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

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.

Just a *likely* fall in profit

[johannesg]

The (gaming) press is at it again, talking a good company into the ground before anything has really happened. This has happened so many times now: "company X might be going down!" followed by noone buying a machine from company X since it might not be a sound investment - thereby causing the bogus predication to become true.

Nintendo is doing fine. They are making a nice profit. They are writing great software. They own lots of profitable franchises that noone else has. They may have slightly less sales than Microsoft, but that does not mean they have been wiped off the face of the earth.

I hope Nintendo turns things around

[agentmouthwash]

It's sad to see Nintendo going the same path as Sega. Right now Nintendo has the same niche that Sega once had with the Dreamcast; fun addictive light-hearted games. Nintendo greats like Animal Crossing, Mario Kart, Zelda- and sega greats like Crazy Taxi and Space Channel 5 and Samba De Amigo. I really hope that genre doesn't go away in a gaming world ruled by Sony and Microsoft. The way things are going... I think it will.

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.

Re:They should just do Software

[Dot.Com.CEO]

Disagreeing with someone, tactfully or not, does not merit the branding of "fanboy". Fact is, I enjoy games and Nintendo offer an oasis of innovation where others walk with fear of putting out something new. They never take the easy way out, and even when they disappoint, they do with style (Mario Sunshine).

As far as the 3d capabilities of the n64 and the psx are concerned, the psx's 3d capabilities are laughable compared to the n64. That is what I mean. It was the N64 and mario 64 that pushed the console gaming world to 3d. You had NOTHING like that before.

As I said in my original post, perhaps innovation was not the correct word. But the N64 era had games that were absolutely unforgetable, and they pushed gaming in a different direction. Yes, they have lost the edge now and, much as I love Zelda's latest outing, it does not amaze me like Ocarina did. Metroid was a surprise, yes, but I guess we'll have to wait for the next Nintendo console to see true innovation.

The "you are wrong" part, btw, refered to the assertion that Nintendo should stick to software. I think he was wrong, and I said so, writing a couple of paragraphs framing my ideas a bit. If I offended you, well, it was not my intention.

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.