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)."

Comments

I applaud Nintendo

[NVP_Radical_Dreamer]

I applaud nintendo for being able to pull this off. In an era where console companies are losing money left and right, they are consistantly able to post a profit. I think much of this stems from innovation of their products. Even if they sometimes fail (gb printer, virtual boy, power glove) the times they hit it, and when they do they hit it big. If you remember, they are the ones who pioneered the handheld controller as an alternative to the joy stick. They also pioneered shoulder trigger buttons, analog sticks, rumble feature, OEM wireless, and are now giving a stab at a gyro based contol system.

You can call them childish or for kids all you like, but there are few people who can say they dont truely enjoy the vast majority of what nintedo has created.

Re:Long Term Sales?

[falcon5768]

Nintendo has made more profit than both Sony and Microsoft combined actually. Even on release, the Gamecube was sold at a profit, which considering its price being half of what the other systems where (and the system actually being better capabiliy wise than either the Xbox of PS2) was amazing. Add that plus the profit from the games and they have a really large warchest.

Sony and Microsoft have the money to throw at their machines, BUT they are also taking huge hits whenever they release a system. Nintendo never takes a loss, everything is profit for them. They might not in the end make AS much as the other two, but they dont nearly have the bills either. With the Revolution being estimated at 1/4th the price of both the systems, it doesnt look like Nintendo will be in trouble anytime soon even IF the controller idea doesnt work out.

Nintendo and Apple very much have the same philosophy toward their systems and it works very well for both of them. People can kick and scream that both are dying, but the sheer amount of money they have in the bank proves that those who say they are are cluless as to how to run a buisness.

Re:Long Term Sales?

[SetupWeasel]

I'm sure the poster is speaking about Sony's and Microsoft's game divisions. Let me put it to you this way. Microsoft has lost so much money on the Xbox that I have made more money than Sony's and Microsoft's game divisions combined over the past four years.

And no, Sony is not doing as well as you surmise. The GameCube sells a lot of software per console sold. Since they don't subsidize their console, software profit is actual profit. Sony has a 70% stake in the home console business and they regularly report quaterly losses. Nintendo has reported one quarterly loss in fifty years of public trading. The GameCube is profitable. Not super ultra mega profitable, but it makes them money.

Sony's business model is based on the assumption that they are the far-away leader. Ask yourself this, if Sony does not capture 70% of the market in the next generation, will they turn a profit?

Sony is the worlds 2nd largest electronics manufacturer. They have movie and music studios and are a major force in the traditional entertainment industry. Nintendo is almost solely a video game company, and they manage to make more than half the profits (overall) of the Sony behemoth.

Nintendo is a tightly run ship. They know how to make money, and they do it by the truckload.

Their attempts rebuild their image amongst hardcore gamers has fallen largely on deaf ears, and it's not financially feasible for them to battle it out head to head with the titans like Sony and Microsoft.

Nintendo keeps more money than Microsoft lost on the Xbox in its entirety liquid. That's right. They have more than 4 billion dollars cash on hand to invest quickly (7.5 billion is the number I could find). Nintendo could play the game that Sony and Microsoft has started, but what would be the point? Sony and Microsoft might both lose money in the next generation. Nintendo doesn't care to play a game that no one might win.