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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Re:Okay, that's pretty bad..

[Anonymous Coward]

"..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.

Re:Other obvious reasons...

[Gldm]

* 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?

I might have bought one....

[Norfair]

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.

Re:More half ass BS from 1up

[SirSlud]

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!

As opposed to what Nintendo did?

[Moraelin]

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.

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 /. booing MS and cheering a far worse monopolist.

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.

Re:As opposed to what Nintendo did?

[stonecypher]

Plus, it's sorta ironic, that what goes around comes around.

That's not what irony means.

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."

Yeah, and you could only publish five games a year, too. They did that for a good reason. It was harsh, and they kept it up too long, but that's what salvaged video gaming. It's also the reason there was a Robbie the Robot.

See, the problem was, Nolan Bushnell didn't know how to keep a tight leash. He treated his programmers like crap (wouldn't even put their names in the manuals, even when it was a two-person job back then, ffs.) As a result, a big block of his programmers split off and formed the first independant game software company, Activision; they were quickly followed by several other outfits.

Now, by the standards of their day, Activision kept their shit together for a while. They were about the only ones. Suddenly, there were 30 ripoff pacmans on the market. Some would crash; a few wouldn't even boot. The market was flooded with crap.

Much like the reaction to the immense mass of crap FPSes in the mid to late 90s (RoTT comes to mind,) parents began to balk, to return too many games; publishers went under. There wasn't this huge mass of other genres to fall back on, like there was with the FPSes; it was the whole market, that time. Quickly, the only games that would sell were games attached to big names, such as movies, since they had the budgets to follow through a four man team for 6 months. (Those were the days.)

Then, ET went big. Much bigger than anyone expected. Way, way too late in the year. The person who managed to get the contract was already spread far too thin. He contracted a single individual to write that game in six weeks, including the art support and writing the manual. Remember, this was pure-ASM days, and it's not easy to write a game for a machine which has no video ram; updating the raster on the h-blank costs you nearly all of the almost-zero CPU time that thing had to throw around.

The result, as you can imagine, was crap. 'Course, you don't need to imagine; everyone throws this game around as an example of the worst game in history, though in fact there are far worse; even though the game sucks, it has no major flaws outside of that it sucks: no crashing bugs, no accidental impossible levels, etc.

Nonetheless, every parent on earth had gotten ET for the 2600 for their kids for christmas. Because the movie had such wide appeal to both kids and parents, the parents often sat down and tried to play it with their kids.

As the old phrase goes, it was the straw that broke the camel's back. It turns out that the game had been made with some fantastically bad decisions: for example, twice as many carts were made as there were systems in circulation, because someone actually believed that that game would singlehandedly drive console circulation to double based on the popularity of the movie. (Had the game not sucked, there's a reasonable chance it might have gone halfway that far.) Furthermore, Sears had been hornswaggled into a contract which made them take the bullet for returns, instead of the publisher, something unheard of in the retail industry.

They lost tens of millions of dollars. Remember, Sears Roebuck was in the seventies what Walmart is now - the 800 lb gorilla whose word made or broke you. When sears trashed all consoles that february, video gaming looked like its first generation was at an end.

It was two years before retail took consoles seriously again. Nintendo was who pulled it off, and they pulled it off by both understanding and duping the retailers, in addition to being at the right technology place at the right time. This required three things:

1) It was the era where RAM dropped to the price point where fu

Re:sorry had to

[schtum]

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.