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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.
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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