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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!"
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some 24 yearolds have 6 year old kids and like to spend their money on pokimon instead of grand theft auto.
"..but how did the other guys do?"
They had losses, of course. Nintendo is financially healthy while Sony's in billions of dollars worth of debt (60billion, IIRC) and Microsoft's gaming division is losing money. But of course it's Nintendo who's doomed!
The posting of the article itself outlines what is perhaps Nintendo's biggest problem: its image. Just from reading the comments already here, you can see people presuming that Nintendo's going to go under or stop making consoles. I honestly have no idea how this crap gets posted everywhere, though I wouldn't put it passed either Sony's or Microsoft's marketing departments.
Even more importantly, the *producers* are all focused on next-gen stuff right now. My guess is all those next-gen development costs (that aren't generating one iota of profit at the moment...) are really eating in to profit margins.
* Gamecube not competitive enough with PS2
The hardware's superior, where's the software? Looks like Nintendo scared too many developers away with their previous N64 policies, and now they don't have the install base to attract enough anymore.
* Nintendo DS too bulky compared to PSP
This is a load of crap. My husband owns both, he's a professional game reviewer for a major magazine (print, not web). Guess which one fits in his jeans pocket? I'll give you a hint, it's not the one that attracts dust from 20 meters, is so expensive you're constantly nervous about scratching or dropping it, has constant hardware problems (his has a broken UMD latch but no dead pixels fortunately), has almost no titles, has no easy way to find other people to play wireless games with, has been delayed for made up reasons in most of the world, and has "support" in the form of patches that break anything interesting you can do with it.
DSlinux.org and Gamemaker port for the win!
* People are waiting for PS3 (Cell processor + Linux!), not GC3
I think people are waiting for a console they can actually afford that has some games they want. I've seen a good dozen HD trailers of complete or nearly so Xbox 360 games, where's the PS2 titles? Any killer apps yet? I haven't seen any. Maybe developers are having problems dealing with a CPU that has terrible integer performance and a wacky memory system with too little local memory to do a few algorithms like say... collision detection on the SPEs?
Introducing the new Occam Fusion! Now with sqrt(-1) fewer blades!
A lot of people I know skipped out on buying a Gamecube simply because it was damn near impossible to pirate the games. IMO, you want an early success for your console? Let the games be copyable. Yeah, it'll hurt sales to begin with, but its probably the best way to stir up some interest (not to mention building up some trust among gamers) early on. If the games are good enough, most people will end up buying them anyway. You want an example, just look at the GC's current competition.
...are the problem Nintendo has. Seriously.
:/
I'm not a fan of any of their money-spinning franchises. I don't really like Mario since it went 3D. Never really liked Zelda. I don't "get" Metroid, I can recognise some of its goodness, but I don't enjoy it. Even their few exclusives don't really float my boat (Resident Evil? No thanks!).
Whether good or bad, PS2 has the breadth and depth of range that the Gamecube could only dream of. Whether you like sports games, driving games, beat 'em ups, survival horrors, shooters, or even just strange things you won't find on another console (just look at EyeToy and SingStar, all you people who say only Nintendo innovate!), you'll find at least 2 or 3 possible purchases. Maybe only one will be good, who knows. But the point is, there's a wide choice.
Xbox gets more ports, I think. That's just a gut call by the way, I haven't checked it out in terms of titles, but certainly it seems that way to me as a slightly interested observer. The ports are usually enhanced in some way (almost always graphically at least, but things like multiplayer Tenchu for instance).
And what does Gamecube have for me? Well, I do own one. And I own one game. It was made by Sega, and it is Super Monkey Ball. I looked in my local games shop a few weeks ago for something to buy, and the only thing that I considered was Super Monkey Ball 2.
Ah well. Maybe Revolution will have more for general gamers like me...
Game dev and music blog
"Unlike either Sony or Microsoft, Nintendo does not have enormous financial backing from other divisions which can offset losses."
Well, if they go out of business, doesn't that set up a perfect anti-trust trial, in this case, against both? If you purposefully sell something at a loss simply to kill competition?
I mean, this isn't like the Windows with IE and bundling. We're talking about flat out sales of valuable systems at big loses.
I project that when those two cases are settled, probably 10 years from now (they'll file in 5), Nintendo will have probably made more money from Sony and MS than they ever did competing against them. Who knows, maybe they will do better than Netscape in terms of real results (breakup).
I8-D
Dear Nintendo...
I hate to say it, but I've seen this coming for a long time. Don't expect this to be a "blip"; if you don't change your ideas pretty fast, the word "profit" will soon be a distant memory. That said, it's not too late for you to turn things around. Here's what you need to do:
First, admit you've made mistakes. Not just little mistakes, but huge stonking big ones. Sticking with cartridges for the N64 was a mistake. Neglecting online gaming for the Gamecube was a huge mistake. Treating the European market like dirt was a mistake. Relying so heavily on first-party titles was a mistake. Pretty much every announcement you've made about the Revolution to date has been an expensive mistake (more on this later). Now, I don't expect you to come out and say this in public; that's not how business works. What you do need to do, though, is show through your actions that you've understood this. A few changes to your board might be a good place to start.
Now, once you've acknowledged you've made mistakes, the next thing to do is start rectifying them. First of all, for the love of god, stop dictating to the gaming public and start listening. Next time one of your people comes out and tells the world that "THIS is what gamers really want", sack them. Let's face it, it's not 1992 any more. You're not the industry leader any more and you can't drive through changes in gaming culture any more. I'm not saying you need to stop trying to do new things, but I am saying that you need to let the public and the market realities inform the framework within which you do them. There's a difference between "Innovation" and "Insisting building cars with square wheels". Learn it. Look at what gamers are buying and respond accordingly. You don't have to move exclusively into "mature" games, but you sure as hell need to diversify from what you're doing right now. Hate to break it to you, but Mario, Zelda and their ilk just don't have the brand strength they used to.
Next, realise that it's not just the public you need to listen to, but the wider industry as well. You've demonstrated a high-handed superior attitude towards third party developers for way too long. This needs to stop. They don't need you any more, but you sure as hell need them. So get down on your knees and crawl to them. Swallow that famed Nintendo pride before it does you any more damage. Find out what they want from the next gen consoles and then act on it. What you've said about the Revolution so far has been a disaster on this front. Cross-party developers don't want to be in a situation where they have to redesign games for release on your system because you've insisted on using a new control system, just because it fit what you wanted to do with a few first party games. Tell them they've got to do that and they just won't bother with you. By all means, bring out your new controller, but make it very clear, right now, that the Revolution will also ship with a dualshock-alike. Treat your third parties right and some of them will come back to you.
Next, cut the fanboys out of the loop. You've basically got a similar problem to Apple here. A minority, but a *significant* minority, of your hardcore fanbase is a walking PR disaster area. They're arrogant, spiteful and incredibly sensitive to criticism. They make a mockery of the slashdot games moderation system. They're the worst possible advert for your company. Now, you can't come right out in public and tell them to get lost... again, that's not how business works. But you can make it clear that they're no longer in the loop. Stop pandering to them in press-releases and at trade shows. These people will be giving you exactly the wrong messages. They'll be saying "OMG DON'T CHANGE!!!". All they care about is getting their next Mario or Zelda fix. Listening to them might make you feel good, but it's a recipe for disaster.
You see, what some of these people will tell you is that it's possible for you to survive as a niche player. That you don't have to play to the mainstream. This
The whole industry is drinking this Koolaid.
...
I own a Gamecube. I own 15 games. Many crossplatform (and better looking than the PS2 ports, I might add.)
RE4? Check. Both primes? Check. GTA? Loved Vice City for the PC, but SA was really not worth it. Not much new, worse missions (less driving, what the hell. Edgy content doth not a replayable game make.) I bought the PS2 for Burnout 3, and so far, thats the only thing thats been worth it. I regret buying the PS2.
I really don't care at this point. Let the naysayers keep coming, but so far, the PS and the Xbox have just been expensive adventures in getting brand names beside your television.
My Gamecube has repaid itself over and over and over in terms of the amount of time I've spend in first and second party games.
Smash bros, Pikman, Eternal Darkness, Wind Waker, Ikagura
And I'm capable of dissing first party GC games; Sunshine sucked, and Mario Kart just didn't have what it takes. I still think for the connaiseur gamer, Nintendo will continue having 'what it takes' for a long time to come, and their bottom line will reflect that.
Sony and MS can absorb the losses, so whatever. I've been keeping tabs on the trailers, but holy yawn, Batman. They're all the same games, but with *crowds* this time! Whoa!
"Old man yells at systemd"
As an owner of all three consoles and reasonably frequent game buyer (1 or 2 a month), I like the choice of being able to pick the best game on whatever platform... unfortunately when games come out on multiple platforms the GC always seems to be the more expensive version, and I'd be a fool to pick it after spending money on all the consoles just so I can get the best value :-) So for Price of Persia, XIII and more recently killer7, I went for the PS2 versions because, well, it they were all about £8 cheaper than the equivalent Gamecube edition.
:-)
Does Nintendo not see the value in paring down their costs for non-exclusive titles, just so that their GC owners (and fans of their exclusives, Zelda, Mario, Pikmin etc.) can build up a library on their platform? As it stands I really don't own many GC games, but I do appreciate the big N's higher quality control (loading times? what loading times?) and would like to enjoy it a bit more often.
Mind you, this is all from a cheapass who's bought maybe 4 games in the last 4 years actually *new*, and all the rest second hand
Matthew @ Bytemark Hosting
Let's face it, Nintendo applied the "we'll give consoles at a loss, and overcharge for games" model long before Sony or MS were anywhere near interested in consoles at all.
/. booing MS and cheering a far worse monopolist.
So Nintendo's case in an anti-trust lawsuit would be... what? "Your honour, they did the _exact_ same thing we did, but took a bigger loss"? I think the judge would have to call a recess just to stop laughing.
Plus, it's sorta ironic, that what goes around comes around. And I don't just mean dumping prices on hardware. Nintendo, for all its other merits, was a far nastier monopolist than MS when it was at the top.
Anyone else remember the exclusivity contracts they made developpers sign? No, I don't mean the _nice_ MS way of "we'll give you a big wad of cash if you give one exclusivity on this one game for a year." Nosiree, bob. Nintendo's version was more like signing yourself into exclusive serfdom, for life. Sorta "we're the Big N, we're King. If you want to be allowed to develop for our console, you worthless insignifficant peon, sign there that you're not allowed to _ever_ publish _any_ game for any other system."
Took some desperate lawsuits to get that crap declared illegal.
Remember the anti-competitive behaviour in Europe? Yeah, Nintendo got convicted and fined as a monopolist over here. Not only that, but they cheerfully continued doing it during the trial, on the explicit assumption that they'll make more money out of it than the EU can fine them. Much to their surprise, the EU had a nastier bite than Nintendo estimated. But still, it's the kind of "we know we're breaking the law, but you can't stop us" behaviour that we condemn Microsoft for.
So I find it sorta strange to see much the same gang on
Either way, I'd find it bloody hillarious if Nintendo filed an anti-trust lawsuit. It would be like seeing Microsoft filing anti-trust against someone. _That_ surrealistic.
A polar bear is a cartesian bear after a coordinate transform.
Yes, it's hard when it is illegal for video rental stores to rent out games in your country.
The Gamecube for most of this year so far has been lacking games, and it's known. However this doesn't mean "Nintendo's dead" It's just not getting the games right now. The rest of this year will likely be Massive earnings compared to this section because We have a couple Mario based games, as well as The Legend of Zelda being released on the GameCube.
There is also some highly anticipated games coming out for non Nintendo properities such as Geist and such. But for the most part Nintendo has been the main supporter of the Gamecube and that's what has hurt the sales. It's still a decent system, but hopefully Revolution will get more third party support.
Because a 2 party game war with Microsoft and Sony as the leaders is just scary. Neither of these companies have proved they are about the consumer, rather about their monopolies (with MPAA actions from Sony and Microsoft's money lust)
I'm sorry, but i've looked all over the internet, even in the original Reuters article and it IS a 80% drop.
Quote from Reuters' article: Nintendo's consolidated operating profit for the April-June first quarter fell to 3.75 billion yen ($33.35 million) from 17.47 billion yen a year earlier.
I wouldn't mind you in my head, if you weren't so clearly mad -Lews Therin Telamon
Irrelevant. What we are talking about here are the total-profits of the company. Nintendo's profits dropped 80%. And while both MS and Sony are having losses in their console-business, both are making lots of money overall. Hell, I bet MS's profits are bigger than Nintendo's _revenue_! And with those profits, they can pour more money in to their platform.
I don't care if MS made 1 billion losses with the Xbox. What matters is the overall profits of the company. And MS made humungous amount of money, and some of that money will be used on the Xbox. And that means (to me and to others) that the long-term evolution of the Xbox looks more bright that Nintendo's future does. So Nintendo made money. I bet MS made as much money in one day.
Quarterly results from both companies are closely studied. And both companies made money (MS made huge amounts of money). How each individual division did is next to irrelevant. And even though Both MS and Sony lost money on the consoles, they STILL seem to whipping Nintendo. Xbox and Playstation have momentum, and Gamecube/Revolution seems to have very little.
Lesbian Nazi Hookers Abducted by UFOs and Forced Into Weight Loss Programs - -all next week on Town Talk.
I don't know why GC isn't more popular.
Because perception is reality in their industry. Gamers are extremely image-conscious, and Nintendo was never able to shed their "kiddie" image. Some people think the kiddie thing isn't so bad because Nintendy is building brand loyalty in the most impressionable audience there is. What those people fail to take into account is that little boys worship their big brothers. That's why commercials for toys use kids a few years older than the intended audience.
The more people believed Nintendo was for kids, the more it became true. 3rd parties stopped releasing "mature" games for the GC because the audience wasn't there. Think: When was the last time you saw a commercial for a video game that showed a Game Cube logo next to "available for these systems"? It's usually some combination of PS2, XBox and *PC*! Game makers look at non-console options before they look at Game Cube!
I think Nintendo's only chance with the next gen is to substantially sweeten their licensing deals. Even if they make zero profit from Rockstar games, it's better than not having any Rockstar games because their mere availability will sell consoles and peripherals.
Grr. So I went and read TFA. Talk about burying the lead! The story here isn't that Nintendo profits are down 80%, it's that Nintendo is PROFITABLE while their competitors are not.
The points I made above still stand, with the added note that Nintendo runs the tightest ship in the industry and never sells anything for a loss. Still, it's anyone's guess how long they can go on bleeding market share and still make money. Like I said, perception is reality. Headlines like this probably do more to hurt Nintendo than any questionable business move they may make because it scares people away from buying their products.
All the platform developers have potentially fatal flaws in their business plans. Sony is bent on owning a format for movies. UMD movies just scream "Betamax!" to me every time I see them. Microsoft really believes that if they can prove their platform is more powerful on paper, they win.
Nintendo's recurring problem is more interesting, and potentially far worse - they are gadget crazed, and think it's great to innovate regardless of need. The Virtual Boy was a real obvious step down the wrong road. If you could have strapped the thing to your head, maybe it would have worked, but you essentially had to set up a chair and table just right to play the damn thing. Cat owners didn't stand a chance. Of course having every game start with a warning telling you not to play too long was a bad way to inspire addictive gaming. As bad as that was, it was relatively harmless to everybody except Nintendo and early adopters.
The Game Cube, GBA connectivity was a good idea implemented poorly. I had GBA before Gamecube, so buying the cable wasn't that big of a deal, but then you got assaulted with expensive tie-in scenarios. I bought Mario Cart DD, just to get the bonus disk for use with Fire Emblem. I like Mario Cart, but certainly would have waited for it drop in price if I wasn't interested in some extra items for Fire Emblem. I also got the GBA Zelda game mainly to see the Tingle Tuner in Wind Waker.
Although Nintendo made some money off me with this scheme, they kept losing status in my mind. By the time Crystal Chronicles and 4 Swords was on the shelves, I was getting the feeling they were just cheaping me into buying a lot of crap. I'm sure I'm not the only one to feel this way. Even though I had my old GBA and the SP, the room the cube was in had poor light, so somebody would have had to suffer. Also, I'd have to buy another damn cable and I was already loving the Wavebird - more on that later - and not really wild about going back wired just to have a personal display, which is mandatory.
There was no way I was going to buy the DS. I've already got a Palm Pilot, so I'm not thrilled by the prospect of a touch screen. If you de-mystify that part, your just left with two screen of the same thing you had with the GBA. So I bolted to Sony for my handheld fix and love the PSP for all the wrong reasons - emulating Nintendo games from back in the glory years. Nintendo's foray into selling old games is expensive - one NES game per cartridge - give me a break. If for no other reason than not to have a fistful of cartridges when one would suffice - this was obvious customer abuse.
Now I don't know what the revolution controller is going to be like, but the very idea that it is going to be innovative scares me. Why? People like familiar interfaces. The best interface is a transparent one, so you can get into actual gaming. If they have some gyroscopic touch screen it's not going to be easier for me to use than something based on the basic joystick, which has been around almost as long as videogames themselves.
The worst part about deciding to be the driving force for innovation is simply that your best ideas are easily copied and you just ate all the research and development expenses for the industry. The Wavebird is great, an excellent piece of hardware, and the first wireless controller capable of playing action games well. But how long was it before you could get a reasonable copy for your PS2 - 6 months tops. Now, every console is going to have them. How about a drum interface? Cool or stupid, Sony's got it too. Thanks Nintendo, you guys are truly philanthropists!
If they would stop messing with gadgets and put more money into game development, it would be nice. It's been a really crappy summer for Cube games. Since Resident Evil 4, I'm looking for something on the Cube. Kid games? I love 'em, but where are they? Ironically, the really best Game Cube exclusives are all M titles. Maybe they should take their lumps and be the kiddie company they are alway
Nintendo's big problem is the same as alot of companies. Namely stale IP. Comic books, movies, television shows have sequels ad nauseum. Nintendo has been using the same half a dozen game lines to justify 20 years and 4 home consoles worth of gaming. In the case of the gamecube, the games are often simply dressed up versions of older games with no really new core mechanics.
But as I said, this is a universal issue with major media companies merging. We are destined to see the same pop culture of the last 20 or 30 years recycled over and over for quite a while. Case in point: why are the ninja turtles having a resurrection? Why is James Bond still around? Why are they working on a Transformers movie?
That kind of parallelism, while costing the world a variety of culture, generates alot of profit in several crossover markets (toys, comic books, CD's, clothing, etc..).
I think something is very, very wrong when we base a company's perceived future viability not on "does it have money?" or "is it making money?", but apparently solely on "does it have a big corporate sugar daddy to support it regardless of its fortunes?"
Irritable, left-wing and possibly humorous bumper stickers and t-shirts
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.
Actually the PS2 has had some good original games, as well as a few unique ones, released for it...they just easily get lost in the pile of crap. Personally it's only the Xbox I can't name anything unique or original for...at least nothing that didn't come out for PC or another console first (such as Monkey Ball). Though personally I think Xbox Live was a major evolution in console gaming that the Xbox can claim, and they earn a lot of points in my book there. If you can keep a pretty good friend list going, and thus stay out of the games that are filled with dumbasses, XBL is a truly excellent experience. Before Live voice comms were generally more of a novelty in the PC world, and having a level playing field, hardware-wise, made it different as well.
Though I'd say my favorite console gaming experiences still involve having several guys in a room all talking crap to each other and kicking the crap out of each other in games like Smash Bros., or Monkey Ball.