Nintendo Profits Drop As Gamecube Loses Ground

Thanks to several readers for pointing to a Bloomberg Japan report reporting a likely fall in Nintendo's profits, as they lose market share to the Xbox and sell less Gamecubes compared to this time last year. They're still on course for a profit of hundreds of millions of dollars, mind you, but the article does say that "some investors criticized Nintendo for failing to announce any significant plans to boost its game business.. at last week's Electronic Entertainment Expo." Investors also seems worried about increased competition for the Gameboy Advance, in the form of Sony's PSP handheld.

Comments

A Few Thoughts

[Acidic_Diarrhea]

" Nintendo last month indicated it sold about 2.72 million GameCube consoles worldwide in the second half, down from 3.29 million in the same period a year earlier."

Isn't that to be expected? I mean, for each generation of consoles don't all the people who are going to buy a console, buy one and then focus on buying games? Sure, you can get some new converts but that number is going to be much smaller than the number of people buying when the system is new. I remember reading an interview with someone at Sony who said they had a particular number for the year that they wanted to hit. I wonder if that number was higher or lower than the year before that.

"A game company's business strategy is either to limit the machine's functions to playing games or to target a wider range of consumers with additional functions,'' said Yorinobu Hara, who helps manage the equivalent of $970 million at Resona Asset Management Co and declined to say whether he owns Nintendo shares."

And here I think Nintendo went wrong. The more functionality you can build into the system, the better. Now I know that Sony's DVD support hasn't been the greatest from that previous article (I've never had a problem with my PS2) BUT it's a feature that people can point to as yet another reason to buy the machine. If Sony had included mp3 playback in their PS2s, I would have bought mine much sooner because something that plays mp3s, dvds, and video games sounds very appealing - even if I know that in all likelihood, I wouldn't listen to mp3s using it. And as far as the Gameboy Advance interfacing with the Gamecube: so far Nintendo hasn't sold me on it so I can understand why investors haven't been exactly captivated. The Pacman thing was a little cool BUT I don't know if it's a reason for me to go drop my money on the table for both a Gamecube and a Gameboy Advance. Since that's a game that requires at least two players to even bother with plugging the Gameboy in, how much use would I get out of it? And really, couldn't the same type of game be done using an online game? Multiple Gamecubes linked together is a great idea because I can find other people with Gamecubes but having to buy a Gamecube and a Gameboy Advance to play a game? Seems like a jump...