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Nintendo, Sony Take Big Financial Hits

Posted by Soulskill on from the can-we-call-it-a-bubble-yet dept.

The Installer writes with news that Nintendo is seeing a significant financial downturn to match the general slowdown in the rest of the industry. "Sales of the once unstoppable Wii console have tumbled for the first time since its launch three years ago, sending the gaming giant's quarterly profit down 61 percent." Meanwhile, Sony is feeling the pain as well; the company sold 500,000 fewer PS3 consoles than in the previous quarter, and PSP sales saw an even bigger drop. Interestingly, Sony also revealed that the manufacturing cost of the PS3 has now dropped 70% since it was released. The drop in sales has caused the resurgence of rumors about console price cuts.

20 of 119 comments (clear)

  1. Yet Another Chapter of Recession Porn by christoofar · · Score: 5, Funny

    Will Nintendo lay people off in a "Wiistructuring?"

    1. Re:Yet Another Chapter of Recession Porn by iamapizza · · Score: 5, Funny

      A friend of mine who works at Nintendo was fired a few days ago... he was in-console-able.

      --
      Always proofread carefully to see if you any words out.
  2. This is fucking retarded. by MukiMuki · · Score: 5, Insightful

    Nintendo's the only one not surprised by this. They didn't have a single major release, save for maybe Wii Sports Resort (which came out when, 2 days ago?), this year. By Christmas they'll release New Super Mario Bros. Wii and next year brings Mario Galaxy 2, possibly a Wii fit expansion or whatever they're doing with the pulse sensor, and lo and behold, those months will do ridiculously well for the Wii, and the year afterward, on the same month, analysts will worry about Nintendo's downfall when the sales aren't as high due to a lack of major titles.

    It's the same dumb shit with Hollywood. Half a dozen studios release films in June with quarter-of-a-billion budgets+marketing campaigns and when all of those types of films don't come out 'till August the next year, there's an article about how the film industry is failing, all because it's easier to make up "Sky is falling" predictions than to actually wait a whole fucking fiscal year and take into account the number major releases that hit a particular year.

    Games and film have 2-3-year production cycles, and many times projects get delayed. The money still comes in (albiet with a higher cost due to the delay, which, for better companies, tend to result in more revenue for a better product), but as it doesn't come in steadily, it gives "analysts" plenty of fuel to predict doom whenever there is none.

    1. Re:This is fucking retarded. by Jurily · · Score: 4, Funny

      than to actually wait a whole fucking fiscal year and take into account the number major releases that hit a particular year.

      Oh come on. Everyone knows nothing happens towards the end of the year anyway. Especially not that thing where everyone buys stuff for their kids at the same time.

    2. Re:This is fucking retarded. by ivan256 · · Score: 3, Insightful

      Clearly you're not an <any kind of software at all> developer.

      Business types pick the subject matter they think will sell, then the platform(s) that give them the market size they want to sell into, and then they hire/invest in some development team to produce their product. Rarely do they give a half-shit if it's easy or not to develop unless it's sufficiently difficult to develop for a particular platform that it will cause a competitor to beat them to market.

      When you're talking about something as complex as a game engine, saying that the PS3 is harder to develop for than the 360, while perhaps technically true, you need to take that in context. In terms of overall project difficulty, it's only a small percentage more difficult to develop for one platform over the other.

      You would be hard pressed to find even a single major title out there that was developed for one console or the other because of difficulty. The big studios are either making cross-platform titles, or they're making an exclusive based on a business deal (not based on the difficulty to develop).

    3. Re:This is fucking retarded. by Dutch+Gun · · Score: 2, Insightful

      Which strangely wasn't an issue when everybody was making games for the PS2 which is weaker than the Wii...

      Because the technology gaps between the PS2, GC, and Xbox were far less substantial than the gap between the PS3/Xbox360 and the Wii, which is nearly a generation behind in terms of raw horsepower. There's a significant difference between porting a game between roughly equivalent systems and porting to a platform vastly different than the original games. It generally means that most of the assets must either be re-created or altered substantially, and that costs a lot of money.

      Add to this the fact that the Wii is a fairly unique console, both in terms of demographics and controllers. It's just not a system that's attractive for simple ports (as demonstrated by the abject failure of most attempts). It seems to be a machine that demands games be specifically tailored for it (or at least substantially modified).

      --
      Irony: Agile development has too much intertia to be abandoned now.
  3. The games... by DreamsAreOkToo · · Score: 4, Insightful

    If I hadn't already bought a Wii, I wouldn't buy one either. I'm disappointed with the game line up. 3 years have passed and I can name 3 games that I'm glad I bought. I can also name off a dozen names I deeply regret having ever bought/rented.

    Back in the 80s and 90s, any schmuck could decide to go make a game. With enough dedication and talent, he could really make something awesome, too. I mean one day Robyn and Rand Miller decided to sit down and make a game. And that game (Myst) was the best selling game for the better part of a decade.

    Now, it takes millions of dollars for the spoiled consumer to even *consider* playing a game. So now we see less and less games being made by the inspired and talented, and more and more games being made by corporate committee.

    As time marches on, I have a feeling we'll see a (relative) dieing out of the multimillion game and the rise of the $10-20 household device game. (Cellphones and computers to be specific.) It takes inspiration and talent to make a good game, not millions of dollars of art assets.

    1. Re:The games... by christoofar · · Score: 2, Interesting

      My Wii is a doorstop.

      I've been sort-a temped to get a Wii Fit, but I already pay for a $60 gym membership that I use about 3x a week. Kinda defeats the purpose of buying one. Plus the WiiFit is no fun if nobody if you're single and nobody can see you sweat. [Best place to pickup a date short of inter-office dating]

      3 years into the Wii the only game I really liked playing was the Wii bowling in WiiSports, which came with the unit.

      I also use a really nice DLP HDTV projector for games and movies, and I cannot tell you what a PITA it is to set up that IR bar underneath the projector image in the front side of my living room but yet have the Wii sit in the back of the room where the projector and my amp sits. I have to disconnect everything when I'm done or my dog will trip over all the wires.

      Then there's the trouble of standing in the right spot so I can use the Wii without blocking the picture, because the way I swing the controller around I really can't use the thing sitting down.

    2. Re:The games... by mooglez · · Score: 4, Informative

      I also use a really nice DLP HDTV projector for games and movies, and I cannot tell you what a PITA it is to set up that IR bar underneath the projector image in the front side of my living room but yet have the Wii sit in the back of the room where the projector and my amp sits. I have to disconnect everything when I'm done or my dog will trip over all the wires.

      Wireless IR bars have been available a few weeks after the Wii launch. Those really solve the issue with Wii + Hometheater.

      The bar does no actual communication with the Wii, just gets power from there.

    3. Re:The games... by MartinSchou · · Score: 2, Insightful

      Plus the WiiFit is no fun if nobody if you're single and nobody can see you sweat. [Best place to pickup a date short of inter-office dating]

      This works fine, if you're in shape to begin with.

      Nobody's going to want to date the fattie with huge sweat pits under their arms and loose long sleeved t-shirt and baggy pants that we use to cover up with. And even fewer than that wants to date the fattie who dresses in tight lycra and sweats profusely.

      And if you're that person, you're really not looking forward to showing yourself to the fit people either.

      I know this because I am that person, and I know plenty of people who are or were that person. It's bad enough going to the gym to start building muscles without having to worry about the lifestylers laughing at you because you can't do a single push-up. And the cute fit people in the gym aren't going to throw you a pity-date either.

      Now, once you're in decent shape, yes, it becomes an interesting place to pick up dates, but until then you're just a big sweaty lump of lard.

      Gyms aren't made for those of us who are overweight and need to get into shape. We already know that it's not the prettiest sight to behold, when your man-tits leaves sweat marks on your t-shirt. And watching a bunch of really fit people working out isn't much of a motivator. We don't want to see Mr. or Ms. Fitness World working out next to us. What we really want to see is someone who's just slightly fatter or thinner than we are, so we are properly motivated to outdo them.

      Think about it - do you really want to be doing bench presses next to the world's strongest men when you can barely do 50 push-ups? Sure, they're unlikely to laugh at your feeble efforts, but deep down we all fear that they will. If we didn't care about their opinions, why would we be in the gym in the first place?

      I don't want to do my workouts next to Vin Diesel. I want to do mine next to Jason Alexander, a rotund, out of breath, balding guy who's likely to keel over with a heart attack before I do.

    4. Re:The games... by tomhudson · · Score: 3, Interesting

      3 years have passed and I can name 3 games that I'm glad I bought. I can also name off a dozen names I deeply regret having ever bought/rented.

      So please name them ...

      I bought a Wii at the end of February, and in my 30-disk library (all legit, bought and paid for - my Wii isn't modded), I'd have to say that at least half the games are "I'd recommend them".

      Examples: Mario Kart (everyone likes it), Pinball Hall of Fame (a must-have - noisy), Pop Star Guitar (very addictive air guitar), Trivial Pursuit, Namco Museum Remix, Boom Blox (you'll get a work-out), AMF Bowling, Super Mario Galaxy, Prince of Persia, Shaun White Snowboarding (you really need the wii fit to use this one), Speed Racer (for mindless crash-n-burn vegging out), Blazing Angels.

      The people I've seen complain about their Wii don't spend money on games and accessories, then wonder why they don't enjoy it. Buy 4 remotes, 4 wheels, 4 nunchuks, get a decent library of games (catering to various tastes/ages), and you'll see that people will actually PLAY it when they come over. That's the way to get your money's worth out of the console. Not "Oh, the freebie games ere fun, and I rented a couple others, and bought one or two that sucked, so the console is a piece of crap!"

    5. Re:The games... by MogNuts · · Score: 2, Insightful

      I saw this comment and I have to address some things. Only because I've realized not a lot of people actually are not aware of some some things:

      1) To address you picking up people, if someone is unattractive outside of the gym, women won't talk to them either. Unfortunately, that's just how it is and there is nothing u can do about it. And ask yourself this: would you say "NO" to a sweaty, hot woman asking u out? Of course u would say yes. The sweating doesn't matter.

      2) Why did you join that gym? Gyms come in 3 flavors. The meat-market (which u joined), the gym where people are serious about it and are there to actually just work out, and the "community" gym where high-schoolers and old people go. You should have joined the last 2 then. When you went for a week trial, or even just to visit, didn't you bother to look around the place? A note for you: next time your membership is up, look around at different gyms and get 1 week trials. You may find a great place, and if anything it helps because you can use the deals each gym gives u against the other for a cheaper deal.

      3) Some of us actually go to workout and don't care that ur fat and sweaty. I used to be you, but now I'm not. It takes time.

      4) Going because we care what people think of us... Believe it or not, some of us like to do it for health reasons and it makes us feel good. Or because we have goals we'd like to reach (e.g. x amount of bodyfat, 7-minute mile, etc.).

      5) Believe it or not, you WANT to workout next to Ms. Fitness champ. They know so much advice to give you, their motivation is glowing and contagious, and generally people at that level are the most down-to-earth humble people you will meet *anywhere*.

      6) The guys that are massive benching 500 lbs. are on steroids. Period. Anybody on steroids I have found also doesn't know what the hell they are doing at the gym. The only reason they look in shape is because they cheat--the needle.

      7) If the gym really bothers you, get a personal trainer who comes to your house. Or get a gym if you have the space in your house. The stuff is cheap, and dirt cheap if you compare it to years of paying a gym membership.

      Seriously people, instead of blaming the world for your problems, take some responsibility and *DO* something about it.

    6. Re:The games... by PixelScuba · · Score: 3, Insightful

      $240 - Wii
      $40(3) - Wiimote
      $20(3) - Nunchuck
      $15(4) - WiiWheel
      ------
      $480

      Now they tell me...
      $20(4) - Wiimotion Plus
      $90 - $wiifit/board (will I need more than one?)
      ------
      $650

      And I still won't have any games for it besides Wii Sports. When you say "you have to buy the additions and accessories to enjoy the Wii" That starts to get pretty damn expensive for this generation's "budget console".

  4. Context Matters by Triv · · Score: 3, Informative

    Context matters.

    "Meanwhile, Sony is feeling the pain as well; the company sold 500,000 fewer PS3 consoles than in the previous quarter, and PSP sales saw an even bigger drop."

    500,000 units is just a number; losing a sandwich is less of a tragedy if you had two of them to begin with. FTFA:

    "Sony did release console sales numbers for the period, which also painted a bleak picture. Quarterly worldwide PlayStation 3 sales dropped from 1.6 million units in the first quarter of the past fiscal year to 1.1 million units in the most recent fiscal quarter, while PSP sales plummeted from 3.7 million units to just 1.3 million units. VAIO sales and profitability were also down, though Sony did not offer specific figures."

    So selling 500,000 fewer units this quarter in this context means that Sony has sold approximately 30% fewer units than last quarter.

    1. Re:Context Matters by Triv · · Score: 3, Insightful

      My point was mostly editorial, that putting $scary_big_number; in a summary doesn't provide any information beyond making the reader think, "Huh. That's a scary big number." To use a familiar number, if McDonald's served 500,000 fewer people today than yesterday it would look like a point of concern if nobody told you that McDonald's serves 47,000,000 people a day on average.

      We're scared of very, very big numbers because we're not trained to comprehend them - we're never going to have to make change for a million dollar bill, so who cares what 100,000,000 pennies looks like.

    2. Re:Context Matters by kramerd · · Score: 2, Interesting

      If a client wants 500 widgets, then you make them enter into a contract for 500 widgets. If your new whizbang baby ITX thin client PCs are a significant portion of your annual revenue, you make em pay for the whole order prior to production and you slap a client logo on em as a bonus, so you can claim these are custom builds and an order for 500 can't be reduced since you can't resell them. If necessary, require custom, non-refundable orders on orders of 1+.

      Then, when they later only want 350, you deliver 350 if they demand it, but you still invoice 500 (and you still produce 500 so that you are square on the contract). By the time you are assembling the last 20 PCs, the ability to back out of the contract should be down to the amount you have already begun to pay for. Not paying the $5k annual lawyer fee to set proper language in your contract terms is beyond negligent.

      Seems pretty simple to me. Include a couple of clauses about delivery time and product spec (they get widgets, not the new widget+, delivery by [date] and not prior, if client wants full or partial delivery moved to [later date], client pays warehousing fees and cost of credit). With this, you should be able to renegotiate you mastercard interest costs because ADA is lowered. If the total cost is immaterial to the client, you likely will get the client's interest rates for a specific job order but get the gain of credit history. Alternatively, some larger clients are even willing to cover the float and take it out of the price of delivery (ie pay directly for the materials, so if they reduce the order to 350, they just have to resell the parts).

      On the other hand, if a client orders 500 and doesn't have the credit to cover 500, I would probably not take the client order, or require a cash downpayment, or have them put some assets in escrow prior to acceptance (like title to building, not intangible assets).
      Of course, if 500 widgets is a lot for you to make, client probably goes with a competitor who does 500 on an hour's notice.

  5. Amazing by CarpetShark · · Score: 3, Insightful

    Old consoles aren't selling as if they were cutting edge. Fascinating.

  6. Then what instead of a PS3/360/Wii? by tepples · · Score: 3, Insightful

    Between installing malware on it's customers' machines, using draconian DRM, constantly trying to shove proprietary crap down our throat [...] I have decided that Sony can go @#$% itself.

    What console doesn't use "draconian DRM"? What video game published by a major label isn't "proprietary crap"?

  7. Re:While PS3 cost may be dropping... by StingRay02 · · Score: 2

    But is that going to get us a price drop? When the PS3 first dropped, everyone justified the price of the console because Blu-Ray players were just as expensive, if not more so. Well, I'm seeing hundred dollar Blu-Ray players now, but the PS3 is as expensive as it ever was.

  8. Re:Intel GMA by tepples · · Score: 2, Informative

    But the Wii is going to be -much- more powerful than the laptop.

    Wii's CPU is a PowerPC G3 clocked at 0.73 GHz, and it has less than about 91 MB of RAM+VRAM. The cheapest new laptop is a $300 Eee PC with an Atom CPU clocked over twice that and ten times as much RAM. Besides, I understood Albert Sandberg's comment to mean that publishers don't consider Wii-to-PC ports because a PC is so much more powerful than a Wii, not less powerful.

    Even on an "inactive" system, there are hundreds of tiny processes going on, polling hardware, etc. the Wii is more or less truly single tasking.

    Do "hundreds of tiny processes" take up half the CPU and nine-tenths of the RAM, even on the version of Windows XP loaded on these low-end laptops? My cousin has an Atom-based laptop, and it doesn't for him.