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Nintendo's Profits Fall On Gamecube Sales
Gamasutra reports that Nintendo's sales have dropped 21% compared to last year's numbers, largely on sluggish Gamecube sales. From the article: "Although a significant fall, Nintendo remains the most consistently profitable console hardware manufacturer when also factoring in game sales, especially compared to nearest rival Microsoft, which is estimated to have lost around $4 billion on the Xbox in the last five years. Nintendo officials are sticking to full year forecasts of operating profit of ¥90 billion ($758m), net profit of ¥75 billion ($631m) and sales of ¥400 billion ($3.4bn)."
Oh noes... a system that's near the end of its life is not selling as well any more. No kidding. At this point if I didn't have a GC at this point I'd probably be holding off for a Revolution which will have full backward compatability.
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Technology-based entertainment products decrease in popularity over time.
So they made almost half of the forcasted income in half the year. Keep in mind that the second half of the year has the Christmas season which brings in more money, so achieving the target is not really far-fetched.
To be perfectly fair, the Power Glove wasn't their failure. I believe it was made by Mattel. I could be wrong on the manufacturer, but it was NOT Nintendo that made that. The other failures though, are of course theirs.
But the point remains that they are a profitable company making systems and games. They do NOT require "side businesses" to keep them afloat.
...at least from a UK perspective - practically nowhere sells Gamecube stuff anymore. It's been evaporating from retail for over a year, by now it's pretty much specialist games shops (and even some of them appear to be dropping it, the Game in Redditch no longer sells new games[1]). Frankly, I think it's too far gone here for Nintendo to pull the Gamecube out of it's death-dive. Although The Twilight Princess will probably sell well to the people who have bought the Gamecube, but with such a small retail precence, I can't really see Nintendo shifting many more consoles.
(Isn't the UK on it's own the 3rd biggest market for videogames? )
Then again Nintendo are good with this money side of things, and they do have the handhelds as a cash-cow. They also have sensible management (who about two years ago had a revaltion that European gamers do tend to notice if a big game is released in the US months / years before a European release, strangley coinciding with the Xbox beginning to get an upper hand in the console race). I'd say they have a fair chance with their weird Revolution thingy, which seems to either be a valiant failure, or the single greatest change in gaming since [Pong / Atari2600 / NES / Megadrive / PlayStation] (or both of course).
[1] The Game in Redditch is tiny though, I guess bigger stores still sell it.
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Uhh no. You are VERY, VERY wrong. The differences in net profit(the figure that matters) between Nintendo(as a company) and Sony(as a company, all divisions) have been within 10-20 billion yen(within around $100 million at today's exchange rates) for this entire generation. Sony's operation isn't nearly as streamlined as Nintendo's, they make more money, but they spend a lot more money as well.
At that difference, it would take sony several decades to out-profit Nintendo's multi-billion dollar warchest.
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You know, when I first read the grand-parent post I assumed he was talking about cost to manufacture,not total price. The total price will likely be around $200, if not exactly $199.99. Hell, I doubt they can do anything else. Everyone is expecting the system at that price point.
But as far as manufacturing goes, it could be anywhere between 1/3 to 1/4 the cost of the most expensive system with the 1/3 being the most likely. Since Nintendo likes to make a profit on their consoles, the Revolution could cost as little as $150 to make, maybe as "high" as $180. Most people seem to agree that even if the 360 is not a loss leader the PS3 will be which means that the ps3 to make will cost over $400. Here is just one example estimating a production cost on the PS3 at $500.
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