Nintendo to Report Huge Losses

[Guest Mr. N]

Source: http://ds.ign.com/ar..._source=twitter

Well...as long as I keep seeing gimmicks and nonstop milking franchises that need a break, I'll say it's fair game to assume Nintendo has abandened their audience...and soon, we will get no more Starfox games and many others.

Your thoughts?

[Drasiana]

This isn't especially surprising. The WiiU is just catching up to the PS3 and 360, consoles that have already been invested in, and the 3DS is/was too expensive for what you were getting, particularily in terms of game selection. I don't really know why Nintendo keeps shooting themselves in the foot with problems like that.

[LoneWolf]

[Fluxy]

They'll be fine; They just need to roll with the punches and just well... Need to make better decisions. A handheld that was to be that expensive -really- should have had a lot more hype behind it to get more people dedicated to buy it, and games coming out for it on release; It would have been more money spent at the start, but that sorta investment could have saved them. It could have also possibly failed worse. They just need to market stuff better, and make a good comback.

And this doesn't mean essentially that there will be no more Star Fox. The newest game for it got a very high and nice review for it, it was just a shame that the system it had to go on was getting a lot of shitty handling.

They'll be perfectly fine; Their Nintendo for goodness sake; Nothing to be scared about. [One more pokemon game and they're set practically]

[CrypticQuery]

It was 'bound to happen sometime; their current business practices were going to land them in a whole lot of trouble. Just think, the Wii-U will be ignored by the majority of 'hardcore' gamers simply for carrying the Wii moniker, and the casual gamers will figure that they already have a Wii, why buy a Wii-U?

[Fire Yoshi]

It was 'bound to happen sometime; their current business practices were going to land them in a whole lot of trouble. Just think, the Wii-U will be ignored by the majority of 'hardcore' gamers simply for carrying the Wii moniker, and the casual gamers will figure that they already have a Wii, why buy a Wii-U?

My thoughts exactly.

They should have came up with a more unique idea, something more branched off from the Wii's motion controls for hardcore gamers. I mean, the casual and family players already got they wanted. Most don't care about new consoles, they just want something they can use to play with their family. Nintendo has achieved that half, now to go on with the other half that's been mega-broken for years now; the hardcore gamers. It seems they wanna try this with the WiiU. Will it happen? Nope.

[Robert Monroe]

It goes without saying the only games that make money are BROWN AND BLOOM FPS games.

Also, lolut milking franchises? That's pretty much what dominates the market right now: look at all the non-Nintendo sequels we're getting. More Cowadoody, more Battlefield, more Assassin's Creed, more Elder Scrolls, more Gears of War, more Halo, more Resistence.

The only big Nintendo franchise releases this holiday season is looking to be Zelda and Mario.

[Fire Yoshi]

It goes without saying the only games that make money are BROWN AND BLOOM FPS games.

Pretty much, since the majority of the hardcore gaming market is FPS's, like (herp)CoD and Halo.

Nintendo might as well just make a CoD hack with Nintendo characters as the skins. =P

[Dublinthefox]

I didn't know this was gonna happen this soon. Its sad to see that the casual gamer is almost that to nothing.

It goes without saying the only games that make money are BROWN AND BLOOM FPS games.

Which I think has been getting a little repetitive. <_<

[DZComposer]

There are multiple factors that went into this.

I'm sure the Osbourne effect (wait for WiiU instead of buying new Wiis) is part of it. It is hard to imagine the Wii still being a profit center this late in its life.

Also, the article mentioned Nintendo had a hell of a lot of R&D costs last quarter. Hard to tell if that R&D is for WiiU or for something else Nintendo is going to announce, though I hope it is work on WiiU that addresses concerns raised after E3. Note that since E3 we have heard nothing about WiiU.

Currency markets are another thing mentioned in the article, and are worth noting. The Yen is strong against the Dollar and the Euro right now, and fresh off of 3DS price cuts, that hurts, especially since 80% of Nintendo's revenue comes from outside Japan.

I'm sure the lackluster 3DS sales aren't helping, but the system is still young. Q4 will be important for 3DS, though. It needs to sell well during the holiday.

Another factor is the global economic situation. The US has high unemployment, and those that can find work aren't finding good jobs. If people are just trying to make ends meet, they won't be buying new gaming devices. Especially if they already have a PS3 or 360.

One quarter of loss is nothing to worry too much about. It is unusual for Nintendo, but is hardly the sign of death for the company. You can find quarters of large losses for Sony and Microsoft or any other company for that matter.

It becomes a concern if there is a trend.

But, I think Nintendo needs to be careful. The WiiU announcement made Nintendo look unsure about what they want to do. Iwata may have steered Nintendo out of a course towards disaster 10 years ago, but he may have steered it into it again. I'm not quite ready to call for Iwata to go, but Nintendo's strategic decisions over the next year will be very, VERY, important.

Here is a little non-financial light-SWOT analysis:

Strengths

Globally recognized, quality, brands: Nintendo still has more brand power than any other company in the industry.

Focus on developing innovative gaming technology: Nintendo's systems are always pushing the bounds of what people think about game consoles.

Strong ability to tap foreign (to NCL) markets: 80% of Nintendo's revenue comes from foreign markets.

Weaknesses

Less diverse than its competitors: Nintendo is only a gaming company. It's main competitors are established in other industries.

Too much emphasis on self-sufficiency: This has led to very myopic decisions, particularly around online network development. Some of these decisions seem to be made through a Japanese lens, which is dangerous for a company who only pulls 20% of revenue from Japan. Nintendo could benefit greatly from consultation with parties familiar with Western tastes.

Weakening of first party software quality though ports and "play-it-safe" game design: Milking cash-cows is not necessarily a bad business decision, but re-releasing the same thing over-and-over indicates that Nintnedo's software design talent may be taking a hit. Software development is one of Nintendo's core competencies. If they falter here, it is of serious concern.

Fear of producing high-end hardware: Nintendo seems to fear making high-end systems. While this provides a "cheap option" to consumers, it makes maintaining software parity with competitors that much more difficult.

Opportunities

3D is popular in consumer electronics, allowing 3DS to ride the 3D wave: Everything is 3D now. Nintendo has the only 3D handheld game device on the market.

Emerging markets are not being fully tapped by Nintendo's competitors: Nintendo has the opportunity to build its brand in emerging markets like China and the Middle East.

Competitors have not shown willingness to introduce a new systems yet: Nintendo looks like they will have a head-start on the next console generation.

Threats

Casual gaming increasingly dominated by Angry Birds type games on mobile phones and mobile phone OS-based tablets: Nintendo's profit center during the Wii lifespan was casual gaming. This market is now very difficult for companies like Nintendo, as why would someone buy a $150+ device to play casual games on when their phone does it? Phone games are becoming increasingly sophisticated.

PS Vita: The Vita is not much more expensive than the 3DS, but has more powerful hardware. If Sony can woo handheld developers away, Nintendo could be in trouble

Poor economic situation in the US: The US is in the middle of a consumer economic crisis. This will make US customers much less likely to buy new gaming systems.