Topic: Nintendo lowers profit expectations... again

[bonestormer]

Even with the recent boost Nintendo has been receiving with the release of Zelda TWW and the GBA SP, Nintendo has once again lowered profit expectations for this year.

They cut it a whooping 18%, to 66 billion yen (about 550 million USD) down from the 80 billion yen they stated in November, 2002.

If Nintendo only sees a 66 billion yen profit, that will only be a little more then half of what they recorded last fiscal year (106 billion yen). They REALLY need to do something to fix this trend... fast.

http://www.reuters.com/financeQuoteCompanyNewsArticle.jhtml?storyID=2518143&ric=7974.OS&infotype=news&compname=NINTENDO


(All you 'diehards' don't bother trying to jump on me. I'm just the messanger. Plus I'm not forcasting any kind of doom for Nintendo. Just expressing concern.)

[jarob]

Also on CNet now.

http://news.com.com/2100-1043-995783.html?tag=lh

All you people saying so what if this or that game gets cancelled, had best wish it does not continue.  Now N's profits are going down.  

All I hear is that Nintendo makes money.  True, but if there are not enough machines out there, those profits will go down.  N does NEED 3rd part support people! Eventually if things do not turn around soon...

[misterd]

Do you really think this is just because of third party support?

The GCN had a great deal of support for most of the last year, and many expected the RE exclusives to be sure fire sellers. Nintendo is now losing its support (like Sega sports) because of the poor sales.  For whatever reason Nintendo has been unable to capitalize on the release of a number of smash games the past year - RE1, RE0, Metroid Prime, Mario Sunshine, Animal Crossing and Eternal Darkness alone offer more than enough quality titles, and there was plenty of filler for those "between" months. What is hurting Nintendo, at least in the states, is its image, and I don't know anything they can do to overcome that.

[Squall]

Could this be because of more marketing or trying to atrract 3rd parties?  

[Cap]

it all comes down to advertising if you ask me, and nintendo's lack of it. on top of that, the ads they do have just arent very good. but their advertising has been a problem since day one with the gamecube, and nothings changed, so i dont expect it to any time soon.  

[mouse_clicker]

"putting console sales for the full year at 5.6 million units, far below its target of 10 million units."

Not sayig this is wrong or anything, but I really don't remember Nintendo forcasting 10 millions units, and if they did I doubt anyone there really expected to reach it. Just an odd note.

But I completely agree that Nintendo needs a TON more marketing. They may make more profit than Sony or MS, but if that profit doesn't have much potential, they could easily be overtaken. Basically, if the product isn't KNOWN, it won't SELL. Sure, sure, you can say MS is evil and they're underhanded with their marketing, but you have to admit that it WORKS. MS's first console has sold very well considering it's their first endeavor, even better than the Gamecube in some cases. I really think Peter Main leaving was a bad decision (and probably Arakawa, too).

[rpglover]

yeah nintendo should be marketing more- i mean they do have some great games on the gc that could use some help with marketing
not only that but nintendo has their huge lineup out now with mario, link, and samus- all on the gamecube
if people would see some of nintendos marketing it may help them sell more- but i am not sure
people still go on how the gamecube is kiddy and nintendo sucks and on and on and on
it gets real annoying
but to be honest- nintendo is making the most money out of all 3 major consoles- and i think that is what counts to nintendo
they may be in last place in the number of consoles sold, but they do make the most money off of each one sold
nintendo just saw a huge jump in gc selling mostly due to zelda and a free game with the console
i have seen nintendo a little more aggressive though with their marketing now- i see nintendo commercials every day on espn
hopefully nintendo keeps dishing out the good games so i can be one happy gamer

[Tycoon__]

gba oversold... they truly have a fix on the handheld market..

GC in Japan does have more support then GC in USA FYI............

[Tycoon__]

Quote
Originally posted by: rpglover
yeah nintendo should be marketing more- i mean they do have some great games on the gc that could use some help with marketing
not only that but nintendo has their huge lineup out now with mario, link, and samus- all on the gamecube
if people would see some of nintendos marketing it may help them sell more- but i am not sure
people still go on how the gamecube is kiddy and nintendo sucks and on and on and on
it gets real annoying
but to be honest- nintendo is making the most money out of all 3 major consoles- and i think that is what counts to nintendo
they may be in last place in the number of consoles sold, but they do make the most money off of each one sold
nintendo just saw a huge jump in gc selling mostly due to zelda and a free game with the console
i have seen nintendo a little more aggressive though with their marketing now- i see nintendo commercials every day on espn
hopefully nintendo keeps dishing out the good games so i can be one happy gamer

huh.. so all those zeldas went to non regular gcers? not ot mention how some others bought it ahead of time.......................

[Scyth3r]

Eh, could mean lots of things.  With decreased profits it may be making more of a marketing push or expanding user base and so and so.   Look at Microsoft, profits are little but it has a good amount of market share and user base and such.

[VideoGamerX]

The cause for lowered profit expectations seems pretty simple to me. The introduction of the Xbox has simply cut into Nintendo's sales more than they expected. If not for the Xbox, isn't it safe to assume Nintendo would sell at least a few more Gamecubes? Also, in consideration, just the purchase of a third console and games for that third console makes a difference in the amount of games purchased.

For Nintendo to make only half of the profit they've made previously doesn't mean they're failing. It means they're having to spend more and compete more with a third competitor in the market. It's nearly impossible to meet the expectations they had with Microsoft throwing its weight around.

I attribute these lowered expectations to Microsoft doing better than anticipated over the long stretch. North America is going to be a dog fight. Here's to hoping Nintendo can continue to outsell for the next several months and into the holiday season!

[Mingesium]

Nintendo forcast 10 million units by the end of the fiscal year (March 31).

Fiscal year 2002 - 5.6 million
Fiscal year 2001 - 3.8 million
Total - 9.4 million

Iwata said in Jan that they were going to miss their forcast by 10% so 9.4 million is about right.

The price cut and lackluster sales of GameCube systems lowered Nintendo's profit. I think that Nintendo didn't expect to cut the price of the GameCube so soon.

[Perfect Cell]

Quote
Nintendo blamed the sluggish performance of GameCube and its software to rising popularity of such PlayStation 2 titles as Grand Theft Auto

Thats from IGN Cube..... Seems like Nintendo finally "Got it"  If this is the reason for their lack luster sales then i see more of the GTA type games appearing on the cube, and less of the pikmins and Mario sunshines. Nintendo is changing.... The Nintendo of the future isnt your NES nintendo folks.... Its almost quasi historic.

[unicron5]

Ming --

Your numbers are false. Nintendo projected to sell 10 million for fiscal 2002-03 *alone* (not total userbase). At one point last year, Nintendo actually raised this to 12 million before dropping it again to 10 million. In January Mr. Iwata warned that sales would be off by 10% or so, I think this was more of a pre-emptive PR move to warn stockholders that sales would be lower than expected without really letting on how bad things were.

The GameCube really experienced little growth in North America and actually managed to sell less in Japan in fiscal 02-03, despite having a full 12 months on store shelves and games like two new Bio Hazards, Mario Sunshine, Zelda: TWW, Mario Party IV, etc.  

[Duriez]

Quote
Originally posted by: bonestormer
Even with the recent boost Nintendo has been receiving with the release of Zelda TWW and the GBA SP, Nintendo has once again lowered profit expectations for this year.

They cut it a whooping 18%, to 66 billion yen (about 550 million USD) down from the 80 billion yen they stated in November, 2002.

If Nintendo only sees a 66 billion yen profit, that will only be a little more then half of what they recorded last fiscal year (106 billion yen). They REALLY need to do something to fix this trend... fast.

http://www.reuters.com/financeQuoteCompanyNewsArticle.jhtml?storyID=2518143&ric=7974.OS&infotype=news&compname=NINTENDO


(All you 'diehards' don't bother trying to jump on me. I'm just the messanger. Plus I'm not forcasting any kind of doom for Nintendo. Just expressing concern.)

No biggie, at least they are making healthy profits, unlike Microsoft.  Everyone in the industry has been lowering profit expectations.  It's a common trend.  Why focus on just Nintendo's lowered profit expectations?

[misterd]

Quote
Originally posted by: unicron5
Ming --

Your numbers are false. Nintendo projected to sell 10 million for fiscal 2002-03 *alone* (not total userbase). At one point last year, Nintendo actually raised this to 12 million before dropping it again to 10 million. In January Mr. Iwata warned that sales would be off by 10% or so, I think this was more of a pre-emptive PR move to warn stockholders that sales would be lower than expected without really letting on how bad things were.

The GameCube really experienced little growth in North America and actually managed to sell less in Japan in fiscal 02-03, despite having a full 12 months on store shelves and games like two new Bio Hazards, Mario Sunshine, Zelda: TWW, Mario Party IV, etc.

Right. I remember after their Euro launch last year Nintendo had projected 16 million cubes total by the end of the fiscal year. Had they hit their 10 million, it would have been pretty close.

[bonestormer]

Why focus on Nintendo? I dunno, maybe because this is Planet GAMECUBE, a Nintendo focused site?

And I don't see nearly a 40% drop in profits in one year as 'healthy'. Sure there could be a number of factors affecting this, but overall I think it has to concern Nintendo. The fact alone they lowered low expectations from just 6 months ago can't be a good sign. Especially with this coming right after (and really during) a nice boost from sales of GBA SP and Zelda TWW.

Xbox is a bad comparison. MS is spending everything just to get a foothold in the market since they are a new comer (to consoles). Nintendo has been around a long time now. They can focus more on being profitable.

[Marufy007]

I'm actually glad these "negative" things keep happening to Nintendo because maybe it will wake them up and they will change a few things about their company. im a big Nintendo fan and would probably support them to the end, but they do need to change how they do things. they are lucky in a way. most companies have trouble making good games, but have good marketing and what not. Nintendo seems to have it reversed. if they can find some way to change their image for the better, then im more then positive they wont pull a "Sega" not that i think they would in their cirrent situation anyway.

the interesting thing though is, once a company lost its image it usually never rebounded. once Sega's dropped, it was downhill for them. same with Atari. we have yet to see a console maker rebound after losing marketshare. maybe Nintendo will be the first. HA, maybe? they BETTER!  

[greenwood]

There seems to be too many people here that just don't get it or don't understand. Nintendo didn't make as much money because they've been spending more. Deal with Capcom, deal with Konami, deal with EA. Those cost money. They've also published a lot of games.
Also, you can't compare this year to last year. The previous fiscal year (March 2001-March 2002) they launch the GCN in 3 separate territories. Sales are always much larger at launch.
Plus, The GCN's not selling as well as you'd expect considering the quailty of titles available.
One last thing, you say you can't compare MS to Nintendo in terms of profit. Why not? MS is not some new business that just fell off the truck 2 days before the Xbox launch. They went out and hired the best people they could get to help run their video game division. This is not an excuse for Nintendo, rather this is praise for MS. So what if they're a newcomer? Yes, the Nintendo name has helped sell some GCN's but at the same time it's also stopped some people from buying it. There are people out there that refuse to buy a GCN because "it's a kiddy console" and all that crap. Also, the N64 left a bad taste in some people's mouths and that has also made some wary of buying a GCN.
MS as a newcomer doesn't have to deal with any of that. I really dislike when people use that to hate on GCN sales. It's a double-edged sword.
One (truly) final thing, why do people justify MS losing tons of money on Xbox as being okay because "they're just getting their foot in the door for the next gen" yet turn right around and go on about how Nintendo makes most of their profit from the GBA and try to use that as being a bad thing or a reason why Nintendo should stop making home consoles?  

[Mingesium]

did you even read the article?

Quote
Citing poor demand for its mainstay GameCube console at home and abroad, the company trimmed its group sales estimates to 500 billion yen from 600 billion yen. "Demand for the GameCube console was significantly lower than our expectation," a company spokesman said, putting console sales for the full year at 5.6 million units, far below its target of 10 million units.

The reason why they didn't make as much money is because of lackluster GameCube sales.

[Hybrid Hunter]

Well, with Nintendo firmly behind the plan to have GBA help GCN sales, i hope it works in the end.
Especially with a Pokemon GCN game coming out.

[Nintendo]

Something does NOT add up here!
One source says something different from the other, look at this:

$4.2 billion sales (profit=$547 million) VERSUS $4 billion sales (profit=$550 million)

Which is true?

[Perfect Cell]

Well, Iwata and Company arent stupid, hopefully they will rectify this.. The comment about games like GTA has given me hope that Nintendo will also change with the times. Nintendo isnt leaving the console buisness just yet, but they do have to get their act together and make a STRONG push...

[jarob]

It is kinda sad.  That games like GTA3 sell so well while great games like Metroid and Mario Sunshine are not in the same leage sales wise.  It seems to be a top seller you have to have violence and sex anymore.  Does not matter about the quality of the game.  I hope Nintendo sticks with their current ways, but have 3rd parties make the guys the 'market' demands.  Nintendo does have to do something different quick though.  This industry is about violence now (b**bs are coming on stronger now), not great gameplay.  Kinda sad, especially how violent the real world has become.  I enjoy a 'break' from it all.  What I mean by violence, the ultra bloody type, not Zelda or Pikmin.

[NWR_Lindy]

It's all about games.

Hate to say it, but Nintendo needs to release something that can one-up Halo.  That could have been Metroid Prime, had they actually had a brain in their head and worked in some killer multi-player deathmatch.  Don't get me wrong, Metroid Prime was amazing, but once I beat it I put it on the shelf.  Mind you I don't own Halo, but I guarantee if I did I'd still be deathmatching my buddies on a regular basis.  Heck, I still play TimeSplitters 2.  And don't even get me started on how Nintendo dropped the ball as far as online goes.

Nintendo is no longer cutting edge.  They're known as the company that makes cartoony, Disney-type stuff and shoves Mario and Zelda down your throat.  Rehashed game after rehashed game.  I'm the biggest Nintendo mark out there and even I'm getting tired of Mario and Zelda.  Mario Sunshine is Mario 64 with better graphics just like Wind Waker is Ocarina of Time with better graphics.  Gameplay is exactly the same and doesn't offer anything different.  Both of those franchises are getting stale, and frankly I wish they would just retire them.  That's heresy but it's my honest opinion.  Why do you think everybody loved the new look of Link at Spaceworld 2000?  Because that was something hip, that was something new.  Then we get Wind Waker, a game that's exceptionaly but basically aimed at kids.  I'm far from a kid anymore and that's why I enjoyed Eternal Darkness a million times more than Wind Waker...ED's story wasn't dumbed down so that "everyone" could enjoy it (read: so that 10-year-old kids wouldn't get confused).  Yeah, Wind Waker uses the cool cel shading, it sold a million copies, but come on people - it's all been done before.

Gee, Nintendo is losing money because of PS2 titles like GTA.  DUH.  Never would have imagined that.  Your company losing money because your competitor outsells you 10:1 and has cooler products and a cooler image?  Astonishing.  Still, Nintendo seems content to sit back and say, "We're losing money because the buying public is stupid, and they don't appreciate our works of art".  Whatever Nintendo.  Can't wait to play Mario Golf, Mario Tennis, Mario Pachinko, Mario Poker, Mario Swimming, Mario Freestyle Skiing, Mario BMX, Mario Othello, Super Mario Moonshine, Mario Kart 8,  Zelda: The Sleep Inducer, and maybe you could throw in yet another Kirby sequel, 1080 sequel, F-Zero sequel and Donkey Kong Country sequel.  Oh, you're already working on those?  Great.  Excuse me while I move to PS2 and X-Box, where they actually make new games because they don't have 50,000 franchises to fall back on.

silks (drinking gallons of Haterade)