beat it. I can't believe they had forecast (for example) that MP8 would be as strong a seller as it is.

Still, its impossible to really know. We don't really know how much they are spending on R&D (although some future figures were in their financial report?), marketing, legals and other issues.



Gesta Non Verba

Nocturnal is helping companies get cheaper game ratings in Australia:

Game Assessment website

Wii code: 2263 4706 2910 1099

DarkNight_DS on 17 September 2007

I've been figuring that Nintendo would announce around 4.5 billion in profits for the year, with even higher profits next year. If this continues... we should expect 5-6 billion in profits next year. Wii Fit will lead the way....

If Nintendo keeps this up... will there be room for Sony and Microsoft in the games industry? How much longer will a loss for them be acceptable? Nintendo needed the success more then the other two, but this is just insane. I want the competition to survive... competition is good in any industry... especially in media.



Prepare for termination! It is the only logical thing to do, for I am only loyal to Megatron.

Magera on 17 September 2007
TheSource said:

The financial times just ran an interesting story, which said:

"Nikko Citigroup games analyst Fukuda estimates that gross profit accumulated for every Wii console sold in Japan equates to 1,500 yen ($13), while in the US and Europe the figure is much higher due to greater retail prices. In the US and Europe, Fukuda estimates gross profit per console stands at 5,600 yen ($49) and 8,500 yen ($74) respectively. "

http://www.next-gen.biz/index.php?option=com_content&task=view&id=7180&Itemid=2

Basically, Nintendo is estimated to make...

$13 profit for each Wii sold in Japan (no pack in)

$49 profit for each Wii sold in the Americas (pack in allows higher price)

$74 profit for each Wii sold in Europe (pack in allows higher price)

Nintendo is expecting to ship 16.5 million Wiis from April 1 2007 to March 31 2008, on top of the 5.84 million shipped to retail by March 31 2007.

Lets say profit was ~$25 on average through 5.84 million/March 31 2007. Wii hardware resulted in $150 million in profit.

Now, if Nintendo ships 5 miillion units to Japan, 6 million units to the Americas, and 5.5 million units to Others this fiscal year you get...

(6 million x $49)+($74 x 5.5 million) + ($13 x 5 million) ...$766 million in profit. Not bad.

I don't think it is impossible for Nintendo to ship 18 or 20 million Wiis either. Add an extra 1 million shipped to each region and you get another 136 million in profit.

Looking back at Nintendo's forecast shipment data, expectations are for 26 million DS units. DS has been out for years now, so profit is likely $20 or more per DS - which adds at least another $60 million in profit.

This means Nintendo likely will make ~$1,000,000,000 in profit just on hardware.

Looking at software expectations in Nintendo's financial report, Nintendo expects to sell 212 million units of software. It is quite possible Nintendo will beat this projection - since the Wii hardware forecast in June accompanied no software boost. At $10 profit per piece of software, Nintendo would add another $2.12 billion in profit. Note this may not include virtual console sales. It certaintly does not include accessories or 3rd party liscencing fees.

Overall Nintendo expects ~$3,000,000,000 in profit, but I predict something more like:

Wii:

hardware shipped: 6/7/6 = millions (6)($13)+(7)($49)+(6)($74)

DS:

hardware shipped: 30 million x $20

 

Total software shipped:

software: (250 million)($10)

 

Accessories + Liscencing profit: $500,000,000?

Estimated Profit: $60,000,000 + $500,000,000 + $2,500,000,000 + $865,000,000 ~

Estimated Profit: $3,925,000,000

So overall, I expect Nintendo to beat their own projections for profit.

 

 


 I don't know if anyone else has pointed this out, I browsed through most of the posts but lost track.

Anyway. 30 million x $20 does not = $60 Million.

30,000,000 x 20 = 600,000,000 ($600 Million in DS hardware) 

 

So to revise your Estimated Profit:

Estimated Profit: $600,000,000 + $500,000,000 + $2,500,000,000 + $865,000,000 ~

Estimated Profit: $4,465,000,000

 



It's me...  no really, it IS me!!!

Around the Network
shams on 17 September 2007

Even with the lower price points, I think $10 / unit (software) is too pessimistic. Ninty would be averaging closer to $20US - with big titles coming out (Galaxy, Metroid, WiiFit, Smash, etc...). DS titles may be closer to $10-$15/unit.

An extra $10/unit adds an extra $1.5bn - $2.2bn in revenue/profits.

So you be looking as high as $5.5bn-$6.0bn in profits.

Very nice numbers for shareholders ;)



Gesta Non Verba

Nocturnal is helping companies get cheaper game ratings in Australia:

Game Assessment website

Wii code: 2263 4706 2910 1099

tiachopvutru on 17 September 2007
Soriku said:
GranTurismo said:
If Nintendo has all this hard cash around then why don't they spend it and get good third parties under the Nintendo Name. Do they not care that Sony and Microsoft have all the big third party games. Do they not care that their system cannot match what the PS3/360 bring to the table. Do they not care about their fans and want to bring big games to the wii.

 

Because they're not pussies and don't need to buy they're way through everything. The T-P support comes naturally (See: DS, started out so-so like Wii but more new good games announced weekly)

 That was uncalled for... meh



I'm an ALIEN!!!! - officially identified as by Konnichiwa

Of course... My English is still... horrible - appreciation and thanks to FJ-Warez  

Brawl FC: 0301-9911-8154

Magera on 17 September 2007

Nope, never mind. scratch this one.



It's me...  no really, it IS me!!!

tiachopvutru on 17 September 2007
DonWii said:
naznatips said:
GranTurismo said:
If Nintendo has all this hard cash around then why don't they spend it and get good third parties under the Nintendo Name. Do they not care that Sony and Microsoft have all the big third party games. Do they not care that their system cannot match what the PS3/360 bring to the table. Do they not care about their fans and want to bring big games to the wii.

Uh, what do the PS3 and 360 bring to the table that they cannot match? There are millions of Wii owners out there who think the Wii brings much more to the table than the PS3 or 360 ever will. They are reinvesting that money in games. They do bring more 3rd parties under the Nintendo name (most recently Monolith Soft).

Nintendo doesn't have a parent company to leech off of to fund development or to pay off third parties to make games for their systems when they are selling badly. They depend completely on their own success. The money they make is immediately reinvested into new development. It looks like a lot of money, but if you look at the ridiculous amounts of money Microsoft and Sony spend trying to keep their struggling systems alive you'll see that a small company that depends on it's own resources isn't going to be able to do that.

For example, Microsoft is still throwing money at RPG companies to try and keep their system alive in Japan. They have spent hundreds of millions of dollars buying and making games that appeal to the Japanese. They obviously aren't getting any return on this. That's the kind of spending you can only do when your goal isn't to make a profit. Sony similarly has paid for development of Lair and many other 3rd party games that are not going to come close to returning their investment. They paid money to optimize the Unreal Engine for UT3, and they are still suffering billions of dollars of losses in this generation.

That's the kind of spending big businesses can do. That's what happens when your goal isn't to make a profit, but to make a monopoly. Microsoft wants to monopolize home entertainment, and Sony wants to monopolize HD formats. The most entertaining part of this whole situation is neither are succeding, and both are getting their asses handed to them by a tiny little company who just wants to make games. The little guy that spends his money wisely is beating the corporate giants with endlessly deep pocket books. This kind of situation is practically unheard of, and it's actually one of the most interesting corporate standoffs in any industry.



I'm gonna quote this one XD

Also, nice writeup, naznatips ... It was interesting to read although I don't know anything about corporations. And yay for small guy beating the big guys, something I always enjoy watching in anime but doesn't happen a lot in real life =P



I'm an ALIEN!!!! - officially identified as by Konnichiwa

Of course... My English is still... horrible - appreciation and thanks to FJ-Warez  

Brawl FC: 0301-9911-8154

fkusumot on 18 September 2007
naznatips said:
fkusumot said:
FishyJoe said:
I don't know if you can really call Nintendo the little guy anymore.

QFT - But they like it when people think that.

 


They have a little over 3000 employees worldwide. That's pretty small lol.


 They have 8 billion (or so) little guys in the bank, that's pretty big.



I Blame Wii Fit!