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Nintendo Quarterly Profits Down 80%
mybrainonfire writes "1UP is reporting that Nintendo had a 78.5% reduction in operating profits for the quarter. 'Speculation from the news service on the reason for the drop makes perfect sense - the GameCube doesn't have enough exclusives, first-party and third-party, and sales of GBA SP and GameCube have been declining.' Time to release more Pokemon games, stat!"
Perhaps it would be appropriate for someone to point out that Sony and Microsoft's gaming divisions have both reported net losses this quarter. Nintendo still profited, just not as much as it expected, and they remain more profitable overall than any other gaming division. Of course, you'll never see that in any gaming publication. It's all about how Nintendo is constantly doomed. Yeah right.
Some profit is better than no profit.
According ot the article, N's profits are down, but they are still operating in the black. Seems that when they're operating at 80% profit less, they still do OK.
They just haven't had a blockbuster game recently.
Even still, unless Nintendo don't do something, they'll fall by the wayside like SEGA did.
READY.
PRINT ""+-0
Reminds me of Sega's end.
I wonder if the market can ever support more than 2 consoles. Sega went under after Playstation came out. This may be the ultimate result (for Nintendo) of the success of the Xbox.
But far be it from anyone in the word of investor driven "growth at any cost" to acknowledge that fact.
They're still in the black, they're still making a profit, they're not going out of business.
He tried to kill me with a forklift!
Nintendo is not a division of an extremely successful multinational corporation: it is a multinational corporation. There is nothing to support it if it fails to show a profit.
AC, you raise an interesting point.
Microsoft is still in the video game business only because they have the Windows cash cow to ride in on. Sony rides solely on their name, as best as I can tell. No one I know really wants a PS2 because the games are that much better (Ok, Denny really likes Ys, but aside from that...), but because they know the Sony brand is "King of A/V".
The way I see it, the video game magazines have destroyed N's image. They've been buzzing Sony since the beginning, even though the N64 had clearly superior graphics and games (yes, all three of them). (And yes, I'm familiar with the reasons the N64 did poorly: game prices, developer support, etc.).
Of course, I doubt anyone on Slashdot would actually admit to owning a Gamecube if asked. I mean really. Who here enjoyed Mario Kart: Double Dash LAN Parties? Final Fantasy: Crystal Chronicles? Mario Sunshine? Resident Evil 4? Rogue Squadron? Super Smash Bros. Melee?
Sure, there's only a dozen (give or take) games for the 'cube, but I can't find any really unique games for the other systems. Well... there is that PS2 game where you roll the ball and absorb everything you pass over... what's it called?... oh well.
Deja Vu
n. 1. The sensation that you've read this very article before.
You're right, Norfair.
The only reason I bought an X-Box was because I knew I could pirate games. I mean, I've downloaded 30 or 40 of those suckers now...
I can't say I've actually bought an X-Box title yet... Maybe one day. I mean, at $150 Microsoft made a huge profit off of the sale of the system. Right?
Deja Vu
n. 1. The sensation that you've read this very article before.
I never realized Nintendo games were geared towards any particular age range. They are kid-friendly, but hell if I don't find the games just as fun as I did when I was 6. When do you become too 'mature' for Super Mario Brothers, exactly? To me, Mario Party is just so much funner than 'yet another multiplayer frag fest', but I guess that's probably because I feel more thought was put into making the game fun. (They couldn't just give you a choice of 6-10 weapons and have you run around and shoot people.)
Whenever I hear this criticism about "more mature games", it seems more a request for Nintendo to play to gamers' insecurities than anything. When I play a Mario, or Zelda, etc. game, I don't think "geez, Nintendo's treating me like a kid! Where's something that plays to my need for raw violence, bloodletting and gritty realism?" I think - gee, the gameplays really good, the game is huge, and all the best parts aren't cut-scenes. (Unlike most other games out there.) But apparently many gamers don't agree. Games have to be complicated, be badass and 'realistic', or be like movies, to be playable. Not to worry, Sony and Microsoft have got those folks covered. FPSs and sports (i.e. racing) games are flooding those platforms.
Personally, I don't see this as cause for alarm. When Nintendo's in the red, and the other two vendors are making gobs of cash (at least up until recently, MS was bleeding cash on XBox) then let me know. But hey, I'm a Mac user and so I'm quite used to people predicting the imminent death of a profitable company. :)
However contrary to Microsoft and Sony which doesn't make the best seeling games for their system, Nintendo needs their software to be copyproof or otherwise they will lose money on it.
Stern Electronics is probably the best example I could give to refute those who think profitability is so bad.
Stern are the only remaining pinball manufacturers in the world. Midway/Williams, Gottlieb, Sega, Atari, you name it - all gone.
How did Stern survive? Well, they never were into the glitsy uber-electronic versions of pinball that Midway and Sega were killing themselves over. They simply did a simple thing: made FUN pinballs modestly.
Eventually, their competitors priced themselves out of the market or found more profitable venues (Midway's arcade division produces gambling machines). With Sony and Microsoft not even close to breaking even after all this time, you know the next generation will be even worse for them. The PS3 is practically a supercomputer in console form, and the 360 will be more powerful than just about any PC you can put together.
The ultimate question is: will they EVER turn a profit? I don't believe they will and in the meantime, Nintendo may experience a loss in sales to older, more demanding gamers, but they will continue to sail on through and IN THE BLACK.
"...Well, there's egg and bacon; egg sausage and bacon; egg and spam; egg bacon and spam; egg bacon sausage and spam..."
On the other hand, it probably takes a real adult, mature person to look beyond the superficials and have a deeper understanding of things. Most people just want their fix of blood and gore it seems. But that doesn't make them any more mature or adult. In fact, most of the people I know of who love blood and gore in games are kids.
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Funny you would compare them to Apple while Apple is making a killing in the market.
... by doing what they think is best, and being judged on their product rather than having people who have checked out LONG AGO try and tell them what to do.
Dude, I really don't mind that Honda Civics or Pontiac Grand Ams or whatever it is today outsells everything out there.
But please do not mess with the niche players; if they did everything that fans were asking for, the companies in a million other markets (ie, MS, Sony) would beat them everytime. They will survive by not catering to you, but retaining a portion of the market just like Apple does
You clearly arn't interested in what they have been doing since the SNES, so why do you care? Download ZNES, enjoy, and guy the PS2. I'm not being arrogant, I fully respect your decision, just like you should respect that some of us actually LIKE what Nintendo has been doing since the SNES.
"Old man yells at systemd"
You can always rent games, which are available from every video rental store that I have ever seen, or sign up for one of those online rental sites. Is that so hard?
Ah but it's not quite that simple.
Most people actually buy games rather than pirating them. Most people dont have the ability/knowladge to even download and burn pirate games, let alone install mod chips and the like. However, if a system had a fanbase of pirates, they would (in the opinion of the original poster (I assume)) be enough of a force to raise the popularity of the system to the point where it is of a much bigger apeal to the law abiding populace.
This does imvho make sense. Most "hardcore" gamers are able (and quite willing) to pirate games, but they are also the most vocal part of the gaming population. If a system gets a good reputation there, it will spread into the mainstream, and the whole system will benifit.
Nintendo dosn't aim at Kids or Adults. They aim at everyone, unlike Sony and MS who aim ONLY at adults.
It's a heavy generalization, but a good generalization if one were to be made. Nintendo makes things that are fun, straight up. Mario Party 7??? Come on, they are obviously getting positive feedback from that series. You look at XBOX and what do they have that even TOUCHES the fun of Mario Party? Some game that has a music industry-acceptable hip-hop genre with sexual/violence mandated undertones.
Some people say that Nintendo is for kids. I say that those people are the same folks that wouldn't be caught dancing because their ego and social acceptance of what's "cool" prevents them from just letting loose.
So there, now I've said it, I enjoyed them all, where's the problem? Do I get a prize?
Now, the PS* may have cooler games, but Nintendo is far more superior in making fun toys to play with.
True confidence comes not from realising you are as good as your peers, but that your peers are as bad as you are.
I have owned most the consoles over the past 20 years, so not a fanboy of anyone in particular. But I have had more fun gaming in my past 4 months of GC and 6 months of GBA owning than I have done in the past 3 years of PS2 owning. Its not the quantity of games, it really is the quality, and I think this is where Nintendo excel.
We are not 6 years old any more nintendo!!! And 6 year olds do not have money, 24 year olds have money
No, 24 year olds don't have money. 30-50 year olds have money. And we decide which games our 6 year olds buy. We get the ones that are fun and age appropriate. And Pokemon rules.
More expansive article here If you read the article, it tells you "80% decline," but that's a lie. If you actually do the math, a 3.75 billion yen decline to 13.72 billion yen of operating profit is obviously not an 80% decline, and in fact what actually happened is a decline TO 80%. Likewise, they had a 14% drop in sales, netting 70.7 billion yen.
Now, let's look at Sony and Microsoft's numbers (linked article last paragraph). Microsoft lost more money than Nintendo made in profit. Sony lost about a third as much as Microsoft, but they're still in the red! Where's the front page "Sony's losing money! So's Microsoft!" articles?!
Good lord, no wonder why everyone thinks Nintendo's doomed: the media has it out for them! Why didn't they report on Sony or Microsoft's losses, let alone why didn't they check their numbers/headline/article before posting it?! Seriously, Nintendo has an uphill battle next generation, and it's mostly because the media puts them in a bad light like this.
Um yeah, that's a great business model:
1) Sell console at a loss or very little profit.
2) Sell games at absurd profit to make up for console.
3) Make games easy to pirate to encourage people to buy your console.
4) High price of games and easy copy-ability drives everyone to not buy your games.
5) ???
6) Certainly not profit.
You see? You see? Your stupid minds! Stupid! Stupid!
Nintendo's profit has dropped $120 million, while the revenue has dropped $102 million. While Nintendo's sales have dropped in the last quarter, that is not why their profits are going down. If you are going to use the argument that they aren't selling as much as they did last year then you should see a larger fall in revenue than profits as you take the unit production/marketing/logistics/etc. costs out of the total revenue costs, leaving you with profit.
What was posted was a 1.2:1 decline for profit:revenue - something that is very bizarre to begin with. You should be seeing things like 0.5:1 decline if sales were the primary cause. Even if you get a 1:1 decline, you're sitting pretty as your investment/production/etc. capital is returning double what you invested. This 1.2:1 decline should indicate only 1 thing, Nintendo is spending more.
They are gearing up for the next console generation, that is all.
I had this roommate in college. He was a big black ex-football player and one day he discovered pokemon, and played that game day in and day out, during class, at night. He even bought a gameboy for his girlfriend with the game (she abdicated soon after).
Pokemon is just an rpg with cartoony characters. It has all the strategy of a final fantasy game. The only problem with it is they ran out of ideas for new pokemon, so they got cuter and stupider with each new generation of game. In any case, I have to admit it was something new, and was entertaining.
I paid $127 Final, after tax, last november, with 2 controllers and Mario Kart Double Dash. Which still costs $60. And this is in Canada. It must be around $75 US now for the system. Actually scratch that. Just checked. It's $100 US. That's very cheap for a game system. Pay $127, and you get 2 good games. Not like xbox and it's tennis/snowboard combos. You get Zelda and Metriod. These are top selling games. Anyway. I don't know why GC isn't more popular. It's got the right price, and is small and light enough to bring with you to a friend's house. Also, it has a 12 month warranty instead of the 3 month offered by the other manufacturers. It beats the other systems in everything except raw processing power. Which isn't all that important anyway. Oh, and you can't pirate games as easily. Maybe that's why it isn't popular.
Anthropic principle: We see the universe the way it is because if it were different we would not be here to see it.
On of my family members recently got rid of their X-Box and switched to Nintendo for the very reasons you are citing. She grew up with a bunch of different game systems, but ultimately ended with a Super Nintendo and she was hooked.
Flash forward a few years and she and her husband purchased a new X-Box. They didn't end up playing it much. They found many of the games were just too complex to play casually. They wanted to be able to pop in a game and play for a few hours without having to go through boot camp.
The GameCube ended up being the perfect system. It had updated versions of many of the games they liked from old Nintendo systems (F-Zero, Metroid, Mario Kart), they are pretty easy to learn, and they had more options for playing games together. They weren't really into multiplayer FPS, but they would race each other in Mario Kart any day.
Just a little empirical evidence to support your point. As video gaming becomes more popular, more niches are going to open up; Nintendo is probably smart to stick with the family space. Heck, even hardcore gamers like to play games like Lumines every now and then. Personally, I wish Katamari Damacy was on the GC.
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Basically what the article said was while Nintendo reduced its costs, its still in the black and more importantly it said unlike Sony and Microsoft actually making money and not operating in the red, and look to stay that way even when they release the Revolution. Both Sony and Microsoft are looking to take insain hits in the push to release theirs
I dont know about you but the whole point of being in buisness is to make money, and Nintendo does that every year. A lot of the "faiilure" of other makers is not that they dont have superior systems, its that they spent way too much promoting a system that they where selling for a loss... something Nintendo has NEVER done cause they know their limits and know what happens if you dont follow them (Virtual Boy anyone?)
Alreadys the PSP is on its way out with barely a hint at any decent games coming while the DS has a slew of games that have boosted the sales in Japan well past the PSP. The revolution is poised to be a decent 2nd system that /gasp DOESNT SELL FOR A LOSS unlike the 360 and PS3 which will... so every system they sell MAKES money.
Nintendo also has a pretty hefty piggy bank that they havent even touched recently because of the fact they make a profit every year.
Nintendos far from over, they are the Apple of the gamming world, and everyone knows you can make a mint fast, but its the ones who refine what they do and do it day in day out with profit who in the end win. The PS3 and 360 can be awsome machines, but if they produce too much loss for their respective companys they will be cut loose no mater how many games they can sell and how much money their parent companys have. Losses are losses and this who game is about profits.
"Slashdot, where telling the truth is overrated but lying is insightful."
Agree - we're talking about a decline in profits, not losses. The previous quarter the year before they made 17.47b yen and now down to 3.75b. The 17b figure was up a stunning 140% from the same 2003 qtr. Management kept their full year forecast (3.1% profit) the same so the decline wasn't unexpected by the home office.
Remarkable how people want to write this company off. They may not be bleeding edge but they know how to run a game business.
7) Force the competition to slim down their profit margin...
8) Until they're broke, and out of the business
9) Stablish a Monopoly
10) ???
11) Profit!!!
It's Microsoft we're talking about, they don't want to compete with Nintendo, they want to destroy them!
---- You know how some doctors have the Messiah complex - they need to save the world? You've got the "Rubik's" complex