Nintendo Announces Net Loss, New Prices

Daetrin writes "As reported by CNN/Reuters, Nintendo announced that they expect a net loss for the first half of the financial year, from April through September. Nintendo claims this is mainly due to exchange rates, as the yen has appreciated against foreign currencies during that period. This is reported as the first loss for Nintendo since its establishment. The projection for the full fiscal year was reduced to a [still significant] net profit of about $542 million U.S. Nintendo also announced further price cuts in other territories to follow the cut to $99 in the U.S.: 'Beginning on October 10, the console will have a suggested retail price of 79 pounds (approximately $131.8 U.S.) in Britain, and 99 euros (approximately $115.4 U.S.) in continental Europe. The new price of the GameCube in Japan is now 14,000 yen (approximately $126.5 U.S.)'"

Comments

Yen Problems

[BigDork1001]

Taken from a story at planetgamecube.com : Nintendo blames much of the losses on the unexpected appreciation of the Japanese yen, citing roughly 40 billion yen in foreign exchange losses for the time span. Nintendo also disclosed it had originally planned to reduce the GameCube's price earlier in the year, and expects the new price to vastly improve sales during the holiday season.

Nintendo just dropped the price of the GC. Now sales have gone up significantly. And with the sales of the consoles are sales of games. I'll bet that Nintendo will be back in the black real soon.

Re:Yen Problems

[Anonymous Coward]

Also: On top of the price thing, very soon we have Super Mario Kart coming out, followed immediately by the christmas season.

The N64 was not a great game machine, but it was used widespread, and for 90% of the people who played it, if you asked them what the N64 mean to them, it was Goldeneye and Super Mario Kart. Maybe Mario Party.

This means, if nothing else, revenue.

Because Nintendo is back

[Anonymous Coward]

Nintendo will be back in the black

They hit the sack. It has been too long; they are glad to be back. Yes, they are dead loose from the noose that has kept them hanging around. They are just living on the side because it is getting them high. Forget the hearse because they never die. They have nine lives (cat's eyes). Each and every one of them is wondering why. Because they are back.

Bad Press

[sirmikester]

Its too bad that stories like this keep getting posted about Nintendo. In this case the losses come from the depreciation of the yen against the dollar, but I'm sure that some people will just glance at the story and assume that Nintendo is hurting financially. I hope that this bad press doesn't discourage anyone from getting a gamecube right now, its a great machine at a great price :)

Re:Bad Press

[mausmalone]

Yeah... for those of you just glancing and wondering how much the Yen-Dollar conversion factors in, here's the rundown (off the top of my head... everything is estimated; $USD).

1) This is the first time Nintendo has posted a loss ever. Also, this is a mid-year estimate, not an end of year report. It basically means squat.

2) Nintendo expected to gain about $150 million, but lost about $25 million. That means somewhere along the way Nintendo "lost" about $175 million.

3) With Yen conversion losses, Nintendo lost about $360 million. That means that if the Yen conversion had stayed stable, Nintendo would have $360 million more, putting them at $180 million above estimates.

So, yeah, they're doing A-OK, just didn't forsee the Yen doing so poorly. If the Yen picks back up for the second half of the fiscal year, they'll easily beat estimates.

But not only that

[Anonymous Coward]

Because they are back.

But an important thing to keep in mind is that they are back once again with the renegade master. Deep thought damager, power to the people. Back once again with the renegade master.

Deep thought damager with the ill behavior. Back with the equal. Power to the equal.

The importance of this cannot be underestimated.

Nintendo v. Sony v. MS

[superultra]

I think it's fairly important not to forget that Nintendo is the only company in the console manufacturing business whose only business is consoles (including handhelds). Nintendo doesn't have a line of electronic devices or movies or operating system to fall back on. We'll never really hear if the Xbox or PS2 divisions of Sony and MS are losing money because those are largely internal divisions, whereas if Nintendo is losing money it's solely because of poor console/software sales.

It *is* notable that it's the first time Nintendo has posted a loss, but I think that this may be slightly representative of the gaming market at large. We're on the downhill from here to 2005 in the sense that the market is no longer hard-core first adopters but largely families or potential multiple console owners.

The good news is that Nintendo will probably just keep on being Nintendo. That means we'll continue to see one or two extremely high quality Gamecube games until and perhaps even into the next console lifespan. The bad news is that, well, Nintendo will just keep on being Nintendo. That means that if there's one of the three companies feeling a bit like a third wheel, it's Nintendo. What with the PSP on the horizon that may potentially do to the portable market what the PSX did to home console market,

I think Nintendo's in a rough spot here. They're stubborn bastards though, and I don't think they'll go down without a fight, nintendo-style. The problem is that while Nintendo-style is good for those of us here and the serious gaming community, I don't think it's a viable strategy for the post-PSX/GTA market (regretably).

X-Box

[nippinout]

The X-Box has yet to turn a profit for the Home & Entertainment division at Microsoft. -2.3 billion in video games.

Re:Pounds & Euros?

[BigDork1001]

You are incorrect, they do not use Euros in the UK. They still use Pounds there.

Idea time

[DumbWhiteGuy777]

I still say that if any console released an SDK, they would beat the others overnight. They'd lose all their income from licensing fees, but their console sales would be through the roof with all the games that would be popping up, and games really do make the system.

You're actually right

[yerricde]

if any console released an SDK, they would beat the others overnight.

That would be PS2 and GBA, the top two non-PC game systems in the States. The PS2 console has Linux for PlayStation 2, and the GBA handheld has the unofficial DevKit Advance and a community around it. So the systems with publicly available development tools have the biggest market share, even if the relationship isn't exactly causal.