Nintendo Profits Up Amid GameCube Worries

Thanks to Gamesindustry.biz for their report on Nintendo's announcement of significant first-quarter profits, around $95 million (11.5bn Yen), "buoyed by stellar Game Boy Advance console sales, foreign exchange rate gains in Europe and the well timed re-emergence of the Pokemon brand." However, the article cautions that GameCube's current prospects are "...looking increasingly bleak, with a mere 800,000 units of the underperforming console selling through from April to June. Targets of six million have been set for the end of its financial year, but it's looking unlikely that it will reach this unless it's prepared to heavily discount the console in the run up to Christmas - something Nintendo has traditionally been reluctant to do." What can Nintendo do to get out of this hardware slump? Update: 08/05 20:43 GMT by S : According to this Reuters report, Nintendo sold just 80,000 GameCubes to retailers worldwide, not 800,000.

Comments

Nintendo Doesn't Need to

[Schezar]

Nintendo is a niche console. The people who own it will buy the big games no matter what. They don't need market saturation because they have a significant base of loyal fans/customers. These people are a steady, reliable income stream.

See also: Apple Computers.

Re:Every house needs to buy 5 GCs

[eclipsemgp]

"Xbox and PS2 can break the limit of 1 per household because they can run Linux,"
Come on now, did you really just type that statement? I know many an XBox and PS2 user, many of them nerds, geek, whatever. How many actually run Linux on them? Zero. While fun and interesting to have Linux running on you console, is there really a need? The consoles were designed to do one thing, play games. And that's what most people use them for. To say that the Gamecube is failing to sell because it doesn't support Linux is ridiculous.

Nintendo is doing the best they can

[truffle]

Nintendo has improved things so much since the N64. The Gamecube is a really great machine, with a set of killer gamecube specific titles (already mentioned in this thread), that cause people to buy gamecubes just so they can play those titles. I know I did.

However, Sony got so much market share with the PS1, back when all the other console manufacturers had their heads far up their asses, that it's pretty hard to come back and gain ground. Still, I'm sure they have, compare the market share of the N64 to the PS1, and I think you'll see the Gamecube is doing a lot better.

The GBA and the level of integration they offer with it is exceptional. The new Playstation hand held is Sony trying to copy them, and I'm sure it's going to kick ass (I have a PS2 and I'll buy one of the Sony handhelds for sure). None the less I'm already convinced that my Gameboy Advance SP is going to remain my favorite hand held console. I don't need a killer CPU, and larger screen, for my portable player. I don't need portable movies and music (esp. since DRM will make sure I have to pay $15-30 for each disk). I need something small, sexy, long battery life, with great games - that's the gameboy advance SP.

The GBA SP is great also because it plays Gameboy Color and Gameboy games as well. Very smart. Gameboy Player lets you play all those on your TV (Great purchase, strong incentive to buy a cube, GBA games are great and are great to play on a TV. Friends have come over to my house and spent 60+ hours playing Golden Sun on my gameboy player). Unfortunately everything from the N64 and back is lost, but I'm sure the next edition of the GameCube will support GameCube games. Nintendo has recognized how great for Sony it has been that the PS2 plays PS1 games (I love that I can play dance dance revolution PS1 games on my PS2, plus super puzzle fighter).

The one area Nintendo does seem to still mess up on, is their high licensing fees, which discourage development by destroying profit for game makers. I don't know why Nintendo doesn't wake up and halve those. It would work great, games would drop $5 and developer profits would increase $5. Customers and developers both happier, more units sold, maybe less money for Nintendo in the short term but a better chance for market share growth.

The gamecube is the fun family console. If I was buying one console system for my 12-or-under kids I would buy a gamecube probably. They're also a great secondary console for houses that already have a PS2 or XBox and want to get in on Nintendo games. With Cubes being cheap and coming bundled often with killer games like Metroid Prime, Gamecube is in a great position to be that second console. I'm pretty sure that's where the future of the gamecube really lies, being the second console for grownups, and the first console for kids. They won't beat Sony any time soon, but hopefully they'll obtain a growing market share.