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

They should just do Software

[brave1]

I hope Nintendo dumps the hardware thing altogether and focuses on making Software and Controllers. (Despite my best efforts, I've never broken a Nintendo controller.) Im my opinion, Nintendo is the best console game developer. You can pretty much buy a Nintendo 1st party game sight unseen. I'd love to be able to play Halo and Zelda on the same system.

Plus, that would free up Final Fantasy to come out and play with my XBox.

As far as competition from Sony on the handheld front is concerned, I'm gonna wait and see how big (and battery hungry) the thing is before I lay odds on Nintendo's chances.

Re:They should just do Software

[Dot.Com.CEO]

You are wrong. Nintendo have in the past been the one force of innovation in the gaming market, both in software and hardware. Innovation might be too strong a word, actually, but they have succeded were others have failed miserably. The Gameboy, for example, was amazing for its time, as was the SNES. The N64 was the first, and for a while, the only console that was built with 3d in mind. But that is not really the point. The point is that Nintendo is not a software company that does hardware, or vice versa. They apply a holistic approach to gaming, they use their hardware experience to innovate in software (Mario 64), and they create hardware to create a different level of interaction (remember the first time you saw the N64 controller). It just happens that the current console is less innovative than the past nintendo consoles have been but there are a few things you cannot find anywhere else (gameboy connection, wavebird, etc)

I don't care whether I can play Zelda and Halo on the same console. Face it, if you are a true gamer you are pretty much forced to have all three major consoles, plus a gameboy. And I definitely do not want Nintendo to copy Sony's strategy. Sony are doing quite well, no need to have more of the same. I want new things, and Nintendo have been there. Less so in the past year or so but I think it is more likely they will bring something that will astonish the gaming market than, for example, Microsoft.

Even with Double Dash?

[EarwigTC]

After hearing of the eight-player capabilities of Mario Kart, I and several friends have all pledged to become 2-cube households the day it comes out. They may have been thinking about console sales a little after all...

Multifunctional machines

[sporty]

There are a LOT of devices that are jack of all trades, master of none.

Look at the iPod. It's not a great PDA. It never will be. Apple won't persue it very hard.

Look at those annoying scanner-fax-printer things. Great if you dont' care much about poor performance of one or even two of the functions. It's the same reason why the ones that really do everything right tend to be very expensive.

Counter-point, the tivo-directv combo box. They were meant for each other. It's rare when devices should combine. Radio's and music players are the same way. Look at receivers and walkmen. Surprised I don't see more cd players /w radios.

BTW, the GBA functionality is almost always optional. Look at wind waker. It's simply a bonus to have the linkup. Same /w sonic.

An insiders perspective... sort of.

[Anonymous Coward]

Hi there guys, this is the first time that I have *ever* replied to a post on slashdot, but I figure that I should give you guys the inside view of the gamecube situtation.

First off, I am the store manager for an extremely high volume video-game specialty store, and myself and all of my staff own all three systems. I love the gamecube, feel really bad about what is happening to it.

In the last three months my store has sold eight gamecubes! Just eight! And that was *after* the free game offer started! In that same period of time we have sold fifty-four PS2's and fourty-two xboxes. On a conference call last week, I we disscussed or experiences with the GC lastely, and most stores echoed my dissapointment.

And that's not the worst of it either. The worst part is the software. For example, when "Splinter Cell" came out for gamecube and PS2 we have sold 94 copies for PS2 and 2 for gamecube. So far on "Enter the Matrix" we have sold 160 for xbox, 140 for PS2, 24 for GC and 10 for PC. (BTW this is the 1st time we see xbox beating PS2 company-wide on a new release.)

On average, we sell about 4 gamecube games a day compared to 25 xbox games and 30 ps2 games. The *only* game for gamecube that has sold well this year in Zelda. Publishers that make GC exclusive games need to have balls of steel, because they know these numbers. That's why there are so few GC exclusive 3rd party games.

On the flipside, GBA and GBA SP are doing amazingly well. We sell many, many, many more GBA games than GC games. Nintendo makes a killing on GBA, so the company is not going anywhere.

I don't know why this is happening, but I fear that it has a lot to do with marketing. The gamecube is not percieved as "cool." It's best exclusive games, metroid and zelda, are often perceived as kiddie games, even though they are not! When customers think PS2, they think Vice City; when they think Xbox, they think Halo. But when the they think GC, what do they think of?

***Warning gross generalizations coming!***

Here's what my customer's think and much of this is not true, but this is what they tell us before we can correct them.

PS2: The cool system, what my buddy has, the "best" system, the one with the "best" controller, and the most games. I want a ps2 because I played vice city at a friend's house.

Xbox: Big, black, and powerful. The most "powerful" system. Less games than PS2, but gaining. I want an xbox because I played halo at my friend's house.

GC: Small and purple, nobody has it. Less powerful that ps2 and xbox, because it's smaller and costs less. Zelda is a kids game, but GC is kinda cool because I once was at some guy's house and he was playing resident evil on it.

This is what they say to us, I don't know who is to blame, but the future does not look good for nintendo.

Investors don't understand their investment

[Zed2K]

"Investors also seems worried about increased competition for the Gameboy Advance, in the form of Sony's PSP handheld."

Then the investors are stupid and really don't know anything about the market they are investing in. The sony thing won't be out till late 2004, you can place pretty good bets on it not showing till 2005. 2 years is an awfully long time and you can place another bet that nintendo will have an updated gameboy out by that time to compete. Why would they announce it now and give Sony a heads up into what they are working on?

3rd man-out

[CashCarSTAR]

The poor performance of the Game Cube is kinda weird, in my opinion. Just to little note, my only current-gen game system is a GameCube, so I might be biased...but not much.

I think that Nintendo is at the bottom of the mindshare curve, and that is pretty much all that is going on. I agree with one of the above posters that states that Nintendo is going to be the Apple of video gaming. It's going to have a dedicated following that will increase slowly year after year.

For me, the X-Box is just a complete snore, (Halo is still the only half-decent exclusive, and that is only because of a hack..CTF over the Internet is fun.). The PS2 is a whole lot better, to be honest, having partial exclusives like GTA:VC and the Dynasty Warriors series.

However..Nintendo got the goods. Really. Yes, there are less games out for it. Does it really matter when....well..quite frankly it has some unbelievable games. Metriod and Zelda, go without saying, are amazing...and I'm not even a Zelda fan. Mario Sunshine was great, however limited by the game flow (what WAS there was great). Animal Crossing is amazingly adictive, (again, I'm not usually a fan of that style), then you add the "2nd-tier" stuff, stuff that is still amazing, Eternal Darkness, Star Fox Adventures, Rogue Leader. The controller is excellent, and it has enough multi-platform games to make me happy. (Tony Hawk, Burnout, Ikaragua, Skies of Arcadia, Timesplitters 2)

The focus on GBA connectivity is a gamble, and in fact, it's an artistic decision rather than a business one in my mind. The previews of the upcoming GBA focused games sound amazing (FF:CC,Four Swords, Pac-Man)

In any case, I for one am very happy with my small little box. Nintendo seems to be barking up the wrong tree right now, comercially speaking, but artistically, they are better right now than any other VG company at any time in history.

Oh, please.

[13Echo]

Nintendo is in no position to go away. We've seen what happened to SEGA because people "forgot" about what they stodd for. And those gamers that have been around the block will be damned if they're going to let Nintendo go.

Just maybe Microsoft is selling more XBox units, but the numbers have shown that they *are not* selling the software along with it. It's pretty sad when SNES titles top the best selling XBox games on GameFAQs.com. Hmm... Nintendo has been solid on those lists for months now, especially since the Metroid Prime release. Weather it is Game Boy titles, or GCN titles, they've remained pretty consistant. Unless everyone totally buys into the PSP hype, I don't see that changing too much. Gamecubes still keep selling, and software is selling well enough. The PS2 sales are grinding to a halt. Everyone and their mom already has one. The rest are just replacements for dead systems. Tell me if you don't know somebody that hasn't had to replace their PS2? (Gamecubes have a 12 month warranty, compared to the PS2's and XBox's 90 day).

Third party companies are afraid to make the jump, but it is begining to happen. Some of the companies that we've *never dreamed* would make games for non-Sony platforms are doing more cross-platform work. Where's Squaresoft in terms of XBox games? Granted, 3 Gamecube games from Square isn't *everything*, but it's a start. Nintendo still has the biggest and best exclusives that the *fans* want. And even companies like Konami and Capcom are finally working on some satisfactory exclusives.

The fact is... The dedicated game companies will *never* let Nintendo go, and neither will the fans. Nintendo may be a company, and they may be in it for profit just as Sony and Microsoft are, but they are *totally* about the games. You can't say that about the other two, which are primarily electronics, media, or software companies that just want total media domination. Many of us hated to see SEGA go, but we'll be damned if the same thing happens to Nintendo.